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Tariffs on Steel and Aluminum; Justin Wolfers is Interviewed about Manufacturing and Tariffs; Sarah Krissoff is Interviewed about the Combs Trial; Migrant Children in U.S. Custody; Marc Caputo is Interviewed about Musk's Comments on Trump's Agenda Bill. Aired 9- 9:30a ET

Aired June 04, 2025 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:00]

BARAK RAVID, CNN POLITICAL AND GLOBAL AFFAIRS ANALYST: But there are elements that are very different. So, it's a -- if -- if you look at the premise of Trump's proposal, it has a lot of similarities to Obama's deal, meaning, Iran will be able to have what the Iranians called the right to enrich, but their ability to do it will be very, very, very limited.

SARA SIDNER, CNN ANCHOR: I lived in Jerusalem when the Obama deal went through, and -- and Netanyahu was livid at the time and wanted it crushed then. But after President Trump killed that deal a year later, some of the former Israeli defense officials said killing that Obama deal was a major mistake. And we're talking about the former deputy IDF chief of staff, a former Israeli national security advisor, former head of Mossad and two former defense ministers said that the withdrawal was a huge mistake, including Ehud Barak, who said it was delusional to kill the Obama deal and helped Iran further its nuclear capabilities.

I'm curious if you're hearing any grumbling about what is happening now.

RAVID: Well, as you remember, in 2015, Netanyahu did not hide his criticism of the deal Obama was negotiating.

SIDNER: Right.

RAVID: He even came to the U.S. Congress and gave a speech in front of both chambers. In the last few weeks, since the U.S. started its direct negotiations with Iran, Netanyahu is mostly quiet. You don't hear a word from Netanyahu or his cronies about this negotiation. And I think it's very interesting because there are two reasons for that. Two possible reasons. One is that Netanyahu doesn't think this deal is going to go through and he says, why would I fight something that is not going to happen. Or he understands that he has no cards and he can't really fight Donald Trump, therefore he's trying to cut his losses.

SIDNER: Barak Ravid, it's always great having you with your insight and expertise. Thank you so much. Appreciate it. A new hour of CNN NEWS CENTRAL starts right now.

KATE BOLDUAN, CNN ANCHOR: Breaking news this morning, stock futures so far throughout the morning really indicating that markets are not reacting so far to President Trump's latest terror move, doubling the tariff on steel and aluminum overnight. What one economist called the largest jump we've seen since the 1930s.

And we are moments away from another dramatic day of testimony to start back up in the trial of Sean "Diddy" Combs. A new accuser is set to take the stand.

And also new CNN reporting. Sources say the Trump administration is taking hundreds of migrant children from their homes and putting them into government custody, even separating them from their families.

I'm Kate Bolduan, with Sara Sidner and John Berman. This is CNN NEWS CENTRAL.

SIDNER: In less than 30 minutes, we will see how the markets react exactly to President Trump's new tariffs on steel and aluminum, which take effect today. And new private sector job numbers have dropped.

Also, the president who says he's the master of the art of the deal, now admitting he's having a hard time making a deal, a trade deal, with China, taking a new jab in his trade war at China's leader Xi Jinping.

Joining me now is CNN anchor and business correspondent Zain Asher.

Let us start with the new steel and aluminum tariffs. What do we see here? The head is nodding. Things are not looking up.

ZAIN ASHER, CNN ANCHOR AND BUSINESS CORRESPONDENT: The head is shaking from side to side.

SIDNER: Yes.

ASHER: So, one of the reasons why this is so problematic is that a lot of us had thought this trade war was de-escalating, right? We thought that things were moving in the right direction. Obviously, there's been hiccups when it comes to negotiations with China, but there had been some positive momentum. We've climbed down from the triple digit tariffs we've seen. We have the trade deal with the U.K. The EU and the U.S. are negotiating. Things seem to be moving in the right direction, until now.

Obviously, this is a massive setback. Twenty-five percent tariffs on steel and aluminum is bad enough. Fifty percent tariffs, disaster. You think about the fact that imports from Canada, from Mexico, from Brazil, from South Korea, all of that grinds to a standstill.

When you think about the reasons why the Trump administration is doing this, of course it makes sense to try to protect U.S. Steel. You know, they now have effectively eliminated competition. They can raise their prices freely. SIDNER: Right.

ASHER: But on the other hand, you think about the fact that price increases for consumers, that is going to go into effect as well. Think about all the things that contain steel and aluminum. I mean everything from kitchen appliances, laundry appliances, beer cans. So, all of that is likely going to see price increases. So, the administration wins in one way, but loses in 100 other ways.

I think what's also interesting, as I've been speaking to economists, is that steel mills in this country are operating at about 80 percent capacity.

[09:05:02]

So, they're almost at full capacity already. They're not going to be able to ramp up production overnight, right, in order to take advantage of these protectionist policies. And also, I think another key question is why would they, especially when you consider the fact that trade policy in this country is literally changing by the day, changing from week to week. You're not going to want to spend that kind of money, capital, expenditure, investment in expanding production when you don't necessarily know what the trade policy is going to be next month.

We did see this before, right? We saw back in 2018 Donald Trump imposed steel and aluminum tariffs. They were at a much lower rate.

SIDNER: Right.

ASHER: And we still saw price increases and job losses back then. They were targeting China mostly. This time it's targeting everybody. And so, everybody is worried.

SIDNER: I do want to ask you, today is the deadline for trading partners to make their best offer, according to the Trump administration, to the United States.

ASHER: Right. Yes.

SIDNER: What are we seeing?

ASHER: You know, this really shows that the Trump administration, even though they might not want to admit it, they are under a lot of pressure to get a lot of these deals done. We know that the U.S. economy is extremely -- I've been surprised, right, by the hard data. The U.S. economy is very, very resilient to a point, right? That -- that -- the party is going to be over soon enough, and the Trump administration knows that. They need to get deals on the books ASAP.

You think about the fact that the only deal we've seen in the past two -- it's been two months since liberation day. The only deal we've seen is with the U.K. And that's not even a deal. Why do I call it a deal? It's an agreement to make a deal, right?

SIDNER: Right. ASHER: And then you consider the fact that the EU, Trump has complained that the EU has been so slow to negotiate. Of course it is. You're dealing with 27 member states. And then now with China, there's been this back and forth. As I mentioned, good news with China, just in terms of the 30 percent versus the 10 percent. And, obviously, a massive climb down compared to the triple digits that we saw initially.

But still, there's been back and forth about who's to blame for violating the agreement. Donald Trump posted on Truth Social essentially saying that Xi Jinping is really difficult to deal with. So, the U.S. is under a lot of pressure as the trade war impacts begin, as we believe they will, to start to show up in the hard data.

We've got the jobs report on Friday. That will give us a key indication of what's happening with that.

SIDNER: There's a lot going on, but it sort of proves these deals are very hard to make, and Donald Trump is saying that now out loud on Truth Social.

ASHER: Yes.

SIDNER: Zain Asher, it is always a pleasure.

ASHER: Yes. Of course.

SIDNER: Thank you for going through that with me.

John.

JOHN BERMAN, CNN ANCHOR: All right, with us now is Justin Wolfers, a professor of economics and public policy at the University of Michigan.

Professor, always great to see you.

I'll ask you about manufacturing and tariffs in just a second. But first, a bit of breaking news. ADP, which is a private sector company that tracks jobs, just came out with its jobs reports from May and it's way below expectations, adding 37,000 jobs in May, the economy did. The expectation was for 133,000 -- 130,000. This is the lowest jobs total since March of 2023. The president blames the Fed chair for not, you know, lowering interest rates. That aside, what do you see as going on here?

JUSTIN WOLFERS, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, UNIVERSITY OF MICHIGAN: Well, we've all been waiting to see when the effects of the tariffs are going to be seen in the hard economic data. And, frankly, we're all on the edge of our seats.

We've all been a bit too impatient. The, you know, liberation day was only in April, and we've -- we're barely starting to get the very first slivers of May data. And that's what this is.

So, very worrying. But on the flip side, here's the good news. That has not been a particularly reliable data point in the past. But I think it just means that we're all going to continue to be on the edge of our seats on this macroeconomic roller coaster we're on.

BERMAN: So, something to watch maybe again as we get the federal report on jobs. That would be on Friday.

So, these steel tariffs doubling from 25 to 50 percent. What do you see as the immediate impact there?

WOLFERS: Yes. So, here's one way for viewers to think about it. The thing these steel tariffs do is they hit -- they help Pittsburgh. Pittsburgh, of course, the Steelers, that's where they make steel. But I'm coming to you from just outside Detroit. And here we make cars and a lot of manufacturing. And almost every other part of the manufacturing sector uses steel as an input. So, we help Pittsburgh, we hurt Detroit.

So, what really matters now is the magnitudes. It turns out there's only about 5,000 people who work in steel in Pittsburgh. Depending how you count it, you could say there's several hundred thousand who work in Detroit in the sort of manufacturing industries that use metals. And so immediately now you see the problem, which is, this helps a small sliver of the economy, the folks in hardhats in Pittsburgh, but all of a sudden, when Ford goes to buy more steel, even if it's buying American steel, its steel manufacturer will say, well, guess what, if you don't buy it from us you have to buy elsewhere. It's 50 percent more expensive elsewhere. So, we're going to jack up our prices by 50 percent. And so all of the manufacturing firms in Detroit are going to face these much higher costs.

And, by the way, manufacturers in other countries don't face this higher surcharge.

[09:10:02]

And as a result, it's going to really hurt the rest of the manufacturing industry. And on net will almost certainly cost America jobs.

BERMAN: You know, we have a graphic that actually shows what happened in 2018, in the first Trump administration with -- with steel tariffs that he put in place there. By -- by one analysis, it did increase steel jobs by about 1,000 jobs, but it decreased manufacturing jobs overall by 75,000. So, as you just laid out, some people suggest it adds jobs in Pittsburgh, it just takes them away from Detroit.

Professor, I want to ask you about a story I read in "The Wall Street Journal" today about sort of a remarkable side effect from this trade war over manufacturing right now with -- with China making it much harder for the United States, almost impossible to get rare earth minerals right now for magnets used in auto manufacturing. "The Journal" reports, "several traditional and electric vehicle makers and their suppliers are considering shifting some auto parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation said. Ideas under review include producing electric car motors in Chinese factories and shipping made in America motors to China to have magnets installed."

So, "The Journal" suggesting there are some people actually mentioning now that manufacturing could move away because of this trade conflict.

WOLFERS: Yes. Look, this is not just about rare earth minerals, although the story you tell just there is a very good and important one. The president has also recently threatened 50 percent tariffs on the European Union. It turns out if you want to set up any kind of manufacturing plant, almost certainly you're going to use precision manufacturing equipment. The stuff that gets the soup into the can and stuff like that, that comes from Germany or Italy.

The -- the -- the important intellectual point for your audience to understand is, when we talk about tariffs, often these are tariffs on things that are inputs into American production. And so that makes it more expensive, more difficult, more costly for American manufacturers to produce and has no effect on the rest of the world. And that, in turn, makes American manufacturers less internationally competitive.

So, it's not just that we're hurting foreign consumers, we're hurting American manufacturers at exactly the same time, throughout this trade agenda, it's not just rare earth minerals.

BERMAN: Professor Justin Wolfers, I have to say, you explain things so clearly. Where were you when I took economics? Appreciate your time this morning. Thank you.

Kate.

BOLDUAN: Had a -- had a better -- teaching at a better school than you went to. Just kidding. Just kidding.

Coming up for us, the trial of Sean "Diddy" Combs has started back up. Today we could hear from the woman who says Combs held her over a 17th floor balcony in one violent incident. And soon the jury will also hear from a second woman prosecutors say was a victim of sex trafficking by Combs.

And how an island in the Caribbean could be the key for American companies trying to save their supply chains from Trump's tariffs.

(COMMERCIAL BREAK)

[09:17:02]

BOLDUAN: Happening now, court has just resumed in the criminal sex trafficking and racketeering trial of Sean "Diddy" Combs. The judge is on the bench. Prosecutors and the defense are discussing upcoming testimony from one of Cassie Ventura's friends. Bryana Bongolan has arrived in court a few moments ago. You're seeing video. She's set to testify about an alleged incident that is referenced in the indictment briefly against Combs, and also in that bombshell civil suit that Ventura brought in 2023 that Combs allegedly dangled Bongolan over a 17th floor balcony in one incident. And also, another accuser could take the stand today, known only publicly as Jane, who prosecutors say was a victim of sex trafficking by Combs. Yesterday, the jury heard from a former hotel security officer who

testified that Combs paid him $100,000 for that 2016 video of Combs assaulting Ventura. Eddie Garcia is his name, and he said that he gave the video to Combs because Combs was worried it would ruin his career. Garcia saying at one point that Combs called Garcia his, quote, "angel," and said, "I knew you could help."

Joining me right now is former assistant U.S. attorney in the southern district, Sarah Krissoff.

It's good to see you.

Is that testimony from that former hotel security officer -- I guess let's start with that since what we heard. What -- how does that line up with or how are prosecutors trying to use it and did they effectively in trying to make this connection to sex trafficking and racketeering?

SARAH KRISSOFF, FORMER U.S. PROSECUTOR, SDNY: Yes, I thought he was a really effective witness for the government, actually, because he sort of tells more of the story about this video. And this video is obviously a key piece of evidence at the trial.

BOLDUAN: Yes.

KRISSOFF: The defense has tried as hard as possible to keep the video out or to limit the number of times it's being played. But the -- it is a key piece of evidence for the government. And Eddie Garcia really, like, drove home that even Combs thought this was an important piece of evidence and showed all the way -- all the way that Combs sort of tried to hide or bury that video at the time.

BOLDUAN: So then also you hear from the CFO of Combs' company, Derek Ferguson. He testified. He was a witness for the prosecution, but you think he may have helped the defense score some points? What -- why? What did you hear?

KRISSOFF: Yes, I think the government needed to put on someone high up in the Combs organization.

BOLDUAN: Right.

KRISSOFF: They're trying to show this was an enterprise and that the crimes were sort of run -- the crimes were committed to support the enterprise. So, they needed to put someone else on that was high up. But the defense was able to ask Mr. Ferguson a number of questions that really, you know, helped the defense. Mr. Ferguson said, you know, he never saw Combs commit any crime. Mr. Ferguson, you know, repeatedly talked about how sort of well the business was run, that they were doing things on the up and up, all of those things I think helped the defense.

BOLDUAN: One -- there's a lot of -- there's clearly, as I was laying out more testimony and new testimony coming today.

[09:20:04] But one thing that I know has caught your attention is just how the evidence and accusations that this -- that is covered in -- by this case just spans many years. I mean you've got Cassie Ventura testifying that freak offs that became a regular part of their relationship dated back to 2008. And then you come up all the way to, you know, 2016, you've got the video, and even later. Why -- what does that mean for the case and why is that grabbing your attention?

KRISSOFF: So, I mean, first of all, the government charged this as a racketeering case so they could get all of that evidence in, right?

BOLDUAN: OK.

KRISSOFF: So they could go back way far back in time and they could go either -- now the -- the allegations go up to 2024 and they could -- they could prove up conduct during a very wide span of time.

The problem is, that kind of confuses the jury, right? They are -- they are talking about an incident, at this point, they're talking about an incident ten -- ten years later or something, six years before that. So, at the end of the day, the government's really going to have to sort of draw a timeline for the jury here and explain sort of the course of events, because, you know, this is the first time the jury is hearing all of these things. It is going to be very hard for them to really follow the timeline here without some more help from the government.

BOLDUAN: Yes, like a literal timeline drawn for them at some point.

KRISSOFF: Yes.

BOLDUAN: It's good to see, Sarah. Thank you so much.

KRISSOFF: Thank you.

BOLDUAN: John.

BERMAN: All right, new this morning, hundreds of migrant children are being taken out of their homes and put into government custody after what the administration is calling welfare checks.

And big and beautiful or a disgusting abomination. Elon Musk slams the president's legislative agenda. We are standing by for a response from the president. Strangely quiet.

(COMMERCIAL BREAK)

[09:26:07]

SIDNER: The extent of President Trump's immigration crackdown is coming down hard on children. Sources tell CNN, ICE is taking hundreds of migrant children out of their homes and into custody, at times separating them from their families. Trump officials argue the children are in unsafe situations or caught in limbo as their families are mired in immigration enforcement actions.

CNN's Priscilla Alvarez is joining us now.

Priscilla, what can you tell us about these children as we look at some of these pictures here from 2021?

PRISCILLA ALVAREZ, CNN CORRESPONDENT: Well, Sara, this is part of this aggressive push by the Trump administration to locate unaccompanied migrant children. That means migrant children who cross the U.S.- Mexico border alone, came into government custody over recent years, and then were released to what are called sponsors. And that is usually family, including parents.

Now, as you mentioned, senior Trump officials have been citing this influx that happened in 2021, critiquing the previous administration for the handling of unaccompanied kids, and saying that some of them could be in potentially dangerous situations.

Now, former Homeland -- or former Health and Human Services officials refute those claims and say that a large swath of children aren't actually missing, and they are with their families.

Now, what this has all served as the premise of, however, is what is called these welfare checks. Immigration and Customs Enforcement, including in some cases the FBI, going to the -- their doors nationwide. The doors of children and their families. And I'm told by sources that around 500 kids have been brought into government custody, some of them returning to government custody. And the pace at which that is happening, according to sources I'm talking to, is unprecedented. And in some scenarios has also led to them being separated from their relatives and their parents.

Now, advocates and experts have said that there should be checks on children, but law enforcement isn't the way to do it. It should be with child welfare experts, and there have been programs in place to do exactly that.

The Department of Homeland Security, however, disagrees and says that they do need to check on these kids and have ICE do it. In a statement they said, quote, "DHS is leading efforts to conduct welfare checks on these children to ensure they are safe and not being exploited." They go on to say that "these welfare checks have resulted in arrests of some sponsors of these unaccompanied minors, and as a result, the children are being placed in the Office of Refugee Resettlement."

Now, that is the agency under the Health and Human Services Department that is charged with the care of unaccompanied kids. The department also providing two examples, one of which the child was with someone with a criminal record.

All of this to say, however, that there is more underway. A war room has been set up in HHS to track these cases. And in addition to that, Sara, these kids are staying in custody for a long time, from 67 days to now 170 days. So, there is concern internally that they are languishing in custody, and some kids have reported being depressed.

SIDNER: Wow. All right, Priscilla Alvarez, thank you so much for that really important reporting this morning. John.

BERMAN: So, this morning, the president has already vented at Fed Chief Jerome Powell on Truth Social, but what about Elon Musk. This morning we're just waiting to see how the president will respond, or if he responds after Musk attacked his tax and spending bill. This is what Musk posted on X. He said, "I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it. You know you did wrong. You know it."

With us now is senior politics reporter at "Axios," Marc Caputo.

And you're here because you've got some reporting on maybe what ticked Musk off, what insiders are telling you. And your list doesn't actually include specifically being really upset about the debt. It's other things.

[09:29:58]

MARC CAPUTO, SENIOR POLITICS REPORTER, "AXIOS": Yes. From what we understand, there's sort of four inflection points that have troubled Musk over the months that this bill has been debated, and also that he has been in.