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Early Start with Rahel Solomon
U.S. Ramps Up Pressure on Houthis; Trump Says He'll Speak to Putin Wednesday; Widespread "Tesla Takedown" Protests. Aired 5:30-6a ET
Aired March 17, 2025 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:00]
HITHA HERZOG, CHIEF RESEARCH OFFICE, H SQUARED RESEARCH: Which gave the market a boost on Friday as -- you know, towards the close. But because of that, I mean, that's just a small little -- almost a band aid on a bigger problem that's happening. And then, when you increase and when you think about what is happening with the mayhem with tariffs, that is also having an impact certainly on the psyche of the American consumer.
RAHEL SOLOMON, CNN ANCHOR: Yes, what would you say is happening on the luxury side of things? Is that holding up?
HERZOG: Yes. Well, Rahel, we're seeing a bifurcation of the consumer, right? That basically means you have on one end people who are living paycheck to paycheck and having trouble paying for eggs. And then you're seeing the other end, which is the luxury consumer that can afford to pay $12, $14 for a carton of eggs and still go out and buy luxury items.
With that said, we are still seeing that consumer pull back a little bit on the luxury items. Prices are increasing over -- across the board. It doesn't matter if you're buying an expensive handbag or you're buying a carton of eggs. And when you incorporate those tariffs, those prices are going to go up even more.
SOLOMON: Yes, it's an interesting point because we've heard some of the airline CEOs also issue similar warnings and for months, he -- the economist would tell me that spending among the higher income consumer was disguising weakness with consumer spending among some of the lower income consumers. And so, my question is, if now you're starting to see the luxury kind of spender start to pull back, what does that suggest about the larger U.S. economy?
HERZOG: It suggests a couple things. So, if you, the larger -- if the more -- if the other end of the American consumer is starting to pull back and we want to, of course, look at what is happening with the inflation, but that might still signal more of an issue happening down the pipeline.
When you start looking at retailers and especially when you start looking at tariffs and prices increasing, the decision comes down to the businesses. And those businesses not only are determining prices of products, but they are also determining employment, business decisions. So, the American consumer is not only worried about prices, but they're also worried about their jobs. So, you have a lot of layers incorporated into what goes into what they are spending.
When you have that kind of cloud hanging above you, you're going to. think twice about taking that luxury vacation or going and buying that aspirational handbag. And of course, you have the other side, which people are struggling to buy basic things. So, you have this sort of giant cloud over pretty much the entire American consumer. I'm starting to sound negative this early in the morning, but that is exactly what is happening.
SOLOMON: I mean, look, if it's the reality that we're seeing, it's a reality that we need to understand and appreciate. And then, Hitha, just lastly, I mean, what have you been hearing from the retailers in terms of how they're planning to offset any higher costs, whether it be because of the tariffs or just sort of the uncertainty around the environment right now? I mean, what plans are they making? Are you hearing potentially plans of layoffs? I mean, give us a sense of what you've heard.
HERZOG: I mean, this could be a documentary on its own. But right now, we're seeing retailers do this dance with their vendors and suppliers because it comes down to whether or not the vendors can take on that price increase. So, if they cannot take on that price increase, that price increase is going to be passed on to the consumer.
Retailers like Walmart, Target, they don't want to do that. They have built a business on consumers going to them for everyday low prices, right? That's Walmart's tagline. But when you see a retailer like Dollar General that may not have those vendor relationships and can't take on the price increase, they'll pass that on to the consumer.
So, this big dance is happening with suppliers behind the scenes. And that is what is going to shake out over the next couple months, and that is why it's so interesting. And really, the focus should be on where these tariffs are going because every day it changes. So, every day these retailers have to make a different business decision.
SOLOMON: Yes, to that end, I'm sure we will see you again and speak again because this is a story, obviously, that is fluid and develops day to day. Hitha Herzog, we appreciate you today. Thank you.
HERZOG: Thanks for having me.
SOLOMON: Well, still ahead, the U.S. is planning to ramp up pressure on Houthi rebels to, quote, "protect American shipping, air, and naval assets." How the militant group is responding. That's coming up next.
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[05:35:00]
SOLOMON: The Trump administration is vowing to keep up strikes on Houthi rebels while warning Houthi ally, Iran, it could be next. Houthi leadership now claims to have retaliated by firing 18 missiles and drones at a U.S. aircraft carrier Sunday. U.S. officials say that it appears that there was no damage, and it's unclear if the carrier had to intercept any launches. Officials say that the U.S. airstrikes are aimed at preventing the militant group from targeting international shipping vessels in the Red Sea.
(BEGIN VIDEO CLIP)
MARCO RUBIO, U.S. SECRETARY OF STATE: We're not going to have these guys, these people with weapons able to tell us where our ships can go, where the ships of all the world can go, by the way. It's not just the U.S., we're doing the world a favor. We're doing the entire world a favor by getting rid of these guys and their ability to strike global shipping. That's the mission here, and it will continue until that's carried out.
That never happened before. The Biden administration didn't do that. All the Biden administration would do is they would respond to an attack. These guys would launch one rocket. We'd hit the rocket launcher. That's it. This is an effort to take away their ability to control global shipping in that part of the world. That's just not going to happen anymore.
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[05:40:00]
SOLOMON: According to the Associated Press, Houthi officials say that the U.S. strikes in Yemen killed at least 53 people and injured nearly 100 others, mostly women and children.
Israeli negotiating team is in Egypt to discuss the potential release of more hostages held in Gaza. That's according to the office of the Prime Minister Benjamin Netanyahu. The meeting comes as the U.S. proposes a new deal whereby more hostages would be released, and the current Gaza ceasefire would be extended past Ramadan and Passover. Last week, Israel sent a delegation to Qatar, saying that it would try to advance the negotiations with Hamas.
All right. Still ahead, as Elon Musk advocates for more federal job cuts, protesters are gathering outside Tesla showrooms across the U.S. to voice their growing frustration with the company's CEO. We'll take you there. When we come back.
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[05:45:00]
SOLOMON: Welcome back. I'm Rahel Solomon. And here are some of the stories we're watching for you today. President Trump says that he will speak with Russia's Vladimir Putin on Tuesday. U.S. president told reporters aboard Air Force One that he hopes to have something to announce on the U.S. ceasefire proposal for the war in Ukraine.
Trump is also defending his use of the centuries old Alien Enemies Act to deport a group of mostly Venezuelan alleged gang members to El Salvador. His remarks come after a judge temporarily blocked the administration's ability to use the act and verbally ordered any planes in the air carrying some of those migrants back to the U.S. The White House defended the deportations and said that there was, quote, "no conflict" with the judge's order.
A storm system that swept across the U.S. over the weekend has killed at least 39 people across seven states. The death toll is the highest in Missouri and stands at 12 people there. And in Alabama, the governor says that damage is being assessed in more than half of the state's counties.
Across the U.S. protests have been growing outside Tesla showrooms. The nationwide demonstrations began last month amid Musk's growing involvement in the slashing of thousands of government jobs. CNN's Julia Vargas Jones has the latest.
(BEGIN VIDEOTAPE)
JULIA VARGAS JONES, CNN CORRESPONDENT (voice-over): At Tesla dealerships from coast to coast, growing signs of discontent.
CROWD: Elon Musk has got to go.
JONES (voice-over): The target, the world's richest man and Tesla CEO, Elon Musk.
ELON MUSK, CEO, TESLA: This is the chainsaw for bureaucracy.
JONES (voice-over): Outraged by Musk's dismantling of the federal government, protesters are taking it out on his business.
CROWD: Elon Musk has got to go.
JONES: What's your sign say?
UNIDENTIFIED MALE: It says two things. It says, honk if you hate fascists and boycott Tesla swasticars.
JONES: Why should people boycott Tesla?
UNIDENTIFIED MALE: Because Elon Musk is destroying our government. Nobody elected him.
TAMMY SILVER, PROTEST CO-ORGANIZER: Elon Musk's wealth is based on the value of Tesla stock. Well, the value of Tesla stock is based on air and dreams.
SHARON DELUGACH, PROTESTING TESLA: So, we're sort of hitting him in the wallet. Getting him where it hurts. Even though, you know, he's richer than God. So, it's hurting his reputation. I really believe it's hurting his reputation worldwide.
JONES (voice-over): Anti-Elon bumper stickers popping up, including these sold on Amazon, marketed specifically to Tesla owners. And since December, Tesla stock has lost nearly half its value.
Donald Trump; Politics; Politicians; They have one, which is $35,000, which is pretty low.
JONES (voice-over): President Trump using the White House as a Tesla showroom in an attempt to reverse that trend. And on Friday, Attorney General Pam Bondi issuing a clear warning on Fox Business.
PAM BONDI, U.S. ATTORNEY GENERAL: If you're going to touch a Tesla, go to a dealership, do anything, you better watch out because we're coming after you.
JONES (voice-over): In recent weeks, Teslas were engulfed by a fire in Seattle. A charging station torched in Massachusetts, and a Molotov cocktail was thrown to a dealership in Oregon after shots were fired at cars there. Not the scene at this Southern California protest, part of dozens nationwide.
SILVER: This is a joyous, festive protest and nonviolent, and I urge people, likeminded people, to do this at every Tesla dealership in the country.
JONES: And that organizer, by the way, owns the Tesla herself. She said she doesn't really know what to do with it at this point, but she does have pretty serious buyer's remorse at this point. Although, at this protest we did see another gentleman come in here across the picket line saying that he was repairing his Tesla in order to sell it because he just could not bear the shame of driving it around for, that's how deeply he disagrees with the policies of Elon Musk.
Julia Vargas Jones, CNN, Burbank, California.
(END VIDEOTAPE)
SOLOMON: Democrats in the U.S. are apparently not happy with the state of politics right now, especially within their own party. A new CNN poll reflects some of the frustration among the American public overall. The Democratic Party's favorability rating has hit a record low. It is now just 29 percent. That is the lowest in more than 30 years of CNN polling.
Many Democrats, nearly 60 percent, say that their party leaders should do more to stand up to President Trump and his agenda. Now, this polling happened before Friday, when nine Democratic senators and one independent senator crossed the aisle to advance a Republican bill, which helped narrowly avert a government shutdown.
[05:50:00]
All right. Coming up, a tearful reunion after more than three months lost at sea, coming up, how a Peruvian fisherman survived after being adrift on the Pacific Ocean since early December. We'll be right back.
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SOLOMON: Welcome back. After docking at the International Space Station, a relief crew of four astronauts were welcomed with hugs and cheers from Suni Williams and Butch Wilmore. The two astronauts have been in orbit for nine months after spacecraft problems caused multiple delays to what was supposed to be an eight-day mission. Now, they finally have a ride home and are set to return aboard a SpaceX Dragon capsule.
[05:55:00]
If all goes as planned, Williams and Wilmore could be back on Earth as soon as Wednesday. Our aerospace analyst Miles O'Brien has more on what the handover will look like.
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MILES O'BRIEN, CNN AEROSPACE ANALYST: Right now, they're in what's called a crew handover and they're -- you know, these are a lot of veterans who've spent a lot of time on the International Space Station collectively, but the space station is an everchanging, craft and as the crew comes up, they need to be shown the ropes. Where are things stored? Where is the food? Where's the clothes? Where's the equipment? What kinds of new scientific apparatus is up there in the laboratory that they might need to become familiar with? It's just an orderly handover.
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SOLOMON: We're learning more about the disappearance of a University of Pittsburgh student in the Dominican Republic. Sudiksha Konanki was last seen more than a week ago on a beach in Punta Cana. Newly released pictures show flip flops and the sarong left on a lounge chair. Authorities from her hometown in Virginia have just returned from the Dominican Republic and they have questioned Joshua Steven Riibe, the man believed to be the last person to have seen the student. Here's what the sheriff is saying.
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SHERIFF MICHAEL CHAPMAN, LOUDOUN COUNTY, VIRGINIA: He seemed to be very forthright with our detectives. Seemed to be doing, you know, pretty honest and forthright here. And so, I think our detectives were pretty satisfied with the way the interview was conducted. I know they've done an exhaustive search and, you know, around the beach in the water and even on land. So, they're doing everything that they possibly can. We're still working very closely with them on and certainly work with the family here.
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SOLOMON: Rob has also been questioned by local authorities who stressed that he is not considered a suspect at this time.
A Peruvian fisherman has been found alive after more than three months lost at sea. Peru's state news agency says that Maximo Napa Castro headed out to sea on December 7th that got lost in bad weather. He was found by an Ecuadorian vessel on March 11th, badly dehydrated and in critical condition. He told local media how he managed to survive. Take a look.
(BEGIN VIDEO CLIP) MAXIMO NAPA CASTRO, FISHERMAN (through translator): I was with God. I did not want to die. It was 95 days. I ate roaches, birds. The last thing I ate was turtles. I didn't want to die. My mother is alive. And I said, I didn't want to die because of my mother. I have a two-month- old granddaughter. I held on to her now.
(END VIDEO CLIP)
SOLOMON: Now, according to Reuters, he spent the last 15 days without eating at all before he was finally rescued.
All right. Time to start filling out those brackets as the seeds are set for college basketball's March Madness. Selection Sunday saw Auburn, Duke, Houston, and Florida picks at the four number one seeds for the men's tournament. Auburn was named the top seed overall despite dropping three of their last four games. Have a big night for the Southeastern Conference, which will send a record setting 14 teams to the big dance.
So, what are the chances of someone now picking the perfect bracket? CNN's Chief Data Analyst Harry Enten has the answer.
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HARRY ENTEN, CNN CHIEF DATA ANALYST: I thrive at the odds and the chance of an event occurring, the chance of a perfect bracket, I have to remind myself of this, is only one in 9.2 quintillion. The abbreviation for quintillion is QI. I just learned that today. Compare that to the chance. I know. Isn't it amazing? The chance of winning a Powerball is one in 292 million. Far better than getting that perfect bracket. How about the chance of getting killed by a shark? That's way better. That's at 1 in 4 million. So, your chance of getting that perfect bracket is one in 9.2 quintillion. That is 19 digits out. Holy cow.
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SOLOMON: All right. It is the ultimate list for foodies. Media group Time Out set out to find the city with the best food in the world. And New Orleans topped the list. People love the blend of French, Spanish, Vietnamese, and African influences in New Orleans cuisine. More than 18,000 people were surveyed, and the top five cities cover five different continents. The second spot went to Bangkok, Thailand, which includes Michelin starred fine dining and street food markets. Medellin in Colombia came in third for its affordable prices and cheap coffee. Now, surprisingly, given its reputation for fine dining, Paris actually came in ninth on the list.
And before we go, it is St. Patrick's Day. And in the coming hours, U.S. cities like New York and Boston will be celebrating with parades and, yes, some drinking, although places did start celebrating early. On Saturday, the Luck of the Irish took over the Chicago River, turning its water bright green. This is a St. Patrick's Day tradition in this city for, what, more than 60 years now. Thousands of people lined Chicago's riverside and bridges to cheer as the dyed water started to glow. The dye is nontoxic and is safe for wildlife. You can see all those people there along the bridge, along the sort of -- you know, the water there to just kind of see it all, every year. It's quite the site.
All right. And thanks for joining us here on Early Start. I'm Rahel Solomon live in New York. CNN This Morning starts right now.
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