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CNN International: Steep Selloff On Wall Street After China Retaliation; Trump Extends Deadline For TikTok To Sell U.S. Operations; Trump Derides China Tariff Response: "They Panicked"; South Korean Court Removes President Yoon From Office; Historic Flooding Across Parts Of U.S. Aired 3-4p ET
Aired April 04, 2025 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:24]
ERICA HILL, CNN HOST: Hello and welcome to our viewers from around the world. I'm Erica Hill. This is CNN NEWSROOM.
We begin with U.S. stocks plunging for a second straight day after China fired back against Donald Trump's sweeping wave of new tariffs. Beijing's 34 percent retaliatory tariffs really helping to fuel more major losses on Wall Street. As you can see there, a whole lot of red. The indices tanking at this point.
CNN business editor-at-large Richard Quest joining me now.
There was already some concern about what day two was going to look like on Wall Street. But those 34 percent retaliatory tariffs really added some fuel to the fire, Richard.
RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: Yes, they did. And I think what you're seeing, were in the last hour now and the market has sort of gone south because people just don't -- I mean, this is really awful. This is self-inflicted by the administration. I've used the phrase, economic vandalism several times.
And to see the markets off 2,000 points, 5 percent for all three. By the way, the Nasdaq is now in a bear market, which means more than 20 percent, a sustained 20 percent, by the way, we expect from its all its recent high -- to see these sort of numbers. When you know the reason why, and frankly, there's no -- and one aspect today, by the way, I -- forgive me. I should of course, been pointing out Chair Powell at the Fed has come out and said specifically that the tariffs are greater than expected and will have a deeper, wider economic effect than anticipated.
(BEGIN VIDEO CLIP)
JEROME POWELL, FEDERAL RESERVE CHAIRMAN: Uncertainty remains elevated. It is now becoming clear that tariff increases will be significantly larger than expected, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth.
(END VIDEO CLIP) QUEST: There is no magic here. There is no mystery about it. There is a straight line between the Trump policy, greater inflation, slower growth and investors saying we don't know what's going to happen.
HILL: And what is fascinating is you have Jerome Powell saying, not unexpectedly, really the best move here amid all of this chaos is to just keep rates on hold, stay the course as you have Donald Trump putting out on Truth Social. And I'm paraphrasing a bit here trying to pressure in many ways, the Fed chair once again telling him to stop playing politics and that now is the time to raise rates. Theres a certain irony in those comments.
QUEST: Yeah, yeah, sorry. You cut rates. Absolutely. And -- and I think that they're going to have to do that.
But here's the problem for the Fed. The fed has a dual mandate. The law says price stability, full employment. We've just about at full employment. If inflation goes up, the Fed's job is to bring it back to the target of 2 percent. They can only do that by cutting rates.
But if you've got stagflation, you've got no growth and you've got high inflation. What do you do? Because if you cut rates, you risk getting -- you risk inflation getting even worse.
And I think that's going to be the very difficult aspect. This graph is fascinating. This chart is -- is extraordinary because it shows the significance of what is being done. The broad-based nature of the shift, 10 percent for much of the world, to be sure, 20 to 30 percent and more beyond. This is why the economics of the global economy has become very, very, very difficult.
HILL: Yeah, absolutely. Richard, appreciate it as always. Thank you.
When we look at these new tariffs, some officials, some Chinese officials are describing the new U.S. tariffs as a form of bullying. President Trump, responding to China's retaliatory measures on social media, writing China played it wrong. They panicked. The one thing they cannot afford to do.
Anna Stewart joins me now with a closer look at what is happening in China here, the role of China. You know, I was speaking -- speaking with economists earlier who said maybe there's a little panic, but I asked him, is this more about China also calling President Trump's bluff? And he said there's a certain element of that. This is really upending the global order in many ways.
ANNA STEWART, CNN CORRESPONDENT: They are not going to take this lying down. And if you consider the fact that Trump's actually already had two tranches of 10 percent tariffs against China plus the 34 percent, it's actually 54 percent against China.
[15:05:04]
And China has now retaliated with 34 percent against the U.S., and we're talking here about roughly half $1 trillion in trade. So even if we could somehow ignore the fact that we're actually in a global trade war, this is huge. This is sizable.
And we were already seeing a market selloff in Asia. We were expecting to see more of a selloff in the U.S. but once this news hit that China was going to retaliate, the selloff deepened significantly. And some of the losses were seeing, of course, are in the U.S. on Wall Street, one of the big ones, of course, Apple down 7 percent today. It's actually now down, I believe 15 percent just in the last two days.
We are looking at billions of dollars being wiped off market cap at this stage. And that's because some companies like Apple are of course, so reliant on manufacturing and supply chains in China. And you have to question where this ends.
We had the Truth Social from President Trump. Thankfully, no immediate trigger for the tit for tat tariffs yet from him. But, of course, you do wonder where this ends and so much retaliation to come. I think around the world.
HILL: Well, and speaking of what is to come, there are big questions about what the response is ultimately going to be from Europe.
STEWART: The EU, one of the biggest trading partners as well. In fact, the U.S. is its biggest trading partner outside of the European Union. What are they going to do? We have a trade ministers meeting on Monday. By Wednesday, I believe were expected to get what they're going to do about the steel and aluminum tariffs from some ages and ages ago. They also need to consider what to do about the auto tariffs and now what to do about the 20 percent blanket tariffs they are being hit with.
There is also just a complete sense of bafflement and confusion from many European politicians. I don't think they can quite believe that this has happened. And of course, comments from the chairman of the European parliament's international trade committee, which I really think gets to the heart of this sort of extraordinary confusion.
Have a listen.
(BEGIN VIDEO CLIP)
BERND LANGE, EUROPEAN PARLIAMENT MEMBER: For us. We are unjustified because we have clear rules where we both are working with and in average, the tariffs between European Union and United States are 5 percent and put it the volume of trade on. It's only 2 percent because a lot of products are about 70 percent are tariff free. So, therefore, we are really not happy about this decision. And we are analyzing the effect quite closely.
(END VIDEO CLIP)
STEWART: He mentioned rules there. You know the EU likes rules. The whole world has been governed by trade rules. And that rule book has been completely ripped up.
We do expect some retaliation next week, but how far can the EU go? Can they match the U.S. tariff for tariffs? Should they? What will that end up with?
So much more to come next week. So, while we've seen a lot of volatility this week, I think next week, we could just see more of the same.
HILL: I feel like buckle up is really becoming the phrase of 2025. And I appreciate --
STEWART: Or hide.
HILL: Yes, thank you. Hiding may not be a bad idea.
Let's take a quick look at oil prices. Theres been a real follow on oil prices throughout the day because we have seen well. And there you go. You can see why.
Crude down nearly 7 percent. Brant crude down 6 percent. Of course, this is in reaction to everything that we're seeing around the globe.
And in terms of China's reciprocal tariffs on U.S. goods, there's also a major focus on American farmers. The impact that it will have on them. Keep in mind China is the top U.S. market in the world for American soybeans. The American Farm Bureau has been warning now for weeks that those tariffs will really hit rural America hard.
The chair of the American Soybean Association says China and other countries they believe will begin looking to other markets. In fact, get a little bit more to say to my colleague Kate Bolduan.
(BEGIN VIDEO CLIP)
JOSH GACKLE, CHAIRMAN, AMERICAN SOYBEAN ASSOCIATION: Our biggest competitor when it comes to soybeans and corn as well, is South America, specifically Brazil. So, China and other countries are going to start looking to build more long term relationships with -- with those suppliers, when you get into a trade situation like this.
So, it feels -- it, I guess, the best way to say is it feels really risky. I mean, I know what the administration is saying. Theres going to be an adjustment period. I heard the comments from Secretary Rollins there that, you know, expecting an adjustment period as well, but.
But times are difficult here, not -- and it's not just on my farm. This affects our - our communities, our local businesses, our small businesses all across rural America that rely on a, you know, a healthy and successful farm economy.
(END VIDEO CLIP)
HILL: Well, U.S. President Donald Trump is now extending the deadline for TikTok to sell off its U.S. operations. The owner, ByteDance, had until Saturday to sell or face a ban in the United States. You may recall, of course, last year, Congress passed a bipartisan bill which then former President Joe Biden signed into law, which required ByteDance to sell the app's U.S. operations. [15:10:01]
Now, there are said to be several interested buyers. It's not known, however, whether ByteDance will accept any of those offers.
Clare Duffy joins me now with more.
A lot of back and forth here, perhaps not the most surprising move that President Trump has decided now to extend this this pause, if you will, on the ban.
CLARE DUFFY, CNN BUSINESS WRITER: Yeah, basically what we're hearing and what President Trump is saying here is that more time was needed to work out this deal. This, of course, is going to be great news for TikTok's 170 million American users. ByteDance now has an additional 75 days to agree to a deal here.
Here's what Trump said on Truth Social just a little bit ago. He said: My administration has been working very hard on a deal to save TikTok, and we have made tremendous progress. The deal requires more work to ensure all necessary approvals are signed.
And this is interesting, right, because both Trump and Vice President Vance had been saying in recent days that they expected to have a deal by this April 5th deadline. Trump now indicating that it is going to take more time to finalize that deal, as we have seen this sort of flurry of interested buyers in the last week, even some companies submitting bids to buy the company.
And look, the ByteDance also is now saying -- is now acknowledging the fact that it is in talks with the white house about a potential deal here, but it said that no agreement has been reached and that there are key matters still to resolve. It also said that the Chinese government will have to sign off on whatever deal is made here. And I think that is the big question is whether Trump can get the Chinese government to agree to sell off this very popular, important platform, especially amid an escalating trade war between the United States and China.
For me, the other big question here is how members of Congress who voted on a bipartisan basis to pass this law last year over national security concerns, national security concerns that were upheld by the Supreme Court earlier this year.
How are they going to respond to the fact that this ban is now being pushed off once again?
HILL: It's such a great question, right? And they were asked the first time on that. President Trump was asked because, of course, he raised concerns about national security.
DUFFY: He was the first one to try to ban TikTok in the first place.
HILL: Right.
DUFFY: So, it's really interesting to see this reversal from him. HILL: It is. And to your point, interesting to see how the leverage
has shifted with these tariffs. So, watch this space. More to come as they say.
Claire, appreciate it. Thank you.
Well, Donald Trump says countries will do anything when it comes to making a deal on tariffs. Just ahead, we'll take a look at how different governments are taking on this trade war.
(COMMERCIAL BREAK)
[15:15:36]
HILL: China's new tariffs on the United States may be the biggest tit for tat response yet to Donald Trump's trade war, and the U.S. president seems to think China has made a mistake, writing on Truth Social: China played it wrong. They panicked. The one thing they cannot afford to do.
Yesterday, Mr. Trump claimed countries were lining up, though, to do a deal.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Every country has called us. That's the beauty of what we do. We put ourselves in the driver's seat.
If we would have asked some of these countries, almost most of these countries to do us a favor, they would have said no. Now, they'll do anything for us. The tariffs give us great power to negotiate. Always have.
(END VIDEO CLIP)
HILL: Some countries are now bending to Mr. Trump's demands. Cambodia, which sends more than a third of its exports to the United States, announcing today an immediate reduction of tariffs on U.S. goods. Mr. Trump says Vietnam's secretary general is promising similar after what he referred to as a very productive call.
So, what is the best way for countries to respond to these tariffs from the U.S.?
Phelim Kine is the China correspondent for "Politico".
Good to have you with us. I mean, is there I don't know that there's really a one size fits all response unless it is. You tell me.
PHELIM KINE, CHINA CORRESPONDENT: Yeah. I mean, look, my inbox is full today with messages from diplomats here in Washington saying, what do we do? What does the Trump administration want? What exactly is the end game here?
And the thing is, we don't know. We have Trump. We have Marco rubio, we have political adviser Stephen Miller all saying this isn't a deal making option here. We are changing the way we do business. We are readjusting or retooling the global economy.
And this is the way it's going to look from now on. We're going to make things in the U.S. Everyone else has to come here and do stuff. So, it's really hard if you're Vietnam or Cambodia or the EU or China to say, well, we can't do that on a dime, are we? Do we have to just suffer with this?
And so, you know, we saw China basically drop the gloves and bring down the hammer in terms of a 34 percent tariff on U.S. products to see if they can bring the U.S. to a more reasonable stance.
HILL: What are the chances that that does, in fact, bring the Trump administration to the bargaining table?
KINE: Well, again, you know, even during the election campaign, President Trump, Vice President Vance warned that their -- that their economic plan was going to cause some pain, that there would be a teething period as they bring industries home and change how the U.S. has done business.
And so, you know, in the short term, it looks as though they are wanting to double down and see how they can weather this, weather this out. I mean, we had Marco Rubio today saying, look, the stock market isn't the whole economy. Those are just investors panicking. We have a longer term approach.
And so, you know, if that's what they stick to, we are looking at a situation in which us consumers are going to suffer. Markets are going to tank. And you know China's -- sorry -- U.S. trade partners are going to have to respond in kind. And that is a very bitter trade war.
HILL: So, it's also, you know, as you look at this, you have the president posting on Truth Social. The policies are never going to change. Also posting. But hey, now's a great time to invest. Everybody, come here. You're going to get rich.
But there's the reality, as you point out, that so many businesses cannot just shift on a dime. Even businesses already in the U.S. I feel like a broken record, but it's important to point out the realities for -- for many folks, when it comes to manufacturing, it's not just about the building and the infrastructure and the machinery. It's also the workforce.
That doesn't happen overnight, especially when there's no -- no guarantee that there will be a return on your investment.
KINE: Exactly. Like, you know, you can't turn on it. You can't turn the world economy, and this network of imperfect but mutually beneficial trade relations that have grown up over the -- over a period of, of a century, you can't just flick the switch into something new overnight.
And so, if the administration sticks to this, if those liberation day tariffs stay in place for the medium to long term, we're looking at a really serious impact on the U.S. economy and on the U.S. main trade partners. And to a large extent, you know, that's really a bit of a windfall for China.
[15:20:01]
Beijing has been planning for this for years.
And, you know, they are ready to take steps to mitigate the pain they have and extend their influence among developing countries who are really going to be hit by this. Vietnam, Cambodia, for example.
HILL: I was going to say you read my mind on that, but this really does open up potentially a massive opportunity for China, which is exactly what the Trump administration doesn't want.
KINE: Yeah, I mean, look, it's no accident that later this month, where's Xi Jinping going? He's going to Southeast Asia, a Southeast Asian tour. What's going to be his narrative?
We China, the peoples of China are the leader of the world in terms of the rules-based trading economy and the World Trade Organization. And, by the way, we can invest in your infrastructure, too. It's a pretty winning argument when your other main trading partner of the U.S. is essentially slamming the door on you in terms of these sky high tariffs.
HILL: Phelim Kine, great to have you here. Thank you.
KINE: Thank you.
HILL: I do want to get you to some breaking news in a story that we have been following very closely. A Maryland father who was -- who was sent to that prison in El Salvador. A hearing today, I believe we may have an update on that.
Stay with me. We're going to get you that update in just a minute while we work to establish that connection. I do want to bring you up to speed on what were also seeing out of Brussels, where U.S. Secretary of State Marco Rubio, of course, was to meet with world leaders and has been defending President Trump's tariffs, acknowledging, as you just heard there, that the price hikes are impacting global markets, but also trying to temper that.
(BEGIN VIDEO CLIP)
MARCO RUBIO, SECRETARY OF STATE: Around the world, including in trade and global trade, they just need to know what the rules are. Once they know what the rules are, they will adjust to those rules.
So, I don't think it's fair to say economies are crashing. Markets are crashing because markets are based on the stock value of companies who today are embedded in modes of production that are bad for the United States.
(END VIDEO CLIP) HILL: So those remarks from the secretary of state coming at a NATO gathering, where he was also discussing his talks with Russia to end the war in Ukraine.
Alex Marquardt has more on that.
(BEGIN VIDEOTAPE)
ALEXANDER MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: There was no avoiding the subject of tariffs here at NATO, even if it wasn't part of the official conversations, it did loom large. The Canadian foreign minister, for example, telling me that it was difficult to focus on these important NATO issues when there's a trade war going on.
But at the end of these two days of meetings, the secretary of state, Marco Rubio, defended the tariffs from the Trump administration. He pushed back on questions about whether economies around the world are collapsing. He said that, yes, the markets are crashing, but that they are reacting to what he called a dramatic change.
He said that there has to be a reset in the global order of trade, and that businesses and markets would readjust once they got used to what he called the new rules. There was also a lot of discussion, of course, about Ukraine here at NATO, the future of Ukraine, a lot of praise for the United States, for the efforts that it is undertaking to try to get to a ceasefire and a peace deal between Russia and Ukraine.
And Rubio actually revealed that before coming here to brussels, he had sat down with Kirill Dmitriev in Washington. That's the kremlin aide, the Putin ally who went to Washington earlier this week. And the message that Rubio said he gave to Dmitriev was that they need to see concrete steps that the U.S. wants to be convinced that Russia does indeed want peace.
Here's a little bit more of what he had to say when I asked him about that meeting.
RUBIO: Well, we're not interested in -- and I'm not accusing them of this. I'm just telling you what we're not interested in is negotiations about negotiations, that we're not going to continue this forever. So, none of it was threatening. I think it was more an explanation of this is our timeline.
And at some point, it will be clear whether you want peace or you don't want peace. And that time is coming. It's pretty short.
MARQUARDT: That timeframe is just weeks, Rubio said, not months. And that's the message that he said he wanted Dmitriev to take back to Putin in Moscow.
Meanwhile, NATO allies have been telling Rubio and other U.S. officials that they believe that President Putin is stalling, that he's playing for time, and really that the only kind of peace deal that he would go for is one that is on his own terms. Alex Marquardt, CNN at NATO headquarters.
(END VIDEOTAPE)
HILL: And we do want to get you out to that breaking news in the case of a man who was mistakenly deported to El Salvador by the U.S. government. A judge now ordering that man be returned to the United States.
Priscilla Alvarez is live for us.
Priscilla, so you were in the courtroom, ordering now that Kilmar Abrego Garcia must be returned. How and when is that going to happen? Do we know?
PRISCILLA ALVAREZ, CNN CORRESPONDNET: We do. The judge saying that it needs to happen by 11:59 p.m. on April 7th. So, this was a week that began with the administration conceding in a court filing that it had mistakenly deported Abrego Garcia to El Salvador. This is Salvadoran national, who is a resident of Maryland and the administration saying that it was because of, quote, an administrative error.
Now, a few days later, were ending the week with a ruling from a federal judge directing the government to return him to the United States. There were a couple of key points that came up over the course of the hearing. The first was a status that Abrego Garcia had in the United States, protecting him from being deported to El Salvador.
In 2019, an immigration judge granted him what is called withholding of removal, meaning that he could not be deported to El Salvador over fear of persecution, even though he could still be deemed removable just to any other country that wasn't El Salvador. Well, fast forward to last month, when he was detained by immigration and customs enforcement and then shortly thereafter deported to El Salvador to a notorious prison there.
Now the administration has maintained that he has ties to the gang MS- 13, his attorneys and his family say that is not the case, and that too came up during the course of the hearing. The judge asking for more evidence in this case, and the Justice Department attorney saying that the government was not producing any additional evidence beyond what was already in court documents. And insofar as it relates to that gang, those documents dating back to 2019, during his immigration proceedings.
Now, again, this was a significant case because it was an admission by the federal government that they had sent someone mistakenly to that notorious prison in El Salvador, recalled that they have also sent Venezuelan migrants to that same prison that is the subject of another case. And the attorneys saying after the hearing that this was a victory. But they note that the administration could still seek to appeal, and the real victory will be when Kilmar Abrego Garcia is able to come home.
His wife was also in the courtroom. She -- having some level of relief with this ruling. But, of course, there's a lot that can still happen between now and Monday if the administration is to appeal. But the key part of all of this that the attorneys and the family have said over and over again is that the administration did concede that they made an error here. Therefore, they're hopeful that they won't try to seek an appeal.
Lastly, the administration had previously said that they can't return Abrego Garcia back because he is in Salvadoran custody. Well, the judge wasn't keen on that, noting, of course, that the administration has provided millions of dollars to El Salvador to detain these migrants. Therefore, she said it should be available to the U.S. government to ask for him back.
HILL: Yeah, absolutely. Priscilla, really important developments. Appreciate it. Thank you.
Still ahead here, the U.S. economy with one piece of good news on this Friday, but didn't seem to have much of an impact as president Trump's trade war really has an impact on the markets for day two.
(COMMERCIAL BREAK)
[15:31:08]
HILL: From Europe to Asia, U.S. stocks once again getting hammered today in the wake of sweeping new tariffs imposed by President Trump. You see the numbers there on your screen. The three major indices here in the U.S., all in the red. We are about 30 minutes away now from the closing bell on Wall Street, a day and likely a week that many folks would like to forget.
There was a better-than-expected U.S. jobs report today for the month of March, but it wasn't enough to calm the markets as, of course, we look at the impact of these tariffs and this rapidly escalating trade war. We'll take a closer look at those jobs numbers, adding 228,000 jobs in March, again, better than expected. But it wasn't enough to really shift things on Wall Street today.
Vanessa Yurkevich is live at the New York Stock Exchange.
It has been a rough day, to put it mildly, down there on Wall Street, Vanessa.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yeah, certainly. I'm just taking a look over my shoulder at the numbers. The Dow down about 1,700 points at one point today. It was down 2,100 points. The S&P down more than 4.5 percent and the Nasdaq down more than 4.5 percent as well.
And this is really just all in response to this global trade war and this retaliation that we are getting from China. The country announcing a 34 percent tariff on all U.S. exports going into China.
An analyst, Dan Ives, he's with Wedbush, he said in a note earlier this morning that he's really never seen anything like this on Wall Street. And he pointed to the dotcom bubble, the financial crisis, COVID. And he says that he's never seen anything like this because he believes that this is self-inflicted, that it did not have to be this way, that Wall Street did not have to look like this. And this trade war did not have to be what it is becoming.
Investors were really waiting to see just how much other countries would retaliate. And we heard from China that 34 percent retaliation rate. And we're waiting to hear from other key trading partners like the European Union. President Trump announced a 20 percent tariff on goods coming from the European Union. And so, what will they respond with?
Really, investors are dug in on really thinking this is going to be the worst-case scenario. And that's what they're pricing into markets. And that is ultimately what you're seeing in this selloff.
A couple stocks have ticked up into the green today, Nike and Lululemon after we got word that Vietnam was talking to U.S. trade representatives about potentially lowering their tariffs to zero. But that's really just a small bright spot in this sea of red just markets down over 4.5 percent right now just before the close, Erica.
HILL: It is -- it is really something that other small bright although, of course not enough to change what we're seeing in terms of the overall reaction on Wall Street. What's this jobs report for the month of March? Much better than was anticipated.
YURKEVICH: Yeah. And I think on any other day, any other week, any other time, Wall Street would be celebrating this report, more than 100,000 jobs added over what was expected, 228,000 jobs added, the unemployment rate ticking up just slightly to 4.2 percent from 4.1 percent. That was also largely expected.
You know, I guess it says that the jobs market is in a solid place right now, but really a lot of analysts I've been speaking to have said that this is old news at this point. This is ancient news, really. Analysts and investors are looking forward trying to figure out what this trade war will mean for the overall economy.
I think the jobs report, in one way, may have taken some pressure off the Federal Reserve to make any moves or big decisions at their next meeting in May. We heard from Jerome Powell earlier today who really said that these tariffs were much more aggressive than the fed was expecting. We will probably see inflation rise and stick around for a little while.
[15:35:03]
And we could see a slowing economy. Obviously, not exactly what President Trump is hoping for, but really a direct result of this trade war.
HILL: Yeah, certainly not what he's hoping for, but definitely what we are hearing from a number of analysts and economists at this point.
Vanessa, I appreciate it. Thank you.
Well, despite that better-than-expected jobs report, layoffs in the U.S. are actually starting to reach the highest level since the pandemic, according to a new report, which says the main culprit is the federal government.
CNN's Kayla Tausche spoke with workers in Kansas City, a city that relies heavily on federal jobs, and they are reeling from Elon Musk's DOGE cuts.
(BEGIN VIDEOTAPE)
KAYLA TAUSCHE, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): More than a thousand miles from Washington, D.C., the impact of DOGE is hitting the heartland. In Kansas City, the federal government is the largest employer. A growing presence in recent years.
In Trump's first term, the Department of Agriculture relocated two divisions to the area to save money and move closer to farmers. Now, USDA is among the many agencies scaling back here. All told, job cuts are expected to be in the thousands.
QUINTON LUCAS, KANSAS CITY, MISSOURI MAYOR: It's going to hurt the city. Its going to hurt the people a lot. Its going to hurt their families, and it's going to hurt a lot of secondary businesses.
TAUSCHE: Kansas City's Democratic mayor says the city won't be able to absorb all the laid off workers.
LUCAS: We're not building a new 4,000 person factory to replace 4,000 jobs at the IRS at the same time, and frankly, these folks will have very different skills.
TAUSCHE: At Kauffman Stadium, Jason Buck has picked up bartending part time. He used to manage fleets of government vehicles until he was fired a month ago. The search for a new job was slow going.
JASON BUCK, GSA PROGRAM SUPPORT SPECIALIST: Get a spattering of interviews over the course of a month and, you know, haven't really had any headway on that.
TAUSCHE: While we spoke with him, his manager called to say he'd been reinstated. He doesn't know for how long.
Do you worry that this is temporary?
BUCK: Absolutely. Yeah. I -- yeah, I don't' know if I'm going back just to get be a part of a reduction in force at some point, or. I have no idea what to expect.
TAUSCHE: Daniel Scharpenburg worries his job is on the line, too. He joined the IRS 16 years ago. With two teenage kids, he's taken a second job to save money.
DANIEL SCHARPENBURG, VP, NATIONAL TREASURY EMPLOYEES UNION & IRS EMPLOYEE: Some days, I get off work here and I go straight to the movie theater. I bring my work uniform with me and I change, and I go straight to the movie theater and work there. I'm 45 years old. I'm too old to be working two jobs. TAUSCHE: The owner of Whataburger Coffee says business has picked up,
with federal workers ordered back to offices, but he fears its short lived.
UNIDENTIFIED MALE: Definitely the mood just feels sort of different. Everything feels kind of stressful, uncertain. It's just kind of created this mood of anxiety overall.
TAUSCHE: The layoffs will ripple through the economy. Many federal workers say they may have to sell their home. Others canceling family vacations. For each federal worker who loses their job, economists say the pullback in their spending could cost the city another one and a half jobs, multiplying the effect on unemployment.
The Kansas City metro is blue, but polls show that voters in Missouri still largely support Trump.
Shannon Ellis leads the treasury employees union here and says her members feel the cuts hitting close to home.
SHANNON ELLIS, CHAPTER PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION: I've had people approach me in this building and state, look, if I knew that this was what was going to happen, that all these attacks on federal agencies, I would have voted a different way. So, you can't say that all Americans still support what's happening.
TAUSCHE: Republican Senator Josh Hawley was among the proponents of moving these agencies from Washington to states like Missouri. He told CNN that he thinks the state's voters are largely supportive of the move to downsize. The next major wave of federal layoffs is expected in mid-May, but employees say they expect to learn their fate in the next two weeks.
Even so, as we were leaving Kansas City, employees reached out to tell me about ongoing cuts at the Department of Health and Human Services, with some workers terminated on the spot. So, this is happening in real time and with very real world impact.
Back to you.
(END VIDEOTAPE)
HILL: Important reporting from Kayla Tausche and we'll be right back.
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[15:42:14]
HILL: The search for new president starts today in South Korea. The country's constitutional court upheld the impeachment of the previous president, Yoon Suk Yeol.
CNN's Mike Valerio has the details.
(BEGIN VIDEOTAPE) MIKE VALERIO, CNN CORRESPONDENT: We're pretty much in the center of the old city. For anybody who's ever been to Seoul. This is right in front of Gyeongbokgung Palace, Gwanghwamun Gate. It's been here for centuries, a gathering point, and this has been a gathering point for people who are rallying against the now former president of South Korea, Yoon Suk Yeol.
But a lot of people are starting to leave. It's a far cry from the thousands of people who were cramming in close to the constitutional court and all the streets and alleyways that had not been closed down by police.
So, people here are having their after-lunch sort of victory celebrations. And now what happens next is that we have all on our phones, read the throwing in the towel statement, so to speak, so to speak, of the former President Yoon Suk Yeol, where he apologized and said a word of thanks to his supporters.
Now, we did speak to an anti-Yoon demonstrator. Listen to her reaction, what she felt when the verdict came down earlier today.
KIM NA-YOUNG, ANTI-YOON PROTESTER: It's hard to describe, honestly, excited, happy. But the moment the constitutional court said that he was impeached, I started bawling. I cried for four minutes and I couldn't talk. And it was just such a -- it was such a heavy feeling.
VALERIO: And this is a very visceral moment for millions of South Koreans, because this was all about martial law. This all goes back to December 3rd of last year, when the now former President Yoon Suk Yeol to try to solve a political crisis, sent troops, members of the military to the national assembly a couple of kilometers away from where were standing, the heart of South Korean democracy in the name of from his point of view, resolving a logjam, resolving a political crisis.
But those gathered around us, certainly the majority of South Koreans said sending in the military is not how a democracy functions. You don't send troops to get rid of a political logjam and solve a crisis. So, where do we go from here? Later in the evening, down one of these main avenues, this is where we're going to see a rally of anti-Yoon supporters, those who are thrilled with today's decision, 7:00 p.m. local time by city hall.
We're now headed towards elections within the next 60 days. That brings us around to June 3rd. The country is going to need to elect somebody who can go toe to toe with the Trump administration after 25 percent tariffs levied against South Korea yesterday.
(END VIDEOTAPE)
[15:45:03]
HILL: And our thanks again to Mike Valerio reporting from Seoul.
Well, as Israel launches a major expansion of its military operation in Gaza, President Trump says he expects to welcome Benjamin Netanyahu to the U.S. as soon as next week. The U.S. president says he spoke with the Israeli prime minister on Thursday.
Here's more of what he told reporters on board Air Force One.
(BEGIN VIDEO CLIP)
TRUMP: Gaza is a very, very important thing. It's -- it's been under siege for many, many years. And it's a shame. It's a shame.
A lot of people die in Gaza. Gaza has been a place where you have a lot of people die. A lot of bad things happen in Gaza. We'll see what we can do about it.
(END VIDEO CLIP)
HILL: Meantime, a senior Hamas source telling CNN the group has now rejected Israels latest proposal for a temporary ceasefire in Gaza. That plan called for a 40-day pause in fighting in exchange for the release of 11 hostages.
Still ahead here in the CNN NEWSROOM, millions of people in the U.S. are under flood alerts during a once in a generation flooding event. Those details after the break.
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HILL: A powerful storm slamming parts of the south and the Midwest this week in the U.S., triggering what's being called generational flooding.
Take a look at the scene in Arkansas. This was on Thursday after tornadoes ripped through the region, leveling homes and anything else in their path. As you can see, the storm also bringing heavy rain and flash flooding to the Nashville area in Tennessee. Forecasters warn more severe weather is on the way.
CNN meteorologist Derek Van Dam has a look ahead.
(BEGIN VIDEOTAPE)
DEREK VAN DAM, AMS METEOROLOGIST: The National Weather Service had warned of a once in a generation flood event, and we are living it in real time. These are the scenes coming out of Nashville, Tennessee. Look at these apartment complexes and some of the fully inundated vehicles. Those are complete write-offs in terms of an insurance standpoint and whether or not that vehicle will actually work any longer.
Guess what? This is not the end of the rain. We have millions under flood alerts stretching from the Ohio River Valley towards the southwest near the Ark-La-Tex region, and it continues to rain from the sky.
Our radar estimated rainfall totals has pockets indicating over ten inches of rain, and there's still more to come. These are the official observations. Weve topped nine inches in Lewisburg, Kentucky, and this is how much
rain we still have in the forecast. We're really highlighting some of these hardest hit areas, western Kentucky, Western Tennessee and the border of Missouri and Arkansas. This area could pick up another 5 to 10 inches locally.
[15:50:03]
So that gives us the high risk from the Weather Prediction Center that's been back to back to back. And these are extremely rare. Only issued about 4 percent of the time.
But keep in mind that about a third of all flood-related fatalities occur during these high risk events, and roughly 80 percent of all flood related damages occur in and around these high risk areas. So, on top of the flood risk comes the threat of severe storms, with storms moving over the same locations, we've experienced the past several days.
Here's our chances of tornadoes greatest outlined within this hatched area. Of course, our best probability for us very powerful tornadoes, EF2 or greater, right here across this hatched red shaded region. Thats an enhanced risk.
And then we see this multi-day severe weather setup refire as the atmosphere reloads into the afternoon tomorrow and then eventually starts to sag to the south and east, impacting places like Georgia, Alabama and the Florida panhandle before finally exiting by the end of the weekend. But boy, it has been extremely busy. From the flooding to the severe weather. Hundreds of reports.
Back to you.
(END VIDEOTAPE)
HILL: Derek Van Dam with the latest for us -- Derek, thank you.
We are just minutes now, of course, from the closing bell on Wall Street and it will cap off two days of big, big losses around the world triggered by these new tariffs from U.S. President Trump. Investors looking at another massive decline for U.S. stocks and coffee bean farmers are expected to really feel the heat once those tariffs from the Trump administration come into effect.
The world's largest coffee suppliers, the largest suppliers of raw coffee beans, are facing tax hikes of up to 46 percent costs. That will ultimately, of course, be passed along to importers, supermarkets, coffee shops and ultimately you, the consumer. Brazil, Vietnam and Colombia are among the largest exporters in the world.
Stefano Pozzebon is in Colombia's capital, with a closer look at how that country is bracing for a major, major exporter, of course, of coffee to the U.S.
STEFANO POZZEBON, CNN CONTRIBUTOR: Yes, Erica. Well, there is no better image to show you how big the coffee trade between Colombia and the U.S. is than just this shot. We are in the warehouse where the coffee is stored before being exported. And it looks to me as an endless amount of coffee. We were talking before about the scent, the aroma that is coming from these sacks. Think that every one of these sacks weights around 60 kilograms. And last year, Colombia sent about 5 million of them towards the United States.
And what is causing a lot of concern here in Colombia, Erica, coffee is a is an agricultural good that is harvested by small farmers. About 550,000 coffee farmers are a member of the coffee federation of Colombia. And if you were here with me, you would see where this coffee comes from. It comes from Santander. This one comes from another region called Boyaca or Huila. It's a -- it's a trade that takes over the entire country, and where millions of people depend on them.
And that is what is causing most of the concern, because we're talking here about, Erica, a small increase. The tariff is only 10 percent for Colombia. Vietnam, which is a major coffee producer, got 46 percent.
Other countries, Brazil, Costa Rica, Guatemala also got 10 percent. So it's not that big of a tariff compared to other goods. But at the same time, it's a good that everybody drinks, everybody consumes every single day. And so ultimately, at the end of the year, it will add up. And this is causing concern because so many jobs, so many workers are depending on the U.S. trade. The U.S. is clearly the largest purchaser of Colombian coffee, around 40 percent of these Colombian gold that I'm surrounded at right now is destined for the United States.
And so, where the United States, when the United States imposes a 10 percent tariffs on all of these, well, that is causing, of course, shivers down here -- Erica.
HILL: Yeah, absolutely. Stefano, I really appreciate it. Thank you.
Donald Trump's highest tariff has been levied on one of the poorest nations in the world. The tiny African kingdom of Lesotho was hit with a 50 percent tax. That is a number that analysts say could demolish the country's economy entirely. On Friday, officials put together a delegation in hopes that meetings in Washington could lead to a deal, as locals are sounding the alarm.
(BEGIN VIDEO CLIP)
TEBOHO KOBELI, QUANTUM APPAREL REPRESENTATIVE: We were supplying that market duty free. So, now with the 50 percent hike, it means it's impossible. Remember, we are competing -- we are competing with other countries worldwide. So, it is impossible.
PHATHELA MAMUTU, TEXTILE WORKER: I'm very worried about this happening from America. Well, 50 percent is not okay at all because our job cannot finish any time. Even the payment is going to be okay. I'm very worried about this.
(END VIDEO CLIP)
HILL: Recently, Donald Trump mocked Lesotho as a country that he said, quote, nobody has ever heard of.
Let's take one more quick check at the markets as we are just about five minutes out from the closing bell on Wall Street. As you can see, the declines continue actually up a bit, since we last checked just about 20 minutes ago. All three industries -- indices rather tanking, down more than 5 percent on the day, capping off two very difficult days for the markets. And of course, a rough, rough week.
My colleague Richard Quest will have much more just ahead at the top of the hour. Be sure to join him for "QUEST MEANS BUSINESS". I'm Erica Hill, thanks for spending your time with me on this Friday.
(COMMERCIAL BREAK)
QUEST: Closing bell ringing on Wall Street. Safe Bulkers, I think we're okay with them. Safe Bulkers ringing the closing bell. I bet they're not that delighted to be doing it particularly today. The market is in a terrible mess.
The Dow Jones is off at the worst point of the session, down 5-1/2 percent.