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The Source with Kaitlan Collins
Trump Declares "Economic Independence" With Sweeping Tariffs; Car Dealership Owner Says He'll Take A "$20,000 Hit" On Some Vehicles Due To Trump's Auto Tariffs; Liberal Wins Wisconsin Supreme Court Race In Blow To Trump & Musk. Aired 9-10p ET
Aired April 02, 2025 - 21:00 ET
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[21:00:00]
ANDERSON COOPER, CNN HOST, ANDERSON COOPER 360: Whatever he was on film, in life, it seems, he was a sensitive soul, and he had clearly thought about his own mortality.
The documentary ends with a clip of Kilmer, playing Mark Twain, on stage, early in his career. And one of the lines he recites is by Twain's better-known lines. Don't part with your illusions, Twain said, When they are gone, you may still exist, but you have ceased to live.
Val Kilmer is survived by his children, Jack and Mercedes, who said he died yesterday from pneumonia, at the age of 65.
That's it for us. "THE SOURCE WITH KAITLAN COLLINS" starts now.
KAITLAN COLLINS, CNN HOST: Straight from THE SOURCE tonight.
President Trump rolls out major new tariffs. Nearly all of the things that you buy from other countries will be taxed, some much more than others, with economists warning that those taxes will ultimately be paid by you.
The Treasury Secretary of the United States will share his view, in moments.
I was there inside the Rose Garden for the President's big announcement, along with my fellow White House insiders. We'll take you behind-the-scenes, what you may not have seen on TV.
And Elon Musk bet big on Wisconsin and lost big last night. So how does President Trump feel about his role right now? Maggie Haberman is here with her latest reporting.
I'm Kaitlan Collins. And this is THE SOURCE.
Tonight, inside the White House, across Washington, and really around the world, everyone is bracing for impact. That's because that impact could be substantial.
President Trump, who Americans voted back into the Oval Office, in large part because of his central campaign promise to bring down prices, just laid out his vision to overhaul the global economy, which will raise those costs in the process.
The President says, to make it more fair for Americans, that he is implementing a universal 10 percent tax on just about everything that is coming into the United States from another country. Some trading partners are getting hit with a lot more than 10 percent. That is food, cars, clothes, technology, the list really goes on and on. As economists, most of them, say that you will pay those higher prices.
But I was there inside the Rose Garden today, as the President made his case for why that short-term pain for American families, seniors, and small businesses, will be worth it.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT, UNITED STATES OF AMERICA: This is one of the most important days, in my opinion, in American history. It's our Declaration of Economic Independence.
(END VIDEO CLIP)
COLLINS: July 4th, 1776, meet April 2nd, 2025.
The only exceptions to the new actions tonight are things from Mexico and Canada that comply with that deal, that the President negotiated during his first term in office. Stuff that you buy from there is currently getting hit with a 25 percent tax.
But beyond that, you saw the President pull out these charts today, and we'll zoom in on them in a moment, to reveal the specific taxes that he'll be charging to import things from countries, 60 countries that he calls bad actors.
(BEGIN VIDEO CLIP)
TRUMP: In many cases, the friend is worse than the foe in terms of trade. But such horrendous imbalances have devastated our industrial base and put our national security at risk.
(END VIDEO CLIP)
COLLINS: Now the countries that the President singled out include some of the United States' closest allies. For example, if you buy anything from a country inside the European Union, it is going to get hit with a 20 percent tariff. Anything from Japan, 24 percent.
Then there's China, which just was hit with an additional 34 percent tariff. That's on top of the 20 percent that was already in place. That's what the Treasury Secretary confirmed earlier. And that means that goods that are shipped from China to the United States will face a 54 percent tariff in just a matter of days.
As we come on the air tonight, we are less than three hours away from that 25 percent tax on all foreign-made cars. Now, given the fact that practically any new car that you buy has at least some imported parts in it, it's much more extensive than the industry was expecting. The business community that had been clamoring for certainty, over what these tariffs were going to look like, and what President Trump had ultimately decided here, even though he foreshadowed a lot of this, doesn't appear to like what they are seeing. U.S. stocks plunged in after-hours trading, as the President was speaking earlier.
But as he personally noted this afternoon, for him, this moment and really this argument, has been decades in the making.
(BEGIN VIDEO CLIP)
TRUMP: We let Japan come in and dump everything right into our markets and everything. It's not free trade. If you ever go to Japan right now, and try to sell something, forget about it, Oprah. Just forget about it.
So the fact is that you don't have free trade. We think of it as free trade, but you right now don't have free trade.
China is taking advantage of this country, unbelievably. Now, I say you put a 25 percent tax on everything that's made in China.
WOLF BLITZER, CNN ANCHOR: That's a tariff. That creates a--
TRUMP: Absolute -- and you know what? And then the free--
BLITZER: --that creates a -- a trade war.
TRUMP: That's right.
(END VIDEO CLIP)
COLLINS: The President's premise, when it comes to tariffs, and his affection for them, has been central, really, to his entire political career.
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(BEGIN VIDEO CLIP)
TRUMP: The most beautiful word in the dictionary to me is tariffs.
I love tariffs. I love tariffs.
So, I love tariffs.
And I say, the most beautiful word, in the entire dictionary of words, is the word, tariff. I love tariffs.
(CHEERING)
(END VIDEO CLIP)
COLLINS: When you look at the sum total of all of the numbers on the chart that the President brought out in the Rose Garden earlier, the United States is about to have the highest tariff rates in the world. I sat down with the Treasury Secretary, Scott Bessent, about all of that and more, at the White House earlier.
(BEGIN VIDEOTAPE)
COLLINS: And Secretary Bessent, thank you so much for being here.
This is obviously a massive announcement that the President just made. I know there were a lot of options being considered, behind-the- scenes, different -- different pathways. How did the President come to this decision?
SCOTT BESSENT, TREASURY SECRETARY: Well, look, the President's had a vision for a long time. He's been talking about tariffs. He implemented China tariffs in his first term. So, he has been thinking about this for a long time.
And with the reciprocal tariffs, there are a group of factors. Is one -- excuse me -- what's the other country's tariffs? As important, or sometimes more importantly, what are the non-tariff barriers? Is there currency manipulation, and is there unfair subsidy to labor or finance cost?
COLLINS: Yes, and when you look at this, on the reciprocal tariffs themselves, how did you come up with the calculation, essentially, in terms of what this looks like for each country? Because obviously, we're looking at the numbers here. There are different ones.
How did -- and I can see some of the countries disputing some of these reciprocal tariffs, saying, That's not actually what we charge. What would your response to that be?
BESSENT: Well, I can tell you, USTR has the volumes of data, and they've been doing it a long time, so. And all this will probably be challenged in court. And I think that USTR and Trump's first administration won over 4,000 lawsuits. So, I think the data is very robust.
COLLINS: So you expect that if there are any legal challenges, that the administration would be successful on that front?
BESSENT: I think the data is very robust, and it's going to be difficult to challenge.
COLLINS: And as we're looking at this, for, on China, for example, some of the nations, there's a baseline 10 percent tariff and then there's a reciprocal tariff. China has this 34 percent tariff. There were already 20 percent tariffs in place on China. So is that 34 percent on top of that, meaning, it's a 54 percent reciprocal tariff on China?
BESSENT: I believe it is.
COLLINS: OK. And so, when you -- when you look at that, on the reciprocal tariffs, as these are going into effect, I imagine some of these countries are going to call and try to negotiate this. Is that an option for these countries, over the next few days? Or what is the White House's mindset on that?
BESSENT: Well, I think the mindset is, Let's just see where we are, and then we'll see how President Trump feels about all this.
COLLINS: OK, so it's essentially up to President Trump if he's in the mood to negotiate with some of these countries?
BESSENT: Well, I mean, it's not the mood. It's the how -- how are we seeing things? I think the real thing is going to be, and that he's going to gauge the tariff level by, it won't be necessarily the calls from the leaders. It's going to be the calls from industry, saying, OK, how can we get these off? And he's going to say, You can get it off, bring your factory to the U.S.
COLLINS: Yes, and obviously, with the cars, all foreign-made cars imports are getting a 25 percent tariff, starting at midnight. If half the cars coming into the United States are foreign-made, that's hard to turn around overnight, as you know.
So, what would you say to people, in the auto industry, who are worried about that timeline and how quickly that could shift?
BESSENT: Buy American.
COLLINS: And what about American-made cars and -produced cars that are used made -- being made using foreign-made parts?
BESSENT: Well, I believe the USMCA is exempt.
COLLINS: Yes, those that are compliant with this.
BESSENT: Yes.
COLLINS: Obviously Canada and Mexico are not on here.
A lot of these are our closest allies. South Korea. Japan. When you look at those countries, and the tariffs that they're being charged, if they're calling, what would you say to those nations who may have concerns about how to lower these numbers?
BESSENT: Well, I would say they've been doing it to us for a long time, right? And if they don't like tariffs, then why do they have them?
COLLINS: And should we view these as permanent?
BESSENT: Again, I think we're going to wait and see how this plays out.
COLLINS: And if countries retaliate, which some have said that they would, some have said they wanted to wait and see, what is the White House's response going to be, to those countries?
BESSENT: Well, Kaitlan, one of the messages that I like to get out tonight is, Everybody, sit back. Take a deep breath. Don't immediately retaliate. Let's see where this goes. Because if you retaliate, that's how we get escalation.
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COLLINS: And then it becomes a full-fledged trade war, in your view?
BESSENT: Not a trade war. Depends on the country. But remember that the history of trade is, we are the deficit country. The deficit country has an advantage. They are the surplus countries. The surplus countries, traditionally, always lose any kind of a trade escalation. So I'd, as a student of economic history, or a professor of economic history, I'd advise against it.
COLLINS: So you're essentially saying that they should not retaliate?
BESSENT: I would say that doing anything rash would be unwise.
COLLINS: And on the 10 percent of all imports across the board, that's that baseline on all countries. You've said before that strategic -- that tariffs should be used strategically. How would -- what is the strategy in that? What is the ultimate endgame for that?
BESSENT: Well, no, I've said that that's one use, of the tariffs. Go back all the way to Alexander Hamilton. Alexander Hamilton used them to raise revenue. He used them to protect industry. And President Trump has added the third leg of the stool, which is strategic.
So, if we are thinking about a 10 percent global tariff, and let's assume we import about $3 trillion a year. So that's $300 billion, and that's a substantial revenue raiser that could then be used for working Americans on no tax on tips, no tax on Social Security, no tax on overtime. And for those buying autos, they can reduce their bills, because interest on American-made cars will be tax deductible. So this is really a working-class the -- tariff and tax plan.
COLLINS: And if the point of this, ultimately, is to get people to buy more U.S.-made products, but you are counting on that revenue, as we've seen some of your colleagues, like Peter Navarro arguing, of how much money this could bring into the United States. In the end, wouldn't that theoretically dwindle over time, if people are buying more U.S., and there's less money coming in from what's being imported into the United States?
BESSENT: Yes, that's a great question. And that's why, in the past, I've called tariff policy done properly is a shrinking ice cube.
Because what will happen? We will start out with high -- high tariff income. But then as the factories come to the U.S., we will have more business income, and we'll have more paycheck income, because American workers will be earning. So, you would see, it's a rebalancing. So, we rebalance away from tariffs to more domestic income.
COLLINS: But the idea that it would put a dent in the national debt then would seem not to be likely, right?
BESSENT: Well, not at all, because for right now, we have the income that we have, and we will be adding tariff income to that. So when we get CBO scoring, the CBO scoring is not going to include any tariff income. It's not going to include any. So, this is all going to be extra.
So, we're at this that the -- the other T, other than tariffs, is tax. And from here, I have been -- I'll be spending most of my time on the tax deal. And we're in this strange betwixt and between on the tax deal, because there will be substantial tariff income, there will be substantial cost savings, and we're not going to get credit for either of those with CBO scoring.
COLLINS: Well, and obviously, that's why you've been having a lot of conversations with Republican lawmakers.
But before I get to that in a moment, we're seeing international markets start to respond to the President's announcements. Obviously, the markets in the United States are already closed. What do you expect the stock market to look like when it opens tomorrow, in reaction to this?
BESSENT: I don't know. I don't know where it's going to trade them -- open tomorrow. I don't know where it's going to close tomorrow. And I think what's going to be important are the underlying economic fundamentals. Because at the end of the day, Warren Buffett says, in the short run, the market's a voting machine. In the long run, it's a weighing machine.
COLLINS: Well, and we've heard some of the allies of this White House say, there will be some short-term pain for Americans.
I think regular people watching may say, How do you define short-term? What does that look like for me and for my bottom line?
What would you say to them?
BESSENT: Well, again, and I think there are two -- two things there to unpack, Kaitlan.
One is on what we are doing on government spending. So, we are bringing down government jobs. We're bringing down government borrowing. So, this unsustainable level of government stimulus is stopping. And then, on the other side, private sector jobs and private sector borrowing will take over. Those may not be perfectly matched, but we did see an increase of 10,000 manufacturing jobs, last month.
[21:15:00]
On the other side, when you think about, especially for working Americans, could we get a price adjustment due to the tariff? Maybe. Maybe not. Walmart's CEO seems intent on making China, or his suppliers in China, eat all the tariffs. So Walmart, biggest retailer in America, 40 million people a week go in there, so.
And then on the other side, once the tax bill gets through, then we will see the decrease for working Americans. So that's why part of what I've been doing, up on the Hill, is pushing the House, pushing the Senate. And they don't need much pushing, because I think the most under-told story in Washington, these days, is the level of Republican unity.
COLLINS: Yes, well, on that front -- and we'll see what Republicans do and how that looks. Obviously, that's the President's ambitious agenda.
But on the argument of short-term pain, long-term gain, which assumes what you're arguing about the long-term, what this will look like. Prices will go up, for Americans, in the short-term, right?
BESSENT: They could. They don't have to.
COLLINS: And that's, if they don't have to, you're arguing, if businesses do not pass those on to those consumers?
BESSENT: Well, in the President Trump's first administration, prices didn't go up. So the businesses don't have to pass them on, or the producers in the other countries can eat the tariffs. And traditionally, the dollar adjusts. So, it's a very complicated calculus to see where we end up.
COLLINS: Yes, and of course, these are much broader than the ones in the first term. The President was making the argument in the Rose Garden about what that -- what economists predicted then, and what this looks like now.
But on what you mentioned on what the President promised on the campaign trail, whether it comes to no taxes on tips, or Social Security, do you envision this, in a large way, helping pay for that? Because sometimes that's a criticism, from critics of this White House, saying that he's just using these tariffs to pay for the extension of those tax cuts.
BESSENT: Well, for the extension of the tax cuts, or the new no tax on tips, no tax on Social Security, no tax on overtime and auto deductibility. And look, what's wrong with that?
That if you -- if we take the 10 percent ring around the globe tariff, that if there's a currency appreciation, if the producers eat a portion of it, and then there's a slight price adjustment, on the other side, you have all four of those things happening for working Americans, at the end of the day, we could imagine that their real after-tax purchasing power has substantially increased.
COLLINS: And we'll see what that looks like.
But on just this overall, you're coming into this. Some people say, most Americans, I feel pretty good about where the economy was when President Trump took office. We saw the stock market rally. Do you have any concerns that this announcement will put that in jeopardy for Americans?
BESSENT: Well, first of all, Kaitlan, I back up, because out on the campaign trail and for the previous year, I called it the steroid economy. It looks great on the outside, you're kind of big, muscular in this. But on the inside, it's killing your internal organs. And what was happening was we were heading for a financial crisis. We were at 6.7 percent deficit to GDP, which we've never had, when we weren't at war, weren't in a recession. And no matter what, we were going to have to put the brakes on that. So that, as we bring that down, I'm feeling pretty good about averting the crisis, and getting to the other side of this.
COLLINS: Secretary Bessent, thank you so much for your time.
BESSENT: Good to see you.
(END VIDEOTAPE)
COLLINS: The White House made a major event of this big announcement, in the Rose Garden today, decisively making the President, the face of these new tariffs. The question is, does his plan pay off? I'm going to speak with my White House insiders, about the details behind these announcements, next.
[21:20:00]
(COMMERCIAL BREAK)
COLLINS: Tonight, we are seeing countries, around the world, scrambling to respond to President Trump's sweeping tariffs.
And in the coming hours, we're going to hear the first reactions from leaders in the European Union, and the U.K., as they're digesting this message from the President's Treasury Secretary, Scott Bessent.
(BEGIN VIDEO CLIP)
COLLINS: If countries retaliate, which some have said that they would, some have said they wanted to wait and see, what is the White House's response going to be, to those countries?
BESSENT: Well, Kaitlan, one of the messages that I like to get out tonight is, Everybody, sit back. Take a deep breath. Don't immediately retaliate. Let's see where this goes. Because if you retaliate, that's how we get escalation.
(END VIDEO CLIP)
COLLINS: My White House insiders are here tonight.
Jeff Mason is a White House Correspondent for Reuters.
Jeff Stein is the White House Economics Reporter for The Washington Post.
And Nick Timiraos is the Chief Economics Correspondent for The Wall Street Journal.
So you're all perfectly positioned for this.
Jeff Mason, what do you make? I mean, I don't know if countries are going to listen to what the Secretary, Bessent, was saying there about, Just take a deep breath and relax.
JEFF MASON, WHITE HOUSE CORRESPONDENT, REUTERS: No, I -- I don't think so. I think that's an optimistic view on his side.
I do think it's instructive, because the White House has shown that when it feels like it's pushed into a corner, the President certainly just punches back. So if there is immediate retaliation, I wouldn't rule out the possibility that the White House would just increase those tariffs even more.
But there's no question that the rest of the world is going to respond to the -- to what the President did today.
COLLINS: Well, and as you accurately pointed out, Jeff is that, the White House was kind of telegraphing this. The President himself certainly was. Wall Street maybe wasn't fully believing what this was going to look like today. But now, I assume they are.
JEFF STEIN, WHITE HOUSE ECONOMICS REPORTER, THE WASHINGTON POST: What I don't understand is why people on Wall Street, like, can't afford, like, $150 subscription to the newspapers that we all write, which are not that expensive.
[21:25:00]
We have been reporting for over a year, and I think all three of our cases, that the President is dead-serious about this. And you've seen that not just in sort of the overall thrust of the announcement, but the specific details.
These tariffs are falling not just on countries that the President has long-argued are undermining the U.S. economy with this type of -- trade practices, but on every country in the world. So, we are looking at tariffs that are imposed on things that we literally cannot make here, things that we cannot onshore. And so, yes--
COLLINS: That's a great point--
MASON: It is.
COLLINS: --in terms of what we're taking in.
STEIN: And you would think that people on Wall Street would have heard these things, and decided to trade accordingly. People get paid millions of dollars to advise banks, and investors, and other people, on how to invest, and how to plan, and how to trade.
And for over a year, the President has put out campaign proposals that say, I am going after stuff that is literally impossible for us to onshore. How are we going to produce more Chilean sea bass in the United States? That is just a way to raise money, and a sign of how much the President just loved the idea of tariffs.
COLLINS: Yes, or avocados, or canned tuna, a lot of these things that are imported. And this is what was on the charts at the White House, handed out today for people, who could see. The reciprocal tariffs are over here, in terms of what this is going to look like on these nations.
I think there is a real question of how this math was done. I mean, the Treasury Secretary said that there's just loads of data from the USTR, that is how they made this decision.
But in terms of calculating that, there aren't a ton of exemptions, or any exemptions for foodstuffs or whatnot.
NICK TIMIRAOS, CHIEF ECONOMICS CORRESPONDENT, THE WALL STREET JOURNAL: 99 percent of coffee is imported. So unless we're going to ramp up Hawaiian coffee production, your cup of coffee, every morning, you're going to face a price hit on that.
I thought it was interesting, in your interview, with Secretary Bessent, he's talking about the possibility that companies will swallow the hit on the tax, really, the tax on imported goods that gets paid here, either through a currency adjustment. But that hasn't happened. The dollar weakened today. Or because companies will just accept lower margins, they'll take the hit to their margins.
A 25 percent tariff, you're talking about Vietnam now, 46 percent, half of Nike's shoes, Kaitlan, are made in Vietnam. I mean, these are large, much larger tariffs than even what Trump had campaigned on. He said 10 percent across the board, and 60 percent on China. And it is, as Jeff said, much bigger than what Wall Street was expecting.
COLLINS: Yes, so if it's bigger than what they were expecting. The Treasury Secretary downplaying what's going to happen on Wall Street tomorrow. He said it's the underlying economic fundamentals that he'll be watching.
But in terms of all of this. I mean Israel also -- there's a question of what these countries have to do to change this, because it's not clear what the barometer is. Israel canceled all remaining tariffs on U.S. products, yesterday. But if you look at this, they are also still getting hit, 17 percent tariffs here.
MASON: Well, and you bringing up Israel, I mean, it's worth underscoring that the President did this to allies, friends and foes alike, and that he's expecting calls. I think he's expecting to get an in -- flooding-in of calls from others, saying, All right, we've changed our policies and/or what else can we do?
But to the other Jeff's point, the market misjudged the seriousness that the President had about this. But maybe to give them a little bit of credit, the President does change his mind, and the President does go back and forth on these things, and has with some of the other tariffs that we've seen up until today.
COLLINS: Yes.
STEIN: The thing about the President's flexibility, though, is that it undermines their other argument that the whole point of this is to create long-term incentives to bring jobs here. If all of this is for show, and the China tariff will go down 20 percent, then why are companies going to decide to use this as an impetus to invest in the United States? As we're saying.
COLLINS: It's a great question. I imagine the White House switchboard will be lighting up tomorrow. Thanks everyone for being here.
We're going to continue breaking these downs because -- down, because in just hours, the new car tariffs are going to take effect, 25 percent on all foreign-made cars. One of the President's Republican allies in the Senate, who knows what it's like to own a car dealership, will join me after this.
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(COMMERCIAL BREAK)
COLLINS: In just over two hours from now, President Trump's 25 percent tariff on all foreign-made cars will go into effect.
One Pennsylvania car dealership owner tells CNN, his business and his customers, he thinks, will hurt because of it.
(BEGIN VIDEO CLIP)
DAVE KELLEHER, PRESIDENT, DAVID AUTO GROUP: That car could go from $30,000, ostensibly, to $37,500, and it's that quick. And that kind of change in a price moves that payment a $175 a month. And our customers, they're middle-class people, they just can't afford that kind of bump.
That $86,000 car becomes a $103,000 car, overnight. And that customer, he's going to turn to me. I'm most likely going to eat that. That's a $20,000 hit that I'm going to take. I can't do that.
(END VIDEO CLIP)
COLLINS: My source tonight has experience running and owning car dealerships in neighboring Ohio. Republican senator, Bernie Moreno, is here.
And Senator, it's great to have you.
[21:35:00]
You know what that's like, and to be in that position. What would you say to the consumer who's watching that, who's worried that they're going to have to pay more for their car tonight.
SEN. BERNIE MORENO (R-OH): Well, actually, March had the record car sales, in the month of March. Sales are booming. I think there's a lot of inventory, probably 60, 90 days' worth of inventory. So if somebody is really concerned, they can go buy a car today, at dealer inventory and not have to worry about the tariff at all.
But ultimately, what we're looking to do is very simple. We need cars made here in America, that are sold here in America. It's extremely important that that happens, to rebuild our middle-class, rebuild our industrial sector, rebuild cities like the ones I represent in Ohio.
And of course, eventually you need customers. And if we keep getting out our middle-class, who are we going to sell these cars to? Henry Ford taught us that. Pay your workers well, and they can buy the very products that they make.
COLLINS: One question. If there is inventory at these dealerships, because certainly they have been stocking up in anticipation of this, especially with the one-month delay that President Trump gave them. What happens -- how quickly can this turn around for production inside the United States? Because obviously, a lot of the cars, even ones made here, have parts that come from other places.
MORENO: Well, remember, the cars that are made final assembly in the U.S., and get parts from Mexico and Canada? Those cars, if they're USMCA-compliant, they don't get any tariffs, so they're completely tariff-free. So that's a big population of vehicles.
The only ones that are mostly hurt are the cars that are made overseas, exclusively, and are shipped into the United States. The ultra luxury cars. I think the Democrats should rally around this tariff. Because, let's face it. If you're tariffing a guy, who buys a Bugatti for $4 million, it's a tax on the very, very wealthy. You'd think Chuck Schumer should be applauding that, right?
COLLINS: What about a Mercedes dealership in Tuscaloosa, Alabama, though?
MORENO: Yes, well, the Mercedes makes a lot of cars in Alabama, huge chunk of them, actually exports some, by the way. And I think those cars will only have tariffs as much as the engines, transmissions and electronics that come from Europe. If the other parts come from the U.S., or Mexico, or Canada, there's no tariff.
COLLINS: But if your experience running a dealership, and you've got this inventory, are you going to make those prices go up? Because you've only got 90 days of inventory, and then you're not really sure what that's going to look like, in terms of a lot of those cars that are made in other countries, you're not sure -- I mean, you can't just -- that quickly make all of those in the United States, and you're going to run out of cars.
MORENO: Well, again, two different worlds. The luxury car world, somebody's buying that $200,000 car, that $500,000 car, there's a lot of price elasticity. The person who's buying a $500,000 car, if it's a little bit more expensive, they don't care. And like I said, it's an ultimate tax on rich people.
You're talking about the like mainstream cars, a Honda, a Toyota, a Subaru, a Ford, a Chevy. If one car goes up in price, because there's a tariff? That person will just buy the other one that doesn't have a tariff, which is your American-made automobile. And places like Ohio benefit, because your neighbor is employed as a result of that car being made in the United States.
COLLINS: The argument has been, and you've made this, that this is worth the short-term pain that some Americans may feel. I mean, the White House has been clear that there will be short-term pain. How do you define short-term?
MORENO: Well, I actually don't think there's short-term pain. I think the reality is, especially in the auto business, because you have about 60, 90 days, sometimes a 120 days of inventory, you really won't feel that at the dealership for a little bit of time. And then, of course, we're going to land the plane. Look--
COLLINS: What about bigger than autos, though? Because this isn't just for cars. Yes, that's what's going into effect at midnight tonight. But for all of this. I mean, it's a 10 percent tariff across the board on everything.
MORENO: Yes, we don't know, because we don't know what the currency is going to do.
We also have to remember, we're creating the best tax environment on Earth. We're going to make the 2017 tax reform permanent, that put more money in working-class Americans' pockets.
We're going to get rid of taxes on overtime, tips and Social Security. We've massively lowered regulations, especially around energy, so energy prices are lower. You see, what's going on with eggs, what's going on with gas. So, you're lowering the cost of everything else and then raising wages.
So it doesn't -- you got to look at -- yes, prices go up 2 or 3 percent. But if real wages go up 5 or 6? Which is the opposite of what happened during Biden. You have massive inflation, and wages couldn't keep up.
COLLINS: Yes.
MORENO: So Americans will feel.
Plus, you got to remember, one of the things we haven't talked about well enough is $6 trillion in investment. I think the stock market is going to majorly correct upwards. Because when you pump $6 trillion of investment, that's only what's been announced so far, that the stock market is going to go very, very high, because you're investing $6 trillion in the United States, that's never happened before.
COLLINS: We'll see what it looks.
The former Vice President disagrees.
You were in the Rose Garden today with Vice President Vance.
But Vice President Pence tweeted that the Trump Tariff Tax, he says, is the largest peacetime tax hike in the United States' history. He says that they're nearly 10 times what they imposed during the first term, the Trump-Pence administration, as he noted. He says they're going to cost American families over $3,500 per year.
If President Trump and Vice President Vance were hired by the American people to lower costs, what happens if their policies raise them?
[21:40:00]
MORENO: Well, again, they were -- they were hired to make it, so that your wages outstripped inflation. So, if inflation is at 2 percent, and wages are up by 6, they feel better about what they're doing.
And look, no offense to Mike Pence. He's never run anything other than a political campaign. This is not a business guy. So, he's repeating talking points.
COLLINS: He was the Vice President.
MORENO: Yes, but he never ran a business. So, he has no idea what any of this is about. He's never been in the private sector. These career politicians are part of the problem here in D.C., because they actually don't know what it's like to actually understand how businesses work.
And what President Trump is doing is reversing the policies of people like Mike Pence, who sold this country out, that over decades, gutted our industrial sector, shipped our jobs overseas. Cities like Cleveland, Columbus, Dayton, Toledo, Youngstown, these were thriving cities that produced a lot of goods. Look--
COLLINS: Why do you -- why do you hold Pence responsible for that though?
MORENO: Because he's just -- he's just that group of politicians that were both Republicans and Americans (ph). That's not, again, him personally. It's just that group of politicians. A lot of the ones that I watch give speeches today, on the Senate floor, they've been there for 20, 30, years, while this country has been taken advantage of by foreign countries, did nothing about it.
COLLINS: Senator Bernie Moreno, thank you for joining us tonight.
MORENO: Thank you.
COLLINS: Appreciate your time.
Up next. We have new questions tonight about the President's relationship with Elon Musk, after last night's stinging political defeat in Wisconsin. Maggie Haberman has her latest reporting. She'll join us next.
[21:45:00]
(COMMERCIAL BREAK)
COLLINS: With the blame game from last night's key Wisconsin Supreme Court loss underway, inside the Republican Party. Tonight, The New York Times is reporting that inside the White House, President Trump's advisers are more than happy to let Elon Musk be the scapegoat.
The liberal judge, Susan Crawford, handily defeated her conservative opponent in that race, last night, as you can see the numbers here, despite Elon Musk investing serious time, tweets, a few million dollar checks and more than $20 million in campaign money against Judge Crawford.
My source tonight is the co-byline of this new piece from The New York Times. New York Times' White House Correspondent, Maggie Haberman.
Maggie, it's great to have you.
Because I think there have been some questions raised. Really, last night, kind of, I guess, was the catalyst. But what President Trump's view of Elon Musk is right now? Does he see more upside or downside in this relationship, in this moment?
MAGGIE HABERMAN, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES, CNN POLITICAL ANALYST: He definitely, Kaitlan, still sees more upside.
One of the things that I think is really important to remember about Trump and Elon Musk is, among other things, Musk controls X. That is a website that he has been able to use, to promote certain people, to attack certain people, people who Trump likes, people who the MAGA ecosystem like, or attacking those they don't like. Number one.
Number two, Musk spent roughly $300 million, that we know about, in the election, in 2024, helping to push Donald Trump. He has already said he is -- privately, to people, in Trump's world, that he is going to spend $100 million through entities, directly controlled by Trump's advisers or his allies. That's a shift for him.
So, Elon Musk is never going to be out of Donald Trump's circle. But is Donald Trump aware that there is, you know, there are downsides to Elon Musk? Yes. Is he aware that members of his Cabinet, and members of his staff, don't like Elon Musk? Yes.
I don't think you will ever see Elon Musk completely out of Donald Trump's orbit. But I do think you will see him leave, barring something changing, at the end of his stint as a Special Government employee.
COLLINS: Right. Which is, just a certain set period that he can stay.
HABERMAN: Right.
COLLINS: And when he was asked how long he plans to stay in the White House, in recent weeks, this is what Elon Musk had to say.
(BEGIN VIDEO CLIP)
LARRY KUDLOW, BROADCASTER AND FORMER DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL OF THE UNITED STATES: You're going to go another year?
ELON MUSK, SENIOR ADVISOR TO THE PRESIDENT OF THE UNITED STATES: Yes, I think so. I think we will have accomplished most of the work required to reduce the deficit by a trillion dollars within that timeframe.
BRET BAIER, FOX NEWS HOST: So in that timeframe? A 130 days?
MUSK: Yes.
(END VIDEO CLIP)
COLLINS: So that's that timeframe for being an SGE.
There was a point in time, though, where Elon Musk was telling the President, maybe six months is what he had been looking at. What do you think has changed here?
HABERMAN: Well, I don't think there's a huge difference between the 130 days, and six months.
But I think that, look, Trump is certainly aware that this has been a turbulent period. I don't think that he wants to spend the entirety of the next year and a half, leading into what is likely to be a challenging midterm cycle, debating questions about Elon Musk's approach to shrinking the government, which has been commonly described as with a chainsaw, as opposed to, in Trump's word, with a scalpel.
And Trump would, I think, like something more precise. But he does see advantages in having Musk around. I don't think that he is eager to shove him out. I do think there are a number of Trump advisers, who are tired of Musk's presence. And I think that is going to continue, as long as Musk is there.
COLLINS: Separately, Maggie, tonight, there was new reporting from you tonight, on this TikTok deadline that the White House is facing. It is by Saturday. There has to be a decision of what's happening with the ban for TikTok inside the United States. Amazon was a last-minute player. What are you hearing from sources, about how seriously they were taking that offer?
HABERMAN: People within and outside the White House are not taking that offer especially seriously. It came in at the last minute. The offer letter was addressed to the President, the Vice President, and Howard Lutnick, the Commerce Secretary, and I'm not entirely clear what his involvement was in this.
But this was not a bid -- this was a bid that would have given Amazon, a full stake in TikTok, which basically would have made TikTok irrelevant. What makes TikTok matter is the algorithm. What makes them a global company is managing this algorithm, globally. So, this was just seen as another wealthy entity coming in.
But this is a process that has not been especially clear. There was a meeting today at the White House. We don't yet know the results. They are coming up on this deadline. It is up to the government to decide whether they're going to enforce this ban or not.
[21:50:00]
But TikTok, and people close to TikTok, have said over and over again, it's not a company that's for sale. So what this looks like remains to be seen.
COLLINS: Certainly does.
Maggie Haberman, great reporting, as always.
HABERMAN: Thanks, Kaitlan.
COLLINS: Still ahead, how Democrats plan to seize on what happened, in Wisconsin, last night. The state's Democratic senator is going to join me, right after this.
(COMMERCIAL BREAK)
COLLINS: Tonight, Democrats are looking to Wisconsin as a small glimmer of hope, after a stunning turnout there happened, in Tuesday's state Supreme Court race.
Here in Washington, we saw Senator Cory Booker's historic 24 -- 25- hour speech, on the Senate floor, helping energize what has been a discouraged Democratic base, for the last few months.
My next source tonight is the Democratic senator, Tammy Baldwin, of Wisconsin.
And it's great to have you here, Senator.
[21:55:00]
Obviously, Trump won your state in November. They were hopeful about this, but maybe realistic. What are the biggest takeaways, you think, Democrats should have after last night's win?
SEN. TAMMY BALDWIN (D-WI): Yes, so last November, I won by less than a percentage point, Trump won by less than a percentage point.
And last night, in Wisconsin, we saw a thorough rejection of Elon Musk and Donald Trump. Elon Musk for trying to buy an election, buy a Justice. And Trump for his cruel and harmful policies. Every single county in Wisconsin, all 72 counties moved away from Republicans. And in half of our counties, in 36 of them, that movement was over -- was double-digit movement. And so, this was a resounding rejection of Elon Musk and Donald Trump.
And I think, in many ways -- you know, you talked about Cory Booker and his 25-hour speech. One of the -- one of the ideas, that he raised over and over again, was that the power of the people is stronger than the people in power. And Wisconsinites embraced that, and showed us that yesterday.
COLLINS: Yes, I think there are questions about what the takeaways can be? Obviously, the voter ID passed. It's been a law, but it's only strengthening it, essentially. But it's still a lot of those voters who clearly voted for that, voted for this Supreme Court Justice who won last night, the liberal candidate.
If Elon Musk is only in his role in the White House, for 130 days, and he's not a factor in the midterm elections, how does that work for Democrats? Can you still run on that, do you believe?
BALDWIN: Well, as I said, this was a rejection both of Elon Musk, for the millions that he spent in this race, trying to buy voters, and buy a Supreme Court justice. But it was also a sound rejection of Donald Trump, and his harmful and, frankly, cruel policies.
And we saw, you know, I can tell you from my own experience as a senator, my phones are ringing off the hook, with people from Wisconsin, worrying about the harmful impacts of Medicaid cuts, worrying about the harmful impact of tariffs.
As we engage, just later this week, in what will be one of the most important debates we will have in the U.S. Senate, on budget reconciliation, the very measure in which Trump intends to slash programs like Medicaid, and Medicare, and Social Security, in order to find room for massive tax breaks for billionaires, like Donald Trump, and Elon Musk, and big corporations. This is right when we need those constituents to be engaged, because we -- it's going to take all of us, to fight back, and fight back successfully.
COLLINS: Yes, and the President has pledged that he's not cutting Social Security and Medicare. Obviously, we've asked House Speaker, Mike Johnson, how they'll -- how they'll pay for the $1.5 trillion.
But you mentioned tariffs there. So I want to ask you about that. Because when you won reelection, as you just mentioned, this past November, you did so as the first Democratic candidate, I believe, in 20 years, who had the endorsement of the Wisconsin Farm Bureau, which is the state's largest farm organization.
How are they feeling about these new tariffs that we heard from the White House tonight?
BALDWIN: Look, I have been hearing from farmers, and manufacturers, and consumers, in the State of Wisconsin, about the harmful impacts these tariffs are going to have.
And my farmers are specifically recalling the pain that was caused in the first round of Trump tariffs, back in his first term. Collectively, across this nation, we lost about $27 billion worth of agricultural exports. And they see this time around, as being potentially worse.
My farmers talk to me, whether they're dairy farmers, or potato farmers, or bean farmers, they talk about the cost of their inputs. And the fact that there are some things that they need that they can only get from Canada, that they can only get from overseas, and this is going to increase the cost of production, and really injure their bottom line. So they are very worried. And it is my honor--
COLLINS: Do you think you'll have to--
BALDWIN: --to work on behalf of farmers in Wisconsin.
COLLINS: Do you think that they'll need a bailout again, as they had one about -- over $20 billion, last time?
BALDWIN: I think that there is always going to be discussion of how they can alleviate some of the worst harm that's going to happen.
But this, how are they going to pay back the consumers in Wisconsin who are going to see on average -- you know, I've seen averages ranging from $1,200 per family to $5,000 per family. How are they going to mend that harm? What about our manufacturers?
[22:00:00]
We want to bring more jobs back to the United States. But these policies are going to do just the opposite, and they are going to harm the bottom line of a state like Wisconsin, where we make things.
COLLINS: Yes. We will see what the impact is.
Senator Tammy Baldwin, thank you for your time tonight.
BALDWIN: Thank you.
COLLINS: Thank you all so much for joining us.
"CNN NEWSNIGHT WITH ABBY PHILLIP" is up next.
