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CNN International: Tariffs On China Set To Rise To At Least 104 Percent; Markets Tick Up After Days Of Losses; Zelenskyy: Chinese Nationals Fighting For Russia In Ukraine; Musk-Navarro Rift Deepens. Aired 3-4p ET

Aired April 08, 2025 - 15:00   ET

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


[15:00:35]

RICHARD QUEST, CNN HOST: An hour left to trade on Wall Street. You can see how the markets are drifted down over the last couple of hours. Well, since the big beginning, the high point was the day. Those are the markets that we'll be talking about. I'll get into more details, the events that were going to grab and talk about.

Donald Trump's new China tariffs are on the way. More than 100 percent from tomorrow. China, though, is digging in.

The markets are rebounding and they're not. A dire start to the week, global markets have given back their gains.

And dumber than a sack of bricks. Elon Musk and Peter Navarro go head- to-head in a very public feud unfolding between President Trump's inner circle.

We're live from New York, along a special version of QUEST MEANS BUSINESS tonight. I'm Richard Quest. It's April the 8th, Tuesday. I'm Richard Quest, and I mean business.

(MUSIC)

QUEST: Good evening.

Wall Street investors are catching their breath today. Although tariff escalation is around the corner, if we look at the triple stack, you'll see having been higher. Now they're all sort of lower.

And we are in the dangerous hour in a sense when you get the book squaring ahead. Bearing in mind and we'll get to the detail of the China not withdrawing their retaliatory tariffs, and our escalatory tariffs are on the horizon. But you can see the falls, particularly on the Nasdaq, continuing through.

The Europe and Asia markets had rebounded. They saw the best in a sense. They were the bouncing back up. And there were some impressive gains. But you know again, they couldn't be with -- they couldn't -- they'd seen what was happening and they got the best of the day.

Paul La Monica is the senior markets analysis writer of "Barron's". Paul is with me. You know, I don't know about you, but I'm not surprised that the gains

have gone. There were -- there was never any justification for them in the first place.

PAUL LA MONICA, SENIOR MARKETS ANALYSIS WRITER, BARRON'S: Yeah, I agree with you, Richard. I mean, I think there had been hopes after some extremely painful days for the market. Over the past week or so, that maybe cooler heads would prevail, we would get some, you know, talks about potential trade deals.

But I think once again, were heading into the close with fears of both the U.S. and China really digging in their heels. And, you know, a full-blown trade war just between U.S. and China would be bad enough, even if there were some deals to be struck between the U.S. and, say, the E.U. and Canada and Mexico and other trading partners.

QUEST: Right. So let us go through this bit by bit, if you will be as kind could, sir. So what I'm calling the escalatory tariffs, the escalate, they come in tonight. Is that right, at midnight? And when do the next --

LA MONICA: Set of, as I understand it.

QUEST: -- and the higher level tariffs, are they also tonight at midnight, April the 9th.

LA MONICA: That is my understanding as well. The 104 percent, you know, I believe on China that is being talked about it seems as if the, the deadline is tonight. And that's what I think investors are focusing on right now.

But, of course, all of this could change in you know, a heartbeat. All it takes is a Truth Social post from the 47th president. And were off to the races with a different narrative.

QUEST: And there is going to be an executive order signed in the next hour or so. That that could be the opportunity to do that. And it's -- where do you think the markets are? I was reading your analysis on last night's close, but if you were to take -- take the temperature now, where do you think we are?

LA MONICA: Yeah. Investors are still incredibly nervous. You have the VIX, you know, popping again, that measure of volatility. You know back around 50 or so. That is clearly a sign of agitation to put it mildly.

I know the old -- my old beloved CNN fear and greed index is well into extreme fear territory. It was near zero not that long ago and it can't go into negative territory. It really just showcases how nervous people are.

[15:05:03]

And again, Richard, as you know, it's not just that investors are worried. We're going to have first quarter earnings reports from a lot of big companies coming soon. And their hands are tied. How do you commit to capital spending of any magnitude. If you're worried about tariffs and a potential global trade war?

QUEST: I've just been checking. So, it looks as if the others, like the E.U. tariffs and all the higher level non-baseline tariffs, they come in. It looks like at 12:01 on April the 9th. So that's tonight.

LA MONICA: Yeah.

QUEST: We're into the next round in a sense. It all gets a little bit more real tonight. Which is why when we look at the market, the Nasdaq is off 1 percent. This could go I mean, you see the problem following on from what you just said about nervousness is this old phrase that you and I have talked of before.

When the market capitulates, when it just basically says we're out, that's it. You know, go where you want, go as low as you want. We're no longer going to try and even defend these levels.

LA MONICA: Yeah. I think the problem is, as you pointed out, is that there was hope that we would have capitulation, you know, kind of people throwing up their hands and saying, all right, maybe now we start stepping back in to buy. We thought that maybe Thursday and then again Friday, yesterday, to a certain extent, because we had you know, a mixed day. It looked a little bit better.

But I think by and large, Richard, this is still a market that is driven, if not by abject fear. I think that was last week by the considerable amount of angst and just uncertainty. Not to use the overused word, but it's being overused for a reason. It is that uncertain right now. Not since the days -- early days of the COVID pandemic have we had this much lack of clarity about where things were headed with the global economy.

QUEST: Good to see you. I'm grateful. Thank you.

LA MONICA: Thank you, sir.

QUEST: The president's global tariffs, as Paul and I were just discussing, come into effect on Wednesday morning, at basically midnight tonight, New York time.

The White House says countries are desperate to negotiate a better deal with the U.S. president.

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: In total, since the liberation day announcement, nearly 70 countries have already reached out to the president to begin a negotiation. Countries are falling over themselves to reform their unfair trade practices in free, open their markets to our country. Why? Because these countries greatly respect President Trump in the sheer power of the American market.

(END VIDEO CLIP)

QUEST: Now, after midnight Eastern Time, the U.S. will impose that 104 percent tariff on China because Beijing refused to lift its own tariff on U.S. goods.

So, here's a timeline of what's happened in the last week. While many nations are scrambling to try to -- to do deals, China's commerce ministry is calling it a mistake as -- let's just go through this.

On April the 3rd, you've got the -- you've got the announcement of the tariffs, Liberation Day. April the 4th, the so the U.S. are -- actually I would say April the 3rd is the reciprocals. April the 4th is the retaliatories. April the 7th is the threatened of the escalatory. April the 9th, tomorrow, all reciprocal and escalatory come into effect.

Anna Stewart joins me from London.

Have I got that right?

ANNA STEWART, CNN CORRESPONDENT: I'm wondering whether we're going to need to come up with new terms for reciprocal and retaliatory, depending on how many rounds we go through, right?

QUEST: Well, you know, it sort of makes sense, doesn't it? I mean, because from what I can see, China's made it clear they are not doing it, therefore. Ergo, they will the U.S. will follow on. The E.U., we still don't know.

STEWART: So the E.U. is due to vote actually tomorrow, and this will be on the very, very first round of tariffs which wasn't necessarily on their -- I think steel and aluminum from much earlier in March, that will be voted on, that we kind of know about. We know that it's about $28 billion worth of tariffs on U.S. imports. The question is what happens after that.

I think it will be implemented from the E.U. next Tuesday, Richard. But then they're going to discuss auto tariffs and the so called U.S. reciprocal tariffs of 20 percent. And those probably won't be implemented until another month from there.

QUEST: Right. But the reciprocals, the 20 percent reciprocals on the E.U. come into force tonight.

STEWART: Yes. On the E.U., that will come in force at one minute past midnight in the U.S.

QUEST: And what's the mood. Where -- I mean, obviously I know 27 nations. You're going to get different views, but is there any consensus?

STEWART: I think what's been interesting in the last few days is the fact that they are both preparing for retaliation. They are also negotiating and have, it turns out, since February, been negotiating with the offer of zero tariffs on industrial goods and cars. But that has got them absolutely nowhere. And at the same time, of course you do as you say, have 27 member states who have different appetite for retaliation, particularly if you're looking at big economies like France and Germany or with oversize sectors like cars, which will have a 25 percent tariff versus some of the other nations that are perhaps more reliant on, say, services which aren't currently targeted from the U.S.

So there's a mix of opinions there, but they're settled, I believe, on the first round, the votes tomorrow are expecting that to go through, but what happens next and what the balance is between retaliation and negotiation that remains to be seen.

QUEST: So, so -- I suppose you and I just need to agree. We had reciprocal retaliatory today. Weve got escalatory or escalated tariffs. That's the one that the U.S., the 104, the last in the next 50.

I wonder what we go after that if China goes something else.

STEWART: Yes. We'll do we go sort of reciprocal times two retaliatory times three. I mean, do we number them, Richard. Who knows?

QUEST: What -- we'll work that when we'll get there.

STEWART: We'll have a chat.

QUEST: We'll have a chat.

There we go. Thank you, Anna. Good.

Earlier, President Trump's USTR, the trade rep, defended these expansive tariffs before the Senate Finance Committee.

(BEGIN VIDEO CLIP)

JAMIESON GREER, U.S. TRADE REPRESENTATIVE: Senator, yes, they're scheduled to go into effect. We are having negotiations with all kinds of countries at this time. The presidents fixed in his purpose the nature of the emergency that I discussed earlier is not something we can wait on anymore. So, we'll -- we will have the president's plan go into effect, and we're coupling that with immediate negotiations with our partners as they seek to.

SEN. RON WYDEN (D-OR): So, it's not a question of something being scheduled. You're committing this morning that they're going to go into effect.

GREER: This is what the president has said, Senator. Yes.

WYDEN: How many countries? I understand it's over 50.

GREER: That are negotiating with us.

WYDEN: Yes.

GREER: We have about 50 that have come to speak with us.

(END VIDEO CLIP)

QUEST: Well, the senator in that case, Manu Raju, and -- you know, one of those that is highly concerned by this, I guess, and we have a resolution in the House that probably doesn't have much stand much chance, I don't know. Well, you tell me you're the expert.

Is there a groundswell of -- of angst in either chamber that could doom these tariffs?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Not yet. And I say yet because there are a lot of Republicans who, of course, control both the U.S. House and the U.S. Senate who have concerns about the presidents strategy but are allowing -- want to give him some space to actually implement it. But if these continue to go on, they have drastic consequences on the economy, raise prices and constituents of theirs start to raise concerns. Perhaps that could change the calculus on Capitol Hill.

Now, Richard, I caught up with a number of Republican senators, and I asked them, how much space are they willing to give the president? And they made clear they have concerns and they may push back, but they're going to wait to see how this plays out. Listen.

(BEGIN VIDEO CLIP)

RAJU: You seem to have concerns about some of these companies could go into bankruptcy because of this policy. Explain your concern.

SEN. RON JOHNSON (R-WI): I have those concerns I've been expressing for quite some time.

RAJU: Do you think that you think that this could lead to bankruptcy?

JOHNSON: In certain businesses? It's a real possibility.

SEN. THOM TILLIS (R-NC): Of course, it concerns me. I mean, my God, it's a stability issue. You know, businesses hate uncertainty. We've got a lot of uncertainty in business. You always come up with decisions. You create one throat to choke. I'm just trying to figure out who I should compliment or who I should hold accountable.

SEN. TODD YOUNG (R-IN): Congress should play a meaningful role when it comes to developing revenue measures, whether it's taxes or tariffs. I think the president needs broad discretion to be able to enforce whatever Congress develops and implements. And so, I actually have been working with the administration to give them more tools to implement existing tariff laws.

(END VIDEO CLIP)

RAJU: And that last comment came from U.S. Senator Todd Young of Indiana, a Republican who has signed on to legislation that would give congress the essentially a check on the president's tariff powers. But the catch here is, Richard, that the speaker of the House, Mike Johnson, does not support that effort, says the president should be given latitude. And the Republican leader of the United States Senate, John Thune, is -- has some concerns about the tariff policy. But he also is letting this does not plan to bring this to the floor because he cited the president's threat to veto that legislation if it were ever to come to his desk. QUEST: So one of the interesting things is I was talking last night on

Abby Phillip "NEWSNIGHT", and one of the -- it's really just a question of how much pain at some point, if particularly in the House where they're all up for election next year, if they fear this is going badly because of the market reaction, they are going to want some plausible deniability. The politicians.

[15:15:02]

RAJU: Yeah, no question about it. In fact, that one of the senators you heard there that I just spoke to was Senator Thom Tillis. He's actually up for reelection next year. It could be one of the most hotly contested Senate races in the entire country.

I asked him after the hearing about whether or not how long he thinks this could go on for. He said it, by February -- he said by next February, that's the date he gave. He said they need to right the economy by then. If not, he said, there will be, quote, unforeseen political consequences for his party -- Richard.

QUEST: Manu, I can tell you with a few years of covering, you do the politics, I'll do the economics. If those tariffs are still on by next February, there'll be some -- they'll have more than a few problems to worry about.

Good to see you, Manu. As always, bringing that side of the equation to us. Thank you, sir.

It is QUEST MEANS BUSINESS, a double dose tonight. Just what the doctor ordered. Take twice daily.

The Ukrainian President Volodymyr Zelenskyy is demanding answers from Beijing. Apparently, two Chinese nationals have been caught fighting alongside Russian soldiers.

(COMMERCIAL BREAK)

QUEST: Our breaking news, the White House says President Trump will impose a massive 104 percent tariff on China. Only hours from now, about nine hours from now. It's following Beijing's refusal to lift its retaliatory tariff of 34 percent on U.S. goods.

The White House press secretary explained the hardline approach a moment or two ago.

(BEGIN VIDEO CLIP)

LEAVITT: It was a mistake for China to retaliate. The president, when -- when America is punched, he punches back harder. Thats why there will be 104 percent tariffs going into effect on China tonight at midnight.

But the president believes that Xi and China want to make a deal. They just don't know how to get that started. And the president also wanted me to tell all of you that if China reaches out to make a deal, he'll be incredibly gracious, but he's going to do what's best for the American people.

(END VIDEO CLIP)

QUEST: Now, South Korea's acting president says his country will not follow China in fighting back against the tariffs.

[15:20:02]

Han Duck-soo told CNN's Mike Valerio that he plans to negotiate with the U.S. instead.

(BEGIN VIDEO CLIP)

HAN DUCK-SOO, SOUTH KOREAN ACTING PRESIDENT: For the tough negotiator, you don't have to be -- you don't have to have some kind of a permanent and prior perception on what the other party is doing. I think we should -- we should, you know, very -- you know, very cool way assess what this kind of 25 percent means for us. And we should, in a very cool way, should negotiate with them.

(END VIDEO CLIP)

QUEST: Phelim Kine is the Washington-based China correspondent for "Politico" with me now.

Good to see you. Thank you.

But it does look about as though whether it's on South Korea or China, Vietnam or any of those countries, those major tariffs, the -- the -- I'm trying to work out, remember, this is the original tariffs. They come into effect tonight.

And therefore, since there are no deals in place, all these countries are facing their exports, hitting it from tomorrow morning.

PHELIM KINE, CHINA CORRESPONDENT, POLITICO: Yeah. I mean, Richard, what we're seeing here is the global trade conflict equivalent of a slow motion traffic accident. And at midnight plus one EST here in the United States, it's collision time. And, of course, the biggest collision. I mean, it's -- it's more of an explosion is the fact that President Trump has followed through on his threat from yesterday to add an additional 50 percent tariff on top of that, 54 percent liberation day tariff, which effectively means it will be -- it will be absolutely not feasible for Chinese exporters to sell to the United States in the hope of making any profit.

You know, Richard, what we're looking at here is if this goes through and if both sides continue this staring contest, we're looking at a turbocharged decoupling of the U.S. and China.

QUEST: Right. But who suffers most in a sense, because the article -- I mean, obviously, China suffers because of the lack of business, but the article that was I think it was "The People's Daily" that certainly the policy position of China is, as I understand it, number one, there's lots of things that U.S. can only get from China. Number two, China is still a big investor. Number three, China has a greater capacity for pain.

KINE: Yeah. No. Absolutely right.

And look, Richard, we need to take into account the fact that Beijing has been planning for these tariffs for trade conflict with a second Trump administration for years. You know, what the measures that they're and they've -- they've -- they've been taking measures to prepare their economy and to psychologically prepare their population for potential austerity or hardship that this is going to inflict on them, while at the same time they've been going at pains to reach out to other trade partners, particularly in Southeast Asia.

We're going to see Xi Jinping heading to Southeast Asia, Malaysia and Vietnam and Cambodia, promoting the narrative that we are the new leader of a rules-based WTO guided trade -- trade regime. And you need to deal with us now.

So -- and when you ask who's the loser? I mean, look, the U.S. is not prepared for this. You know, it's clear that President Trump really believed that he could bend Xi Jinping to his will with these threatened tariffs over the last, you know, over the last two months, essentially. And Beijing isn't budging.

And so, Trump is furious, but he's also facing -- he will be facing potentially serious, economic and political blowback for the pain that's going to be inflicted on the U.S. economy.

QUEST: So, there's two aspects I just want to quickly go through. The first is many other countries, particularly the E.U. is seriously worried about dumping that China not being able to sell goods elsewhere in the world will take advantage of trade relations, trade free trade agreements or whatever they've got and dump into those countries like the U.K. and the E.U.

KINE: Absolutely. Look, the Europeans are and should be justifiably terrified by the fact that as these tariffs come into place and as China has prepared for them, a lot of the -- of the shipments of goods that were originally going to be hitting the United States are heading toward the E.U. And the E.U., as of now, does not have the tariff safeguards necessary to fend them off.

QUEST: So, finally, if we look at the impact to the United States and where -- how -- how do you think the U.S. will feel this pain?

[15:25:03]

Because at 104 percent, the goods aren't going to arrive. So, it's not like it's an inflationary aspect. Some will, but most or many wont. Where -- how will it -- how will it evidence itself in the United States, do you believe?

KINE: You know, I mean, essentially every, electronic gadget that comes out of China is going to skyrocket in price. The shoes that Americans buy are going to go up in price. You know, right now it's ordering season, Richard, for the Christmas season here in the United States. And those margins are -- are shrinking if not disappearing entirely with these new -- these new tariffs.

So, it's going to be felt across the board. And what you're going to be seeing is you going to see businesses being hit. Small and medium- sized businesses are going to be very hard hit. We're going to see rise in bankruptcies, and consumers are going to be paying through the nose at a time when they've already been wrestling with very high inflation.

It's a very bad combination, Richard.

QUEST: Phelim, we'll talk more. I'm grateful, as always. You're kind and generous with your time. Thank you.

President Zelenskyy is demanding answers from Beijing after saying two Chinese nationals were captured fighting for Russia in eastern Ukraine. He says it's a clear signal that President Putin has no intentions of ending this war.

Fred Pleitgen is with me. He is in Berlin.

Did we know that? We -- we certainly knew about the North Koreans. But did we know that the Chinese might also have -- have shimmied up some help?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We didn't know this. And the Ukrainians apparently didn't know this either. They also are saying that it came as a surprise to them the way that Volodymyr Zelenskyy, the Ukrainian president, told it, he said that there was a combat engagement in the east of Ukraine, in the Donetsk area of Ukraine, between some Ukrainian soldiers and six Chinese fighters. And that's when the Ukrainians say that they took those two prisoners.

And the evidence that the Ukrainians say that they have is the passports of these two individuals, but then also other documents and even their credit cards as well. So, the Ukrainians are saying, look, we know that these people are Chinese, but they also say that this is a different quality than what they've been seeing with the North Koreans, because the North Koreans were brought there directly on the orders of Kim Jong Un. They are fighting on Russian territory. They're fighting in the Kursk region of Russia.

But the Ukrainians are saying, look, these Chinese fighters were actually on Ukrainian territory taking part in offensive operations there. And so, they want answers from the Chinese.

Now, a source tells CNN, so far, there is no evidence that this was a state sponsored thing. Of course, we know, Richard, that on both sides of the front line, on the Ukrainian side and on the Russian side, that there are foreign fighters, some of them coming there voluntarily, others being sent by their governments, like, for instance, the -- the North Koreans.

But the Ukrainians are also saying, look, the United States needs to get tougher on the Russians because they say it's evident that Vladimir Putin does not want a ceasefire. Judging by the fact that he's bringing foreign fighters to the front lines to fight against the Ukrainians, one of the things that we have to point out, though, Richard, is that so far we've not heard anything from the Chinese government about all of this. The Ukrainians say they're trying to get answers, and we've also not heard from the Russians yet either. So that's definitely something that were going to be asking them. Others are going to be asking them as well.

But the Ukrainians certainly are saying that this is definitely a significant development on the battlefield there in Ukraine, Richard.

QUEST: I'm grateful. Fred Pleitgen, thank you.

It is QUEST MEANS BUSINESS double dose tonight.

Still to come, the dispute. Now, they are two of the president's closest advisers. And yet Elon Musk has heaped huge insults on Peter Navarro. And they're slinging the mud back and forth, in a moment.

(COMMERCIAL BREAK)

[15:32:09]

QUEST: Hello, I'm Richard Quest. Theres more QUEST MEANS BUSINESS in just a moment.

Elon Musk is calling one of his White House colleagues a moron after the tit for tat over tariffs. And Prince Harry is at the London -- is in London at the royal courts of justice over who should pay for his security. All of that after the headlines because this is CNN and here, the news always comes first.

(MUSIC)

QUEST: After yesterday's volatile day for markets, today had been a bit more positive, but not so anymore. Look at the big board on Wall Street. Well, there you have it, 30, 28 minutes to go and the gains have all gone. And now we are into losses. We're going to monitor those losses.

The triple stack I think will show the Nasdaq, if we have the triple stack, they're easily available. Yes. Thank you. There we go.

The Nasdaq is off 2 percent. Youd have been up maybe four, three 4 percent in the morning or 5 percent or whatever it is. It's not even worth mentioning it because were so clearly obviously never going to hold those gains. And now, we are back to more normal environment, because at midnight tonight that's when the escalatory tariff comes in on China.

The Trump tariff policies revealed a deep rift between two of the president's top advisers. Elon Musk took aim at Peter Navarro's academic background over the weekend. For his part, Navarro said Musk really doesn't understand -- doesn't make his Tesla cars in the United States.

(BEGIN VIDEO CLIP) PETER NAVARRO, WHITE HOUSE SENIOR COUNSELOR FOR TRADE & MANUFACTURING: When it comes to tariffs and trade, we all understand in the White House and the American people understand that Elon's a car manufacturer. But he's not a car manufacturer. He's a car assembler.

(END VIDEO CLIP)

QUEST: It didn't end there. Musk posted this on social media: Navarro is truly a moron. What he says here is demonstrably false.

Kevin Liptak is here.

I mean, this is just to have two of the closest advisers to the president on crucial issues slanging each other off in public like this is, is unseemly. But Kevin -- Kevin -- Kevin, the president might actually like this because he loves to have people at each other's throats so he can divide and conquer.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes. And that is -- has been his strategy for a long time. Although I will say, you know, for as much as the White House is a pit of vipers, it has been in the first term, it was this time around, it's still rare to see one adviser call another adviser, quote, dumber than a sack of bricks. You know, you don't hear that even in the Trump White House very often.

And I think what is happening here is two things. One, Musk rubs people the wrong way, including in this White House, including people very close to the president who feel and in a lot of ways, he has overstepped some of his authority.

[15:35:06]

And certainly, Peter Navarro, when he's going out on television questioning Musk's opposition to these tariffs, is one of those people.

And I think the other thing that you're seeing is the relative waning, at least in the last two days of Peter Navarro's influence. You know, Musk wouldn't be going out there publicly criticizing him, publicly calling him a moron if it seemed as if Navarro's view of the world and view of trade was getting the upper hand. Certainly, he is supportive of the tariffs, but he has not been openly supportive of negotiating trade deals with other countries to try and ease some of the tariffs, which is exactly what the White House has been talking about for the last two days.

And so, I think it really does give you a sense of the relative positioning of these advisers in this White House, where people are always jockeying for influence.

Now, we did hear from the White House press secretary earlier today who said, yes, that the president does like to hear a variety of viewpoints from his advisers, that she framed this as an exercise in transparency by the White House, to put all of these views out into the open. And in her words, boys will be boys, and they will continue allowing them to publicly spar going forward. QUEST: Kevin, I am grateful. Kevin, we'll watch closely and we'll talk

more in the next hour. Thank you, sir.

Bill Ackman, the billionaire, is now trying to soften his recent criticisms of Donald Trump's trade policy. The hedge fund manager said the United States was in danger of an economic nuclear war. Now, in a new X column -- post, he says: Some have misinterpreted my thoughts on tariffs. I'm totally supportive of President Trump using tariffs to eliminate tariffs and unfair practices, blah, blah. He also reiterated his call for a pause before the tariffs are implemented.

Less than an hour before the initial post, he urges readers to read what he calls an important letter to Donald Trump from Shay Boloor, the host of the podcast, "Investing with the Boys". Mr. Boloor urged Donald Trump: We understand that globalization, as it stood, has reached a breaking point. But this isn't a correction of imbalances. This is a rupture without scaffolding.

Shay is with me now.

You know, I -- I read the letter by Ackman, and it is beautifully articulated. I mean, there's no getting away from it. It is. It is argued you can't replace a fragile supply chain with chaos and call it resilience. No, CA can confidently model a five-year capex. What you've created isn't reindustrialization. It's intentional sabotage of capital planning.

And now, he's gone back on it, basically. I mean, he spoke the truth. And in his view, and now he doesn't want to say it.

What's happened here?

SHAY BOLOOR, HOST, "INVESTING WITH THE BOYS": I mean, we're just clearly in a circus of misinformation and chaos right now. And I truly believe we -- I wish we were in a better environment because things were going great until we started seeing the slow unraveling of credibility from POTUS. This isn't just a communication failure. It truly is a failure of governance. And before I get into that, I do want to say I agree with the detox period that Trump was initiating when he became president.

I really do believe that the U.S. economy played the part of the rich guy at the table, picking up the check for -- for global order that no longer works in our favor.

However, this is not what this is. This is not detox. It's whiplash. There is no roadmap. There is no operational playbook. There is no clear message -- messaging of where this ends or what even metrics of success even are.

So, like you said, you can't replace like you mentioned a quote of I said, you can't replace a fragile supply chain with chaos and called resilience. That just does not make sense.

QUEST: So, if that's the case, how do you get out of this mess? And you've got clearly some sort of dispute between the administration, within the administration. China's not backing down. Everybody else is sort of wishy-washy, but it doesn't really matter.

You see, even if you do -- even if you do deals, the damage is now done. These tariffs come in tonight.

BOLOOR: I mean, you just saw today's market reaction. The SPI from intraday highs to now, that's a 6 percent pullback. Because I think the rally today, we saw was off headlines from friend shoring. But really there was no real policy traction with China and E.U.

And this in no ways was a confidence rally. It was purely a technical bounce. You might even call it a short covering. So, I think that this current market rally we had today should not confuse anyone. The absence of credible structure, capital continue retreating. It's not going to realign to different places.

And I would have supported a four-year plan to end all dependance on Chinese manufacturing.

[15:40:05]

But we didn't have that. We're just doing a peanut butter spread, and were even penalizing our allies at E.U. So, it doesn't make sense to me.

QUEST: So, let's go away from the headline in a sense of the tariffs. And let's now get some insight from you, if we may, about what I'll call the financial plumbing.

Because this level of dislocation and losses in a short period of time is giving cause for a private equity is now seeing a sell out by institutions, and we are seeing a lot of institutions having to short cover, particularly on -- on short selling.

And hence the dollar is weakening. It's no longer the safe haven. Gold is selling off when it shouldn't do.

So, what's -- what's your ear to the -- to the ground telling you.

BOLOOR: So, unfortunately, like businesses are, its nearly an impossible environment for businesses to make any kind of capex decisions on any kind of assumption of what the cost of goods are going to be, or even the regional sourcing, like this level of unpredictability is a nightmare if you're an enterprise. So there's no framework, there's no timeline for POTUS, there's no safe harbor for planning.

So, now, you're seeing everyone retreat. And the incentive right now is optionality. And that's what everyone's trying to get in this current environment, is that optionality. So once the fog clears, everyone can dictate what to do going forward.

QUEST: Right. But is it your feeling or gut feeling that there are people in the market that have got to sell to cover shorts?

BOLOOR: Absolutely. I believe I do believe that we're going to hit a new low come Q2. I think the boogeyman this upcoming earnings cycle will be no guidance. I think that's going to be universally the status quo across the board, and that's going to create a lot of noise because the market hates uncertainty, and that's going to create a ton -- that's going to pour fuel on top of the fire of what is happening in this environment.

So, I do think that there is going to be somewhat of a stagflation risk. And supply chains will stall. Innovation is going to slow down. And there's short term bump that POTUS is trying to get at, there might be a lot more fatal and might be prolonged 12 to 18 months. If that's the case. I can't see a world where his party won't betray him and get him out in six months, because he might be a man -- manmade recession the first since World War II, and that is a crazy statement to say just 100 days ago when he became president.

QUEST: I'm grateful for you. Thank you for joining us, I appreciate it. Thank you.

From Wall Street to the grocery store on Main Street, President Trump's tariffs are going into effect in just a few hours from now. And experts say Americans can expect to see the costs on their grocery run.

Vanessa is with me.

Where are you and what are you doing?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, I'm here at a grocery store in New York City, Morton Williams grocery store, and I'm talking to shoppers, but also the owner of this grocery store chain about what they can expect as tariffs come into play tonight and what they've been seeing.

But Richard, you know, I think a lot of people are going to feel these tariffs play out right here in the grocery store, first, because we're talking about perishable items, right? Things that come across the border every single day. Things like bananas.

These bananas right here from Costa Rica, these bananas right over here are from -- not those. These are from Ecuador. And these are countries that have just received a 10 percent tariff, that universal tariff that went into effect on Saturday.

I'm going to show you a couple other items that economists and that grocery store owners here are saying are going to see higher prices. The owner of this grocery store chain says that they haven't seen those high prices yet, and they haven't translated them to consumers yet, but they are expecting them.

And one of the things that is going to happen at midnight is we're going to see those higher reciprocal tariffs go into effect on countries like Indonesia and Vietnam, where this shrimp comes from. So, a higher tariff of about 32 percent going into effect on Indonesia, 46 percent on Vietnam.

Also, take a look over here. Salmon, we import from into the U.S. about $1 billion worth of salmon every single year. This salmon right here comes from Norway. They are seeing a 15 percent tariff.

I want to take a walk over to the coffee section because as you know, Richard, coffee prices have hit records in recent months because of bad weather, bad climate in key coffee growing countries, mainly in Africa. So here in the coffee section, these are nonperishable items. So maybe there's an opportunity for some of these companies are looking at right now to stockpile a little bit.

But, Richard -- but, Richard, the 10 percent tariff that has gone into effect on countries like Ethiopia and Brazil, that will trickle down eventually, maybe not right now for consumers, but as some of these stockpiled coffee items run out, that 10 percent tariff obviously catches up.

[15:45:02]

And for grocery stores like this, they have to pass those costs down to the consumer because, as you know, margins in the grocery store industry are just so, so slight -- Richard.

QUEST: Vanessa, I'm grateful. Thank you. Vanessa joining us from the grocery stores in Manhattan.

And don't forget, of course, we have got our QUEST MEANS BUSINESS basket of 15, 16 goods that we've put together. We'll see it and we'll see it over the next couple of weeks. We showed you some of them yesterday. They are the goods, they're the carry me basket coming up.

In a moment, we'll talk more. This is QUEST MEANS BUSINESS.

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QUEST: Prince Harry is back in London, where he's challenging the British government's decision to downgrade the level of his security when he visits the United Kingdom. It came after the duke of Sussex and his wife, Meghan, stepped down as working members of the British royal family.

CNN's Salma Abdelaziz reports from London.

(BEGIN VIDEOTAPE)

SALMA ABDELAZIZ, CNNN CORRESPONDENT: We weren't sure if we were going to see him today, but Prince Harry made a surprise appearance. Now he very rarely shows up in the U.K. and that's because Prince Harry says he fears for his safety. Thats exactly why he's shown up at the Royal Courts of Justice in London today for the next stage in a legal battle that has drawn out for nearly three and a half years now, he's seeking more security and protection for his family.

Now, all of this started in 2020, when Prince Harry and his wife, Meghan, stepped down from their roles as full-time working royals. At that point, his taxpayer-funded protection was downgraded from the highest level of security to a case-by-case basis. His lawyer in court today is arguing that decision was unfair, and that Prince Harry was singled out, in her words, for inferior treatment. Now, the appeal will mostly be held in open sessions, much of it live

streamed for the public to see.

[15:50:01]

This is a deeply personal case for Prince Harry, who says his family can't visit the U.K. because of his fears around their safety. Now, a judge is expected to issue a decision in writing at a later date.

Salma Abdelaziz, CNN, London.

(END VIDEOTAPE)

QUEST: And let's stay with royals in Italy, day two of the king and queen's state visit. King Charles and Queen Camilla paid their respects by laying a wreath at the Tomb of the Unknown soldier in Rome. The king is expected to address the houses of parliament in Italy, marking a historic first. On Wednesday, the royals will also celebrate their 20th wedding anniversary.

CNN's Ben Wedeman reports from Rome.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: In his first visit to Italy as king, Charles, accompanied by Queen Camilla, has come here to the colosseum part of a four-day state visit, coinciding with their 20th wedding anniversary.

Tuesday, the royal couple was supposed to meet with Pope Francis, but that meeting had to be postponed as the 88-year-old pontiff recovers from double pneumonia.

King Charles has had health problems of his own. Last month, he was briefly hospitalized due to the side effects of cancer treatment. He was diagnosed with an unspecified form of cancer in February last year.

King Charles is also scheduled to be the first British monarch to address both houses of the Italian parliament. Wednesday, Italian President Sergio Mattarella will host a black tie state banquet for the royal couple. At the request of the British monarch, the fare will be vegetarian.

Italy has rolled out a very big red carpet for the royal couple, but with the U.S.-led world trade war in full swing, markets in disarray and war raging in Gaza, Ukraine and elsewhere, this state visit seems like a quaint vestige of a world fast disappearing.

I'm Ben Wedeman, CNN reporting from Rome.

(END VIDEOTAPE)

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QUEST: Okay, the stock market in the U.S. early rally just all disappeared as the White House doubled down on tariffs against China. We're now well and truly at the low points of the day. The Nasdaq is off two points.

[15:55:00]

Well, you can see the numbers yourself. The Dow is down 1 percent at the S&P, one and three quarters. Tech stocks drag the Nasdaq.

Look at the Dow 30 and -- I mean, what can I tell you. Almost every stock is in the red. That's -- we're at the low point of the day comfortably, by the way, and only those at the beginning. If you're positive -- I can't quite see what the top one is there. It's a bit far away from me on the green.

It's UnitedHealthcare. Thats a standard one to be up. Chase's up. Boeing's up, but otherwise everything else is sharply lower.

The one to really watch is Apple just continues to fall for good reason. Those escalatory tariffs are coming into force over the next 24 hours.

Another hour of QUEST MEANS BUSINESS. I'm Richard Quest. Stay just where you are, and we'll carry on.

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