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U.S. and China Agree to Roll Back Tariffs; New Voices Emerging in Democratic Party. Aired 6-6:30a ET

Aired May 12, 2025 - 06:00   ET

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

POLO SANDOVAL, CNN CORRESPONDENT/ANCHOR: Was flying back from his college graduation at the University of Colorado, where he was an academic all-American. He'll be playing his first season with the Jacksonville Jaguars, and his seat mate said that she will be in the stands to see it.

[06:00:15]

I like to be polite, but unfortunately, I can offer no NFL tickets when I'm flying.

From Rahel, the team and I thank you so much for joining us for EARLY START. I'm Polo Sandoval in New York. CNN THIS MORNING starts now.

AUDIE CORNISH, CNN ANCHOR: It's Monday, May 12, and here's what's happening right now on CNN THIS MORNING.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Both sides on the reciprocal tariffs will move their tariffs down 115 percent.

(END VIDEO CLIP)

CORNISH: A trade agreement between the U.S. and China. Is this the beginning of the end of the tariff war?

Plus, President Trump plans to sign an executive order that he says would drastically reduce drug prices. Is his plan the right prescription?

And also, an imminent release. The last known living American hostage in Gaza could soon be freed. He's been held by Hamas for more than 500 days.

And opening statements set to begin in the case against Sean "Diddy" Combs. How defense lawyers plan to frame the relationship between Diddy and one of his accusers, Cassie Ventura.

It is 6 a.m. here on the East Coast. Here's a live look at the White House as the Trump administration announces a major trade deal with China.

Good morning, everyone. I'm Audie Cornish. I want to thank you for waking up with me.

We're going to begin with this breaking news overnight. A plan now in place for the U.S. and China to dramatically de-escalate their trade war for 90 days.

Top Trump administration officials emerged from days of high-level talks in Switzerland with an agreement. Both the U.S. and China are now rolling back tariffs on each other's goods, and the U.S. will now impose a 30 percent tariff on Chinese goods, down from 145 percent.

China has agreed to roll back their rates on U.S. products to 10 percent, down from 125 percent.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, U.S. TREASURY SECRETARY: The consensus from both delegations this weekend is neither side wants a decoupling. And what had occurred with these very high tariffs, as Ambassador Greer said, was the equivalent of an embargo. And neither side wants that.

(END VIDEO CLIP)

CORNISH: President Trump, hailing the weekend talks as a total reset. Investors also seem to be welcoming the news. U.S. Futures and other global markets spiking higher after the announcement.

Joining me now in the group chat: Stephen Collinson, CNN politics senior reporter; Margaret Talev, senior contributor at Axios; and Alex Thompson, CNN political analyst and senior political reporter at Axios.

Welcome back. You guys, I hope you had a good weekend.

So, even though I gave this description that makes it sound like it's kind of a done deal, "The New York Post" sets me straight, saying it is a Swiss tease, indicating that they are not fully sold, that this deal is done, but the details are going to come out. Stephen, what are you looking for?

STEPHEN COLLINSON, CNN POLITICS SENIOR CORRESPONDENT: I think this is -- the treasury secretary is right. It is a reset, but it's a reset from the situation that the president created in the first place.

He's going to declare this a big victory, because there will still be a 30 percent tariff. He believes in tariffs. Tariffs bring in money to the treasury.

CORNISH: Yes. And the numbers have been so high that 30 percent seems low, even though 30 percent is still really high.

COLLINSON: But the question here is -- is 30 percent tariff sufficient to bring back manufacturing and jobs to the United States that have gone to low wage economies abroad? Probably not over the long term.

Secondly, even if some companies assume the cost of some of those tariffs, if we all end up paying more for Chinese imports, then the consumer is going to be worse off.

So, you have to ask the question of has the president simply solved a crisis that he created himself and left us in a worse position? We'll see.

CORNISH: Here's what China signaled over the weekend, as the talks seemed to be at least making some progress. So, they're saying, "We're going to promote new development in the China-U.S. trade and economic relations and inject more certainty and stability into the world economy. China's position towards the trade war has been clear and consistent. And that is China doesn't want to fight a trade war because trade wars produce no winners.

"But if the U.S. Insists on forcing this war upon us, China will not be afraid, and we'll fight it to the end."

So, this is the talk coming out of the deal.

MARGARET TALEV, CNN POLITICAL ANALYST: Right.

[06:05:04]

CORNISH: Which is this is not our fault. We didn't want this. And also, if you keep doing it, we're like, ready to go.

TALEV: We're watching the headlines out of Switzerland over the weekend. The Swiss cheese deal.

And it was really interesting to see President Trump suggest, like, this is great. Great progress is being made. And then the comments that you'd see in Chinese state media were like, China will never give in to extortion, things like that.

So, I think it -- we have largely been watching a manufactured crisis. And now the president taking his foot off the gas, at least --

CORNISH: Yes.

TALEV: -- of that. It's a 90-day pause. I don't think, based on what the markets have done and what voters have been saying in polls, that it's a fight that he totally wants to reignite.

But it doesn't mean it won't happen. I mean, there's another three plus years left to this presidency.

But the initial reaction that we have all been hearing from CEOs, from experts on global trade, from economists, from experts on recessions, from voters who are going to be instrumental in the midterms, in 2026, are we really don't want an escalation of prices, empty shelves, a shortage of goods.

CORNISH: Yes. I like that you made that list, though. And, Alex, this is one for you, because Commerce Secretary Howard Lutnick was talking about this on CNN over the weekend. And he also was -- was kind of alluding to the idea of what the experts were saying about the tariffs. (BEGIN VIDEO CLIP)

HOWARD LUTNICK, U.S. COMMERCE SECRETARY: So, we do expect a 10 percent baseline tariff to be in place for the foreseeable future. But don't buy the silly arguments that the U.S. consumer pays. Businesses, their job is to try to sell to the American consumer. And domestically produced products are not going to have that tariff.

So, the foreigners are going to finally have to compete. They're going to have to compete. What happens is the businesses and the countries primarily eat the tariff.

(END VIDEO CLIP)

ALEX THOMPSON, CNN POLITICAL ANALYST: Well, you highlighted the key word just before, which was "certainty." And the thing is that Trump is trying to restore certainty into the markets. But the problem is, can you put the -- the toothpaste back in the tube?

CORNISH: Yes. Some people are saying the damage is done.

THOMPSON: Yes, exactly. Like, you cannot bring it back. The fact is that people don't know where they can actually buy products right now.

And, you know, can you bring manufacturing back from China to the United States? Well, now you're looking at this, and you're like, well, there's a 90-day moratorium.

And then Howard Lutnick, you know, he definitely speaks Trump's language when it comes to these tariffs. This is exactly sort of the Trump line when it comes to these things.

But the idea that the -- that businesses and countries are going to be the ones that just eat the tariff willingly --

CORNISH: Yes.

THOMPSON: -- and aren't going to pass on any costs, no -- no serious economist really believes that.

CORNISH: Well, not just that. I've noticed in some of the clips we play over the last couple of months, the average person is saying that now. The average person is saying, well, this prices are going to go up, prices are going to go up. They are not totally bought into this argument. It's not something that's the -- only the elites are saying.

So, group chat, stay with me. We've got lots to talk about today.

Coming up on CNN THIS MORNING, Ukraine's president says he's ready to meet face-to-face with Vladimir Putin. But will the Russian leader show up?

Plus, the fight against hidden junk fees. What you'll see before you buy tickets to Cowboy Carter and any other concert this summer.

And another air traffic control meltdown at Newark Liberty Airport. Is the problem just too many flights?

(BEGIN VIDEO CLIP)

SEAN DUFFY, U.S. TRANSPORTATION SECRETARY: We have to fix this, because what you see in Newark is going to happen in other places across the country.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[06:13:24]

CORNISH: It's almost 15 minutes past the hour. And here is your morning roundup.

Today, President Trump expected to sign an executive order aimed at cutting drug prices up to 80 percent. It's expected to be similar to policies he signed in his first term. Those were overturned by President Biden.

Now, both Medicare and its beneficiaries could see savings, but it could also limit patients' access to medication, according to some experts.

Ukraine's president says he is ready to meet face-to-face with Russia's leader after President Trump urged him to immediately accept Vladimir Putin's offer to hold peace talks in Turkey.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): And I hope that this time, Putin will not look for reasons why he cannot do something. We are ready to talk to end the war.

(END VIDEO CLIP)

CORNISH: Last week, President Trump proposed a 30-day, unconditional ceasefire, something Russia has ignored.

And the Colorado Rockies are looking for a new manager. They fired Bud Black on Sunday after nine seasons with the team. You can call it a rocky start. Colorado is off to one of the worst starts in Major League Baseball history, with a seven and 33 record.

And the partner of imprisoned Theranos founder, Elizabeth Holmes, is raising millions of dollars for a new A.I. startup. And it involves medical testing.

Holmes is reportedly an advisor. Keep in mind, she's serving an 11- year sentence in federal prison for misleading investors about her blood testing startup, Theranos.

Ahead on CNN THIS MORNING, a possible breakthrough in Gaza. We're going to tell you about the last known living American hostage who could go free as soon as today. Plus, where is the Democratic Party heading? How a leadership crisis

is creating a new opportunity for younger voices.

(COMMERCIAL BREAK)

[00:19:20]

CORNISH: Conversation continues in the Democratic Party, still searching for a voice and an identity after the stinging defeat in last year's election.

With longtime leaders like former House Speaker Nancy Pelosi and Barack Obama stepping back, the party is facing a generational shift. This moment presents an opportunity for younger leaders to step in and shape the party's future. So, take Parkland shooting survivor and DNC Vice Chair David Hogg.

(BEGIN VIDEO CLIP)

DAVID HOGG, DNC VICE CHAIR: Ultimately, what we have to do here is figure out how to bring people back in and work towards the bigger goal of advancing the future of this country and helping young people, especially, get by, so that they're able to focus on their lives.

Young people should be able to focus on what young people should be focused on, which is how to get laid, and how to go and have fun. Rather --

(END VIDEO CLIP)

CORNISH: Joining me now to discuss, Michigan's secretary of state, Jocelyn Benson. She's also the author of the purposeful warrior Jocelyn Benson. She's also the author of "The Purposeful Warrior: Standing Up for What's Right When the Stakes are High."

So, your book is coming at this defining moment. You're launching your own bid for governor of Michigan.

First, can you just respond to what we just heard from David Hogg? Because he's actually taking a lot of -- I guess he's taking a lot of incoming from others in the party who say that, you know, his push to primary other Democrats is a real problem.

JOCELYN BENSON, MICHIGAN SECRETARY OF STATE: Well, I think it's important for us as a party to have a conversation about how we can truly show up for the people of America and the people of Michigan who are struggling right now, struggling to pay for child care, to buy a home in the community they want to live in.

And -- and as the cost of everything continues to rise, that's really what's on the forefront, I've seen, of young people's minds, of -- of elder, wiser individuals as well as everyone in between.

And so, for me, as a mom of an 8-year-old kid who, in ten years, is going to be 18, I know that the work we do over the next ten years is going to define his childhood and his future. And I know that's front of mind for a lot of folks in my party right now.

And so, we're working to develop real solutions and then get things done to deliver results. And that's certainly what governors in Democratic-led states have been able to do over the last several years.

CORNISH: So, there are people whose footsteps you're trying to follow, like outgoing Michigan Governor Gretchen Whitmer, who are showing up, right, next to Donald Trump in some instances.

Can you talk about the complications of that? Whitmer has taken a lot of heat for, you know, her -- her difficult moment in the White House, for example, where it was pretty clear she didn't want to be there.

How do Democrats manage those moments?

BENSON: Well, I think the way I've done it, as secretary of state standing up to President Trump when he and many others tried to overturn our election results in 2020, is to speak the truth.

I mean, every minute we've got to be focused on how to save our residents money; how -- to how to make sure we're making their lives better. I want to stand up, and I will stand up for the economic prosperity of every resident of their state. And I'll -- I'll work to protect our rights and freedoms, just as I've done.

CORNISH: But over the next three years, that's going to mean working with this Trump White House. And there are some Democrats who believe it's -- you're saying no under any circumstances.

Others, like Whitmer, say you have to fight for what your state deserves, even if it means you're going to be uncomfortable.

BENSON: As secretary of state and as governor, I'll have a job to do, and I'll work with anyone to protect and grow the economic prosperity of our residents. And I'll take on anyone, no matter how powerful, who gets in the way.

And in many ways, this president has gotten in the way of the economic prosperity of our residents, creating a lot of chaos and uncertainty in this moment.

And so, my job as governor will be to stand up to that, to speak the truth and say, this is actually how your policies are hurting our residents. And then try to, again, work with anyone to get things done to improve the cost of living and -- and cut all of the rising costs in our state.

CORNISH: I'm trying to understand what makes each of these different paths we're hearing from Democrats distinct. You use this term "purposeful warrior."

What is your idea or strategy to connect with the people who are not connecting with Democrats right now? David Hogg says -- is talking about young people. But is there something that Democrats are missing in making this connection? I think a lot of people are cynical. They hear a lot of talk and don't

see a lot of action. They're struggling and they hear solutions, but they're not actually seeing those results in their day-to-day lives.

So, I do think governors, in particular, can deliver. And you see folks like Josh Shapiro, Tim Walz, J.B. Pritzker and others actually delivering on those results. And that's what it's going to take to rebuild that trust in a party that is focused on making the lives of everyone easier and lifting every vote.

CORNISH: Jocelyn Benson, thank you so much for talking with us.

And you can get a copy of her book. It's called "The Purposeful Warrior," and it is out now.

Next on CNN THIS MORNING, selecting a jury. Today, lawyers hope to whittle down the jury pool to 12 in the case against Sean "Diddy" Combs.

And what in the world is going on at Newark Liberty Airport? Another ground stop over the weekend.

(COMMERCIAL BREAK)

[06:29:04]

CORNISH: Good morning, everybody. I'm Audie Cornish, and thank you for joining me on CNN THIS MORNING. It is now almost half past the hour. Here's what's happening right now.

Stock futures rising as the U.S. announces a trade deal with China. The two countries will drastically roll back tariffs for a 90-day period. Both sides have agreed to move down reciprocal tariffs to about 10 percent each.

(BEGIN VIDEO CLIP)

BESSENT: We do want trade. We want more balanced trade. And I think that both sides are committed to achieving that.

(END VIDEO CLIP)

CORNISH: To be clear, there's an additional 20 percent tariff on China still in effect as they continue discussions on the influx of fentanyl coming into the U.S. from China.

And President Trump travels to Saudi Arabia today, the first overseas trip of his second term. He will meet with the Saudi crown prince at an investment forum to strengthen economic ties. He'll also be visiting Qatar and the United Arab Emirates on that trip.