The Trump Tariff Roller Coaster Rides Again
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It's Friday, May 30th. Here's what's happening right now on CNN This Morning. It's so hard to keep up while you're trying to keep business afloat. President Trump's on again, off again tariffs appear to be back on and everybody's feeling the whiplash. Plus, the president and Elon Musk appearing before cameras today. Will he get a warm Washington sendoff or could criticism of the big, beautiful bill come back to bite him?

Then later, will AI trigger mass unemployment? The warning from an industry CEO and this. - Faizan Zaki, you are the 2025 Scripps National Spelling Bee Champion. - Last year's runner up, this year's champion. We've got the final word that won him the trophy and the glory.

6 a.m. here on the East Coast. That's the view that I'm used to. New York City there in the morning. I'm Erica Hill in D.C. today in Friday, Cornish. Thank you so much for waking up with me. In less than the span of 24 hours, President Trump's tariff agenda was both put on hold and thrown a lifeline after a federal appeals court paused Wednesday's ruling from the U.S. Court of International Trade, blocking most of his tariffs. As administration officials, though, vow those tariffs are here to stay.

So you can assume that even if we lose, we will do it another way. We already filed an emergency appeal. We expect to fight this battle all the way to the Supreme Court.

The three-judge panel at the Court of International Trade ruling the president overstepped his authority with those tariffs. His reaction, quote, where do these initial three judges come from? For one of them, at least, that judge came from Donald Trump. Judge Timothy Reif was appointed during the first Trump administration, and he ruled against him here. So what happens now? Well, in terms of the tariff whiplash, it's just adding to the chaos for small businesses.

These last two months, they felt much longer than two months. We've seen the tariffs go up, down, sideways. I've been petrified. I haven't been able to plan my business.

Joining me now in the group chat, Sarah Fisher, CNN media analyst, Rob Louie, president and executive director of The Daily Signal, and Lulu Garcia Navarro, CNN contributor and New York Times journalist. Good morning. Happy Friday to everybody. Nice to be with you this morning. So when we look at where things stand, there are the impact on small businesses, and I want to get into that in a moment. But if we look at the broader impact,

This was the conversation I was having a lot yesterday, especially with the international community. It was what happens now, right? Now that the tariffs are back in terms of negotiation, Lou, there's a real discussion about whether this has further weakened the negotiating stance of the United States. It is.

actually, because what ends up happening is that right now countries don't know what is going to happen. Is this, are these tariffs actually going to stick? Are they going to be overruled? What is the Supreme Court going to say? And so if you're just a regular person, right, and you're going into a negotiation and you don't know if that person actually has anything to negotiate with, this isn't rocket science. You're going to say,

I'm not going to actually, you know, put my best bid forward. I'm going to wait and see how this plays out. And so it does weaken the president. I also just want to say one more thing. When you've lost the New York Post, this is the headline today, terrifying. You know, you've got to be you're going to be in trouble if you're the president. It does say something. Well, we've also seen actually on more than one occasion. And with this as well, we've seen the Wall Street Journal editorial board being pretty

outspoken perhaps in ways that maybe would not always be expected, pushing back on this administration. This morning, the editorial board noting that this shows that Donald Trump is not a king, but also saying that these tariffs have created enormous costs and uncertainty, but now we know they're illegal.

What does that actually do? How is that received in this moment by the administration? Sure. Well, I think that as you heard from Caroline Levitt yesterday, they want a resolution at the Supreme Court so there's a definitive answer as to what's going on to Lulu's point. But I think it also speaks to the importance of getting these bilateral trade deals in place as quickly as possible, as we already saw with the United Kingdom.

As these countries come to the United States, as they come to Washington and talk to Donald Trump, I think that they probably want that certainty that certainly the courts have thrown into a little bit of chaos right now. - The certainty that really hasn't existed for months now, we have to be honest, Sarah, when we look at the landscape,

that is before them, it was striking to me, not surprising, but interesting, not surprising at all to hear the administration say, "We are moving forward. This is going to happen no matter what." But acknowledging that there are other ways to do this, those other ways, of course, involve a little bit more work. - A lot more work. That's why they wanted to go this route the first way, right, unilaterally, so that you don't have to go through an entire court process and legal process

The thing I'm watching though is there's a cost benefit analysis here to be done with these tariffs. So let's say you're going to calculate the amount of dollars coming into the US from these tariffs. You also need to calculate the amount of dollars lost from the economic uncertainty. The markets are way down. Every company I cover

has forecasted weaker projections for sales in Q2 and Q3. Some have said that we won't even put forecasts out, which also creates a lot of uncertainty and causes stock prices to crater. So you might be getting a calculation in on how much you're going to make from these tariffs. What I want to see the administration address is

all of the money lost from the uncertainty around implementing them. And I think if you were to take that cost benefit analysis into play, you would see that you're not net-net and bringing as much money into the economy as you think. There's also a question, as we look at the markets, right? Markets sort of recovering because a lot of the uncertainty is...

is somewhat priced in in some ways when you speak with different economists, but it's also the small businesses, right? So the ruling on Wednesday was a reaction in part to cases brought by a number of states, but also a number of small businesses who were saying, hey, we're feeling the pain here. We're looking at futures now, all down slightly for the major U.S. indices. But the small business is saying they're feeling the pain. What you're hearing from the administration is this isn't an administration that gets you.

a president who understands business, who understands small businesses. That message is not what's being received by a number of small businesses. I mean, I am less interested in the stock market. This actually feels a little bit like there's a stock market, you know, kind of rodeo going on where it's up, it's down and people are making money. Anyway, what really interests me is what is

is the effect on small businesses and regular people. And it is pretty severe. I mean, you are hearing this over and over again. And just I just know from my friend group, you know, my own group chat that people don't want to buy things at the moment because they are worried about where the economy is headed. They don't know where, you know, if there might be unemployment might spike. And so you're seeing that in conversations with Donald Trump. And he had it with the chairman of the Federal Reserve yesterday.

uh... where you know he obviously wants his interest rates down and uh... jordan powell is not budging because of the economic uncertainty so there's a lot happening here with the economy and none of it is very clear i will say this though i i acknowledge that there there is some of that uncertainty at the same time if you compare

the direction of the country now, at least according to public polls, Americans are more optimistic about the future under Donald Trump than they were under Joe Biden. So that is one thing that Trump has going for him in his favor. And if you look at that metric about how people are feeling about their personal finances, well, it tends to fluctuate. They seem to be more confident that Trump has a plan for the long term. There will be some turmoil here in the short term, which is why I think you're seeing that uncertainty that Sarah talked about. But hopefully long term, we can get this resolved.

I think I agree with you. I do think that people like the fact that Donald Trump is coming in and doing something because what happened during the Biden administration is people lost faith that anything new was being done to inject, you know, optimism into the economy. So Donald Trump comes in

think what you will of what he has created and he's at least making moves if you're the average american yes you're feeling the pain from this but there are a lot of people who voted for donald trump thinking i think about his trade war with china's perfect example of this thinking short-term pain might mean long-term gain and i think there is still a sense of that amongst a lot of trump voters i mean i think the big question is how long is this going to last right what is

the grace period that Donald Trump is going to have because they do see him as a businessman. They do have a lot of trust in him. We've seen that poll after poll. You know, at the end of the day, we saw this in the last election. When your pocketbook's hurting, you can't put food on the table, and your job's under threat, I wonder how long that loyalty is going to last. It brings back the question of how long is the short-term pain, right? Yeah, for the long-term gain. And typically we get that barometer in the midterms.

Right. That's when we know. We'll see. It's also only been four months, which is kind of amazing. Just in case anybody was keeping track. Don't worry, I'm doing it for you. All right. Group chat. Stick around. Much more to come ahead this hour, including the Trump administration pushing a DEI rollback for companies, of course, at the start of the year. So what do shoppers have to say about that?

Turns out, they're not all on board. Plus, a convicted murderer and an experienced fugitive on the run for two weeks now as investigators warn they could be anywhere at this point. And it's being called the largest evacuation in living memory for one area. A closer look at the wildfires scorching Canada. The important thing is that I got out, same with my family, and to be honest, I was, like, terrified. She's made up her mind, it's pretty smart.

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14 minutes past the hour now. Here's your morning roundup. It's been two weeks since two men busted out of that New Orleans jail and two of them are still on the run. A convicted double murderer and an experienced fugitive. Authorities are now offering a $50,000 reward for anyone with information leading to the arrest of either escaping. They're also warning by now they could be anywhere in the U.S.

More than 17,000 people in the Canadian province of Manitoba forced to leave their homes as raging wildfires spread there in what's being called the largest evacuation and living memory in that area. There are more than 160 fires burning right now across Canada, and that's prompting multiple states of emergency.

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This is the greatest event every year. Let's call it here. And we have a new champ now in the Scripps National Spelling Bee, Faizan Zaki, taking home the title along with a $50,000 cash prize and some other goodies. The 13-year-old from Allen, Texas, it's his fourth appearance. He was the runner-up last year, champion this year thanks to that final word, which means enlightenment. Now you've been enlightened.

Just ahead here on CNN this morning, emotional testimony from Sean Combs, former personal assistant, as she described a chaotic, toxic workplace and her responsibility to, quote, protect him at all times. Plus, the Make America Healthy Again report on children's health cited studies that don't even exist. And a little good morning shout out to St. Louis. Some beautiful pink skies there under the arch on this Friday morning.

Some pretty big problems with a sweeping report on children's health from the Trump administration's Make America Healthy Again commission.

Among the issues, flawed references and even citing studies that don't exist. The report, which was released last week, has been touted by Health and Human Services Secretary Robert F. Kennedy Jr. as a, quote, milestone. It lays out the government's priorities for addressing chronic health problems in children, focusing on poor diet, lack of exercise, stress, the overprescription of drugs and also exposure to environmental chemicals.

Some of the people named, though, as authors of studies cited in the report say they didn't write those reports. Others were attributed to the wrong journal. An updated version of the report was posted yesterday. Here's the White House response.

I understand there were some formatting issues with the Maha report that are being addressed and the report will be updated, but it does not negate the substance of the report, which as you know is one of the most transformative health reports that has ever been released by the federal government and is backed on good science that has never been recognized by the federal government.

Joining me now to discuss Dr. Dhruv Kular, who's an associate professor of health policy at the Weill Cornell Medical College. As we just heard there from Caroline Levitt, doctor, she says this doesn't negate the substance that this is based on good science, some of it we haven't seen before because I guess some of it did not exist. How troubling is it to you that a report of this importance, as we have been told, made its way out there with these clearly major issues and mistakes?

Well, Arka, it's unfortunate because this report does contain some elements of things that we should be talking about. We need to be focused on the root causes of chronic disease in children, whether it's ultra-processed food or lack of exercise or social isolation. But the number and the type of errors in this report demonstrate, I think, a concerning lack of care. In some cases, as you mentioned, the studies that are cited are misrepresented. In other cases, the studies don't even actually exist.

And these non-existent studies, they seem to be generated by artificial intelligence. And they're being used, I think, in some cases to bolster the narratives that the report is trying to advance, whether it's things like pharmaceutical

advertising or overuse of ADHD drugs. Now, it's important to note that typically reports like this go through layers of internal review to ensure that they're accurate. But in this case, it doesn't seem like anyone bothered to check whether the studies being cited were actually real studies. And Secretary Kennedy has called for radical transparencies, called for gold standard science. This report is certainly not that.

So what do you think the future is? Because as you point out, there are some important nuggets in this report. There are things that should be discussed. Does this, though, undermine anything that could come out of it moving forward?

It does. I mean, there's a lot that's in this report that I think is important to talk about. There are other things that are more controversial. But when you use studies that don't exist or when you misrepresent studies that do exist, that undercuts the validity of what you're trying to get out there. It becomes a distraction. And in some cases, the studies that are being cited are being manipulated in ways that don't actually support

the narrative that the report is trying to advance. And so this is something that should have been picked up. It's something that we needed more transparency about. The other thing that I'll note is that these errors are, they're obvious. They are public errors, but it doesn't provide a lot of reassurance for what's happening behind the scenes. We know that other government scientists have said that they feel like their work has been manipulated, that their findings have been censored if they don't fit into a preconceived narrative. And that is not how science is supposed to work. And so

You know, what's most concerning here is that health policy, public health, these things affect us all and the stakes could be higher for children. And so the report kind of is demonstrating a level of sloppiness that I think should unfortunately concern us all.

I also want to get your take on the announcement that HHS is canceling this nearly $600 million contract with Moderna for the bird flu. And they note that this is because of the mRNA, right, mRNA vaccines, putting out in a statement saying that it was not scientifically or ethically justifiable.

And that the technology is under tested here, going on to criticize the Biden administration. You see here, this is the statement from the communications director at HHS as to why they decided to get rid of this contract. It's important to note Operation Warp Speed under President Trump in his first term actually gave us these mRNA vaccines for COVID, of course. And they are vaccines that have been widely used globally, widely tested. So what do you make of this move?

As you say, Secretary Kennedy has expressed some serious concerns about the safety of mRNA vaccines, but we know that in general, mRNA vaccines have been incredibly safe and effective. They've been administered billions of times around the globe since the pandemic started, and we have an enormous amount of safety data on this vaccine platform that's all very reassuring.

And so, you know, this contract was announced in the final days of the Biden administration. There have been questions about whether it would be continued pretty much since the new administration took office. And now we have this announcement of a cancellation of a $600 million contract. And that money was being used to develop vaccines that could really protect us if there is an influenza

epidemic or an influenza pandemic. And in this case, we're really concerned about bird flu. And so people should know that mRNA technology, it's a vaccine platform. And one of the real advantages is that you can modify the vaccine very quickly based on the genetic sequence of the virus.

And time is critical when you are facing an infectious disease threat that is emerging. And so, you know, I think we're going to regret this decision if bird flu mutates in a way that makes human to human transmission possible. And we need vaccines in a hurry. Dr. Dhruv Kular, I appreciate your insight and your expertise this morning. Thank you. Pleasure. Thank you.

After the break here on CNN this morning, it has been described as a court that lawyers don't even know exist when they graduate law school. So just what is the Court of International Trade, the one at the center of the president's President Trump's terror fight? Elliott Williams is here to explain when we lawyer up. Plus, United says it will be the cheapest summer to fly with one caveat. We'll tell you what that is.

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Good morning, I'm Erica Hill in for Adi Kordesh. Nice to have you with us this morning. It is 6.32 on the dot right here on the East Coast. Here's a look at what's happening right now. U.S. stock futures are pointing to a lower open after a federal appeals court restored President Trump's ability to levy tariffs. This comes after the Court of International Trade ruled he did not have the authority to impose those sweeping tariffs.

The president heading to Pennsylvania today to tout the deal that he announced between U.S. Steel and Japanese steelmaker Nippon. President Trump has called this a planned partnership with the U.S. keeping control. Former President Biden had blocked the deal his last week in office. Sean Combs, former personal assistant, will be back on the stand this morning. She has been identified as Mia in an effort to protect her identity, identity.

She testified on Thursday about what she described as a chaotic, toxic work environment, alleging that he was violent with her and also sexually assaulted her. All right, so the tariff whiplash, it's back. A lot of people feeling it, a lot of businesses, a lot of countries, frankly, feeling it right now. This after an appeals court ruled that President Trump's tariff policy can, in fact, stay in place for now, less than 24 hours, of course, after it was blocked.

We want to take a closer look, though, at the court that delivered that first blow. It's the Court of International Trade. On Wednesday, its panel of three judges ruled many of his sweeping tariff orders actually went beyond the powers of the president. So it's time now to lawyer up with Elliott Williams, CNN legal analyst, former federal prosecutor. So we had this whiplash in the span of less than 24 hours. What did we actually get, though, out of these two rulings, these two

that speaks to the legality of the tariffs. Right. The big point here, and you heard from the administration a lot of courts are now micromanaging the decisions of the administration. And that's not really true. What the Court of International Trade had said is that

There might be a basis for tariffs. There are ways to go ahead and do this, Mr. President. However, the emergency authority on which the administration relied is not it. Now, an appeals court, the Court of Appeals for the Federal Circuit, has put that on hold for now so both parties can write their briefs and argue their case. But we haven't heard the end of this yet. But it's really just the basis for the tariffs, not the tariffs themselves. You talk about, too, the fact that the court

according to that there are ways to do this legally. And we have heard that from some of the advisors, right? - Oh, not advisors, the court said it. - Right. - Yeah, it's quite-- - But I mean also from the Trump administration's point of view, we've heard it, you know, we heard Peter Navarro saying, you know, this is gonna happen. We had Kevin Hassett talking yesterday as well. The reality is those other avenues exist, but they are much more of a heavy lift and they may involve Congress and they involve a lot

legal things you need to take care of. Congress is the big one. Congress in the Constitution has the authority to implement tariffs. Now the president has some authority and some power to do things on an emergency basis, just not right here. Let's also look at what's happening in Boston. So as commencement's getting underway, there was of course a

Court hearing just a few miles away in Boston related to Harvard. And just before that hearing started, the Trump administration said, oh, wait, Harvard, we're going to give you 30 days to figure this out. Was this really just sort of a last-ditch effort to delay? Absolutely, and quite possibly.

all many watchers of this. First of all, I have to correct you. It's Cambridge. Pardon me. Yes. Oh, as someone who went to school in Boston and remembers Harvard as the only school that wouldn't share their books, I know it's Cambridge. Don't worry. As someone who went to Penn and Columbia and my wife went to Yale also, it is with some disdain that I say Cambridge. However, it's really just--

In the guise of giving more time to negotiate to the parties, everybody who's looked at this or many who have looked at it have said, I think the administration's probably just trying to stall here to stretch this out as long as they have. Because it's a political winner for them, fighting with Harvard. It's a political winner, but does it also show that there may be some concerns on the part of the administration about whether it's a legal winner? Well, yeah. They do not have a great legal case here, both in terms of meddling in the free enterprise of private companies

entities hiring and firing decisions and so on but also free speech there are serious questions about whether they are stepping on harvard's ability and students and faculty's ability to speak freely or to uh to engage in conduct in the classroom that is protected under the constitution um this has kept you fairly busy the last several months right as we look at this flood of activity in the courts

Where does the Trump administration stand at this point? It stands where... Those are two different questions, right? It's politically they're doing great. Now, legally in the courts, not so well. Now, often it's important to note what is winning and what is losing. And

Nobody's won anything until the Supreme Court has either ruled on something or decided that they're not going to. Most of these rulings we've seen, and there have been hundreds of them at this point, have really been temporary or preliminary ones at the beginning. And there's been a lot of them far more than any of us have seen in any of our times here. But many of these cases are not on great legal footing. It's just that they're politically popular with many people, and the action taken that got us there

actually cause some harm that can't be undone. So yeah, maybe they lose one day, but some of the damage has been done. The most important case probably this week that both you and I were watching very closely involves Flamin' Hot Cheetos. Yes, and I will note, I've

probably spent more time researching this issue, Flamin' Hot Cheetos, than any of the others. Because I realized, Erica, I know far more about the Court of International Trade than I do about how Cheetos are made. And that led to some, who am I, am I who I want to be? It sort of pains you a little bit, right? It does. Yeah, where are your priorities? No, this is not where I wanted to be at age 49. So yes, Flamin' Hot Cheetos. So, oh, go ahead. No, I was saying, no, go ahead. So this is actually defamation. Defamation suit. Suits it was brought.

A man claims that he, a former janitor, claims that he came up with the recipe for Flamin' Hot Cheetos. There's actually a movie, a biopic made about this individual. Now, Cheetos has said and maintained that, no, we came up with this on our own and that this is sort of a manufactured thing, not Flamin' Hot at all. That has been very successful for the company, we should point out. Wildly successful. Now, what happened was, it's a fascinating story, a Cheeto machine broke.

And he had unflavored Cheetos, which, okay, strike one right there. Yeah.

Lord knows. That's why we want the machine to work. We've all put bad things in our mouth, but an unflavored Cheeto is pretty dark. So he gets unflavored Cheetos, takes them home, puts elote on them and says, I came up with Flamin' Hot Cheetos. They then for years have asserted that, no, we came up with the recipe. He sues them. He ends up becoming an executive, sues them for defamation. That just got thrown out, saying that they had a right to say that this was their trademark. This is how they were created. He can file this suit later at one point.

but sadly, he's not going to become the Cheeto heir or the Cheeto impresario. The Flamin' Hot Cheeto King or whatever it may have been. That was actually my nickname in college, believe it or not. Flamin' Hot Cheeto King? Yes, yeah. It's really unfortunate that we're out of time because I would like to unpack that. Ladies and gentlemen, it was not, in fact, my nickname in college. Spoiler alert. Spoiler alert. Always a pleasure, my friend. Nice to see you in person. Thank you, Erica. Talk to you soon. Thank you.

Well, as a federal judge said she would block the White House from ending Harvard's ability to enroll international students just down the road in Cambridge. The fight with the White House was top of mind as the school held its commencement ceremony. CNN's Lee Waldman has more.

A major win for Harvard University as the judge overseeing the international student case says she will order the Department of Homeland Security and State Department to not make any changes to Harvard's student visa program indefinitely. Members of the class of 2025 from down the street, across the country, and around the world, around the world, just as it should be.

That ruling coming as the nation's oldest university holds its 374th commencement. We leave a much different campus than the one we entered. Prior to the judge's ruling, fears were swirling for the future of Harvard's current and future international students. Many people are looking at.

perhaps a gap year or any other alternatives, which again, none of them sound as good as continuing their education within the university they put in so much effort to get into. President Donald Trump Wednesday telling the Ivy League to behave. Harvard is treating our country with great disrespect.

And all they're doing is getting in deeper and deeper and deeper. In addition to the foreign student fight, the university is also challenging the White House and court over the freeze of $2.2 billion in federal money after it refused to take steps like eliminating diversity, equity, inclusion programs and admission changes. I'm Lou Altman reporting.

Well, with the push to do away with DEI, a new poll finds these policies actually really matter to a number of shoppers, including to the Axios Harris Poll. Companies that maintain their DEI commitments saw a boost in their public reputation compared to those that didn't. Patagonia, Microsoft and Costco among the top rankings there.

DEI wins and remains one because I spent $980 at Costco today. We're going to support the only store I can support anymore, which is Costco. Don't forget, Costco loves DEI, so we love Costco.

Meantime, of course, over at Target, its CEO said the stores were really facing some issues and some of the problems in response, of course, to their DEI changes. We all recall the boycott. So what does this mean for businesses moving forward? The group chat is back. As we look at this, I'm fascinated. The Axios Harris poll, Sarah Fisher from Axios. I'll throw it to you first.

It is really interesting to see the public backlash. So a number of companies have pulled, even if they haven't maybe changed the way they do things internally, they're not broadcasting it on their websites, for example. But it matters to consumers. Yes, Erica, I've been managing this poll for Axios since 2019. There's one through line every single year, which is that as a company, consumers want you to stand up for the policies and the principles that you've always stood for. When you go out of line,

That's when you get hit. So if you are trying to do something to pander to the political climate, consumers do not like that. If you've always stood for DEI, if you've always stood for the environment, and you continue to serve those missions, nobody's going to punish you for it. That's why companies like Patagonia and Hobby Lobby are always at the top of our list, because they are consistent in their beliefs regardless of their political party. It's when you have a perspective and you decide to change that perspective

because you want to curry favor with some sort of administration, consumers really react negatively to that. And when we look at this in terms of that shifting, you know, the shifting priorities, if you will, shifting public stance...

There is, you cannot ignore the pressure from the current administration. So the fact that some companies are ignoring that, do they do it at their own peril when it comes to potential regulations? Well, certainly I believe the DEI is inconsistent with American values. And so I like, particularly as Sarah articulated, those companies that shy away from it.

As she said though, there are some, Target being an example, where conservatives, myself included, stopped shopping there because of their policies. Now that's the consumer's choice. Those companies need to decide who they are trying to appeal to. And if they're out of step, as Sarah indicated, that's when they fall into trouble. As it pertains to Trump and his approach,

It's not just the administration. There are a lot of groups now doing shareholder resolutions and other things that are forcing these companies to make tough choices when it comes to the policies they pursue. But some of those choices are sticking with what works for the company, what they believe is a company, which is we do better when we have a workforce that looks like the country, that is more inclusive, that is more diverse, that is more equitable, which we saw in that.

Yeah, I think one of the things that is really interesting is that companies are now trying to hide what they're doing. They're using other language. So instead of having DEI officers, they're using all these other words to sort of mask it.

At the end of the day, though, the bigger picture is that this is now different than what happened before. This is not about backlash. This is actually about federal rulings, you know, federal interference in these companies and what they're doing. And so that really does look a lot different than what we saw, you know, in 2020 and beyond, where there was a lot of turmoil, a lot of...

consumer angst about what companies were or were not doing. This is now something that is coming from the federal level. And so I do think that that really does change the game. It changes the game. It's also fascinating to me, as you point out, right? Like the language is changing. Maybe what we call the office is changing. The policies are not necessarily changing. How does that play out, though, as you're following this, right? And as you've been tracking it and looking at polling like this, how much do the words matter to people versus the deeds?

Great question. There's two constituencies that a company has to worry about. Internally, they're employees, which if you're a big company, you've got tens of thousands of employees, it matters a lot what type of wording you're using because they have been so accustomed to these policies throughout their years and tenure working there. If you are an

external stakeholder, if you're a consumer, the minutia is not as big of a deal. But if it gets broadcast, if you get called out by the president or if you get called out by somebody for making a change, that's when it becomes a very, very explosive problem. To Lulu's point on the regulatory side of things, one thing I'm following, you have right now the FCC probing a lot of media companies for their DEI policies. So now suddenly these companies are under pressure, not from their employees, not from their constituents or their, you know,

viewers or the consumers, but they want to get their deals approved. They want to get things done with government mergers and acquisitions. They're now suddenly changing their DEI tune to make sure they're occurring favor with the administration. To Lulu's point, that is very different. This is not a pressure coming from like the George Floyd swirl from society. It's coming from the government. It's a very different type of

pressure point for companies. - And I think it should worry people. I mean, I think it should worry people because, you know, when you have the federal government trying to take private companies to task for policies that they're implementing, whether you think they are un-American or not, we can, you know, one can argue that till you're blue in the face, but what is the role of the federal government in actually punishing companies for policies that they're holding about, you know, how they choose to hire people?

And so that becomes, I think, the bigger question under which all of this sits. This is a different era. If those policies, though, are discriminatory in the view of the Trump administration, that is an area where I do believe that they think that they have a right to insert themselves and challenge some of these companies. That's where it goes to the courts, because you have the companies who are going to argue a First Amendment infringement. And then you can say on the other side of it, well, there's discriminatory action. I think a lot of these types of challenges and these conflicts will end up in courts.

like a lot of other things we're following. - Yes. - A lot of time in the courts. All right, Cube Chat, stick around. Much more ahead here. Coming up on CNN this morning, is AI on the brink of sending the unemployment rate to 20%? What one AI CEO is now saying about the rapid rise of the industry. That's just ahead. - These technology changes have happened before, but I think what is striking to me about this AI boom is that it's bigger and it's broader and it's moving faster than anything has before.

That is the CEO of one of the world's leading artificial intelligence labs. He says AI could cause, in his view, a massive spike in unemployment. Just this week, of course, he warned the AI models his company and others are building are progressing, in fact, so quickly they could wipe out half of entry-level white-collar jobs in a matter of a few years. So these are jobs like paralegals, administrative assistants, payroll clerks, even some postal workers. He says that could spike the unemployment rate to 20%.

I think it's eerie the extent to which the broader public and politicians, legislators, I don't think are fully aware of what's going on. A few of them are, but I think for the most part, they don't really see what's coming.

Joining me now to discuss CNN business writer Claire Duffy. Claire, so this obviously generating a lot of attention. These headlines are really alarming to a number of people. What has been the reaction though in the broader industry in terms of how many people are actually on board with this warning from Anthropic CEO? Do they believe he's right?

Yeah, Erica, I mean, people have sort of a range of predictions about how quickly this is going to happen, how quickly we really could see AI replacing half of all entry-level white-collar jobs. But everybody is sort of on the same page that this is going to happen at some point. And I think what we're hearing from Dario Amadei there is that we need to be moving quicker to react to this and to respond to this.

and to find a way to structure society such that we could handle 20% unemployment in the next one to five years. Just to put that in perspective, that could mean unemployment essentially going up five times in the next few years. And he had a number of sort of suggestions, especially for lawmakers in terms of how to handle this, including potentially taxing AI companies. Here's what he said about that.

I wouldn't exclude the notion of, you know, levying a tax on AI companies, right? If AI creates huge total wealth, you know, a lot of that will by default go to the AI companies and, you know, less to ordinary people. And so, you know, definitely not in my economic interest to say that, but I think this is something we should consider. And, you know, I think it shouldn't be a partisan thing. You know, again, if these issues are big enough, they affect everyone.

But Erica, look, I think it's also worth mentioning the fact that this is the company that just released an AI model that it says can work seven hours on its own with very little human intervention and do really complex tasks. So he's making this warning at the same time that his company is selling the technology that could

that could be replacing human workers. Right. And that's part of the pushback, right? Our colleague Alison Morrow even writing over at CNN Business, these warnings feel more like an ad than a PSA for his company, saying it's now on them to show their work, show how AI can be so destructive and how Americans can fix it rather than just shouting about the risks. What more is there beyond that suggestion of maybe taxing AI that he had in terms of how to fix it?

Yeah, I mean, I think that's right. He even told our Anderson Cooper last night that one of the ways that people can respond to this is by learning to use AI, which does sort of sound like an advertisement for his company. I also think it's sort of interesting timing because this is

The major AI labs are also locked in a race, not just to have the most powerful technology, but also to be the most trusted, most responsible stewards for this technology transformation. They want to be the ones that lawmakers are turning to for advice on how to handle this. So I also think this may be a bit of reputation management on the part of Dario Amadei by making these comments at this point. Claire Duffy, great to see you this morning. Thank you.

Well, in just a few hours, Elon Musk is set to officially exit his role in the Trump administration, leaving behind his doge work in D.C. This afternoon, President Trump is hosting Musk for one final press appearance at the White House. The president says it will be his last day, but not really, because he will always be with us. So what about Elon Musk and his criticism of that big, beautiful bill passed by Republicans? Vice President Vance doesn't seem too concerned.

Elon's become a very good friend, really over the campaign and certainly over his time in Washington. I mean, he and his kids have come over to our house and had dinner with our kids. So I'm very close to him. I think Elon's entitled to have his opinions about the function of government. I still think the big, beautiful bill is the way to go.

the group chat is back um how much damage did elon musk do to himself with his comments about the big beautiful bill well if any let's face it there are a lot of senate conservatives who want to see changes to the big beautiful bill as well more spending cuts and other reforms that the house didn't make and so i think that there's room to do that i think one of the most important things that members of congress can do to make sure that elon musk's work with doge does not go to waste is to codify a lot of those cuts in a rescission package that's coming to congress soon can i just be honest

Elon Musk made those comments, I think, because he believes them, but also because he is on his own press tour to try and save himself from his own reputational damage because

Americans found what he did very, very unnerving. They didn't like it. And he is very unpopular. It's hurt his core businesses, which he's now going back to. He's been on a press tour trying to really remediate this. So part of that is to show some separation between him and the administration that he has been so closely tied to. What are you watching for?

today when we see these two together again? I think you're going to see a very friendly departure here. Donald Trump needs Elon Musk. Elon Musk controls one of the most powerful social discourse platforms in the world. And underneath Musk, it's been very positive for conservatives. So I don't think you're going to see much tension. I think you're going to see a very positive send-off, if I'm being quite honest. A little bro-fest happening. The bro-fest is back. All right, before I let you go,

A quick talk about what you're all keeping an eye on today. I'll start on this side. Yes, so there is a big lawsuit right now between Paramount, which is the parent company to CBS News, and Donald Trump. The lawsuit that Donald Trump waged against Paramount last year was over an interview that he alleged is, you know, sort of amounts to voter fraud because he says it boosted Kamala Harris. But if CBS settles, which is something that I'm watching for in the next few days or weeks,

it will have enormous repercussions. The press freedom community says that it would be a sham to press freedom if they settle. Yeah, there is a there are a lot of eyes on that. I have mine as well. Sarah, what are you looking for today? Sure. Well, Erica, we after President Trump is finished with Elon Musk aboard a plane and go to a suburb of Pittsburgh, Pennsylvania, where last week he announced the big deal with U.S. Steel. And this is

transformational in many respects. Selina Zito calls it a game changer for that community there. U.S. Steel's headquarters will stay in Pittsburgh. And of course, we know how important politically Pennsylvania is for Republicans and their future.

I have been looking at Donald Trump and his Truth Social feed, which overnight he went after a kind of unexpected target, someone that he actually owes a lot to, who is Leonard Leo of the Federalist Society. If you know what the Federalist Society is, it's been the architect of really pushing a very conservative judicial agenda. He is seen as the person who was able to really get the Supreme Court to be where it is now, 6-3.

conservatives and so he went after him uh... which just shows that donald trump really holds no one sacred uh... and basically said that he blames the federal society and leonard leo for a lot of the problems with the judicial point he's been playing at the list that he had been given right in this comes west as he's also complaining about one of the judges on the international at a trade court right because this is a unanimous three judge ruling one of whom though was appointed by donald trump and he asked who put these guys there yeah and it was a

Yeah, for one of them at least. Greta, I'm going to be watching a big basketball game because I live in New York, but I am in a house full of Pacers fans. And so I went to bed before it ended last night. Wow.

But there's going to be a lot happening come game six. So I'm watching that. And the playoffs, NHL Stanley Cup. I mean, there's a lot. It's a good time of year for sports, right? Plus the Tony Awards are coming up. There's a lot of things happening. Yay. Nice to be with all of you this morning. Thanks for having me here in D.C. That's going to do it for the group chat and for CNN this morning. Thanks so much to all of you for joining us. I'm Erica Hill in for Adi Cornish. CNN News Central starts right now. Have a great weekend.

This week on The Assignment with me, Adi Cornish. The rise of buy now, pay later services or BNPLs. The idea is this. Instead of using traditional credit or debit to pay for your new sweater or TV or even your DoorDash order, you can break it up. And sometimes those payments happen every few weeks, sometimes once a month. And it's clear we're not sure how to feel about it. Is this a dangerous fad or a smarter, healthier form of credit?

Listen to The Assignment with me, Audie Cornish, streaming now on your favorite podcast app.