Return to Transcripts main page

Inside Politics

Stocks Surge On Interim U.S.-China Trade Deal; U.S., China Agree To Drastically Roll Back Tariffs For 90 Days; Israeli-American Hostage Now In Hands Of IDF. Aired 12:30-1p ET

Aired May 12, 2025 - 12:30   ET

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

(COMMERCIAL BREAK)

[12:31:42]

MANU RAJU, CNN ANCHOR: President Trump hitting pause on his trade war with China. The U.S. and China agreed to roll back drastically the tariffs they've slapped on each other's exports, but only for 90 days while they negotiate a longer deal.

Now markets are rallying on the news, the Dow up nearly 1,000 points. Investors are very eager to see the world's two biggest economies stepping back from the brink. The U.S. is slashing its tariff from 145 percent to 30 percent, still historically high. Now China will lower its tariffs on U.S. goods from 125 percent to 10 percent.

So is this a win for the president? I'm back with my panel. Tia, is this a win for the president?

TIA MITCHELL, WASHINGTON BUREAU CHIEF, ATLANTA JOURNAL-CONSTITUTION: I mean, I guess, today is the win. But overall is it a win? Not necessarily because you just mentioned the tariffs on goods from China are still historically high, which means consumers in America are still paying more for things than they did previous to the Trump administration.

And again, there's still so much uncertainty about what this deal will look like and what will happen after a 90-day pause. And I think a lot of people, even allies of Donald Trump, are still struggling to figure out what is he trying to accomplish with these tariffs.

Is he trying to move manufacturing to the U.S.? Is he trying to bully foreign countries into better trade deals? We still don't know. I don't know how we can consider that a win.

DAVID CHALIAN, CNN WASHINGTON BUREAU CHIEF: There was some certainty prior to today, which was that if the tariff remained at 145 percent, there was no trade and we were certainly headed for an economic recession. That was the certainty.

So I agree there is some uncertainty now, but this is clearly welcome news to the markets. And obviously, this is Donald Trump trying to put forth the vision that he's had for decades about tariffs. And it's just -- even listening to the way you frame the conversation, Manu, when you say he's putting a pause on his trade war. If he had come out day one and said, I'm putting a 30 percent tariff

on China, we would call that a trade war --

RAJU: Yes.

CHALIAN: -- not a pause on a trade war, right?

RAJU: Yes, it is.

CHALIAN: But he had set this up. So two things can be true here. It is true that he made this mess and put the economy into this tailspin and is now cleaning it up to some degree to good reviews from the market. It is also true that we do not yet know if this is going to work and achieve his ultimate goals here. That remains to be seen. And that's where the uncertainty exists.

RAJU: And this is how Trump framed it this morning when speaking at the White House before he left on this foreign trip.

(BEGIN VIDEOCLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: It would go up substantially higher.

UNIDENTIFIED FEMALE: OK, and then --

TRUMP: You know, at 145, you're really decoupling because nobody's going to buy. But they can go -- they got very high because of additional tariffs I applied during the course because of fentanyl and other things. But no, but they go substantially higher.

(END VIDEOCLIP)

RAJU: He's saying they go substantially higher if they can't get a deal within 90 days. So perhaps short-lived win.

SEUNG MIN KIM, CNN POLITICAL ANALYST: Yes. And perhaps trying to keep the pressure on for his negotiators to come to some sort of an agreement with the Chinese to try to calm this trade war. But, yes, I mean, we've seen how his tariff policy through the beginning of the administration has been all over the place.

You know, it's on, it's off. It's on this sector. It's not on this sector. And it's just kind of that chaos that he himself has created that he is now then scaling back to David's point.

I did think just as a Congress note and as a Congress nerd and as a side note, he said -- he also said this morning that he was going to raise so much money from all of his actions, whether it's the tariffs or with the prescription drug pricing order that he announced this morning that he told Speaker Johnson and Leader Thune that you can use this to score your big tax bill.

[12:35:19]

I don't know if the Congressional Budget Office would agree on that -- RAJU: Yes.

KIM: -- but I also do think that it's --

RAJU: Or the hardliners in the House GOP.

KIM: Exactly. But I also do thinks to the -- that speaks to the other struggle that he's having with his big agenda on Capitol Hill, how to make all those numbers work. And those numbers are pretty complicated.

RAJU: Yes. And Stephen, you wrote about this over the weekend about the negotiations that is happening behind the scenes. You talk about any negotiation at any time can be blown up by Trump's unorthodox and volatile approach and his capriciousness hangs over all the negotiations.

STEPHEN COLLINSON, CNN SENIOR POLITICS REPORTER: That's true. At the same time that unorthodox style could unlock some openings that other presidents who act in a more traditional way perhaps wouldn't be able to access. There's not a huge amount of evidence, especially from his first term, that actually worked.

Remember when he met Kim Jong-un, the North Korean leader? That was a great series of photo ops and summits, but it didn't stop the nuclear program. To your point as well, I think the White House says what they're doing here is a three-legged stool.

You do rebalanced trade with tariffs, you bring a load of revenue, you use that revenue to create some of the tax cuts beyond the extension of the tax cut, you know, no tax on tips, et cetera, and then you do deregulation. And they say by the end of the year, the economy is going to take off like a rocket. I think there's a lot of reason to question whether that's true, but we're going to find out.

I mean, that's the thing. They're trying to argue this long-term strategy here, passing this bill in that -- that is now just being released in the House that deals with a whole wide range of issues, but getting a big tax deal through, and then having it implemented, have the American public feel the effect of this, in addition to all these trade deals, that's going to take a significant amount of time, well beyond the midterms of next year.

MITCHELL: A lot of time, and what they're banking on is that people will stick with them. And I don't know if that's going to be the case. Again, we've, in the past week, not just heard about, you know, don't worry that the economy isn't rebounding in the way Trump promised, but now, you know, your kids might not have the Christmas that they want, and things like that.

And again, we're talking already about the midterms, and there are a lot of Republicans on Capitol Hill who are just as concerned, but I think there are voters who are waiting for the Trump administration to make good on its promises, and hearing, hey, there's going to be some more pain before it gets better, is not what they were promised.

CHALIAN: You raise such a good point, because I am so curious to know if, listen, I said last week on this show, I think a deal with China is probably the most -- the highest political imperative that this president has, because I think everything flows from that.

And I do wonder if voters who have given them a thumbs down in the first 100 days all of a sudden do see this as some sort of progress to buy more time with them. We'll see. We don't know the answer to that.

RAJU: But why not just make it the focus on China, right? Why do this whole global trade war, including with America's close allies?

KIM: Well, first of all, he's a tariff man. Like, this is just a policy that he himself has believed in as a businessman for decades. And I do think he truly believes that you have to reorient the global economy to bring manufacturing back home. Of course, certainly a lot of the products that we import are from China, but also elsewhere.

But it is -- but the focus on China, obviously, is what is paramount to President Trump right now, just because it is such a major trading partner. It is a two -- it is the world's two largest economies. And so we'll see -- we'll have to wait and see how this all plays out.

RAJU: Yes. He's pulling back from the brink from now.

All right. Coming up, you're looking at live pictures outside an Israeli military base where Israeli-American Edan Alexander will arrive any moment after being released by Hamas. Stay with us.

(COMMERCIAL BREAK)

[12:43:33]

RAJU: You're looking at live pictures of an Israeli military base where any moment now we'll see 21-year-old Edan Alexander, who was just freed from Hamas captivity. He was just released to the IDF.

I want to bring back in CNN's Jeremy Diamond, who is live for us in Tel Aviv. So, Jeremy, tell us what the latest is.

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, Manu, I'm here in Hostages Square, where there's really been a celebratory atmosphere over the course of the last hour, as people here have been listening with bated breath to every single update as Edan Alexander was transferred by Hamas to the Red Cross, as he was then en route to Israeli forces.

And now, moments ago, as we learned that Edan Alexander is indeed in the hands of the Israeli military, on his way to meet with his mother, to embrace her for the first time in more than 19 months at an Israeli military base just outside of Gaza.

We've also now seen a photo of Edan Alexander standing on his own two feet next to a Red Cross official, as well as several masked Hamas gunmen. And while it's difficult to draw too many conclusions from one photo, we did just hear from his father on Israel's Channel 12 saying that, while he looked a little bit pale and weak, that he said, that's my boy. And so, certainly, the fact that he's able to stand on his own two feet after 19 months of captivity is, obviously, a positive initial indication.

[12:45:03]

Now, of course, there are questions about the -- by the families of the other 58 remaining hostages still held in Gaza about what this deal, which was brokered not by the Israeli government but by the United States to get this American citizen out of Gaza, what it means for the other hostages who don't have American citizenship, who just have, in many cases, Israeli citizenship.

And there is certainly hope that perhaps this agreement to release Edan Alexander could unlock a broader deal to secure the release of all of the other hostages, to perhaps even end the war in Gaza, or at least to get to some kind of a ceasefire that will see hostages coming out of the Gaza Strip. And, of course, much-needed calm in Gaza and much-needed aid to go into the Gaza Strip for the more than two million civilians who live there.

We know that tomorrow, an Israeli delegation will be traveling to Doha, Qatar, to try and work on that broader negotiation. And all of this, of course, is happening because of enormous, enormous diplomatic effort and pressure that is now being brought to bear by the United States and by President Trump, who said that he very much sees this release of Edan Alexander as a first of the final steps towards ending this war in Gaza and releasing all of the remaining hostages held there. Manu?

RAJU: Just to direct our viewers, that picture you're seeing on the screen is the one that was just released of Edan Alexander, now in the hands -- now being -- of the IDF, being ultimately going to be transported over to a hospital, going to be evaluated, he's going to be reunited with his mother as well.

Jeremy, I want to ask you about Prime Minister Netanyahu, what we've heard from his office about this news, and whether they actually see this as potentially something that could lead to a ceasefire deal that could ultimately end up with the release of the remaining Israeli hostages.

DIAMOND: Well, look, they are not saying this publicly, but the Israeli government got completely bypassed in this deal, got completely sidelined by the Trump administration, which worked directly with the Egyptians and the Qataris to talk to Hamas and to secure the release of this Israeli soldier with American citizenship, Edan Alexander.

And it comes at a time when the Israeli prime minister had been preparing for something much different, at a time when he had said that the supreme goal of Israel's war in Gaza was not the release of the hostages, but the defeat of Hamas and Israel's enemies.

And now we are seeing the momentum really shifting in a very different direction, as he is being put under enormous pressure now to secure another deal to free more Israeli hostages. He is stressing that while he is engaging in these negotiations, that these negotiations will be held under fire, with the Israeli military continuing to carry out airstrikes and ground activity in the Gaza Strip.

But he will engage in these negotiations, and he will face enormous pressure from both the Israeli public as well as from the American government to reach a new deal.

RAJU: All right. Jeremy Diamond from Tel Aviv. And we're going to continue to watch these pictures as we get more news. We'll be right back with you on this very busy day. We'll be right back. Stay with CNN.

(COMMERCIAL BREAK)

[12:52:41]

RAJU: All right, we're following the breaking news this morning. Israeli-American hostage Edan Alexander, 21-year-old, who had been held in captivity by Hamas, now released, now is free and will soon be transported via helicopter to an Israeli military base. He'll then get treatment at a hospital, be evaluated, and ultimately be reunited with his family after this ordeal.

And we just have a new photo of Edan Alexander, just -- that's from today. Right in the middle of your screen there, you can see him in the aftermath of his relief, handed over to Red Cross officials. And pictures there -- and here, you can see his family, this euphoria of Alexander's family cheering there. That's from Tel Aviv, from just moments ago, celebrating this news of his release after some more than 580 days or so in captivity.

My panel is back here in the room. Seung Min, you cover the White House. How much -- how involved was the president and his team in getting -- securing the release?

KIM: The president said this morning that this was a key initiative of his envoy, Steve Witkoff, and he really credited his abilities as a negotiator. I mean, this is something that both the Biden and the Trump administrations have been working on since October 7th, 2023. And this is just an ordeal that, just the pain in and out that his family has seen, and finally it's ending.

RAJU: I mean, this is going to put a lot of pressure on Netanyahu too. This was -- Netanyahu was not involved in these negotiations at all. So he's going to face some new pressure, at least from the American side, to secure the release of all those other Israeli hostages.

COLLINSON: That's right. It's very interesting that Hamas was prepared to deal with the U.S. through Egypt and Qatar again to build, clearly, pressure on Netanyahu before the president goes to the Middle East. Let's remember that it's slightly unusual that Trump isn't stopping in Israel at the same time.

There's a building humanitarian crisis in Gaza. The Israelis are preparing a big operation in Gaza after the president leaves the region. So a lot of things are coming together here. A lot of people in Washington and in Israel believe that Netanyahu doesn't want to have a ceasefire because that could imperil his own government. [12:55:05]

RAJU: Yes, I mean, Gaza's been pounded through the course of all this.

MITCHELL: Yes. And I think, to me, this leaves the question, of course, Americans are celebrating the release of an Israeli-American hostage. But now that there's no longer necessarily a direct American interest in getting hostages released, what will be the role of the U.S. in these negotiations between Israel and Hamas?

You know, President Trump has said he wants the conflict to come to an end. But what will that role be? And will there be an active role for the U.S.? Or is it -- you know, there are many Republicans in Congress who say that isn't our job, and that's between Israel and Hamas. What is that going to look like moving forward?

RAJU: Yes, well, that's a good question. A lot of questions, but still some good news after this, of course, horrific war that's been going on for quite some time.

And thank you for joining us in Inside Politics on this busy and breaking news day. CNN News Central starts after a quick break.