It's fairly clear that in the full clip Trump is talking about electromagnets. Trump is shortening 'electromagnet' to 'magnet', as it is a type of magnet which is already explicitly defined in the full speech to be the type in question.
At the 1:30 minute mark of the below fuller video of the clip he even launches into a story about how an engineer named Bill Jones from the NAVY was talking to him and comparing the older and more reliable steam systems with the electromagnetic systems on ships. One of the problems mentioned is that when the electromagnetic systems were exposed to water they would shut down. This is where the concern about water comes from.
The electromagnetic systems the engineer worked on on those NAVY ships was assuredly "waterproofed", but the doors to the systems had to be opened for work and maintenance. The engineer suggests he is concerned about giant waves hitting the ship during maintenance and the water making its way inside and damaging the components, when this was not an issue with previous designs.