00:00 - 00:02

This is CNN breaking news,

00:02 - 00:03

and we begin this hour

00:03 - 00:04

with President Trump

00:04 - 00:06

set to meet with his cabinet

00:06 - 00:08

as a key part of his second term.

00:08 - 00:10

Agenda hangs in the balance

00:10 - 00:12

right now up on Capitol Hill.

00:12 - 00:15

And after a week of tariff whiplash

00:15 - 00:16

here in the United States,

00:16 - 00:16

as the president's

00:16 - 00:17

trade war

00:17 - 00:19

clearly intensifies

00:19 - 00:20

and as we know, Wall Street

00:20 - 00:21

doesn't like the uncertainty, right?

00:21 - 00:23

Wednesday's green bounce

00:23 - 00:24

after the tariffs will pause.

00:24 - 00:26

That is turned into Thursday's red.

00:26 - 00:28

Reality check.

00:28 - 00:30

Let's go to CNN chief national affairs

00:30 - 00:31

correspondent Jeff Zeleny

00:31 - 00:32

at the white House.

00:32 - 00:33

And Jeff,

00:33 - 00:33

you have reporting,

00:33 - 00:35

along with your white House colleagues

00:35 - 00:37

about how this all came to be,

00:37 - 00:38

with a pause

00:38 - 00:41

and this cabinet meeting today as well.

00:41 - 00:42

Good morning, Pamela.

00:42 - 00:43

It certainly was an extraordinary

00:43 - 00:45

turn of events yesterday,

00:45 - 00:46

not even quite 24 hours ago.

00:46 - 00:49

But we have learned that it certainly was

00:49 - 00:49

the advice

00:49 - 00:50

that the president

00:50 - 00:51

was receiving

00:51 - 00:52

from some members of his cabinet,

00:52 - 00:54

including the the

00:54 - 00:55

the Treasury Secretary,

00:55 - 00:56

Scott Benson,

00:56 - 00:57

who will be in that room today

00:57 - 00:59

when the cabinet is meeting.

00:59 - 01:00

he was the one, of course,

01:00 - 01:02

who is really sounding the alarm

01:02 - 01:03

and telling the president

01:03 - 01:04

how deep the bond markets

01:04 - 01:05

were reacting to.

01:05 - 01:08

The president's a sweeping, tariff plan.

01:08 - 01:10

So one thing that this whole, situation

01:10 - 01:13

has really, shined a light on,

01:13 - 01:15

are the differing, pieces of advice

01:15 - 01:17

that the president was hearing from,

01:17 - 01:18

Scott Bassett,

01:18 - 01:19

for example,

01:19 - 01:20

the Treasury secretary versus

01:20 - 01:21

his longtime

01:21 - 01:22

trade adviser, Peter

01:22 - 01:24

Navarro, who was urging the president

01:24 - 01:25

not to make negotiations.

01:25 - 01:26

A big question, though,

01:26 - 01:27

heading into this

01:27 - 01:28

cabinet meeting, is Elon

01:28 - 01:30

Musk going to be in the room?

01:30 - 01:31

We have not seen,

01:31 - 01:33

much of him in recent days,

01:33 - 01:34

but he's been very active

01:34 - 01:35

on social media.

01:35 - 01:37

And his view on this,

01:37 - 01:38

sweeping tariff plan was that

01:38 - 01:40

it was not good for the economy.

01:40 - 01:40

So he was throwing

01:40 - 01:43

stones, quite literally at the top

01:44 - 01:44

adviser.

01:44 - 01:46

But the top economic adviser,

01:46 - 01:47

Kevin Hassett

01:47 - 01:48

talked about the cabinet

01:48 - 01:51

meeting earlier like this.

01:51 - 01:53

USTR has informed us

01:53 - 01:55

that there may be 15 countries

01:55 - 01:57

now that have made explicit offers,

01:57 - 01:59

that we're studying and considering.

01:59 - 02:00

And you know,

02:00 - 02:01

deciding whether they're good enough

02:01 - 02:03

to present to the president,

02:03 - 02:04

the chief of staff's office

02:04 - 02:07

has asked all the principals that have,

02:07 - 02:07

you know,

02:07 - 02:10

skin in the game to come and discuss

02:10 - 02:11

what their views are about,

02:11 - 02:12

how this should go.

02:12 - 02:14

And, that's

02:14 - 02:16

what the purpose of the meeting was.

02:16 - 02:18

So the offers that Kevin Hassett

02:18 - 02:19

is talking about,

02:19 - 02:20

there are from allies

02:20 - 02:21

like,

02:21 - 02:22

Japan, South

02:22 - 02:23

Korea and others

02:23 - 02:25

who have opened, lines of communication

02:25 - 02:27

trying to lower their,

02:27 - 02:29

tariff percentage with the president.

02:29 - 02:30

So this is all coming

02:30 - 02:32

as the trade war is very much

02:32 - 02:33

still on with China.

02:33 - 02:35

There is no question about that.

02:35 - 02:35

But the U.S.

02:35 - 02:37

is trying to,

02:37 - 02:39

sort of a circle our allies, if you will,

02:39 - 02:42

Wolf, to have a united front

02:42 - 02:43

against China.

02:43 - 02:44

And it's interesting,

02:44 - 02:45

Jeff, Kevin Hassett is also pushing

02:45 - 02:47

back on suggestions

02:47 - 02:48

that President Trump

02:48 - 02:50

actually manipulated the markets

02:50 - 02:51

when he told people

02:51 - 02:53

it was a, quote, good time

02:53 - 02:53

to buy

02:53 - 02:54

only hours

02:54 - 02:55

before announcing the pause,

02:55 - 02:57

Democratic Senator Adam

02:57 - 02:58

Schiff of California

02:58 - 02:59

says he plans

02:59 - 03:01

to write to the white House about it.

03:01 - 03:02

How is the administration

03:02 - 03:04

defending itself?

03:04 - 03:05

Well, if there is no question

03:05 - 03:07

that, timeline of a few hours

03:07 - 03:08

between when the president sent

03:08 - 03:09

that message,

03:09 - 03:10

be cool,

03:10 - 03:11

time to buy versus

03:11 - 03:13

about a 118 yesterday

03:13 - 03:15

afternoon, East Coast time

03:15 - 03:16

when the president to send out,

03:16 - 03:17

his message about,

03:18 - 03:20

a pause on this, what happened

03:20 - 03:21

during that intervening time?

03:21 - 03:23

Did anyone have a heads up at all?

03:23 - 03:25

Kevin Hassett,

03:25 - 03:25

again, the president's

03:25 - 03:27

top economic adviser,

03:27 - 03:28

told us a short time ago

03:28 - 03:31

that, you know, there was no,

03:31 - 03:34

insider trading or any type of activities

03:34 - 03:34

going on.

03:34 - 03:36

But Democrats on Capitol Hill

03:36 - 03:37

are not convinced of that.

03:37 - 03:37

But, Wolf,

03:37 - 03:38

the reality is,

03:38 - 03:39

since Republicans

03:39 - 03:40

control Capitol Hill,

03:40 - 03:42

there will not be any type

03:42 - 03:43

of a committee investigation.

03:43 - 03:45

However, this will be something

03:45 - 03:46

a moment in time, really.

03:46 - 03:47

Those are four hours

03:47 - 03:49

in time, yesterday

03:49 - 03:51

that will be, viewed in the coming days.

03:51 - 03:52

But for now, at least,

03:52 - 03:54

the trade war on against China.

03:54 - 03:56

The cabinet meeting is underway

03:56 - 03:57

shortly, Wolf.

03:57 - 03:57

All right.

03:57 - 03:58

Jeff Zeleny

03:58 - 03:59

at the white House for us, Jeff.

03:59 - 03:59

Thank you.

03:59 - 04:01

Let's check in now with CNN business

04:01 - 04:02

and politics correspondent

04:02 - 04:03

Vanessa Cavett.

04:03 - 04:04

She is standing by

04:04 - 04:06

at the New York Stock Exchange.

04:06 - 04:08

Vanessa, what are you seeing right now?

04:09 - 04:09

Yeah.

04:09 - 04:10

Well, listen, markets

04:10 - 04:11

are down this morning

04:11 - 04:12

coming off of that enormous

04:12 - 04:13

rally yesterday.

04:13 - 04:16

And I spoke to a veteran trader,

04:16 - 04:16

Peter Tuchman,

04:16 - 04:17

just a short time ago,

04:17 - 04:18

and he told me

04:18 - 04:20

that the real reaction of Wall Street

04:20 - 04:21

really comes

04:21 - 04:23

the day after yesterday

04:23 - 04:24

was this relief rally.

04:24 - 04:27

And today reality has set in that

04:27 - 04:28

we are still very much

04:28 - 04:30

in the middle of a trade war

04:30 - 04:33

with still historically high tariffs.

04:33 - 04:34

That 90 day pause

04:34 - 04:36

on those high reciprocal

04:36 - 04:38

tariffs are very welcome news

04:38 - 04:39

to traders here.

04:39 - 04:40

I spoke to a few yesterday

04:40 - 04:41

after the market close,

04:41 - 04:41

who said that

04:41 - 04:44

any time the Dow is up nearly 3000 points

04:44 - 04:45

that is a good day.

04:45 - 04:48

However, today they are facing down high

04:48 - 04:51

tariffs on China at 125% tariff.

04:52 - 04:53

You have those tariffs in place

04:53 - 04:55

25% on autos.

04:55 - 04:56

And then of course

04:56 - 04:59

you have that 10% universal tariff

04:59 - 05:01

that is in effect right now.

05:01 - 05:03

And you see the markets there right now

05:03 - 05:05

the Dow down about more than 2.5%.

05:05 - 05:06

Look at the Nasdaq down

05:06 - 05:10

more than 4% on the S&P down

05:10 - 05:12

almost 3.5% there.

05:12 - 05:13

But the big questions

05:13 - 05:15

that I'm hearing from traders here

05:15 - 05:16

today are sort of

05:16 - 05:17

what are the off ramps

05:17 - 05:19

here to this trade war.

05:19 - 05:20

What are the negotiations

05:20 - 05:21

that need to be happening

05:21 - 05:23

between these more than 75 countries

05:23 - 05:24

and the administration?

05:24 - 05:25

And then especially looking at China,

05:25 - 05:27

because so many of the

05:27 - 05:29

the companies that are traded on

05:29 - 05:29

Wall Street

05:29 - 05:31

here have direct ties to China,

05:31 - 05:33

get many of their products from China.

05:33 - 05:35

So what does that look like?

05:35 - 05:37

One analysts said to me this morning

05:37 - 05:38

that some of these negotiations

05:38 - 05:39

could actually center

05:39 - 05:41

more around other things,

05:41 - 05:43

non-tariff related things,

05:43 - 05:44

something like with China,

05:44 - 05:45

maybe a deal with TikTok

05:45 - 05:47

or even a deal with the Panama Canal.

05:47 - 05:49

Those are the questions that they have.

05:49 - 05:51

What is the off ramp for this

05:51 - 05:52

trade war for the president?

05:52 - 05:54

So here today,

05:54 - 05:56

I would say less uncertainty,

05:56 - 05:57

but still a level of uncertainty

05:57 - 05:59

about where this trade war is going.

05:59 - 06:00

Pamela.

06:00 - 06:01

Obviously,

06:01 - 06:02

we're not seeing sort

06:02 - 06:03

of those dramatic swings

06:03 - 06:05

this morning that we've seen in the past

06:05 - 06:06

several weeks.

06:06 - 06:08

That is because very much investors

06:08 - 06:08

here know

06:08 - 06:10

we're still in the middle of this.

06:10 - 06:10

Obviously, though.

06:10 - 06:11

Good sign

06:11 - 06:13

that that 90 day pause went into effect

06:13 - 06:14

just yesterday. Pamela.

06:14 - 06:15

Pamela.

06:15 - 06:16

Yeah, I mean, clearly

06:16 - 06:17

investors are sending a signal

06:17 - 06:18

that they understand

06:18 - 06:19

this is far from over.

06:19 - 06:20

There's a lot to be worked out.

06:20 - 06:23

But you do have a businessman

06:23 - 06:24

like billionaire

06:24 - 06:25

investor Bill Ackman,

06:25 - 06:28

a Trump ally, celebrating this pause.

06:28 - 06:29

He was among the business leaders

06:29 - 06:31

who had turned on the president

06:31 - 06:32

over his tariff plans.

06:32 - 06:33

He's now praising the pause

06:33 - 06:34

in implementing many of those taxes.

06:34 - 06:35

What can you tell us about that?

06:37 - 06:38

Yeah, well, we know the past

06:38 - 06:39

several days

06:39 - 06:40

leading up to these reciprocal tariffs

06:40 - 06:42

going into effect.

06:42 - 06:43

Bill Ackman,

06:43 - 06:44

who as you mentioned is a billionaire.

06:44 - 06:47

He is a founder of a huge hedge fund.

06:47 - 06:49

He was saying that these tariffs

06:49 - 06:50

would be I'm reading here

06:50 - 06:52

quoting economic nuclear war.

06:52 - 06:54

so he said that leading up to

06:54 - 06:56

Wednesday's tariffs

06:56 - 06:57

and he was warning that

06:57 - 06:58

this could be really terrible

06:58 - 07:00

for the economy.

07:00 - 07:00

Now that the president

07:00 - 07:02

has reversed course

07:02 - 07:04

and put this 90 day pause into effect,

07:04 - 07:05

he is coming out and saying that, yes,

07:05 - 07:07

he was raising concern,

07:07 - 07:09

but he's praising the president

07:09 - 07:10

in what he calls

07:10 - 07:11

the art of the deal

07:11 - 07:14

that the president actually did right

07:14 - 07:15

by this deal.

07:15 - 07:16

And Bill Ackman

07:16 - 07:18

and other billionaires

07:18 - 07:19

were raising those alarms

07:19 - 07:21

for for several days,

07:21 - 07:22

but many of them

07:22 - 07:23

are seeing a little bit

07:23 - 07:25

more of a relief here

07:25 - 07:27

that the president has maybe

07:27 - 07:28

listened to advisors, as Bill

07:28 - 07:29

Ackman said,

07:29 - 07:30

and really sort of

07:30 - 07:31

put into place

07:31 - 07:32

more of a

07:32 - 07:34

of a better roadmap

07:34 - 07:35

for billionaires right now

07:35 - 07:37

that really, you know,

07:37 - 07:38

they play in the stock market.

07:38 - 07:39

They obviously have their businesses

07:39 - 07:41

tied to the stock market. Pamela.

07:41 - 07:42

They can be against him

07:42 - 07:43

one day and with him

07:43 - 07:45

the next day as they see

07:45 - 07:47

their stocks rise. Pamela.

07:47 - 07:49

All right. Vanessa, thanks so much.

07:49 - 07:51

Let me bring in Anna Stewart.

07:51 - 07:53

So, Anna, we've been seeing European

07:53 - 07:54

stocks rallying

07:54 - 07:55

not just on the news

07:55 - 07:56

that the Americans

07:56 - 07:59

are opposing these tariffs for 90 days,

07:59 - 08:00

but also the fact that the Europeans

08:00 - 08:01

we're going

08:01 - 08:02

to reverse

08:02 - 08:03

the retaliatory tariffs

08:03 - 08:05

that they put into effect.

08:05 - 08:07

yesterday as well. Take us through that.

08:07 - 08:08

Yeah. Look at that rally.

08:08 - 08:09

It's pretty strong.

08:09 - 08:10

And that's largely because, of course,

08:10 - 08:11

the European markets were actually closed

08:11 - 08:13

when the 90 day pause were announced.

08:13 - 08:14

So they didn't have a rally yesterday.

08:14 - 08:15

We're seeing it here.

08:15 - 08:16

And I think it is

08:16 - 08:17

being sustained

08:17 - 08:18

as well by the fact that the EU

08:18 - 08:20

is also going to pause for 90 days.

08:20 - 08:21

Although the EU Commission

08:21 - 08:23

president, Ursula von der Leyen, said

08:23 - 08:25

that while they will pause for 90 days

08:25 - 08:27

if negotiations are not satisfactory,

08:27 - 08:29

countermeasures will kick in.

08:29 - 08:30

So a bit of a warning there.

08:30 - 08:32

But I think for European investors,

08:32 - 08:33

this is possibly

08:33 - 08:35

the first time that it's actually felt

08:35 - 08:37

like almost a reality

08:37 - 08:37

that perhaps the U.S.

08:37 - 08:39

administration will negotiate with them.

08:39 - 08:40

Up to this point,

08:40 - 08:41

the EU has,

08:41 - 08:43

for instance, offered zero

08:43 - 08:43

for zero

08:43 - 08:46

tariffs on industrial goods, on autos,

08:46 - 08:47

and that's frankly being ignored.

08:47 - 08:49

So perhaps this is an opportunity.

08:49 - 08:51

Very different story

08:51 - 08:52

elsewhere in the markets.

08:52 - 08:53

Of course, Wall Street has opened

08:53 - 08:54

lower today.

08:54 - 08:56

The relief rally bet is over.

08:56 - 08:58

And by a number of metrics,

08:58 - 08:59

you know, even from JPMorgan

08:59 - 09:01

not shifting their outlook

09:01 - 09:04

in terms of recession, keeping it at 60%.

09:04 - 09:05

Some of these assets suggest

09:05 - 09:06

that people are still pricing

09:06 - 09:07

in the likelihood of a recession.

09:07 - 09:09

Oil prices

09:09 - 09:11

steeply lower at this stage,

09:11 - 09:15

about 4.6% lower under the $60 a barrel

09:15 - 09:17

it could finish today at the lowest it's

09:17 - 09:19

been since April 2021.

09:19 - 09:20

We're also seeing that the U.S.

09:20 - 09:21

dollar fell sharply,

09:21 - 09:23

and the bond yields for ten year

09:23 - 09:24

bond yields in the U.S.,

09:24 - 09:25

which of course,

09:25 - 09:27

President Trump was concerned about.

09:27 - 09:30

We haven't seen much of a shift there.

09:30 - 09:31

So we've had this huge reversal.

09:31 - 09:33

But actually a lot of the fears

09:33 - 09:35

of a lot of the Euro PMIs,

09:35 - 09:36

if that is even a word,

09:36 - 09:37

is still out there.

09:38 - 09:38

A lot of

09:38 - 09:39

golf players don't

09:39 - 09:42

know exactly what that's a what now

09:42 - 09:43

what now.

09:43 - 09:45

It's a Wall Street wall now.

09:45 - 09:46

And Stuart thank you so much.

Analyzing President Trump's Second Term Cabinet Meeting Amid Trade War Uncertainty

In light of the recent events surrounding President Trump's cabinet meeting, key players like Treasury Secretary Scott Benson, along with White House officials, are at the forefront of advising the President amid escalating trade tensions. The pause in tariffs has sparked mixed reactions on Wall Street, showcasing the market's aversion to uncertainty. The ongoing trade war with China and negotiations with allies like Japan and South Korea highlight the delicate balance the administration is trying to strike.

The Complex Dynamics of Trade Negotiations and Market Reactions

The discussions within the cabinet reflect a diverse range of opinions, from advocates of aggressive tariff policies to those advocating for a more diplomatic approach. The involvement of influential figures like Elon Musk and the contrasting advice between Treasury Secretary Scott Bassett and trade adviser Peter Navarro add layers of complexity to the decision-making process. The administration's efforts to rally allies against China underscore the global implications of the trade war.

During the cabinet meeting, considerations of offers from various countries, including Japan and South Korea, point towards a collaborative approach to address trade imbalances. The market's response to the tariff pause, transitioning from a brief green bounce to a subsequent red dip, underscores the volatility and uncertainty surrounding trade policies.

Market Reactions and Investor Sentiment Amid Trade War Developments

As Wall Street grapples with the ramifications of the ongoing trade war, investors are closely monitoring the developments. The recent rally followed by a decline reflects the unpredictable nature of market sentiment in response to trade-related announcements. Analysts and traders are keen on identifying potential off-ramps and negotiation strategies to navigate the complex web of tariffs and trade agreements.

The European market's positive rally, influenced by the temporary pause in tariffs and the EU's decision to reverse retaliatory measures, signifies a glimmer of hope for international trade relations. However, the cautious optimism is juxtaposed against concerns about a looming recession, as evidenced by indicators like oil prices and bond yields.

Examining Investor Behavior and Business Leaders' Responses

The divergent reactions from business leaders like billionaire investor Bill Ackman, who initially criticized the tariff plans but later praised the pause, highlight the nuanced perspectives within the business community. The shift in sentiment following policy decisions underscores the interconnectedness between trade policies, market performance, and investor confidence.

As negotiations unfold and trade dynamics continue to evolve, the overarching theme remains one of uncertainty. Market participants are navigating a landscape characterized by fluctuating tariffs, global alliances, and economic indicators, all of which shape the trajectory of international trade relations in the coming days.

The intricate interplay between political decisions, market reactions, and investor sentiment underscores the multifaceted nature of trade negotiations in a globalized economy. As stakeholders monitor developments in real-time, the implications of policy shifts reverberate across financial markets, highlighting the complex dynamics at play in the realm of international trade.


The evolving narrative surrounding the trade war and market reactions underscores the intricate balance between policy decisions and economic implications. As stakeholders navigate through uncertainty, the interplay of diplomatic negotiations and market dynamics shapes the trajectory of international trade relations in a globalized economy.