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CNN International: Trump Announces Sweeping Tariffs; Trump Signs High Tariffs On Multiple Asian Nations; U.S. Trading Partners Warn Of Retaliation; Mexico To Announce Own Economic Program; Tariff Trouble For The Auto Industry; Tornado Outbreak Across Parts Of U.S.; Tesla Reports Largest Delivery Drop In History; Amazon Bids For TikTok. Aired 6-7p ET
Aired April 02, 2025 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[18:00:00]
JIM SCIUTTO, CNN ANCHOR: Hello and welcome to our viewers joining us from all over the world. I'm Jim Sciutto in Washington, D.C.
And just ahead this hour --
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: My fellow Americans, this is Liberation Day. Waiting for a long time.
(END VIDEO CLIP)
SCIUTTO: In fact, it's really one of the biggest economic experiments in modern history. President Donald Trump declaring a national emergency to announce a raft of new tariffs. It's 10 percent on almost everything coming into the U.S., plus extra on top of that for what Trump referred to as the worst defenders.
President's self-declared Liberation Day today leads to retaliation day tomorrow. A number of America's trading partners have already warned the president of a swift response to those U.S. tariffs.
And taking a prime position. Amazon's last-minute bid for TikTok. We'll hear from another bidder for the social media app with a potential ban just days away.
We begin with President Trump's long awaited tariff announcement. Just a few hours ago the president unveiled a 10 percent baseline tariff on almost all goods coming into the U.S. A higher reciprocal tariff for dozens of nations.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: Chronic trade deficits are no longer merely an economic problem, they're a national emergency that threatens our security and our very way of life. It's a very great threat to our country. And for these reasons, starting tomorrow, the United States will implement reciprocal tariffs on other nations. It's been a long time since we even thought of that. We used to think about it a lot. We didn't think about it for many decades. And you see what's happened.
For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers and other forms of cheating. And because we are being very kind, we're kind people, but we will charge them approximately half of what they are and have been charging us. So, the tariffs will be not a full reciprocal. I could have done that I guess, but it would've been tough for a lot of countries. We didn't want to do that.
(END VIDEO CLIP)
SCIUTTO: We're going to actually check the president's numbers there. Some evidence they're misleading. Some of the additional rates he announced include 34 percent for China, 20 percent for the E.U., 24 percent for Japan. Of course, those are U.S. allies. President Trump says the rates are based on tariffs charged by those countries on U.S. products as well as trade barriers and currency manipulation.
Richard Quest joins me now. So, Richard, I mean, these were at the upper end of what countries, markets, et cetera, were fearing. By the way, the markets don't seem to like this based on the futures.
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE AND CNN ANCHOR, QUEST MEANS BUSINESS: No, the futures are down quite sharply, and for good reason, because they don't like what they're seeing. I think what's -- you know, it's a -- the Lord giveth, the Lord taketh in a sense. The -- you had the 10 percent minimum across the board tariff, that was lower than expected. That had been the thought it might be 20 percent or 25 percent. So, you end it with a base tariff of 10 percent.
But then, when you go to the individual country, reciprocal tariffs, they are higher with, for example, as you said, China at 40, E.U. at 20, Japan at 24 percent and some higher than that. And I think what's going to happen here is how you get that number down through the sort of the trade negotiations, which will be very difficult because you're not just talking about removing a tariff number.
By and large, to be frank, tariffs are relatively low, 8, 6, 5, 9 percent. It's the non-tariff barriers, the currency manipulation, the local content restrictions, the import duties in a sense, that, Jim, is what's going to push these numbers up and make it very difficult to get rid of them.
So, the U.S. is well and truly set out its stall. The E.U. is having a press conference in five hours. Ursula von Leyen is doing that. She's in (INAUDIBLE). And Australia has already described this as being totally unacceptable and not the way you treat friends.
SCIUTTO: Will consumers see these costs immediately?
[18:05:00]
QUEST: within very short order. There are things on boats. Remember, one of the great revolutions of the last 15 years has been in time supply, just in time deliveries. So, things on cars, on trucks, and boats now will be in shops in weeks. So, yes, as of tonight, that starts getting paid.
One interesting point, Jim, which I think you might note as well, when the president did this today, there was no animus about it. There was no, I hate them. They're evil. This is bad. He actually said, look, Japan, great friend, love the country. U.K., magnificent. E.U., brilliant. But they've been robbing us. What were the words I wrote? Robbed, raped, pillaged, and scammed is the way he described it.
SCIUTTO: Yes.
QUEST: And that's why he is doing it. But he wasn't vicious about it. It wasn't like this was sort of, I'm going to take it out on you. This was, no, it's business and that's what we've got to do.
SCIUTTO: Yes, but he is taking it out of -- I mean, you speak to the leaders of the countries, spoke to the Canadians earlier this week, and they say, this is -- this has the danger of collapsing or the intent of collapsing our economy. I mean, whatever he says -- I mean, he could sugarcoat it but the economic effects are severe.
QUEST: But here's the real problem with it. There's a kernel of truth in what he says. If you talk to any trade expert, and I spoke to Ngozi Okonjo-Iweala, head of the WTO, she says there are legitimate concerns by the United States, and Donald Trump went through that today.
So, yes, there is -- I don't whether it's five, 10, whatever. There's a scintilla of what he's saying that U.S. trade is unfair. But what he's done, of course, is taken not just a sledgehammer, he's taken a bulldozer, a crane, a caterpillar truck, he's taken the old nine yards and he's absolutely blown it out the water. And that, I think, is not the way you go about it.
It's a scalpel -- you know, it's the old thing of the scalpel versus the sledgehammer. And here, he's got more than that. He's blown the thing up.
SCIUTTO: Yes. And his intention, it seems, is to move all manufacturing inside this country, which of course has consequences for countries that make stuff themselves.
QUEST: It's not going to happen, Jim. It's not going to happen. Let me just tell you straight out, people are not going to suddenly move vast amounts of goods back to the United States because it is a high-cost productive country, very productive, and it's not going to happen. The U.S. has just shot itself in both feet and tripped over its shoelaces.
SCIUTTO: Richard Quest, thanks so much. Well, President Trump says one reason for the new tariffs is the revenue they will create. He says, it can be used to pay down the debt and give Americans a break on income tax.
(BEGIN VIDEO CLIP)
TRUMP: Now, it's our turn to prosper and in so doing use trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it'll all happen very quickly. (END VIDEO CLIP)
SCIUTTO: Last year, the U.S. brought in $77 billion in tariffs, according to the Congressional Budget Office, that's about 1.5 percent of federal revenue. Trump has also promoted tariffs as a way to pressure other countries on matters such as fentanyl and immigration and to promote U.S. manufacturing, as I was just noting there, the idea of bringing it all back to the U.S.
CNN Politics Senior Reporter Steven Collinson joins me now. I mean, the issue is the federal government might take in this tariff revenue, but the folks who actually produce and sell this stuff, they're going to pass on these costs to consumers, or if they don't pass it on, then they got a problem.
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: Right. Let's remember the election in November. This was a president who is elected largely because he made a better argument that he could lower prices that have been higher since the pandemic than Kamala Harris, the Democratic candidate, who didn't have an answer. Well, Trump has now effectively put up the prices of almost everything Americans will buy.
SCIUTTO: Yes.
COLLINSON: It's a stunning, I think, indifference to what it's like to be living as a normal American right now from a present who's a billionaire with -- at the head of a cabinet of billionaires and millionaires. And if this doesn't work, I think the political takeaway from this will be, today, Trump said, you're going to remember this day because it's going to work. I think many Americans, if it goes the other way, are going to remember this day.
He has created this historic pivot point for the United States and he's created potentially a real Achilles hill for the Republican Party and himself.
SCIUTTO: The -- Trump has made clear, because there've been numerous opportunities to make a deal on the side, make side deals with countries to pull back from the worst of the terrorists. But Trump is making quite clear he is doubling, tripling, quadrupling down. And the other countries are making quite clear, one, that they're going to retaliate, but two, that they're not going to play this game forever. That they have to fundamentally change their trading relationships.
[18:10:00]
Now, that could change, you know, leaders change, politicians change, but at least on the current course, we're very much in a trade war, and it's just not quite clear what the off ramp is.
COLLINSON: Right. Those theories that a lot of people keep mentioning, oh, he's just looking for leverage. This guy's a deal maker. He's looking for bargains. So, we are now going to a situation where, if that is the case, the United States is going to have to start separate complex trade negotiations with almost every country on the globe, because Trump has pretty much blown up the entire global trading system. You know, even whether administration that finds it easy to do complicated things, that would be extraordinary.
And the other point of this is, the rest of the world is going to go on, carry on free trading with each other.
SCIUTTO: Yes.
COLLINSON: Almost every major trading bloc is now going to attack the U.S. economy. That's something the White House hasn't talked about. The theory is, well, the U.S. is the biggest economy, we can take down China, we can take down Canada, but simultaneously, tariffing the United States and the other countries don't have those tariffs on them with their trade for each other, that completely changes the game.
SCIUTTO: And there is some evidence that they're going to work together. And the Trump administration seems to have some concern about that, for instance, Canada with the E.U. I mean, the other piece here is this, that even if you were to open the door from the White House to a negotiation here one can understand if the folks on the other side of that negotiation just don't trust the deal.
I mean, for instance, these tariffs violate a deal Trump himself negotiated in his first administration the U.S. MCA with Canada and Mexico. So, I mean, they have to be thinking, can we really negotiate with this country in good faith?
COLLINSON: Well, look what the Prime minister of Canada said the other day, Mark Carney. He said, the relationship we've had with the United States economically and even military no longer exists. Countries have decided that, OK, we cannot rely on the United States anymore. Even if Trump's not the president, another populist could come along in a few years. We have to make our own arrangements.
SCIUTTO: Yes.
COLLINSON: So, that's why this is such a fundamental change because the United States, let's not forget, it built this global trading system. It built this international system of western alliances. Trump's project is to dismantle all that. And it's -- I think he's making the biggest political gamble the American economy of any modern American president.
SCIUTTO: And, you know, to your point, it's not just trading relationships, it's security agreements and so on.
COLLINSON: Yes.
SCIUTTO: Flipping that script as well. Stephen Collinson, thanks so much. Well, Asian nations will be hit hard by President Trump's tariffs. He repeatedly called out Asian nations that rely on manufacturing, in particular China and Vietnam.
(BEGIN VIDEO CLIP)
TRUMP: Vietnam, great negotiators, great people. They like me. I like them. The problem is they charge us 90 percent. We're going to charge them 46 percent tariff. Taiwan, where they make -- they took all of our computer chips and semiconductors. We used to be the king, right? We were everything. We had all of it. Now, we have almost none of it.
(END VIDEO CLIP)
SCIUTTO: It's actually not clear the president's numbers are correct there. He seems to be conflating a number of things, including tariffs into those figures. China's foreign minister, Wang Yi, promised ahead of the announcement that Beijing would, quote, "counterattack" against what he called tariff related blackmail.
Marc Stewart joins me now from Beijing. But, Marc, of course, China and other Asian nations, including, we should note, U.S. allies such as South Korea and Japan, they knew that more tariffs were coming. Was this worse, better, or about as they expected?
MARC STEWART, CNN CORRESPONDENT: Well, it's funny you bring that up because I just got an e-mail from a tech firm or a tech investment firm in the United States who described the situation for Asia as worse than worst case scenario.
Look, these are economies, South Korea and Japan in particular, that really do depend on American consumers to buy their products. Now, the one thing which they have going for them is that American consumers really like Japanese cars. They really like South Korean vehicles. So, we were talking about Kia, Hyundai, Toyota, Mazda. I mean, the list goes on and on. These are very well received.
So, it remains to be seen whether or not American consumers are still going to buy them, even though there are these elevated costs. You know, another point to bring up is that in Asia, a lot of auto parts are manufactured, as well as in Canada and other parts of the world. So, American cars are also going to be impacted by this.
We really don't know yet how Japan and South Korea and Vietnam are going to react to all of this. They're kind of keeping this close to the vest. But China, as you mentioned, has been very outspoken even before this announcement was made. In fact, you're talking about Foreign Minister Wong Yi. He said America first doesn't mean American bullying.
[18:15:00]
So, China is going to be prepared to fight back. Certainly, we could see additional tariffs. But I think one thing to really watch is the fact that China has a lot of influence, a lot of control as the world's second largest economy when it comes to supply chains.
Supply chains, as we look back during the pandemic years, are really important. They can help make or break a company's success or a nation's success. So, I would not be surprised if China really tries to put some pressure on supply chains, making it difficult for American firms to get things like critical minerals, which are so important in developing electronics, even pharmaceuticals.
Something else that China could also do is the fact that there are a lot of American companies doing business, setting up shop, have already set up shop here in China. American firms want to be in China. There are more than a billion people here. The economic potential is endless. But China could make things even more difficult. We saw a crackdown on Google as well as many other companies, well-known companies that do business here in the United States.
So, you know, Jim, it's very early in the morning here. A lot of these nations are still trying to digest everything. But I think China, in particular, will respond swiftly. You know, there's usually a daily press brief at 3:00 p.m. local time. We may get something before then.
SCIUTTO: Listen, you talk about supply chains, just ask Apple about where the iPhones are made. I mean, there's certainly a pressure point there. Let me ask you this.
STEWART: Right.
SCIUTTO: Does China see an opportunity here to try to fill in some of the vacuum left by the U.S., perhaps even with U.S. allies, such as South Korea and Japan, say, hey, we can deal and I'm not going to tariff you?
STEWART: Right. There's been a lot of talk about China perhaps forming, you know, a bit of a stronger relationship between Japan and South Korea. That remains to be seen. That's a really complicated relationship because there are military issues involved. But yes, I think China does see this as an opportunity, if anything, to portray itself as a stable world force, a stable world actor.
China has already been preemptive in all of this. It's formed really strong relationships in Southeast Asia, Africa, Europe, to sell its products. China is known as the world's factory. It can produce items at a rate that most U.S. factories simply can't. These factories are nimble.
So, for example, a lot of fashion is manufactured here in China. If the fashion wizards decide that blue is the new color and it's no longer red, these factories can make these shifts so quickly. So, China's got an advantage.
And real quickly, Jim, you know, I think it's really interesting, if you look at the EV landscape, China is known for this EV car, BYD, it's been giving Elon Musk a real run for its money. It's locked out of the U.S. yet it's having success as the top EV maker, selling to everywhere but the United States.
SCIUTTO: Yes. Well, and watch Tesla sales go down for a number of reasons in -- well, in Europe included, is that an opening for Chinese EVs? Marc Stewart in Beijing, thanks so much.
Well, Mexico is set to respond on Thursday to these new U.S. tariffs. President Claudia Sheinbaum saying ahead of the announcement that Trump's trade war is a worldwide issue, and that Mexico will do what's best for its own economy. Have a listen.
(COMMERCIAL BREAK)
CLAUDIA SHEINBAUM, MEXICAN PRESIDENT (through translator): Tomorrow, we'll make the announcement. A comprehensive program is what we're announcing. It's not a matter of you place tariffs on me, I place tariffs on you. Our interest is to strengthen the Mexican economy, particularly the automotive industry.
(END VIDEO CLIP)
SCIUTTO: Well, folks are paying attention. Still ahead, U.S. consumers are rushing to car dealerships to try to lock in lower prices before the tariffs impact. We're going to discuss the effect higher tariffs will have on the auto industry when we return.
(COMMERCIAL BREAK)
[18:20:00]
SCIUTTO: Welcome back, President Trump's 25 percent tariffs on U.S. auto imports will take effect early Thursday morning, just a few hours from now. These tariffs are separate from the reciprocal tariffs the President announced earlier today. And U.S. consumers have been scrambling to buy cars ahead of that deadline, fearing, quite understandably, that the new tariffs will drive up prices.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Tell me why'd you come out to the dealership today?
ROSA SCOTT, JEEP CUSTOMER: I needed to buy a new vehicle before the prices start going up too high.
UNIDENTIFIED MALE: So, that really was on your mind?
SCOTT: Yes.
UNIDENTIFIED MALE: Why did you want this Jeep?
SCOTT: I always wanted lingo really. And this is the 2025. So, I like this and I came forward before it go up more.
UNIDENTIFIED MALE: And what --
SCOTT: I really wanted to wait a couple of months, but it might be too much then.
(END VIDEO CLIP)
SCIUTTO: One car dealer in Detroit says, there is no doubt the prices for cars are going to go higher and soon.
(BEGIN VIDEO CLIP)
GEORGE GLASSMAN, DETROIT CAR DEALERSHIP OWNER: And the manufacturers, it's going to cost them more money, and there's no way that I foresee them not passing those costs onto me and ultimately to the consumer.
(END VIDEO CLIP) SCIUTTO: Ford, Toyota, and Honda are all reporting strong sales in March. This, of course, as folks try to lock in better deals before those tariffs take effect. John Bozzella joins me now. He's the president and CEO of the Alliance for Automotive Innovation. Thanks so much for joining.
JOHN BOZZELLA, PRESIDENT AND CEO, ALLIANCE FOR AUTOMATION INNOVATION: Thank you. Nice to be here.
SCIUTTO: So, how was today for you in the industry?
BOZZELLA: Where do we start?
SCIUTTO: Yes.
BOZZELLA: It's an enormous challenge I think for the industry. These are massive tariffs in the context of the industry that we're talking about. Automotive manufacturing is a high asset, low margin business. Millions of square feet under roof, big machinery and equipment, long supply chains, they don't move overnight. So, this adjustment is going to take some time. So, prices are going to go up and volumes and sales are going to go down before that adjustment can take place.
SCIUTTO: So, let's talk about that adjustment, because the adjustment Trump envisions here is that he believes tariffs will force the entire auto supply chain back into the U.S. Is that possible?
BOZZELLA: Yes.
SCIUTTO: Will that happen?
BOZZELLA: This is a huge question. We share the president's goal of a strong, robust manufacturing sector for automotive of the United States. No question about it. We're committed to the United States. We're investing more here in the United States. But the big question is, can we do that? How quickly can we do it? And will it continue to support affordable choices for American consumers? Those are still big questions that remain unanswered.
SCIUTTO: I mean, affordable choices means, if you were to do that, if that were to happen over a period of time, those cars would be more expensive?
BOZZELLA: I think so. I think that's a challenge, right? Now, it depends. Individual manufacturers have to make decisions about what vehicle lines might be able to move, what vehicle lines might need to be canceled or, you know, how to manage that.
I worry, personally, looking at the industry, having been involved in this industry for quite some time, that you're going to see the lower end of the market, the more affordable end of the market under a lot of stress.
SCIUTTO: Yes.
[18:25:00] BOZZELLA: And fewer choices for consumers.
SCIUTTO: Thinner margins, right?
BOZZELLA: Right, exactly.
SCIUTTO: Let me ask you this, because by doing this, this is not in the interests of our trading partners, right? Because if you're Mexico or Canada, for instance, you're running a pretty good business making pieces of those cars, right? And the demand is, all of that goes to the States. What do those countries do? Because they'll be left out in the cold, will they not?
BOZZELLA: Yes. We have had, for over a quarter of a century, duty free, seamless trade between the United States, Mexico, and Canada. That's helped American consumers and American auto workers and American auto manufacturing. So, unwinding that creates significant problems. It can happen overnight, as I said. But it's also, I think that those -- that trading did support and does support affordability.
So, starting tonight, or first thing tomorrow morning, as you pointed out, a couple hours from now, we're going to see tariffs on vehicles produced in Mexico and Canada. That's a very significant change.
SCIUTTO: Canadian officials have told me that they're going to look elsewhere for trade and trade deals now because of these tariffs and because, frankly, they don't trust the U.S. as a trading partner. Can countries such as Canada -- I mean in the -- that automotive space, can they band together with Europe, et cetera, to build their own, I suppose, independent car industries?
BOZZELLA: Well, sure. I mean, Mexico -- if you look at, Mexico's a great example. Mexico has trade agreements south, east, west. They have trade agreements dozens of them.
SCIUTTO: Right.
BOZZELLA: And so, sure countries can do this. I worry even before that though, that we're going to see retaliation. And so, we, a strong automotive sector in the United States, depends on exports as well. We want to grow this industry by exporting to countries around the world. And so, making our exports more expensive through retaliatory attacks becomes a problem coming the other way.
SCIUTTO: You sell less?
BOZZELLA: You sell less.
SCIUTTO: John Bozzella, thanks so much.
BOZZELLA: Thank you.
SCIUTTO: President and CEO of the Alliance for Automotive Innovation. Coming up next, tornadoes wreak havoc across parts of the U.S. damaging buildings, putting millions at risk. We will have an update from the World Weather Center. (COMMERCIAL BREAK)
[18:30:00]
SCIUTTO: Welcome back to CNN Newsroom. I'm Jim Sciutto. And here are more international headlines we're watching today. Myanmar's military government has announced a temporary ceasefire in its ongoing civil war against armed opposition groups, a move aimed in helping rescue efforts following last week's devastating earthquake, which has killed now more than 2,700 people. State run media says the truce would last until April the 22nd.
A judge has tossed out corruption charges against New York City Mayor Eric Adams. Donald Trump's Justice Department asked to dismiss the case saying it hindered Adams' ability to fight illegal immigration. The Justice Department also wanted the ability to reinstate the charges at a later date. Several U.S. prosecutors quit over the decision. The judge called it disturbing. He ended the case now once before all.
And a senior Russian negotiator is in Washington now for talks with the Trump administration over Russia's ongoing war in Ukraine. Kirill Dmitriev's visit marks the first time a top Russian official has visited the U.S. Capitol for discussions since Russia's full-scale invasion three years ago. Dmitriev is a close adviser to President Putin, who took part in high level talks in Saudi Arabia back in February.
Parts of the U.S. are facing long lasting tornadoes and once in a lifetime flooding as extreme weather puts millions of Americans at risk. Take a look at this video from Missouri showing just some of the damage caused by a tornado earlier today. A rare level five out of five threat has been issued across multiple states. Elsewhere, days of nonstop rain could trigger historic flooding in the Mississippi and Ohio River Valleys.
Allison Chinchar is at the World Weather Center. Goodness. I mean, this is a huge storm system. Tell us about some of the damage it's causing and how you expect it to move from here.
ALLISON CHINCHAR, CNN METEOROLOGIST: Right. Yes. So, not only is it a significant event, but it's really impacting a large population as this system makes its way eastward. Here you can see this entire map, basically, where you see all this rainbow of colors, this is the area where you have the potential for the severe thunderstorms.
Obviously, the greatest threat is really going to be in this red and pink shade area, but even cities on the fringe, say Detroit, Cleveland, even back through Dallas, you still have the potential for some of the same impacts. Tornadoes, large hail, we're talking tennis ball or even baseball sized, and some of those straight-line winds could even be 70 or 80 miles per hour. That is more than enough to cause some power outages and bring some trees down.
Here's a look at that main line that we've been talking about sliding through the Central U.S. into the Eastern U.S. Don't forget some of the northern side of this though too. I know the focus has been on the severe weather, but you have more than a hundred thousand people in Michigan without power right now with snow and ice continues to slide in there, but the strongest thunderstorms are definitely on the southern side.
All of this red shaded area here, that is tornado watches. Now, some of them expire here in the next hour or two. Others will continue on for at least the next several hours well into the evening as that line continues to slide eastward. And we already have numerous warnings out as well. The orange boxes, severe thunderstorm warnings, the pinkish purple boxes, those are tornado warnings.
And even notice you have several of them out ahead of the main line. So, if you are east of this line thinking I've got plenty of time still before that line comes in, keep in mind that we're getting some of those discreet thunderstorms developing well out ahead of the main line of the system. So, this is going to continue to slide eastward, 8:00, 9:00. Really the bulk of it is over places like Paducah and Memphis.
By 4:00 a.m. it barely moves. Still raining in Memphis, but just now starting to enter into Nashville. So, this is not exactly a very fast- moving system. That means prolonged periods of time of dealing with those severe thunderstorms, but also two prolonged periods of time dealing with an excessive amount of rain.
You've got a lot of flood watches in effect, and particularly this area down here across portions of Arkansas and Tennessee, where you have a particularly dangerous situation, a PDS flood watch, just indicating how high these rainfall amounts are expected to be for some of these places over the next 48 hours.
Widespread totals of at least six inches, but it is not out of the question. Several of these communities could pick up a foot of rain or more in just 24 to 48 hours' time. The unfortunate problem is it's spread out. So, take for example, portions of Northern Arkansas. You are under a risk for flooding today, tomorrow, and even into Friday. So, multiple days of having the torrential rain come into these locations. Again, Jim, you're talking multiple inches of rain, possibly two inches an hour for many hours. This is going to lead to some large-scale flooding concerns for a lot of these communities.
[18:35:00]
SCIUTTO: Yes. I mean, goodness, the portion of the country that storm system is covering right now is just remarkable. Let's hope those people get through it all safely. Allison Chinchar, thanks so much.
Coming up after the break, has Elon Musk's Tesla company been running on autopilot? It suffers the biggest drop in deliveries in the country's -- in the company's history.
(COMMERCIAL BREAK)
SCIUTTO: Welcome back. U.S. stock futures are down sharply at this hour. This in response to President Trump's new tariffs announced just a few hours ago. Stocks finished Wednesday's session with solid gains ahead of that announcement with all the major averages, seeing gains of more than half a percent, but futures, of course, pointing in a different direction now.
Tesla, at least today, was an outperformer. Shares finished up more than 5 percent. This, even after the EV maker delivered dismal sales numbers for the first quarter. Sales plunging 13 percent in the first three months of this year. That is the worst quarterly delivery numbers in Tesla's history.
Investors seemingly looking beyond the numbers, though, focusing on hopes that Elon Musk will wrap up his controversial work for the White House soon and perhaps spend some more time at Tesla. Something that investors have been understandably demanding for months. It appears that Musk has become a political liability for Trump only worsened after a big political setback for Republicans Tuesday in a State Supreme Court race in Wisconsin. The Democrat, Susan Crawford, came on top against Republican Brad Schimel by a wide margin.
Musk had spent millions of dollars, more than $20 million of his own money in hopes of getting Schimel elected. At one point, he gave out million-dollar checks to some voters in the state.
Paul La Monica joins me now. He's a senior markets analysis writer for Barron's Magazine. So, tell me about these new sales numbers for Musk. Is this about politics, his politics, the controversy around the brand, or is also about more competition for Tesla?
PAUL R. LA MONICA, SENIOR MARKETS ANALYSIS WRITER, BARRON'S: I think it's probably a little bit of both. It would seemingly be too simplistic to really say that this is all about politics, Jim, but without question, the magnitude of the drop and the timing of it, 13 percent in the first quarter at a time where Elon Musk really disappeared from Tesla.
[18:40:00]
He was not around much running that company. And at the same time was making all these controversial moves with DOGE, which clearly has some negative effect, I think, on buyers. It's -- you know, it's no secret that many electric vehicle buyers tend to be on the coast, lean a little bit more to the left. So, they may not share Elon Musk's political views, particularly when it comes to the president and what DOGE is doing. So, I think it's definitely fair to say that a very significant part of what happened in the first quarter is due to Musk's politics.
SCIUTTO: Let me ask this. How does the tariff issue and the trade war, particularly given Tesla's business in China, and China's going to retaliate as well, does that make Tesla even more vulnerable going forward?
LA MONICA: Yes. Tesla stock, along with the rest of the market, is down pretty sharply after hours following the president's announcement of those reciprocal tariffs, down about 6 percent at last check. The problem, as you noted, Jim, is that this is going to be potentially a concern for Tesla trying to sell more of its electric vehicles in China and other international markets.
The good news for Tesla in the U.S. is that it's somewhat insulated by a lot of the tariff noise because it does rank highly on several lists for having cars that are mostly made in America. The Model Y, Model S, Model X, those vehicles largely made in U.S. manufacturing facilities. So, that's beneficial for Elon Musk and Trump.
But, you know, no one wins a trade war despite what the president might think. The markets are probably going to remain very volatile for the foreseeable future. That's not great news for Elon Musk and Tesla shareholders.
SCIUTTO: Paul La Monica, thanks so much. Well, Amazon is now joining the long list of potential investors in TikTok. That is according to a U.S. administration official. TikTok, of course, facing a looming deadline to find a non-Chinese owner.
Now, just days before Saturday's cutoff, it's been receiving some last-minute offers. Amazon is far from the only company interested in the social media platform. Blackstone and a U.S. venture capital firm are among those offering to buy out TikTok's Chinese investors.
Frank McCourt is the billionaire owner of the Los Angeles Dodgers baseball team. He's also put in his own bid to buy TikTok, and he joins me now. Frank, thanks so much for joining.
FRANK MCCOURT, FORMER OWNER, LOS ANGELES DODGERS: Hi, Jim. How are you?
SCIUTTO: We'll set aside the Dodgers for now, given that I'm a Mets fan. So, we'll talk about TikTok. Tell us where your bid stands for TikTok here. Who has the upper hand at this point?
MCCOURT: Yes, I think we're coming down to the home stretch, you know, April 5th is right around the corner, and something has to happen between now and then. And I think we're getting to the nitty gritty now of the details of the deal and what it takes actually to have an offer for U.S. TikTok that complies with the legislation that was passed with a broad bipartisan support. So, I think we're getting into those details now.
And, you know, for instance the algorithm. Is the algorithm going to -- is China going to continue to have access to it or not? If it continues to have access to it and it doesn't meet the spirit of the letter of the legislation. And China, I think, is a bit reluctant to give up that algorithm.
SCIUTTO: Yes. I mean, that's a fair question because -- folks in the intel world have been telling me for years that TikTok is a security risk here. I mean, should folks on the inside of this and on the outside of this be confident that any deal, any parameters of the deal, can actually remove a potential Chinese backdoor?
MCCOURT: Well, if you completely disentangle from the Chinese technology, then people can be assured, Americans can be assured that they're safe. Let's review where we were, how we got here. The -- it -- the U.S. Congress became quite alarmed when they saw the data and they realized that TikTok does not just have access to 170 million Americans data, they have the ability to manipulate what 170 million Americans think. And that's dangerous. That's a national security threat. This is a propaganda tool.
[18:45:00]
And so, they passed legislation to make sure that TikTok was either shut down or sold. And a sale would require complete 100 percent disentanglement from the Chinese technology. The reason why we made a bid for TikTok, Project Liberty made a bid, is that we've been building a clean American made from the bottom-up tech stack, which does not rely on the Chinese technology. That's why we stepped into this. And we believe we're still the only bidder perhaps that actually can completely disentangle from the Chinese technology.
SCIUTTO: Does it keep its magic, right? Whatever that magic is that keeps 170 million users in this country basically addicted to this device, are you confident that tech fix that you have would still maintain this amazing user base?
MCCOURT: Yes, and I'm very confident our business model is not going to addict Americans to technology. Project Liberty stands for something bigger than just buying TikTok. It's trying to make the point, and I think we've effectively made it during the last year particularly, that the existing internet design, the tech design that we have that, in fact, does addict users, that scrapes their data, that accumulates that data, micro profiles each of us, and then targets us with ads, with news, with information that makes -- that is polarizing us and really creating an information ecosystem, quite frankly, which is -- in which it's very difficult to tell fact from fiction.
SCIUTTO: Yes.
MCCOURT: And of course, we're reading and hearing much more about the harms to kids. We believe that there's another version of internet technology where individuals permission the use of their data benefit financially from their data, and they're actually in charge, again, of themselves. Their identity, their data, their relationships become theirs again, not those of the big platforms.
So, I'm very confident that we can create a U.S. version of TikTok that doesn't addict. Think of this as not a attention-based internet, but an intention-based one, where people are permissioning the use of the data, getting what they want, all the fun stuff, all the news and so forth, but you are in charge of you and you control your feed.
SCIUTTO: Well, listen, as a parent, if you can accomplish that it'd certainly be a gift to us and our kids. Frank McCourt, perhaps we'll have you back when this is all settled.
MCCOURT: I'll look forward to that. Thanks, Jim.
SCIUTTO: Thanks so much. And I will have more news right after a break. (COMMERCIAL BREAK)
SCIUTTO: A reminder now of our top story. Donald Trump is proclaiming what he calls one of the most important days in American history as he unveiled a massive new tariff plan. A levy of 10 percent will be added on practically all goods coming into this country. The rates will be higher for countries that have bigger trade deficits with the U.S.
[18:50:00]
Let's speak about this now with one of America's most important trading partners, of course, Canada, not included on a list of countries facing these new reciprocal tariffs today. This was the reaction from Ontario Premier Doug Ford, who expressed some optimism over the future of the U.S.-Canada trading relationship.
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DOUG FORD, ONTARIO PREMIER: This all goes back to relationships. And I've always believed in that and in business and government, you have to build the relationship. I believe we have built it, but I believe it's going to be a lot less than 25 percent. And that's what I believe through our conversations.
(END VIDEO CLIP)
SCIUTTO: Drew Dilkens is the mayor of Windsor, Ontario. He joins us now. Good to have you on. Thanks for joining.
MAYOR DREW DILKENS, WINDSOR, ONTARIO: Thanks, Jim.
SCIUTTO: So, I wonder, do you share Doug Ford's optimism that somehow Canada dodged the worst bullet today and that there might be a path forward?
DILKENS: Well, I'm optimistic that there's a path forward and the premier's been doing a great job on behalf of all of Ontarians. Let me just say that there are still 25 percent tariffs in place with respect to the fentanyl announcement from some time ago, 25 percent on steel and aluminum, and we're still trying to decode what the president's order means here with respect to autos.
And so, there was a car vote just a few days ago with respect to U.S. components versus Canadian and Mexican components, but then there's a 25 percent tariff starting at midnight. So, I think a lot of folks are just trying to unpack what was announced and understand what it means and hopefully, that there's a pathway forward that respects the trade agreements that we have in place.
SCIUTTO: Scott Bessent, president's treasury secretary, just spoke on CNN a short time ago and he warned countries not to retaliate to the tariffs announced today. Something of a message there it seemed to saying, you'll suffer more than we will. I wonder what your response is to that kind of thinking.
DILKENS: Well, I mean, listen, we understand that we have about 41 million people in Canada, and you're probably 10 times our size in the United States. We're the smallest partner in the trading relationship. At the same time, how can you simply ignore the fact that one of the partners to a trilateral trade agreement has just decided to unilaterally fly wholesale tariffs against one of the partners?
I mean, in that USMCA trade agreement there are dispute resolution mechanisms that allow us to resolve any of the differences that we have. And the president has decided to act in a different way and take a different approach. And so, we have to hit back in some reasonable way to send a signal that we can't tolerate what the U.S. is doing with respect to tariffs on Canada.
We've had a trading relationship that's been free trade since the 1980s, and it's worked quite effectively for all of the trading partners. All we want to do is get back to the table and renegotiate this. If there are problems, let's sit down at the table and figure out a pathway forward.
SCIUTTO: I wonder though, if there will always now be an element of doubt, right, given that, as you say, Trump in his first term, negotiated a trading agreement with both Mexico and Canada, which these tariffs are now violating. So, if he's violating his own agreement, when I speak, for instance, the Canadian foreign minister and you hear public comments from the prime minister, they say that the relationship between the U.S. and Canada has fundamentally changed. I mean, is there a way back from all this?
DILKENS: Yes, there, there's always a way back. But let's -- you know, I'm smiling as you're talking here, because don't forget, when Donald Trump negotiated the USMCA, it was the best trade agreement ever.
SCIUTTO: Yes.
DILKENS: It resolved all of the differences. And so, now, all of a sudden, there are issues that have come up, out of the blue, that need, you know, a wholesale change in the trading relationship. We are always going to be each other's largest trading partner. We're on -- we share the same continent. We share the world's longest undefended border. And something like the auto industry, which is so important to my city, we're the auto capital of Canada, just across from Detroit, the motor city. We have built the auto industry together.
Canada didn't steal this from the United States. We built it together as partners since the 1960s. And so, it is going to be very, very difficult to unscramble the egg that we have created together because it's working so well and so effectively and has created jobs for the benefit of workers in all of the countries that are partners to the agreement.
SCIUTTO: The Canadian foreign minister, Melanie Joly, told me earlier this week that Canada has no choice now really, but to look to other countries as trading partners, to build trading relationships with Europe, partners in Asia as well. Can you do the same from where you are or are the industry so intertwined that you really just don't -- speaking specifically, for instance, the auto industry, that you don't really have an option to do that?
DILKENS: Listen, I think it's right for us to look at how we can expand our trade horizons, but the reality is, again, we share the world's longest and defended border. You're our closest partner, largest trading partner, best friend, and ally. Although with the thought of putting everything on a ship and sending it to Asia or Europe might be interesting to some, the reality is we have to find a way to work together moving forward.
[18:55:00]
But there is no doubt that the president's actions that he's taken unilaterally, we don't want this. We didn't ask for this fight or this battle. Canadians don't want this. We don't want to apply tariffs in place. But certainly, the trust factor has been broken. And when you don't have trust, it makes it hard to do almost anything. And so, we're hoping to find a way to rebuild that trust with the United States, with the president, find a pathway that allows us to move forward for at least the next three years and nine months of his presidency. But hopefully, on a wholesale basis, moving forward for decades to come.
SCIUTTO: Drew Dilkens, Mayor, thanks so much for joining.
DILKENS: Thanks, Jim.
SCIUTTO: Finally, before we go, check out these never-before-seen views of the ocean floor. In January, an iceberg the size of Chicago broke off Antarctica and revealed a thriving new ecosystem. A deep-sea octopus resting thousands of feet below the surface, a giant phantom jelly and a massive sponge, which could have been growing potentially for centuries. Researchers say it could take years to study these stunning creatures and investigate just how they survived for hundreds of years under the ice. Amazing pictures there. We're always discovering more.
Thanks so much for your company. I'm Jim Sciutto in Washington. Please do stay with CNN.
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