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Trump Threatens Higher Tariffs On E.U. & Apple; DOJ Investigating Deadly Shooting As Terrorism, Hate Crime; Trump's Sweeping Legislative Agenda Faces Uncertain Senate Future. Aired 11- 11:30a ET

Aired May 23, 2025 - 11:00   ET

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

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[11:01:33]

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news, President Trump reigniting a major trade war, threatening a 50 percent tariff on all goods imported into the United States from the European Union, sending stock markets tumbling.

And new details on the suspect accused of gunning down two Israeli embassy staffers here in Washington, D.C. The disturbing writings posted on the social media, calling armed action, quote, the only sane thing to do.

And we want to welcome our viewers here in the United States and around the world. I'm Wolf Blitzer. Pamela Brown is off today. And you're in The Situation Room.

And we start with the breaking news, stocks sliding big time this morning, right now down, what, 344 points, as you can see on the screen, as President Trump is upping the ante in the trade wars.

The President recommending a hefty 50 percent tariff on all goods coming into the United States from the European Union, starting on June 1st due to what's being described as a lack of progress with their trade talks, and also putting Apple's CEO Tim Cook on notice, demanding that Apple make all of its iPhones here in the United States or face a brand new 25 percent tariff.

Let's go right now to CNN's chief national affairs correspondent, Jeff Zeleny, and CNN reporter Matt Egan. Jeff, first to you. You were over at the White House earlier this week. The administration warned these latest tariffs could happen. What's the latest?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Wolf, the tariff rollercoaster continues with President Trump surprising many of his advisers here at the White House by threatening this morning a new wave of tariffs against allies to the United States.

The European Union is now in his crosshairs, threatening a 50 percent tariff. But it is a threat, Wolf. We have seen now for really the last several months these threats, and then the tariffs are rolled back. But it certainly is having a deep effect on the market, as you just showed right there.

But Treasury Secretary Scott Bessent said earlier today that this is designed to spark discussions and action with the E.U.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY: I would hope that this would light a fire under the E.U., because, Bill, I've said before, E.U. has a collective action problem here. It's 27 countries, but they're being represented by this one group in Brussels. So some of the feedback that I've been getting is that the underlying countries don't even know what the E.U. is negotiating on their behalf.

(END VIDEO CLIP)

ZELENY: So President Trump's saying on social media this morning that these discussions are going nowhere. That is why he did this. And when you sort of look a little more carefully at the Treasury Secretary's words, he said it's intended to light a fire under the E.U. So it is that. It is a threat. But the threat, of course, is having a real effect on markets. And, Wolf, we shall see if it would go into effect on June 1st or not.

As for the Apple and making the iPhones here, Wolf, it's something that Tim Cook and others who was here earlier this week have warned the President and said bluntly it's not possible to make the iPhone in the U.S. given the labor force, the education, et cetera. And if that were to happen, iPhones would cost so much more, perhaps five times as much or three times as much.

[11:05:03]

So, look, the bottom line here on this Friday before this holiday weekend, the President threatening tariffs, we will see if they would ever cost so much more, perhaps five times as much or three times as much. So, look, the bottom line here on this Friday before this holiday weekend, the president threatening tariffs, we will see if they would ever come to pass, Wolf.

BLITZER: We shall see. All right. Stand by. Matt, let me get to you because remind us what's at stake with these latest threats on the European Union.

MATT EGAN, CNN REPORTER: Well, Wolf, this would be a major escalation in the trade war, and it is not sitting well with investors. The moment that this true social threat came out, we saw U.S. stock futures fall. And you see markets are all solidly in the red with the Dow down by 300 points, about three quarters of one percent, but a 1 percent decline for the S&P 500 and the Nasdaq as well.

And this reaction, I think, makes a lot of sense because investors had been hoping for de-escalation in the trade war. This would be a move in the wrong direction. And it does add a lot of uncertainty because the European Union is one of America's biggest trading partners. The U.S. imported more than $600 billion in goods from the E.U. last year alone, including major items such as pharmaceuticals, cars, car parts, aircraft, machinery and alcoholic beverages as well.

Massive tariffs would disrupt the flow of trade and sharply increase prices here in the United States. I talked to Mary Lovely. She's a trade expert over at the Peterson Institute, and she told me this is just going to backfire. She said the E.U. considers itself to be a major global body. It does not deserve to be treated like a small plumbing contractor. And, Wolf, we did reach out to the E.U. for comment. We have not heard back.

But you've got to believe if these tariffs do go into effect, and that is a big if, but if they do, you've got to believe the E.U. would seriously consider retaliating. And that retaliation is where U.S. jobs could be threatened.

BLITZER: It certainly could be. Matt, the president, President Trump, is also threatening these new tariffs on Apple unless they start manufacturing iPhones here in the United States.

EGAN: Yes, that's right. And let's take a look at how Apple stopped reacting down by 3 percent on this threat to impose massive tariffs on Apple unless it moves its production to the United States. Now, look, this is something that Apple cannot do overnight, of course. This is something that would take five to 10 years. And as Jeff mentioned, this is something that would add cost because the cost of labor is just so much higher in the United States. A Wedbush analyst, Dan Ives, he estimates that this would cost iPhones, it would increase the price of an iPhone to $3,500 if the iPhone had to be made in the United States.

Ives put out a note earlier where he said, we believe the concept of Apple producing iPhones in the U.S. is a fairy tale that is not feasible. And one last point here, Wolf, even if it was economical for Apple to do this, it would be very hard, if not impossible, for the company to find enough workers who have the skills and, frankly, the desire to make iPhones here in the U.S. Back to you.

BLITZER: All right, Matt Egan and Jeff Zeleny, to both of you, thank you very, very much.

Here in Washington, federal prosecutors have filed murder charges against the man accused of killing two Israeli embassy staffers. And that individual could potentially face the death penalty for allegedly gunning down the young couple just outside the Capitol Jewish Museum Wednesday night here in Washington. Authorities are investigating the online history of 31-year-old Elias Rodriguez and are specifically looking into a so-called manifesto that is circulating online.

CNN correspondent Brian Todd is here with us in The Situation. You're doing a lot of reporting, Brian, on this. What else are you learning this morning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the investigation moving very fast at this hour. Investigators have a lot to do yet. They're coming through his Internet activity, his communications, people he might have known who might have been able to tip anyone off on this if there are any of those people out there who they could talk to. What we can tell you is right now the suspect, identified as 31-year- old Elias Rodriguez from Chicago, he faces -- quickly we'll go over the charges, he faces multiple federal murder -- murder charges, including using a firearm to commit murder, and that one carries the possibility of the death penalty. Now, officials have not yet said whether they are going to pursue the death penalty. Other charges you see there, murder of foreign officials, causing the death of a person through a use of a firearm, that's the death penalty one, and also using a firearm during a violent crime.

Police, Wolf, are investigating a lengthy letter posted on X shortly after the shooting on Wednesday night, a letter that is apparently signed by Elias Rodriguez. Some people are calling it a manifesto. It's a letter, a long one, that advocates violent retaliation over the war in Gaza. So we're looking at that to see, you know, that clearly part of his motive, it seems, was allegedly to support the Palestinian movement in -- in Gaza and in that region because he was chanting pro- Palestinian slogans.

Now, we -- CNN did speak to a neighbor of his in the Albany Park neighborhood in Chicago. Our Whitney Wild and her team caught up to a gentleman named John Fry, 71 years old. He says he's lived next to the -- the suspect for about two years. He says the suspect lived with a woman. He doesn't know the woman's name or what the relationship with -- was with her. But he describes the couple as quiet and friendly. Here's what John Fry had to say to our CNN team.

(BEGIN VIDEO CLIP)

[11:10:18]

JOHN FRY, NEIGHBOR OF SHOOTING SUSPECT: He was my next door neighbor. They were very quiet. They were very friendly. And you would never expect something like this. I mean, my goodness, they had Hello Kitty on their front door.

(END VIDEO CLIP)

TODD: And with that account, we also have information on the victims themselves. They are identified as Sarah Milgram, 26 years old, Lischinsky, 30 years old, as we've been reporting, Wolf. This couple was to be engaged, to be married. Lischinsky had bought a ring. He was going to propose to her on a trip to Jerusalem just next week where she was to meet his family for the first time. That's according to Israeli officials who spoke to CNN.

BLITZER: So heartbreaking indeed. All right, thanks very much, Brian Todd, with that update. I want to continue this discussion. Joining us right now is CNN senior law enforcement analyst Andrew McCabe. He's here with us. Thanks so much, Andrew, for joining us. You're the former deputy director of the FBI. Brian just laid out the charges this suspect is now facing. Could there be more charges coming? What do you think? Is there a possibility he could face charges for allegedly carrying out a hate crime?

ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST: I think that's a very good possibility, Wolf. And we know this from some of the comments that the acting U.S. attorney, Jeanne Pirro, made yesterday during her press conference, that they are still considering hate crimes and also terrorism offenses. It's important to remember that those crimes, both the terrorism offenses and the hate crimes, require a very high level of proof of specific intent. In terms of the hate crimes, it's that you committed them, not just that you committed the murder, but you did it intentionally targeting a specific group.

And terrorism, you -- you have to prove that the person was either affiliated with or inspired by a particular designated foreign terrorist group. So we know that investigators are looking for that sort of evidence right now, doing the things that Brian mentioned, looking through his writings, looking through his social media postings and talking to friends and relatives and people who interacted with him. So depending on what they find in that part of the investigation, I think we could see a superseding indictment that would bring additional charges.

BLITZER: As you know, the FBI is seizing his electronic devices, poring over his online activity. What specifically do you think investigators are looking for?

MCCABE: Well, they're looking for those statements by the defendant, Rodriguez, that are illustrative of why, why he did this. What was his intent? What was he trying to accomplish? Why did he target people from this specific ethnic group? Why did he target Jewish people? What was the source of his hatred and his animus towards Jewish people? I think we know some of that already by virtue of the statements he made at the scene.

But the writings, the postings on social media, comments to friends and relatives, that's going to give us a much more in-depth view of what was going on in his head. And one that stretches back in time so we can see kind of how he ended up on this path to radicalization.

BLITZER: I'm curious as to how he knew this event was going on at the Capitol Jewish Museum here in Washington. And did he know that these two individuals, these two young Israeli embassy staffers who were shot, did he know they were Israeli embassy employees when he showed up at that museum?

MCCABE: All very good questions, Wolf. And as far as the event itself, we know that he obviously was aware of the event. He had to go online and sign up and possibly purchase tickets for the event just to find out where it was taking place.

Now, how he became initially focused on that event or aware of it, that we don't know yet. Hopefully investigators will uncover that by looking at things like the search history on his computer devices and his comments to friends, things that he may have written. Whether or not he knew these two, was targeting these two specific people, we also don't know that yet.

I think it's unlikely. If he was targeting the event, he was probably making the assumption that anyone who came out of that place on that night was likely a Jewish person or a supporter of Israel and therefore an enemy to him.

BLITZER: What other questions do you think you would want definitively answered in a case like this?

MCCABE: Wolf, as a counterterrorism professional, I worked counterterrorism for many years in the FBI, ran the counterterrorism division. The first question, the most important thing for counterterrorism investigators is to find out if anyone else knew about what was planned. Did someone know about his intentions? Did someone help him organize and plan his attack? Did someone help him fund it? Did someone help pay to get him there, help him with his transportation?

[11:15:13]

Anyone that falls within that ring of having had knowledge or possibly involvement or provided support to this effort is also someone very concerning to authorities because they are like-minded and might also present a threat. So as an investigator, that's a question I want answered right away.

BLITZER: Good question to be answered, to be sure. Andrew McCabe, thanks so much for joining us.

MCCABE: Thanks, Wolf.

And still ahead, an investigation underway into a jet plane that slammed into a San Diego neighborhood. The deadly crash leaving a quarter-mile trail of torch debris, what authorities believe was the cause.

And the U.S. Treasury Department announcing the end of the penny. Stay with us. You're in The Situation Room.

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[11:20:41]

BLITZER: President Trump's sweeping legislative agenda has passed the House of Representatives, but his so-called big, beautiful bill faces a very uncertain future right now in the Senate.

The measure narrowly made it through the House on Thursday with a 215 to 214 vote, and that was after two nights of intense debate. Now some senators are saying they will push for more changes to the bill. CNN congressional correspondent Lauren Fox is joining us now. She's here with us in the Situation Room. Lauren, what is -- what hurdles does this bill potentially face now that it's coming up in the Senate?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Well, this was a bill that was reached with a delicate balance of negotiations between the House moderates and the House conservatives, and so any change could really endanger this bill's future moving back through the House when it gets back to that chamber, and that has been the point that Speaker Mike Johnson has been trying to impress upon senators. He went to the Senate lunch earlier this week to try to make that case. He also has been in regular communication with Majority Leader John Thune, but you have a number of senators who are now looking at the changes that were made in this bill and say that they have concerns about some of the particular changes when it comes to Medicaid requirements, changes to the provider tax specifically as a problem for Senator Josh Hawley, a Republican from Missouri. You also have Republicans who might have concerns about the changes to energy tax credits that were passed under the Inflation Reduction Act when Biden was president. They may not want those to go into fruition so quickly, the repeals of those tax credits.

And then there's a huge question mark right now if some of these deficit hawks are going to be voting for this bill because they think it just simply costs too much money. People like Senator Rand Paul, people like Senator Ron Johnson, Rick Scott, those are some voices to watch. And as a reminder, John Thune also has a very narrow majority.

So we talk often about how the speaker can only afford to lose three votes. Well, John Thune can only afford to lose three votes in his chamber as well. So there's a lot of work ahead. We'll see whether or not the Senate is going to be able to do this in the next couple of weeks when they return from their Memorial Day recess.

BLITZER: Do you have any idea when this final vote in the Senate could happen?

FOX: Well, Mike Johnson wants them to be through with this by the July 4th recess. That doesn't give the Senate much time to figure out the changes. They want to make pass the bill themselves, send it back to the House and get this all wrapped up in just a month's time. That -- that's very ambitious.

BLITZER: We'll see what happens in the Senate. Thanks very much. Always good to have a Fox with a Wolf in The Situation Room. Thank you very much, Lauren. Appreciate it.

I want to bring in our senior political analyst and Bloomberg opinion columnist, Ron Brownstein. Now, Ron, thanks for joining us. You recently wrote about this bill saying, and I'm quoting you now, Republicans are ignoring the first rule of political survival. Tell us why.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, I mean, one of the things that's striking about this bill is the way in which it targets constituencies that are very prevalent in Republican health districts. I mean, what I was writing about there was the billions of dollars that have been invested in clean energy plants and factories under the incentives of the IRA in Republican health districts.

There are more than two dozen Republicans who have at least $2 billion in the House, who have at least $2 billion in investments in their districts tied to the IRA. They all voted to eliminate those incentives. And the same thing is true about Medicaid.

I mean, as we wrote in cnn.com a couple of weeks ago, there are roughly 65 Republicans who have more than the average number of Medicaid recipients in their districts. Republicans are also more likely to represent districts that have bigger health needs than Democratic health districts at this point. And yet they are voting for massive cuts in Medicaid.

One last point, Wolf. What really makes this bill unique is that it departs from the strategy Republicans used to cut taxes under Bush and Trump the first time. Those bills were all sugar, no spinach. They kept the spending cuts far away from the tax cuts. This reverts to the strategy that Newt Gingrich used against Bill Clinton in '95, '96 of tying tax cuts and spending cuts together. And that proved very difficult to defend at that point.

And you see Democrats already essentially arguing they are cutting programs for the middle and working class to fund tax cuts for the rich. It's a tough argument for Republicans to win.

[11:25:04]

BLITZER: Yes, it certainly is. Ron, I want to play something that the House Democratic leadership Hakeem Jeffries said just before this bill narrowly passed in the House. Listen.

(BEGIN VIDEO CLIP)

REP. HAKEEM JEFFRIES (D-NY), MINORITY LEADER: This day may very well turn out to be the day that House Republicans lost control of the United States House of Representatives. Because the American people are paying attention, they are smarter than you think.

(END VIDEO CLIP)

BLITZER: Ron, many of the cuts in this bill wouldn't go into effect until after the midterm. So is this bill going to have as big of an impact as the leader Hakeem Jeffries is suggesting?

BROWNSTEIN: Well, as I said, the best precedent I think we have is that '95, '96 budget showdown and shutdown between the new Republican Congress led by Newt Gingrich and Bill Clinton. As you recall, Wolf, you covered it, I covered it. The '94 election was a wipeout against Democrats. Clinton's approval rating was in the dumps. Nothing he did in '95 really moved the needle very much.

But when he got into the fight against Republicans over the budget, and he basically said they were threatening what he called M2E2, Medicare, Medicaid, Education, and the Environment to fund tax cuts for the rich, that's when the -- the, you know, kind of the dial flipped. And Clinton's approval rating went back over 50 percent.

He went ahead of Bob Dole in the polls, and he cruised really to a pretty easy re-election. We don't know if it will have the same effect. But as I said, Republicans are basically under pressure from their right, emulating that strategy and departing from the way that Bush and Trump the first time approach tax cuts, which is to keep them as far away as possible from spending cuts, particularly the health care. In 2018, the effort to repeal the Affordable Care Act was a central issue for Democrats in helping them to win so many of those House districts. This may not have quite the same reach as that, but Medicaid now affects 80 million people, and polls show Americans are overwhelmingly opposed to cutting it. And I think it will be a pretty, not a big political lift to convince voters that they are cutting these programs to fund tax cuts that mostly benefit people at the top.

BLITZER: You know, it's interesting, and I'm sure you're aware of this, that new analysis from the Democratic-leaning data firm Catalyst shows the Democratic Party --

BROWNSTEIN: Yes.

BLITZER: -- lost a lot of ground with younger, more diverse, and less engaged voters in the last election. What does that mean for the party as it seeks to turn things around, turn its election fortunes around and go in a better direction?

BROWNSTEIN: Yes, you know, it's really striking. I mean, especially in the Trump era when overall turnout is going up. Presidential elections draw in a lot of irregular voters, and these tend to be people who don't consume a lot of political news, maybe don't feel they have a lot invested in some of the culture war, ideological fights between the parties. But as I like to say, they are experts in their own lives.

And in 2020, they were pretty unhappy with the way things were going in the country, and they gave Biden a solid margin over Trump. In 2024, those younger, diverse voters were again, not -- many of them non-college, were pretty unhappy with the way things were going with -- in the country, and they voted more for Trump, about a 52 percent majority, according to Catalyst.

What we have seen is that after 100 days, Trump's approval rating among virtually all of those groups that moved toward him has fallen well below his vote share with them in 2024. And what that says to me is that these are voters that maybe Democrats a few years ago, people like me, a lot of analysts thought were pretty reliably leaning Democratic.

They are results voters, I think, and neither party really owns them. Trump is in the same position I think Biden was, which is he has to deliver results. And if he doesn't deliver results, those voters, I think, are very clearly capable of moving on, probably in '28, which is the next time they'll show up in big numbers.

But exactly the kind of movement away from Biden that we saw is possible for Trump unless they believe he is making their lives better. And right now, the polling, as you know, is his polling on the -- for handling the economy is weaker than it was at any point in his first term. He doesn't turn that around. I think those gains, a lot of those gains could roll back.

BLITZER: Excellent analysis always from Ron Brownstein. Thank you. Thank you so, so much. And it doesn't make sense anymore. That's what the U.S. Treasury Department has now decided when it announced it's phasing out production of the penny. Consumers will still be able to use the $0.01 coin, but there won't be any new ones put into circulation once the United States Mint finishes manufacturing the last batch of penny blanks. Currently it costs more to produce a penny than it's $0.01 worth. Stay with us.

[11:29:53]

Up next, a phone, a home break in and a dog held hostage and a Molotov cocktail. Rapper Kid Cudi's a shocking testimony in the Sean "Diddy" Combs sex trafficking trial. We have an update. That's next.