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U.S. Stocks Plunging Further; China Slaps U.S. with 34 Percent Tariffs; Obama and Harris Slams Trump's Second Term Actions; Fight Over Deportation Flights. Aired 10:30-11a ET

Aired April 04, 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]

WOLF BLITZER, CNN ANCHOR: All right. Let's get back to our breaking news. The markets right now are plunging for a second day. The Dow is down some 1,300 points at least so far. This comes as China is retaliating big time, slapping a 34 percent tariff on all U.S. goods coming into China. Let's go right now to the economist, Natasha Sarin who served as counselor to former Treasury Secretary Janet Yellen. She's also a professor at the Yale Law School. Thanks so much for joining us.

What do you think is driving today's selloff? Is it those China tariffs, the retaliatory tariffs imposed by China?

NATASHA SARIN, FORMER COUNSELOR TO TREASURY SECRETARY YELLEN, PROFESSOR, YALE LAW SCHOOL AND ECONOMIST: I think that's a big part of what we're seeing. And frankly, I think what you're observing in the market is the aftermath of Trump launching this sort of one-sided, igniting a global trade war that is going to have the effect of the countries who are being tariffed to feel like it's unfair the way the United States is targeting them are obviously going to retaliate in response and tariff are imports to them, and you're going to kind of see this cyclical reaction.

You're seeing the market realize in real-time what Trump had been saying all along throughout the campaign, which is that he was committed to using tariffs as a tool to, he thinks, restructure the global economy. And now, we're all taking him seriously because he is done exactly that.

BLITZER: This morning, as you know, we got a stronger than expected jobs report, 228,000 jobs added in March while the unemployment rate ticked up a little bit to 4.2 percent. Is Wall Street taking that into account right now? because normally a good jobs report would boost stock value.

SARIN: Totally. And what you're seeing kind of is that is a much stronger than expected jobs report that we got today. And what it's telling us is that the labor market is doing very well. And frankly, if what the Trump administration had done is just like sit back and ride a very strong economy that they inherited, we would be in incredibly good shape.

[10:35:00] But even that positive data that normally would be a very good sort of market reaction to kind of better-than-expected performance is not actually having that reaction in the market today. And the reason is that the market understands that this data is a little bit the calm before the storm. It's telling us about ex-ante, what the world looked like before we ignited this trade war that's going to drive prices up for consumers by thousands of dollars a year. That's going to add to inflation. That's going to shrink the economy. That's going to mean less investment in the United States. And is going to mean job losses in the future.

And as you kind of weigh what ex-ante world is telling us relative to ex-post world and the future and what's coming, people are quite concerned and the market is quite concerned as well about the likelihood of a downturn that's ahead of us.

BLITZER: Quick question before I let you go, Natasha. Do you think that people who are watching right now all over the country who have 401(k)s and other long-term investments and a lot of that in stocks, you think about selling the stocks and investing in something safer, albeit the interest rate would be more modest, potentially treasury bills, something like that just to be on the safe side?

SARIN: So, as a finance professor, I should be very sure not to give people financial advice myself, but what I will say is that it is generally a mistake and empirical evidence shows that it is a mistake to overreact or panic sell in moments like the one that is before us. But I totally understand the concern and the impulse given that if the market deteriorates further or kind of maintains where it's at this week, we are having the worst week for the stock market that we've seen in recent history, worse than any week in the last administration.

So, you were asking, Wolf, yesterday, the last time we spoke, you know, where are people going to start to see the impact of these tariffs and the impact of these price hikes? Well, what's true is they're starting to see those price impacts already. They are already feeling the impact of this trade war because they're feeling it in their 401(k)s. They're feeling it in their retirement accounts.

BLITZER: They certainly are. All right. Natasha Sarin, thanks so much for joining us. And we'll be right back with more news.

(COMMERCIAL BREAK)

[10:40:00]

BLITZER: Former President Barack Obama is sharply criticizing President Trump's economic policies and calling the Trump administration's moves targeting President Trump's political opponents unimaginable. President Obama also has a message for his fellow Democrats saying, and I'm quoting him now, "We're in one of those moments when you know, what it's not enough just to say you're for something, you may actually have to do something and possibly sacrifice a little bit," close quote.

Former Vice President Kamala Harris is also weighing in saying, President Trump's actions have been largely predictable. Listen.

(BEGIN VIDEO CLIP)

KAMALA HARRIS, FORMER U.S. VICE PRESIDENT: Each day in these last few months in our country, and it understandably creates a great sense of fear. Because you know, there were many things that we knew would happen. Many -- I'm not here to say, I told you so.

(END VIDEO CLIP)

BLITZER: She said, I told you so. Joining us now, CNN political commentator and Democratic strategist, Paul Bagala. Paul, thanks for joining us. President Obama also called out the silence from Republicans about the economic turbulence here in the United States and President Trump's attacks on his perceived enemies. What do you make of what we heard from the former president and the former vice president?

PAUL BAGALA, CNN POLITICAL COMMENTATOR AND DEMOCRATIC STRATEGIST: Well, President Obama is probably the most popular politician around. I saw a Gallup poll earlier this year, had him at 59 percent. Donald Trump never had a day in his whole life when he was at 59 percent. That's easier to be an ex-president. It is. And I think one of President Obama's great gifts in politics is timing.

He's not out there in your face every day. He's the way -- Trump has to be, he's the president, OK. But he picks his moments and he knows what he is doing. He's the best sense of timing I've seen anybody since Ronald Reagan. And he's connecting right now. And it is both these grocery store issues, these cost-of-living issues, which is the most important. That's what's driving everything now, but also these more existential issues about our freedom.

When you see people taken, handcuffed, and shipped to some hellhole in a prison in El Salvador without any due process. I'm glad Barack Obama speaking out. I will also note, so is Joe Rogan. So, if Donald Trump, OK, he's losing Barack Obama, he's also losing Joe Rogan. A very popular podcaster that Mr. Trump went on his show. Because Americans don't like that kind of lack of due process and they sure don't like the cost going up at the grocery store the way they are.

BLITZER: A recent poll shows just what 63 percent of Democrats view the party favorably right now, that's down from 81 percent at the start of the Biden administration, but according to Ron Brownstein, the columnist and good friend, these image problems might not matter much coming up in the 2026 midterm elections. He writes this, he writes that Democrats' best chance to recover would rely on their ability to, quote, "crystallize public discontent with the actions by President Trump and the Republican controlled Congress." You think he's right about that?

[10:45:00]

BAGALA: You know, it pains me to say this, because I love the guy, Brownstein's always right, and he's right about this. The -- right now -- by the way, I don't know how the Democratic favorable among Democrats is 63. I mean, we've known each other a long time. I've been a Democrat all my adult life. I wouldn't have a favorable opinion of my party right now.

So -- and yet, the Democrats are winning. Stunning, stunning win in Wisconsin this week where Ben Wikler, the state party chair, led his party to a really stunning -- the highest turnout I've seen in one of these Supreme Court elections. And so, he's done a terrific job of coalescing that anger. The thing is rage, which Democrats feel, is a wonderful motivator. It is.

And so, the Democrats are really angry. And they're -- and by the way, that anger is spreading now. You know, it's not just we're watching the stock market, but it's not just the stock market, it's also the supermarket. It's groceries, gas, and rent. Americans who hired Donald Trump, the ones in the middle, not the hardcore MAGA, and we love them, but they don't move around a lot. The people who moved and put Trump in, they put him in because the cost of living was too high, and he's raising the cost of their groceries, gas, and rent.

I think Chris Van Hollen, who you interviewed earlier on this broadcast, has the right message for Democrats, which is the great betrayal. You know, Donald Trump won the voters who make less than $50,000 a year. That breaks my heart as a Democrat, but I admire it as a strategist. He won the heart of the working class, and now he's stabbing him in the back with higher costs on everything that they eat, drink, wear, drive. He's hurting the very people who put him into office, and that is bad politics as well as bad economic policy.

BLITZER: Always good to get your analysis, Paul. Thank you very much. Paul Bagala.

BAGALA: Thanks, Wolf. Great to see you again.

BLITZER: And coming up, it's one of the highest profile and most contentious court battles of President Trump's second term. Up next, the heated moments in court over deportation flights.

(COMMERCIAL BREAK)

[10:50:00]

BLITZER: This morning, a federal judge is considering whether to hold top Trump administration officials in contempt for the deportation of alleged Venezuelan gang members. Last month, the district judge, James Boasberg, put the administration's use of the 1798 Alien Enemies Act on hold. But the deportation flights went ahead anyway despite Boasberg's order to turn the planes around and come back to the United States with everyone on board. The attorney general insists the government did not defy the judge's order.

Joining us now is CNN Senior Legal Analyst Elie Honig. He's a former federal and state prosecutor. Elie, thanks for joining us. The judge has said there is a, quote, "fair likelihood" that the government didn't comply with his orders. So, what are the likely next steps?

ELIE HONIG, CNN SENIOR LEGAL ANALYST, FORMER STATE AND FEDERAL PROSECUTOR AND FORMER ASSISTANT U.S. ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: Well, Wolf, the judge was openly frustrated with the DOJ lawyer in court yesterday, because he's been trying for going on three weeks now to get the full information from DOJ about the who, what, when, and where of those flights. So, the judge has made clear that he intends to get that information somehow or other. He has suggested he may hold a hearing. He may issue written orders and instructions to DOJ, although that has not done the trick so far. He may even require DOJ or other government officials to take the stand and answer questions under oath.

And the last thing he can do, Wolf, is draw something called an adverse inference, meaning you DOJ have this information, you're refusing to give it to me, therefore, I'm going to assume the worst about what it would be.

BLITZER: How likely is it, Elie, that the judge in this case will make a contempt finding against the Trump administration, the government, and how significant would that be?

HONIG: Well, Wolf, I think we are heading in that direction. Now, in the narrow sense, if the judge finds contempt, then he can impose sanctions. He can put a fine on DOJ lawyers. He can issue a finding that DOJ lawyers have not complied with his order. In an extreme situation, we're not going to get there now, but theoretically, a judge can imprison people. Again, that's not going to happen here.

But, Wolf, bigger picture, for a federal judge to make a contempt finding against the Justice Department and the administration is a remarkable event. I think it says something about where the credibility of DOJ stands right now with the federal courts.

BLITZER: This morning the attorney general of the United States, Pam Bondi, defended the handling of these deportation flights and predicted the matter is far from resolved. Listen to this.

(BEGIN VIDEO CLIP)

PAM BONDI, ATTORNEY GENERAL: I anticipate this will go to the Supreme Court, be ruled in our favor. I don't believe anyone defied a court order. I think testimony came out in court that those planes not only had taken off, but were outside of American airspace.

(END VIDEO CLIP)

BLITZER: So, Elie, what's your reaction to the attorney general? Do you also see this case headed to the U.S. Supreme Court potentially?

HONIG: Well, Wolf, the part of the case about the deportations themselves and the judges temporarily block on those deportations, that's already with the Supreme Court. The briefs went in earlier this week. They should rule on that any day now.

With respect to the question about whether DOJ defied the court's order, I think it's interesting that the attorney general there says, we have nothing to hide. We didn't defy anything. If that's the case, why won't DOJ just turn over the information that the judge has requested? And I think DOJ's refusal to do that really is intention with what we hear the attorney general saying there. If they have nothing to hide, if they did nothing wrong, why are they actually hiding some of the information from the court?

BLITZER: All right. Elie Honig, as always, thank you very, very much. Up next, I'll speak to a Ford executive about the auto tariffs that are now in place and ask what a looming parts tariff could mean if you're in the market for a car. Stay with us. You're in the Situation Room.

(COMMERCIAL BREAK)

[10:55:00]

BLITZER: Happening now, breaking news. Stocks plunging for a second day. The Dow right now down more than 1,400 points. Look at that. China is also retaliating big time against all goods from the United States.

Welcome to our viewers here in the United States and around the world. Pamela Brown is off today. I'm Wolf Blitzer. You're in the Situation Room.

[11:00:00]