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The Situation Room

25 Percent on Canada and Mexico Tariffs; Real-World Impact of NOAA Firings; Hochul on Hiring Workers Targeted by DOGE. Aired 10:30- 11a ET

Aired March 03, 2025 - 10:30   ET

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

[10:30:00]

PAMELA BROWN, CNN ANCHOR: As part of this agreement, then is that to be expected? It would be less than that.

HOWARD LUTNICK, COMMERCE SECRETARY: Well, I'll be sitting across the table from the president pointing out that they have done a good job on the border, but they haven't done enough on fentanyl, and he's got to decide how he wants to play. And that's the key to the president's advisers. We are around telling him all the details, but then he's going to decide this afternoon. And tomorrow, we're going to put out those tariffs.

BROWN: So, clearly, you don't want to get ahead of the president here. But why all the uncertainty? As you know, I know you know better than anyone, businesses hate uncertainty. We've seen the stock market hates uncertainty. Don't you want to at least give businesses an environment where they can effectively make plans?

LUTNICK: Well, in a situation like this where it's an emergency based on the border being open and fentanyl killing Americans, I think you've got to let Mexico and Canada take their actions and you've got to let the president use the tariffs as his driving force to get them to take their actions.

The real answer is, why do we need to build a wall if our most important -- if Mexico says the most important thing is doing business with America, why shouldn't they build the wall and they protect us --

BROWN: No one's arguing --

LUTNICK: -- because we're the great America?

BROWN: Right. And just to be clear, no one's arguing that fentanyl should be crossing the border. I think everyone wants to clamp down on that, prevent the deaths, but it's just -- going back to the uncertainty question, businesses hate it, we've seen the impact on the stock market, and a lot of that is centered around the tariff policy and what's going to happen, you're seeing companies hoard inventory, you're seeing prices go up as a result. What can be done about that? You're the commerce secretary.

LUTNICK: Who hates it the most? Mexico and Canada. Close that border. Get the cartels to stop sending in fentanyl. Save Americans deaths. This is the president standing strong on this topic. He's going to decide today. We're going to put it out tomorrow. There's not a lot of uncertainty to tomorrow, but he knows.

They've done a good job on the border. They haven't done enough on fentanyl. Let's see how the president weighs that today. We're going to talk about it all day today. And then, he'll let everybody know tomorrow what the plan is.

BROWN: True. And he could announce it -- before he was supposed to announce it, he said, we'll wait, you know, for a while. And now, that deadline is here. But even if he does announce it tomorrow, there's still a question of the impact, the uncertainty of the impact it would have. And we're hearing from U.S. automakers who are concerned. You heard from Ford CEO, Jim Farley, who said, quote, "Let's be real honest. Long-term, a 25 percent tariff across Mexico and Canada borders would blow a hole in the U.S. industry that we've never seen."

Again, we're waiting to find out the details, but 25 percent is what the president had initially touted. Is that a valid concern from him?

LUTNICK: Well, the order makers are worried about that. If there's a -- you know, they go back and forth between parts with the United States and Mexico. They've built this whole U.S., Mexico, and Canada sort of supply chain going back and forth to benefit from the low cost of Mexican labor to the loss of jobs in Michigan and Ohio.

Let's be clear, Michigan and Ohio moved their jobs to Mexico and Canada, and the president wants them back. He wants to bring these jobs back to America.

So, the key is, will Mexico and Canada have done enough so that the emergency with fentanyl and the border have been solved before April 2nd when he really wants to talk about the policy on autos generally, right? You've got Korean cars, you've got Japanese cars, you've got German and European cars, and you -- they're attacking the American car manufacturers.

So, he wants to bring auto manufacturing back to America. He wants to reinvigorate Michigan and Ohio. And that's the plan of his tariff policy, but that's the April 2nd. So, you got to differentiate between the two. Fentanyl is tomorrow, and fentanyl is murdering Americans. And April 2nd is our tariff policy that says we want those jobs back home. We want these great American jobs back home. We're tired of exporting them.

BROWN: I understand you're saying fentanyl is about tomorrow, but again, the tariffs and response to fentanyl, as you say, does immediately impact these automakers. And as you've laid out yourself, they do get a lot of parts from Mexico and Canada, even if it's an American made car, it's still coming from there. And a lot of them are saying, well, can we have some more time to figure out our supply chain?

And, you know, for our viewers watching this, they may be wondering right now, should I go ahead and buy a car now before prices go up a lot? I mean, they're supposed to go up by -- to produce a car from 3,500 to 12,000, according to the Anderson Economic Group. Should our -- should we go ahead and buy a new car for -- in the market for one?

LUTNICK: You should buy. We want to buy American cars. We like cars made in America, built by Americans, in America. That's what this president wants to do.

BROWN: But there's no such thing as that right now, and the worry is --

LUTNICK: Of course, there is. Why don't you get Jim Farley from Florida?

BROWN: 75 percent -- I think it's up to 75 percent, but they get engines from Mexico. They get other parts from Canada. And I understand that the goal is to have it all manufactured here, but that takes time. Supply chain and figuring that all out. And these automakers feel as though they haven't had the time to sort that out, you know.

LUTNICK: And that's what's amazing about Donald Trump. He understands the details of this, and we are going to craft a tariff policy that hits those things right on the head. We know it takes time to build plants and manufacturer in America. So, we're going to come out with a model that incense people to move it back. I mean, we need production and manufacturing back in America, and we're going to do it with tariffs.

[10:35:00]

BROWN: All right. Stick around Commerce, Secretary Howard Lutnick. More to discuss. We'll continue this conversation after the break.

(COMMERCIAL BREAK)

BROWN: We are back now with Commerce Secretary Howard Lutnick. I want to get your response to Warren Buffett who said, even the tooth fairy doesn't pay tariffs, making the point consumers do, and that it's an act of war to some degree.

LUTNICK: That's so silly. I mean, the United States of America before 1913 only had tariffs. And then, we created -- of course, when we entered World War I, we all had to pitch in and we created, of course, the brilliantly named Internal Revenue Service. That's why it's called the Internal Revenue Service.

[10:40:00]

So, Donald Trump has announced the External Revenue Service. Let's let outside people who live and breathe off our economy, let them start paying, and let's reduce the tax burden on Americans. No tax on tips, no tax on Social Security, no tax on overtime. This is turning that tariff money back to the American people, and that's what Donald Trump's going to do.

BROWN: In theory it might sound good, but in practicality, there are a lot of questions about that. And he wants to get rid of the IRS? LUTNICK: Of course, if we could have the outside -- I mean, that's a big objective, right? The big objective would be to have enough money come in from the outside sources selling, you know, visas, the ability to have a green card to come to America. Imagine if you sold a million of them, you'd pay off our deficit and have $15 trillion to spare. And that's only 3 percent of America. It's nothing.

So, the concept of replacing us paying we're like, we have Stockholm syndrome. We just are so happy to pay we forgot that maybe other people should pay and we should have the benefit of living in the great America.

BROWN: But I want to ask you, consumer sentiment is down. You know, you're making the pitch -- President Trump has made the pitch for the economy. You had adviser -- former Trump adviser Stephen Moore saying to the Wall Street Journal, he's nervous about the prices, that the administration needs to keep its eye on what's happening, that it should be a top priority. The trend is a little bit troubling. Do you share Moore's fears? A lot of consumers are worried right now about prices.

LUTNICK: I don't. We are going to drive down the deficit, and that's going to drive interest rates down. That's going to cut mortgage down.

BROWN: When? Like when could we see that?

LUTNICK: Oh, I think over the first two years. The first two years.

BROWN: But right now, consumers are saying it's too high and it's hurting their pocketbook right now.

LUTNICK: I think it's going to come down. You're going to watch President Trump drive down price of energy, drive down interest rates now. Over the next six months, you're going to see the expectation of the driving decrease in deficits, it's going to cut interest rates, and it's going to really feed right into the American pocketbook. No tax on tips, no tax on overtime, no tax on Social Security. It's going to be in this bill, and we're going to start cutting the cost of Americans and start driving this great economy forward.

BROWN: Quickly, before we let you go, you were in the Oval Office on Friday when everything devolved with President Zelenskyy, bring us there, tell us what happened during that -- what you observed with the president, you were sitting right across from him, and the huddle afterwards.

LUTNICK: So, I've heard nonsense that this was a setup. Let me tell you what the setup was. There was a beautiful signing room next door to the Oval Office, and then a beautiful lunch setup. We expected this to be a love fest. Really, it was just a love fest, but what happened is Zelenskyy -- President Zelenskyy came in and all he asked for was no concessions, security guarantees, reparations from Russia of $300 billion dollars, give up no land, get them off our land, and he kept going 40 minutes before the cameras were in and 45 minutes once the cameras came in.

Endlessly, relentlessly, our president says peace. He says, no ceasefire. Our president says, peace. He says, reparations.

BROWN: Well, he says security guarantees with a ceasefire. But that's what he said.

LUTNICK: But think about it, he's at war with Russia. If we sign a piece of paper with security guarantees, then I guess we're at war with Russia. And the president says, you're just messing with World War III. Stop it. Let's just talk peace. Be a peacemaker. And he kept saying no. And it shocked us.

BROWN: No, what happened --

LUTNICK: I tell you what, it was shocking.

BROWN: And you said it was shocking. We saw it in the camera, but after what happened, you said it was shocking. What was the reaction from the president? Bring us in there.

LUTNICK: Well, we couldn't -- he couldn't believe that this is the way it devolved. I mean, why would the guy come for a signing ceremony and basically just reject everything and saying, I'm not here for peace, when he knows President Trump has said, I'm the peacemaker.

BROWN: Does he want Zelenskyy to resign?

LUTNICK: We were just shocked at the whole thing. No, the president wants peace. He wants to have Zelenskyy say, I want peace. He wrote a tweet right after and that said, you can come back when you are ready for peace. And that's what he wants. He wants --

BROWN: So, he doesn't want him to resign, to be clear?

LUTNICK: No, he's not weighing into Ukrainian politics. What he wants is to be a peacemaker. He wants to mediate. He wants to negotiate.

BROWN: And there's no discussion to withhold aid? Because I read in The New York Times, I believe it will be there -- there's going to be a meeting about what to do and how to respond. Do you think that would happen?

LUTNICK: Well, I think the president is going to exactly consider what to do and how to respond. He's going to figure out what are the tools that he can use on Russia and what are the tools he can use on Ukraine to get them to the table? Like any great mediator, he's going to beat both sides down to get them to the table.

And so, yes, he said it at the meeting, he said, what do you want me to do, say, call Putin a terrorist and then call him up and say, hey, I'd like you at the peace table. Come on. He's got to be both sides.

BROWN: Does he actually think he's a terrorist, but he's outwardly not saying that because he knows that won't help with negotiations?

LUTNICK: We've given $300 billion dollars to Ukraine. Is it difficult to see what side we're on? Give me a break. I mean, this concept of people getting confused is absurd. The president is on Ukraine's side and he said it. He said, I'll give them more military aid. He said it. But he said he'll do it if he can get to peace. And he needs peace. And he needs President Zelenskyy to say, I want peace.

[10:45:00]

And then, the president will bring them together, and you'll see the greatest peacemaker, because he knows you got to hit both sides in order to get to the middle.

WOLF BLITZER, CNN ANCHOR: Mr. Secretary, one quick point, though. You were there in the Oval Office watching all of it unfold. Didn't you see the vice president, J. D. Vance, begin the angry exchange with his tough words about Zelenskyy? And that was in front of all the TV cameras.

LUTNICK: I mean, what he said was -- we knew Zelenskyy would put on a show for the press, right? Because he wants to look good at home, look strong, and all the rest. But we figured it's got to end after 10 minutes. It didn't end after 20 or 30 or 45 minutes. And what did J. D. Vance say? Please say thank you and let's not litigate this disagreement out here in front of these cameras. Let's go back and talk about it then, but at least say thank you to the president.

If you think that is attacking President Zelenskyy, then you were in a different room than I was in, because I thought that was reasonable and appropriate for him to just say, thank you for $300 billion. Thank you for being on my side. I want peace. I'll be with you, President Trump. Let's go figure out how we can do it together with power, and let's use this mineral deals to show that the United States is behind Ukraine and let's go force Russia into a reasonable peace deal. That's what J. D. Vance was trying to do. That's what President Trump was trying to do. That's what all of us expected, and we had no idea he was going to be not a peacemaker.

BROWN: Zelenskyy has thanked the U.S. many times, maybe not in that moment directly to Trump, but was it planned that J. D. Vance would be the one to interject if he continued, in your all's view, to play to the cameras? Because it is unusual for a vice president to interject like that. Was that sort of discussed before the meeting?

LUTNICK: Absolutely not.

BROWN: OK.

LUTNICK: We had no idea this was going to go this way. You would just assume he'd play a little bit for the cameras, right? And then, he would be thankful for the president for the incredible aid that America has given, $300 billion. You got to say, we love America, we appreciate America, you know, we want you by our side. And if you think we should have peace, we should have peace, right? But instead, he said, I want $300 billion in reparations from Russia. I want them off my land. I want all the land. Really. All the land and reparations and security guarantees. The answer was It's just way too far. That's not a peacemaker. That's a troublemaker.

And that's what the president saw, and he took it for 40 minutes before and 45 minutes in front of the camera. And then it was just enough already, enough.

BROWN: All right. Thank you, Commerce Secretary Howard Lutnick. Appreciate it.

BLITZER: Welcome to The Situation Room.

BROWN: Welcome to our first show, our debut show.

LUTNICK: Thank you.

BROWN: We appreciate all of your time. And still ahead --

BLITZER: It's an agency charged with issuing life-saving weather alerts. Up next, we're joined by a former acting administrator of NOAA on the real-world impact of DOGE's cuts and what they could have.

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[10:50:00]

BLITZER: NOAA has become one of the latest agency impacted by the mass firings in the Trump administration, as part of the administration's remaking of the federal government. Sources now tell CNN that more than 800 employees have been fired, including those responsible for sending critical weather alerts. One recently fired specialist says DOGE cuts are an act on science -- an attack on science, I should say.

Joining us now for more is retired U.S. Admiral Tim Gallaudet. He served as the acting administrator of NOAA during the first Trump administration. Admiral, thanks very much for joining us.

You've cautioned against what some are describing as slash and burn approach by DOGE and how it's affecting NOAA. Recently fired NOAA employee told CNN, let me quote this recently fired employee, "If you are impacted by the weather in any sort of way, which means everybody, you're going to be impacted by this." What would these impacts be?

REAR ADM. TIM GALLAUDET, U.S. NAVY (RET.), FORMER DEPUTY/ACTING NOAA ADMINISTRATOR AND CEO, OCEAN STL CONSULTING, LLC: Well, first of all, I think they're very self-defeating, Wolf. They're going to have impacts to national security as well as the economy, and public safety in general from the weather warnings that would potentially be missed because of the understaffing at the weather service, to other areas such as the shipping and seaports, they depend upon weather as well as NOAA's environmental data to operate safely.

BLITZER: Washington's Democratic Senator Maria Cantwell has raised the alarm over the economic impact these cuts could have. She says, and I'm quoting now this, "This action is a direct hit to our economy, because NOAA's specialized workforce provides products and services that support more than a third of the nation's GDP." So, what are the most likely impact that you're likely to see on this front?

GALLAUDET: Well, like I said, shipping and seaport safety, that's going to be a big issue. Another thing NOAA does is they provide nautical charts and they update nautical charts. They're used for mariners at sea as well as the U.S. Navy.

BLITZER: So, you don't think -- do you think that the Trump administration officials who want to cut NOAA don't understand what NOAA is all about?

GALLAUDET: Well, I just think the approach is wrong. Firing federal workers, some of whom have been with the agency for decades and they only just recently became federals rather than they were contracting before, it's just not the right approach. You can find efficiencies in other ways.

For example, look at the redundancies across agencies. NOAA does climate modeling, they do satellite observing. And meanwhile, NASA is doing the same thing with their Earth observing system. Why the repetition? It's a NOAA mission. NASA should just focus on exploring space.

BLITZER: We'll see if they decide to take your advice. Thanks very much, Retired Rear Admiral Tim Gallaudet. Appreciate it.

GALLAUDET: Thank you, Wolf.

BLITZER: Pamela.

BROWN: All right. Thank you, Wolf. And still ahead, from you're fired to you're hired. We're joined by New York Governor Kathy Hochul on the recruitment effort targeting federal workers, and we'll get her take on a controversial figure entering the New York City mayor's race. You're in The Situation Room.

(COMMERCIAL BREAK)

[10:55:00]

BROWN: Happening now, President Trump is digging in, the Kremlin is lashing out, and Europe is rallying around Ukraine. We have some new details on how the fallout from Trump's fiery Oval Office meeting with Ukrainian President Volodymyr Zelenskyy is spreading across the globe.

BLITZER: We want to welcome our viewers here in the United States and around the world. I'm Wolf Blitzer, you're in The Situation Room.

The Kremlin is now celebrating Friday's very contentious exchange of Ukraine's leader in the Oval Office and revealing -- and I should say unravelling in the confusion.

[11:00:00]