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Early Start with Rahel Solomon

Trump Visits UAE, Attends Business Meeting On Last Day Of Trip; Russia-Ukraine Peace Talks Begin Amid Low Expectations; Walmart Warns It Will Raise Prices Because Of Trump's Tariffs. Aired 4-4:30a ET

Aired May 16, 2025 - 04:00   ET

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

[04:00:00]

SCOTT JENNINGS, CNN CONTRIBUTOR: It might have been. And I'm just saying it seems like having this could come in handy. And so anyway, I'm going back into history. In all seriousness, I think this sort of history could be a uniting kind of a relic.

Now, there's a church in I think Ethiopia that claims to have it, but I think a tour in the United States, maybe passing through Kentucky could be fine.

ABBY PHILLIP, CNN ANCHOR: Yes, well, I got to get some bodyguards for that thing. You know what Scott's going to do. Everyone, thank you so much and thank you for watching NewsNight. You can catch me anytime on your favorite social media, X, Instagram and TikTok. CNN's coverage continues next.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: U.S. President Donald Trump heading back to Washington with billions of dollars in deals and potentially reshaping American foreign policy in the region.

DONALD TRUMP, U.S. PRESIDENT: There's only one sentence, they can't have a nuclear weapon.

UNIDENTIFIED MALE: We will do our best to keep our prices as low as possible.

UNIDENTIFIED FEMALE: Walmart, the biggest retailer in the entire world, says they're going to start raising prices at the end of this month.

UNIDENTIFIED FEMALE: The Defense building its case that Ventura was a willing participant.

UNIDENITIFIED FEMALE: He's very determined to present this as a he said, she said.

(END VIDEO CLIP)

ERICA HILL, CNN ANCHOR: Hello and welcome to our viewers joining us from around the world. I'm Erica Hill in New York. It is Friday, May 14th for 4am here noon in Abu Dhabi where Donald Trump will soon be wrapping up his four day tour of the Middle East, making his way back to Washington at the rafter. Eventful few days, billions of dollars investment deals potentially reshaping U.S. foreign policy in many ways.

Becky Anderson, of course, has been covering all of this visit. She is live in Abu Dhabi at this hour. Also, a lot of pomp and circumstance on this trip, of course, Becky, but a clear focus for Mr. Trump in many ways.

BECKY ANDERSON, CNN ANCHOR: That's right, Erica. In fact, much of this trip, including today's meetings, are business focused. So this hour the president will also certainly schedule tour the Abrahamic Family House, which is an interfaith complex here in Abu Dhabi featuring a mosque, a synagogue and a church.

He arrived in Abu Dhabi on Thursday, the third and final stop on what is this whirlwind trip through Saudi Arabia, Qatar and the UAE. And like the earlier stops, the Emirates gave him a warm welcome, less pomp and ceremony, more understated with Emirati kids as part of the lineup, a nod to the importance this future facing country puts on its younger generation.

As a resident here, I can attest to that. The UAE made the rare move to close the Sheikh Zayed Grand Mosque in Abu Dhabi to give President Trump a private tour of the south site. The president said the gesture was a great tribute.

(BEGIN VIDEO CLIP)

TRUMP: It is so beautiful. Very proud of my friends. This is an incredible culture that I can say, very, very proud of my friends.

(END VIDEO CLIP)

ANDERSON: Well, throughout the trip, Mr. Trump has been focused on securing what the White House calls transformative deals with these regional allies. Perhaps the biggest announcement that's come out of this leg of the trip so far is the new agreement between the U.S. and the UAE to build a massive AI data center complex in Abu Dhabi to advance this country's ambitious capabilities in advanced tech.

But foreign policy also playing a very large part in these talks as well. Notably, the president discussed his hopes for a nuclear deal with Iran while he's been in region.

(BEGIN VIDEO CLIP)

TRUMP: It's very simple. It's not like I have to give you 30 pages worth of details. There's only one sentence, they can't have a nuclear weapon. And I think we're getting close to maybe doing a deal.

(END VIDEO CLIP)

ANDERSON: Taking over Gaza after the war. Well, let's bring in Sanam Vakil. She's the director of the Middle

East North Africa Program at Chatham House and joins me now live from London. And ahead of this trip from both the Gulf nations that he was traveling to and from the administration in Washington, there was this sense that this was a pivotal opportunity to reimagine U.S.-Gulf relations in a new era.

And I think it's fair to say that is exactly what we've seen. And much of what we have seen here has been about sort of using investment, partnerships and cooperation around sort of business and very specifically around AI and advanced tech to deepen these regional relationships with Washington and to at the same time ensure that these countries get some key takeaways. This is not a blank check these from these energy rich, sovereign rich countries.

[04:05:00]

This is about what they can extract from the US as well. Correct. What were your key takeaways?

SANAM VAKIL, DIRECTOR OF THE MIDDLE EAST NORTH AFRICA PROGRAM, CHATHAM HOUSE: Yes, you're quite right. First, the U.S. government is looking to anchor its relationships and partnerships in the Middle East away from solely security based dynamics and instead pivot to more economic engagement that will equally facilitate the security relationships. So that is what President Trump was trying to achieve and that's part of his American first burden sharing agenda.

For the Gulf states, of course, I think that they have gotten what they paid for, if you will. They have deals, they have strong relationships and foundations with the United States anchored in AI. In the UAE, which has been where the Emirati government has doubled down, they've also secured a pipeline of semiconductor chips that are really important for their positioning over the long run.

But at the same time, I think it's important to say that these Gulf states not only have demonstrated that they have President Trump's ear on key issues like regional security, Iran talks, lifting of sanctions in Syria, but now the U.S. government is going to be turning to these Gulf states as well in equal breadth to help handle and manage and contain some of these crises.

ANDERSON: Yes, I think your analysis is spot on here. And we're just looking at pictures earlier of the U.S. President along with the Crown Prince here, attending a U.S.-UAE business forum, defense and security key for the region, as you rightly pointed out, and these investments helping to sort of deepen the relationship when it comes to security commitments here.

Let's talk about that. That partnership inked here a huge AI data center complex in the UAE. This is a 5 gigawatt project that is as much power as you would need to fuel a, a pretty big city and it's going to be full of sort of advanced development technology, as you said.

We didn't get the detail on how many chips, as it were, that imports into this country and it says cutting edge chips that the UAE wants to get its hands on, of course, to fuel itself ambitious AI vision here. This is what his Excellency Omran Sharaf, UAE Assistant Foreign Minister for Advanced Science and Technology, told me about this UAE- U.S. partnership here.

(BEGIN VIDEO CLIP)

OMRAN SHARAF, ASSISTANT FOREIGN MINISTER FOR ADVANCED SCIENCE AND TECHNOLOGY: For me, Becky, there is an aspect that we have to keep in mind. You know, when it comes to dealing with critical emerging technologies such as AI, there's that system of governance and it's very critical that also we work together very closely, not just at a political level, but also at technical level in which we converge the different views.

And given the very polarized geopolitical landscape today, I think it's very crucial that we have such relationships in which countries work together very closely. Investments happen both ways to be able to actually converge those views and make sure that we come up with systems that govern these new technologies that if falls in the wrong hands, could be misused, but then the benefits of it outweighs.

(END VIDEO CLIP)

ANDERSON: And this is about sort of trust here, isn't it, Sanam. It's -- we know that the U.S. for example, under the Biden administration, slapped export controls on U.S. made cutting edge chips very specifically from Nvidia, which pretty much, you know, owns the market in these AI chips.

And the idea here is, look, you know, if we deepen our relationship and you have trust in what we are doing here in the UAE and around the region, then we can work better together for everybody's benefit. Correct?

VAKIL: Yes. This is, of course about trust building. And for the UAE, this is about securing its place as a leader in this space, working closely, as the minister said, in building a landscape and governance environment where the UAE has deep influence.

This is about also the UAE's broader global role. It wants to be a player that's networked around the world and bring investment from other countries. And so investing in AI, which has been the focus of President Trump's trip, really cements the UAE as a major player in this space.

[04:10:10]

And at the geopolitical level, what's very important is that President Trump is doubling down with the UAE and certainly making asks of the UAE to work solely with the United States and not with China. And that is a priority for this president.

ANDERSON: I think I'm right in saying certainly one source told me this, that in the States and in this Trump administration, the question is who is on team America, AI's side, who's part of that team? And as much as they're not asking entire countries to pivot their attention away from China because China does a lot of business with these Gulf states, not least, it is its biggest consumer of oil.

But if you're on team America AI, then you get our focus and you get our chips. Sanam Vakil, thank you very much indeed for joining us. I'm going to throw it back to Erica at this point. Erica.

HILL: And I will take it from you. Becky, thank you. Optimism at this hour in somewhat short supply as Russia and Ukraine prepare for their first face to face talks in some three years. Those are expected to get underway a little more than an from now.

Negotiators, of course, are in Istanbul, but without Presidents Volodymyr Zelenskyy and Vladimir Putin. And there is some skepticism that without their presence whether much headway can be made here. Also in Istanbul, U.S. Secretary of State Marco Rubio, who landed just a short time ago, he will be meeting with negotiators but is not directly participating in those talks.

And of course, he arrives in Turkey after some comments from President Trump aboard Air Force One, seeming to pour cold water on these meetings meeting, saying that in his view, nothing will happen until he himself meets with President Putin.

All of this course happening with the backdrop of an increase in fighting between Russia and Ukraine, both sides now accusing one another of launching dozens of drone attacks overnight. Salma Abdelaziz is following all of these developments for us from London at this hour. Salma, bring us up to speed.

SALMA ABDELAZIZ, CNN CORRESPONDENT: Yes, after days of confusion and chaos and countless mixed messages, we now have a clear answer. In a short time, we should see the first direct meeting happen between Russian officials and Ukrainian officials taking place in Istanbul at 12:30 local time. That's according to a Turkish official. This will be the first direct meeting between these two warring factions since essentially the beginning of the war back in March of 2022.

But although it is historic in its occurrence, it is unlikely to be significant in its substance. As you mentioned there, President Trump already downplaying this meeting, saying that nothing could occur until he meets personally with President Putin. And also brushing aside comments that this meeting was originally much more highly regarded.

Take a listen to how he responded to questions from reporters about the attendance of leaders at this meeting.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Were you surprised when Zelenskyy didn't show up either, sir? Were you surprised when Zelenskyy didn't show up either?

TRUMP: No, he didn't show up because heard Putin wasn't going.

UNIDENTIFIED MALE: When do you think you'll meet the President? TRUMP: As soon as we can set it up.

(END VIDEO CLIP)

ABDELAZIZ: Now, it's important to remember here, Erica, that all of this began because European powers had issued an ultimatum to President Putin himself, agree to a 30-day unconditional ceasefire or face greater sanctions. President Putin refused to bow down, instead proposing a direct meeting that he later refused to attend himself. He may think that President Trump would respond to this with some sort of anger considering that he's bit back at anyone he perceives as not committed to the peace process he's trying to start in Ukraine.

Instead, he's offered him what any diplomat will tell you is a prize, a bilateral meeting, a meeting with the American president, his administration saying they're now going to try to operationalize that, make that happen once he's back from his overseas trip.

As for the meeting taking place today, well, President Zelenskyy still wanted to show good faith. He has sent a higher level delegation that includes the country's deputy foreign minister. A higher level delegation than the one that Russia is sending President Zelenskyy saying that was to appease President Trump, saying it is out of respect for him.

But again, very little is expected to come out of those meetings. You heard there from President Trump himself saying he doesn't expect any progress until that meeting takes place. And it's unclear if and when that will happen already the focus shifting.

HILL: Yes, those two important questions without answers, as you point out at this hour. Salma, I appreciate it. Thank you.

[04:15:00]

The world's largest retailer warning that due to the magnitude of the tariffs, some prices are going up. We'll take a closer look at what's on the list.

Plus, the U.S. Fed chairs warning on the supply chain and inflation. That's all ahead.

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HILL: Get ready to pay more. Walmart now warning prices will rise. Citing the magnitude in the world in the words of President Trump's tariffs. Among those items set to see a price hike from the world's largest retailer, electronics, food and toys.

[04:20:00]

Here's more from CEO Doug McMillon on Thursday's earnings call.

(BEGIN AUDIO CLIP) DOUG MCMILLON, WALMART CEO: We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins.

(END VIDEO CLIP)

HILL: So most Chinese goods, of course, are still facing a 30 percent levy. Walmart says it's expected to hike those prices by the end of the month. Meantime, the chair of the U.S. Federal Reserve says that supply shocks could force the central bank to keep rates higher over the long term. Jerome Powell also warning inflation could be more volatile going forward.

The uncertainty is also changing how Americans spend money. They significantly cut back on spending at U.S. Retailers in April, according to new data. And that, of course, is when Mr. Trump announced those sweeping tariffs.

Europe, for its part, carefully optimistic about trade talks with the U.S. that's according to a Polish official who says the European Union remains, quote, open and committed to international trade, but also notes we are not naive.

Trade ministers meeting in Brussels on Thursday as the Trump administration appears to be softening its trade war. There was, of course, a temporary agreement with China earlier this week and announcement that there is a deal in the works with the U.K. for a closer look at where the global markets stand on this Friday as we close out the week.

Nice to see a little bit of green there in Europe, right? The FTSE, the CAC 40 also up little bit. So we'll take the green on a Friday. Taking a look at things in Asia, a little bit more red to contend with there, but a little bit of green out of Seoul and taking a look at US Futures now, we still have, of course, five hours or so to go before the opening bell here on Wall Street, but at the moment could be a nice start to the morning.

As we continue to follow all of that, I want to bring in Ryan Patel. He's a senior fellow with the Drucker School of Management at Claremont Graduate University and joins us now from Los Angeles. Ryan, nice to see you this morning.

So let's talk prices, first of all, and consumers, the fact that Walmart is coming out, and I was struck by the language they're talking specifically about the magnitude of the tariffs. But as we also heard Walmar very bluntly saying, hey, we are not able to absorb all of this because of the margins. There was some pushback right when Amazon was going to maybe include some tariff pricing.

We have not heard as much pushback at this point when it comes to what Wal Mart had to say. Does that Surprise you?

RYAN PATEL, SENIOR FELLOW, DRUCKER SCHOOL OF MANAGEMENT, CLAREMONT GRADUATE UNIVERSITY: Actually, no, because I think Walmart has actually been very clear community -- their senior leadership has, you know, this message that they sent that was very calculated, wasn't something that was just let's do it last minute. They were trying to signal this is not something they wanted to say. And Walmart overall with their consumers has been pretty consistent with their pricing.

When you compare it to Amazon, right, Amazon is could be this dynamic pricing at times, right, Erica, that it could be expensive one day and another. Walmart is setting the kind of tone for themselves to come out and be very clear. I mean, they're super clear that they're saying they're increasing pricing. That's not something they wanted to do at the end of the day.

And I think the timing of this is also interesting because on the back of this week and the truce with China, they could have easily kind of waited another week or two, but they're kind of getting in front of it and, you know, it's causing a conversation like this is not going to be pretty when Walmart comes out and says that they're going to increase pricing because that means there's nothing else they can do after an earnings that they just had.

HILL: When you look at that too, we have a fair amount of data coming out this week. There's also, I found it interesting, there's this back and forth, right? I mean, what is now the one constant is the uncertainty in so many ways. So you have President Trump touting, you know, great things happening with India and then you have India's foreign minister coming out and pushing back a little bit and just saying, yes, there are talks, but this is complicated and frankly, we don't have a deal until we have a deal.

This continuing back and forth in public, is that still having the same impact that we saw early on in April?

PATEL: Only for the businesses is it's holding off on capital investments, Erica. I mean, that's just clear. Why is someone going to decide what they're going to do when it's not really uncertain? And you mentioned this is the new normal. And when there's a new normal, that means you have to actually, you can't be reactive anymore. You have to wait. Even with this week, like as you mentioned, kind of in the green.

Yes, it's a sigh of relief, but it's a pause. You know, it's a pause because you really need to know what is going on going forward.

HILL: And so much of that discussion about the uncertainty and how do you make a decision as a business, the side discussion of that is what we are seeing in terms of new alliances. Right. And changing trade negotiations between other countries, other markets.

Are you starting to see, while it may not be as public in this moment, because, of course, there are still negotiations, one hopes underway with the United States. Is that starting to trickle in at all?

[04:25:03]

PATEL: You are 100 percent right here. You know, regardless if there's a deal or not with any certain country businesses and companies and, you know, USA consumers, they're still trying to find plan B and plan C. They're not going to stop just because a deal gets done. And like you mentioned, it could be changed in a month or two. So if your supply chain is coming from maybe, let's say China and you've already been, and you're in the semiconductor space or you're in, you know, manufacturing area and you haven't figured out where else to diversify your supply chain, you're going to be in trouble.

Other countries are doing the same thing. This doesn't stop even if there's a deal and you mentioned it, that is important in this conversation that's not being talked about. Because even if you agree to a deal one year from now, Erica, there's a diversification. How does that make an impact when it comes to global trade and the flow of goods and money across different regions and countries?

HILL: What are you watching in the coming days and weeks, outside of whether we're going to see some deals, what are some of the indicators that are really going to be of major focus for you?

PATEL: Well, one of them came from the Fed this past week when they said the tariffs led to a 0.3 percent increase in pricing. You know, that to me, you know, how is consumer pricing in this? You know, does it get more expensive? Is it enough to where the resilience is not there?

You know, I'd be lying to you, see, lying to you if I don't say I'm watching the markets, but the markets is very emotional. Right. You know, can it have another good week? The next couple of weeks? Erica, you and me, if they had another week like this, we'd feel a little bit more sigh, relief. But, you know, I kind of feel like what the resistance is, what is the next thing that's going to happen?

And I think to me it's the Fed, it's the inflation, it's the interest rate, you know, and then the second thing I would say is other companies like Walmart, which ones will come out and say that they're passing it on? Are they going to be truthful and direct? Are they trying to hold off? It'll be interesting to see who's next.

HILL: Yes, interesting to see just how much Walmart may or may not have paved the way in some respects. And also, of course, at the end of the month when we get this the real April numbers. Then we'll start to see what the impact was. Ryan, appreciate it. Thank you.

Some developing news this hour. Engineers at New Jersey Transit are on strike beginning today. That went into effect at midnight local time. That move really brings trains in the US's 3rd largest commuter rail service, to a halt. Negotiations between the state run agency and the labor union had failed to reach a deal on wages. So the work stoppage itself, this is going to impact significantly a number of people, some 100,000 daily rail commuters, businesses, of course, will also be impacted across the New York metropolitan area.

The chief executive of NJ Transit says the two sides are due to return to the negotiating table by some Sunday morning or perhaps earlier.

Lawyers for Sean "Diddy" Combs trying to show his former girlfriend Cassie Ventura was OK with his sex parties. We'll take a closer look at that cross examination ahead.

Plus, the surprise court, the Supreme Court mulling a historic ruling as it considers whether to allow the Trump administration to block citizenship to people -- to some people born in the United States. And also weighing in on the broader implications of nationwide rulings.

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