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First Move with Julia Chatterley
Russian Sanctions Janet Yellen and 60 Others; Muslim Countries Condemn India over Anti-Islam Comments; Sommers: More Tax on Big Oil will Restrict oil supply; More Neighborhoods put back into Lockdown in Shanghai; American Golfer Dustin Johnson Resigns from the PGA; World's Biggest Trial of Four-Day Workweek Begins. Aired 9-10a ET
Aired June 07, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: Hello welcome to "First Move"! I'm Julia Chatterley in New York. Fierce fighting an intense street battles
again in Eastern Ukraine. The nation's forces continue to defend the key city of Severodonetsk from Russian attacks.
Ukrainian officials are saying the situation there is changing "Every hour". While in the Black Sea, the Navy sees Russian ships have withdrawn
more than 100 kilometers after its missile and drone attacks.
Salma Abdelaziz joins us now from Kyiv, Salma, good to have you with us. As we were hearing that Ukrainian officials saying this is a moment by moment
case. What's the latest and what are you hearing?
SALMA ABDELAZIZ, CNN REPORTER: Absolutely, Severodonetsk now is really the flashpoint of that battle. The larger goal, of course, that President Putin
has of taking control of the Donbas region Severodonetsk now, at the heart of that matter.
President Zelenskyy saying that Ukrainian defenders are holding their ground but he's conceding that this is an extremely difficult battle just
last week, it looked like that city was on the verge of falling now, Ukrainian forces appear to have been able to claw back territory.
But Ukrainian officials saying that a simply incredible amount of resources, Russian resources, firepower artillery troops being used to bomb
and contain Severodonetsk. And, of course, also the access road leading to that city as well, that means supply routes are tenuous at best.
And that means that for the over 10,000, civilians that we understand, are still trapped in that city, there seems to be for now, no clear way out.
And this is crucial, again, because of that larger goal. If you look at that map against Severodonetsk right on the edge there of that push towards
the west, for Russian forces, it would be a major victory, major gain if they're able to take it because that brings them one step closer to
Kramatorsk.
Of course, the Ukrainian stronghold in that region of Luhansk and I'm very quickly going to mention Julia, here the Black Sea, of course, because you
mentioned that as well. Ukrainian forces saying they've been able to push back Russian warships by 100 kilometers, but already a counter attack in
place by Russian forces.
They say Russian positions; Russian cruise missile positions have been put into place in Russian occupied territories, in Kherson and Crimea. So there
could be a push back there as well. That's important, of course, because the ports key among them, of course, the port of Odessa are what supply
grain the breadbasket here of Ukraine grain to the world.
So this may ease this push of the Black Sea pushing back these Russian forces in the Black Sea may ease that pressure on these ports but there's
also diplomatic efforts here to unblock this very key and strategic area, which provides the really the bread the grain, the supplies that the world
needs, Julia.
CHATTERLEY: Yes, it is a great point, Salma, great to have you with us thank you for that Salma Abdelaziz there. Now Russia has banned more
American officials and media executives from entering the country in response that says, to expanding sanctions by the United States.
A Judge in the United States has issued warrants to seize two private jets belonging to Russia's Roman Abramovich. Clare Sebastian has all the latest
on this, Clare, this is quite fascinating.
So this is sanctions on assets of a non U.S. sanctioned individual not only and you can explain where these assets are, or these planes in this case
are? But also the fact that the details were given if the actual entities that own them, which I think is an important exposure in financial
sanctions too.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, this is part of the sort of strategy of the United States to their transparency is critical to sort of
provide a deterrent for Russian Oligarchs and other officials from trying to hide their assets.
What's happened here is that as you say, Roman Abramovich is not on the - is not personally on U.S. sanctions that he is on U.K. and EU sanctions
list. But this is related to other U.S. sanctions, which prevent the export to Russia, of planes and plane parts. This relates to two of his planes, a
Gulfstream, which is apparently now in Russia, and a 787 Dreamliner and enormous plane to be a private plane, it's said to be one of the most
expensive private planes in the world worth about $350 million.
That is now apparently in Dubai. Now those two facts mean that actual seizure is not guaranteed this these are warrants for seizure. Obviously,
seizure itself depends on cooperation with the country where those planes are actually located. But as you say, the other purpose for this was to
sort of show with us his commitment to enforcement to provide this kind of transparency.
I want to show you actually a page from the affidavit that was published by the U.S. Justice Department to sort of backup this seizer actually shows a
diagram of the various shell companies that the DOJ says were involved in the ownership of these, these planes, which all linked back of course, to
Roman Abramovich.
So that's how they are trying to show their commitment to enforcement trying to convince other jurisdictions around the world to join in and help
them enforce these sanctions as they say that this is just the beginning and more seizures are on the cards.
[09:05:00]
CHATTERLEY: Yes, and officials all over the world now quickly googling those entities to see what they can find as well, which to your bigger
point is, I think part of the plan here, even if they never actually get their hands on these planes, of course, but it does restrict where they can
travel to, to particularly to U.S. friendly or those nations that have sank to Russian individuals as well.
Not only that, of course, it is a tit for tat in this regard, we saw the Russians announce a whole host of names of Americans, including the likes
of Janet Yellen that are now no longer welcome in Russia. I'm not sure at least for the foreseeable future, whether any of these individuals care
about those restrictions, but they have extended to some individuals, including journalists living in Moscow. And I think in that case, perhaps
and in those cases, the pressure is very different.
SEBASTIAN: Yes, so two different issues here. One the Russian counter sanctions, they've expanded the list that they already had 963 U.S.
individuals on their so called stop list preventing them from entry to Russia, they've now added another 61, some very high ranking officials, as
you say Janet Yellen, the U.S. Treasury Secretary, Katherine Tie, the U.S. Trade Representative heads of companies, airlines, ratings agencies, all
kinds of different officials largely symbolic.
It's simply to show that they can sort of return in kind, the U.S. sanctions but not going to have a huge impact on these people's lives.
Also happening this week, though, Maria, however, the Russian Foreign Ministry Spokeswoman did summon U.S. journalists in Moscow, not so much for
any potential violations of the very restrictive Russian laws, on you know, any kind of reporting around what they call their special military
operation in Ukraine.
As you remember, they tighten those laws in March criminalized various sort of what they call fake information around the conflict. This was about the
treatment she says a Russian journalist in the U.S. who she says are being subjected to various restrictions.
She says that these journalists need to put pressure on their management and their management needs to put pressure on the government to change
that. Otherwise, they could be subject to the same restrictions in Russia. All of that together, of course, means that it is getting harder for
foreign journalists to operate in Russia. She did threaten visa restrictions and even expulsions, Julia.
CHATTERLEY: To your point it makes reporting on what's going on here and trying to educate people in particular, that much more difficult, Clare
Sebastian, thank you. U.K. Prime Minister Boris Johnson told ministers to "Draw a Line" under the party gate scandal. He met with his government
earlier today for the first time since narrowly surviving a no confidence vote. He vowed to focus on the cost of living crisis and on Tory Party
values.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, PRIME MINISTER OF BRITISH: It's not enough just to spend money. You got to spend it wisely. And we as conservatives and conservative
ministers have got to make sure that every state we are driving reform and driving value.
(END VIDEO CLIP)
CHATTERLEY: Phil Black joins us now. Phil actions speak louder than words. What else can we expect from a government that clearly does want to draw in
line to this, but now have an embattled leader clearly and questions will continue to be asked?
PHIL BLACK, CNN CORRESPONDENT: That's right, Julia, but really the only clear message from Prime Minister Johnson from Downing Street today is that
a line has been drawn that this has been dealt with that the Prime Minister has secured a comfortable, decisive, clear victory or various adjectives to
that effect that shows he has once again a mandate for governing.
That is what Prime Minister Johnson will hope this results leads to the ability to focus on policy to get back to governing to deliver clear,
achievable results to show a record of achievement that he can then lead the party to have the next scheduled election in about two years' time.
But he can't feel confident that that's how this is going to play out. Because what last night's vote also shows pretty clearly objectively,
mathematically is that around 41 percent of sitting Conservative MPs do not want him to be Prime Minister anymore. And that is a significant number,
much more than many expected a number that shows there is clearly a significant divide in the party.
And by way of strength of feeling what that shows is that those 41 percent were not just voting for him to leave, but they were voting for what that
would mean, which would be a long, potentially messy leadership contest without a clear contender, or a clear likely victory without really knowing
what you're going to get at the end of that process or how electable the next leader would be? And indeed, without - they'd be voting for a period
of unfocused, indecisive Leadership for the Conservative Party.
[09:10:00]
BLACK: So there's clear strength of feeling there that isn't going to go away quickly regardless of job as to how Boris Johnson shifts to policy and
tries to make that work for a period of time their strength of feeling isn't going to go away even though under existing Conservative Party rules,
he is in theory clear from another challenge like this for another year, Julia.
CHATTERLEY: In theory, because there are no rules that say that the rules can't change. You know, it's interesting to your point about the
willingness of some of those MPs to roll the dice given all the uncertainty in order to remove Boris Johnson without knowing what comes next.
And I just wonder, because we can quickly go back to 2018 and compare and contrast the mentality of Theresa May when she faced this situation, and
she survived too and then within a year, she was gone anyway. That feeling of perhaps being betrayed or being backstabbed of people hating you of
criticizing you and not thinking you should be in the role.
I just wonder he's used to that. He's used to the controversy. He's used to the criticism he's used to being in English terms, marmite for some people,
do you think he handles this moment perhaps better as a person and therefore as a leader than she did? And you have about one minute to answer
because I'm being shouted out for taking too long?
BLACK: Well, he is as you've kind of summed up there and touched on often regarded as an unconventional politician, someone who can make mistakes,
make controversial statements, things that would normally be really detrimental to an individual's political career, and yet somehow slip
through the surrounding controversy pop out on the other side, often stronger than he was before.
So there is that. There is also the difference in circumstances. If you compare him to Theresa May back in 2018, when she was - when she faced a no
confidence vote. It was a policy issue. It was Brexit it was very specific back then, in this case, what appears to have angered so many MPs,
Conservative MPs are really fundamental things like Leadership and character and integrity and trustworthiness.
These are not things that can easily be polished over necessarily and indeed they are to some degree questions that have followed Boris Johnson
throughout his political career. So it would seem that this dissatisfaction isn't going to go away, because the people who have been motivated to vote
against him have either done so on a point of principle, or no doubt.
It's also based upon what they are hearing in their individual constituencies. They voted against him. It is very likely at least in some
cases, because they did not believe he was the Prime Minister. He was the Leader of the party that would ensure they win and hold on to their seats
at the next election, Julia.
CHATTERLEY: Yes, critical questions Phil black thank you. Let me bring you up to speed now with some of the other stories making headlines around the
world. Several Muslim countries are condemning controversial comments made by some officials from India's ruling party about the Prophet Muhammad.
These countries have also summoned India's diplomatic representatives and demanded an apology. It's even led to Indian made products being removed
from stores in Kuwait. Vedika Sud, who joins us now Vedika there's a whole host of questions we could ask about this, but I want to set aside both the
religious I think and the political.
It's simply not the time I think for a country like India, the third largest importer of oil in the world to be upsetting nations that provide
like the Middle East, two thirds of those oil supplies, we can boil this down to basic economics, perhaps their response.
VEDIKA SUD, CNN REPORTER: Oh, absolutely Julia, that's perhaps the reason behind the Indian Government currently, being in damage control mode when
it comes to the Gulf nations you pointed that out correctly. Now, a bulk of India's energy imports comes from this region.
Like you said, India is the third biggest oil importer in the world and 65 percent of its crude imports come from this region. That's not all you also
have millions of Indians living and working in Gulf nations Julia and the sent home remittances in billions of dollars.
The UAE and India have signed a free trade deal agreement. You also have the Indian Commerce Minister, who recently said that Gulf nations are
planning to invest 100 billion dollars in India, in the manufacturing and infrastructure sector.
A lot is at stake here like you pointed out Julia, this is not the time to really take off Gulf nations. And that is the attempt being made by the
Indian government country. And that's the reason why for every response for every statement made by be at Qatar or Kuwait, you've had the Indian
government weigh in, and they've made it amply clear that these remarks these controversial remarks made by members of Indian Prime Minister
Narendra Modi's Hindu Nationalist Party, the BJP party, are remarks by individuals even gone on to the extent to calling them fringe elements.
And they've said that this does not reflect the view or the outlook of the Indian government. They're really hoping Julia that this controversy blows
over but it's here to stay for now. According to analysts, the Indian Prime Minister Narendra Modi has always tried to keep a huge distance between his
domestic political agenda and its ties with Muslim nations but this controversy Julia, here to stay for now.
[09:15:00]
CHATTERLEY: Yes, as you said we're in absolute damage control. I think that's the upshot Vedika great to have you with us thank you so much for
that. OK in the United States, the Democratic Senator says bipartisan talks on gun control laws are making progress, but they still have work to do
before reaching a compromise.
Republican lawmakers signaled that their deal would not rise the minimum age required to buy semi-automatic weapons. Instead, they're focusing on
expanding background checks on young people before they can purchase a gun.
U.S. President Joe Biden will announce a new regional partnership when he hosts the Summit of the Americas on Wednesday, according to a senior
administration official. That will be a few noticeable absences however; the White House confirms Cuba, Nicaragua and Venezuela were not invited.
And Mexico's President says he will not attend because of those exclusions. OK, we're going to take a quick break here on "First Move" more to come.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back! And it's a sluggish market tone in the United States and across much of Europe. U.S. stocks set for a pullback as you can
see after a modest rally on Monday. It's the NASDAQ once again the tech heavy NASDAQ underperforming, retailer target meanwhile, adding to the
cautious mood falling more than 7 percent as you can see there pre market after warning of a profit hit due to rising prices and weaker consumer
spending.
This is Target's second profit warning in less than a month. And wearable banks remain on high price alert to the Australian central bank raising
rates by a surprising half a percent today. It's actually the biggest hike in more than 20 years.
The European Central Bank meantime expected to move closer to raising rates as its meeting on Thursday with a half a point hike so half a percentage
point hike possible next month too. And rate expectations are putting increased pressure on Global bond yields and of course renewed strength in
the U.S. dollar benchmark U.S. 10 year yields lower today but still above that key 3 percent level.
German bond yields meanwhile, have hit the highest level in eight years. And rising oil prices remain a leading global cause of inflationary
pressures to U.S. gasoline prices have hit daily records. Just as the peak summer driving season in the United States gets underway and leading to a
blame game over just who is responsible U.S. Transportation Secretary Pete Buttigieg, he is focusing squarely on big oil.
[09:20:00]
(BEGIN VIDEO CLIP)
PETE BUTTIGIEG, U.S. TRANSPORTATION SECRETARY: The price of gasoline is not set by a dial in the Oval Office and when an oil company is deciding hour
by hour how much to charge you for a gallon of gas, they're not calling the administration to ask what they should do. They're doing it based on their
goal of maximizing their profits.
(END VIDEO CLIP)
CHATTERLEY: Meanwhile, the oil industry faults the Biden Administration for refusing to incentivize new drilling amid what it sees is a myopic focus on
renewable energy and the climate. Just yesterday, the Biden Administration invoked a wartime instrument called the Defense Production Act and waived
tariffs to promote domestic solar panel production and other clean energy technologies.
Meanwhile, the oil and gas industry faces output constraints of its own nearly 60 percent of public oil and gas producers surveyed by the Dallas
Fed say they are restricting output because investors are laser focused on controlling spending. There are lots going on. Good news, Mike Sommers
joins me now he's the President and CEO of the American Petroleum Institute. Mike, always great to chat to you! What do you make of that what
the U.S. Transport Secretary said? Is the industry profiting from consumer pain?
MIKE SOMMERS, PRESIDENT & CEO, AMERICAN PETROLEUM INSTITUTE: Well, I think the one thing that people need to know is that this industry is really a
price taker, not a price maker in these markets. The price of oil is set, of course, by world markets, not by one particular oil producer.
And I do think the Secretary gets one big thing wrong. While of course, the President doesn't have a dial on what the price of oil should be. The
President does set a tone and the President does set policies and the policies this administration has put in place have restricted the
production of oil and natural gas in the United States.
And the tone that they put forward at the beginning of this administration, where they advanced that this industry would be over by the year 2035
certainly set a tone for that kind of investment that this industry needs to grow and thrive in the United States and throughout the world.
CHATTERLEY: Yes, we'll come back to policy because this is an important step. And it's a sort of loosely tied to it. The U.K. government just
announced a 25 percent windfall tax on some of the big energy giants with an ability to offset the payments that they have to make if they invest in
capital expenditures.
BP I know in particular said it would review its investment plans as a result. And I believe the Biden Administration is now considering something
similar this windfall tax with potential offsets, Mike is the industry in favor of that.
SOMMERS: I can't think of a worse idea, actually, in fact, the United States actually tried a windfall profits tax in the 1970s. And what
happened was oil production went down the United States and prices went up on American consumers.
This is a terrible idea and terrible economics to boot. In fact, every policy that we've seen over the course of the last many months from this
administration, and from others, has been policies that are actually going to restrict production throughout the world.
So first, they turned to the so called no PAC legislation that would lead to less oil on the markets, then they talked about price gouging, which of
course, that hasn't occurred in the United States. And study after study shows that there's not price gouging going on in the United States.
And now they're turning to a windfall profits tax, which would lead to less energy, we need policies that advance energy, more oil and gas to give some
give consumers some relief at the pump.
CHATTERLEY: I can see an inconsistency here. And you can tell me has the oil industry been approached by the Biden Administration and said, hey, we
need you to increase refining capacity, we need you to, in the short term, at least, pump up production, because I can see a lack of consistency
between the policies that promote renewable energies and say, look, the fossil fuel industry is going to be over by 2030 over by 2035.
But then, at the same time saying, look, we need you to pump money in investment in the short term. That doesn't work it doesn't work for
shareholders, it doesn't work for investors, are they being approached like that by the Biden Administration? And is that message being given to them
that these things don't work?
SOMMERS: We have an open line of communication with the administration. And we consistently tell them that their policies are going in the opposite
direction that they should be going in terms of incentivizing more production here in the United States.
But we have not been asked for meetings with the White House. In fact, you know, we would welcome the opportunity to speak to the President about some
of these policies that we think would work to advance long term investment in oil and gas, which is to the benefit of American consumers and certainly
American energy security.
What we're seeing going on in Europe today is what happens when a continent decides to transition too quickly. And we want to make sure that the United
States does not find itself in the exact same predicament that Europe finds itself in, where they were dependent on a hostile neighbor for their energy
supply.
Fortunately, the United States is here, the United States is going to be produced about 13 million barrels of oil every single day but by 2023 and
we're going to continue to invest in this industry.
[09:25:00]
SOMMERS: But it's not the time for us to be closing off this industry or talking about shutting down this industry, when the world is going to need
American producers to step up during this time of an energy crisis.
CHATTERLEY: Mike how do you feel about Biden heading over to the Saudis, and talking to the Saudis at this moment?
SOMMERS: Look, we operate in a world market for oil and gas; we needed all producers to be at the table. But I think it's a little disappointing that
the President has decided to go to Saudi rather than go to the Permian Basin in Texas, the most prolific oil field in the world right now, where
American producers are producing oil and gas for American consumers with American workers. And I think that's where the focus of this administration
should be on American made energy here in the United States.
CHATTERLEY: So you're saying it's more bad policy?
SOMMERS: Well, I just think that there are real opportunities for us to use resources here in the United States, rather than be dependent on foreign
nations for their oil. But of course, we operate in a world market, and we need to be cooperating with our energy partners as well.
CHATTERLEY: And something that you said before, and I had to choose where I took you, you talked about transition, and you said the transition is
happening too quickly, because at least in the interim, and you and I have talked about this before, unfortunately, you need or fortunately, you need
dirtier forms of energy, be it gas, be it or whether you like it or not, before we transition to a future that perhaps looks more climate friendly?
If that's how you choose to look at it can current policy and ramping up production in the short term be consistent with the transition to net zero,
Mike? Because I think that's the question everybody needs to be asking at this moment.
SOMMERS: Well, the truth of the matter is, is what I'm advocating for is actually a policy that President Obama advocated for when he was President
of the United States, which is an all of the above strategy that advances all forms of energy to ensure that American consumers and world consumers
have access to safe, reliable and affordable energy going forward.
You know, the truth of the matter is, is that the most important thing that we could do to address climate concerns is to replace coal with American
made natural gas, that is the best thing that we could do to advance climate change concerns throughout the world.
The other point that I would make is, I take issue with the term energy transition, because the truth of the matter is, is that the world has been
transitioning energy for decades and decades and decades. And the fact of the matter is, is that most of the time that those transitions aren't
transitions at all, they're actually energy additions, we still use more coal today than we did in the 1960s.
So we're going to need more energy in the marketplace, not less energy, particularly as the world grows by 2 billion people by 2050. And the world
consumes about 50 percent more energy by 2050 than we are today. We all forms of energy, and that include oil and gas.
CHATTERLEY: Mike very quickly, I have 30 seconds, record profits for oil companies. That's a fact record high gas prices for American consumers also
a fact, how do you tell consumers that there's nothing that those oil majors can do to perhaps ease the pressure? You can explain perhaps better
than me.
SOMMERS: This industry is investing at levels that we haven't seen since the pre pandemic, to ensure that we have safe and reliable energy for
American consumers. But we're also dealing with the same factors that American consumers are dealing with supply shortages, and hiked prices for
steel and concrete.
And for sand, which is necessary for the discovery of new oil resources. So we're doing everything that we can to ensure that American consumers have
access to this energy that they're going to need to power our economy going forward.
CHATTERLEY: Mike, good to chat to you, Mike Sommers President and CEO of the American Petroleum Institute will speak soon.
SOMMERS: Thanks, Julia
CHATTERLEY: Let's speak soon. The "Market Open" is next stay with us.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move" and the opening bell has sounded on Wall Street. This Tuesday U.S. stocks weaker as expected in early trade
a profit warning from retail a target weighing on sentiment affect the sign that inflationary pressures continue to weigh on corporate results.
Twitter shares also under pressure in early trade after a volatile Monday that sold shares for some one and a half percent. The share under pressure
was Elon Musk threatens to walk away from his commitment to buy the social media firm over the issue of fake bot accounts Musk says. Twitter is not
leveling with him over the issue and is breaching their purchase agreement.
Twitter insists it's doing all it can to work with Musk on the issue. I think the lack of reaction quite frankly to that is perhaps more telling
than anything else.
In China meanwhile, tech stocks continued a relief rally on hopes Beijing is set to end a period of intense scrutiny on the sector ride hailing giant
- adding to a near 25 percent gain Monday. Here in New York its part of an effort I think, to re galvanize growth after months of strict COVID lock
downs.
However, just days after those restrictions were relaxed parts of Shanghai are now faced with entering lockdown once more. Selina Wang is in Beijing
for us. Selina, great to have you with us can you give us some context on numbers? Because the headlines on this seem frightening for those that have
just got out of lockdown, perhaps going back into it? How many people what kind of scale are we talking about?
SELINA WANG, CNN CORRESPONDENT: Yes Julio, a lot of residents are telling me that it just feels like this endless, unending cycle just days after
Shanghai finally exited that brutal two month lockdown. You have multiple communities going back into lockdown because new COVID cases have been
found.
We're talking small numbers of daily new COVID cases here a handful I mean three or four. But still, the implications of that are entire communities
back in 14 days of lockdown for the rest of Shanghai most of the city's 25 million people though they are able to freely move in and out of their
communities go back to work take public transportation reenter shops.
But still, nearly 2 million residents never got that freedom in the first place because they had recent COVID cases in their communities across
China. Anybody who tests positive along with their close contacts is sent to quarantine facilities and the entire community or in some cases, the
entire city then goes back into lockdown.
So people remain terrified of getting COVID because of the implications of what it means to test positive. Now the tech rally you talked about that
does reflect the broader turn in sentiment for investors here who are pricing in that the worst of China's latest COVID lockdown is over, but
still zero COVID is not going anywhere.
So there are a lot of risk factors to that rebound. You're going to have continual lock downs and continual disruptions to supply chains to
manufacturing to people's lives. Here in Beijing as well just this week the city has started to relax more restrictions public venues reopening more
people taking public transport returning to the office.
[09:35:00]
WANG: And for the first time after a month long ban, people can finally dine inside restaurants. But our lives here are still very much restricted
by COVID testing, and health tracking apps. In Beijing and Shanghai, we've got to get a COVID test once every three days in order to enter any public
venues. And the lines are very long; I stood in line for more than an hour today to get my negative COVID test.
And we've got a scan or health code multiple times a day to get into any of those public venues, those health apps are able to track where we've been
to quickly contact trace and find us if we've been in close contact with anyone.
And while the COVID cases in China have come down significantly, just reporting over 120 COVID cases nationwide, there are still clusters of
outbreaks that are leading to severe consequences for instance, a city in Inner Mongolia just going into lockdown because of a cluster of around 70
COVID cases so a return to normalcy not exactly but about as normal as you can get in zero COVID China Julia.
CHATTERLEY: Well, that as normal as you can get. It's fascinating. I just wonder what it means for consumer spending particularly for people who've
lost wages through this period. If you're afraid of going back into lockdown, does it mean that you're still going to be very cautious, at
least for the next few months? It's an interesting question. We'll come back to it Selina Wang, great to have you with us. Thank you.
Now as China transitions out of lockdown ports around the world are preparing for a potential surge in cargo. The Port of Los Angeles is one of
the world's busiest seaports and handles 16 percent of America's cargo. Its biggest international partner last year was China. The port's executive
director sees imports fell nearly 7 percent in April allowing it to prepare for an uptick in shipments.
Gene Seroka is Executive Director of the Port of Los Angeles and he joins us now. Gene, fantastic to have you with us. You have one of the best, I
think early indicators, both of the lockdowns that China went into but also we hope the economic wake up as well and what it will mean for trade.
What's your sense, because I've been surprised as I look at your numbers about the lack of impact of lockdown?
GENE SEROKA, EXECUTIVE DIRECTOR, PORT OF LOS ANGELES: That's right and good morning, Julia. We've been keeping up with this now into the 11th week of
the lockdown in Shanghai and surrounding areas. And we've seen no precipitous drop in cargo volume.
The folks in China specifically the central government and the ports have prioritize that cargo including the Trans Pacific runs here to Los Angeles
in Southern California. Cargo volume output has been very steady from Central China.
Although there have been impacts on the ground at the sub assembly, manufacturing and land transport areas. Barge traffic along the Yangtze
River is up and neighboring port of Ningbo's cargo throughput is up 25 percent, during this lockdown, to help pick up some of the slack.
CHATTERLEY: Is that in both directions Gene, I appreciate; obviously, you only look at what's going on in your port. But it's interesting that you
say that the Chinese have done their best to protect what they're exporting and to get those flows and allow those flows to continue. Do you have a
sense of whether that's happened in both directions?
SEROKA: As you can imagine, with all of this cargo flowing, the lock downs and all the other variables in the supply chain equation, it's taking cargo
a little bit longer to leave the port of Shanghai to go inland in China exports from the U.S. Europe and other Asia countries.
There are hundreds of ships outside the port of Shanghai in the East China Sea. A lot of that is inner Asia trade, the largest trade in the world. And
again, as the cargo continues to flow through these ports, delays are to be expected. But the folks on the ground are managing this very well.
CHATTERLEY: I think you've answered my question already. So in terms of a Shanghai surge, what are you expecting? Can you put any kind of numbers on
it because I assumed June would have traditionally been a strong month or inflows into the United States anyway?
SEROKA: Once again, a number of layers to consider. First, here is the United States importers are bringing in cargo earlier than normal for
traditional retail peak seasons. We've stated now all the indications are cargo for that peak season will start landing at the end of this month.
We're also in the midst of bringing in back to school products, fashion and fall fashion coming up here all combined at the same time. Now as China
opens up please remember not every factory was closed not every company had to be shut down.
But we will more than likely see some of our factories and land transport companies trying to play catch up on those purchase orders. Get them out
the door an end to the American European and Southeast Asian markets. There'll be an uptick but not as dramatic as some of the observers is
called for.
[09:40:00]
CHATTERLEY: Yes, because I've seen some pretty dramatic estimates. So it's interesting to get your context on this. What's the situation for you,
because obviously, again, we loosely talk about the supply chain issues?
But again, you cut to the heart of it, whether it's waiting for those ships to be able to dock unloading the containers, and then actually the rail
connections and the road connections requiring truckers, for example, and drivers in order to get those products where they're headed.
What's the sort of lead lag time now that we're looking at Gene? And can you give us a sense of the point upon which you're estimating at this
stage? Perhaps everything we'll get back to pre-pandemic levels? I appreciate that's a tough question.
SEROKA: Yes, that's still going to be some time Julia into probably the second half of 2023. But in the meantime, the here and now we've made
tremendous progress. Back in January, we had 109 container ships waiting to enter the ports of Long Beach in Los Angeles that number is down below 30
overnight.
The speed, by which the cargo was being unloaded, is now best in class once again. We're also seeing the flow of cargo improving on our docks going out
into the domestic economy here in the United States with those wait times of containers starting to come down and noticeable levels.
We had our best first quarter on record, second best April ever. And when we announce our main numbers this Friday, they will be sensational. Still,
there's much more work to do, we've got to make better use of our truck gates, the amount of time that it takes for truckers to come in, get their
cargo and move out.
Second, we've seen a six fold increase in the amount of rail cargo coming in via our container ships. We've got to catch up on that. And both Western
railroads, the Union Pacific and Burlington, Northern Santa Fe are working all out to bring that number of containers down and get them into the
interior of the country.
CHATTERLEY: Yes, I mean, I know your people are working incredibly hard and have been now for a long while. How tough is it to hire? I know you're in
negotiations with the unions now clearly saying, hey, you know, we want more money. That's something that we're seeing all over the world, not just
in the United States.
But how much are challenges is hiring at this moment and the demands that you're getting in terms of the pay required getting people in the door?
SEROKA: Oh, we're not immune to the travails in the employment sector. 11.4 million Jobs open the United States, similar here in the supply chain. Are
dock workers of the International Long shore and Warehouse Union everyone who wants work has it and I could argue we need more folks on that job?
They are in the midst of collective bargaining between the Employers Association and the union that's ongoing. We need to attract, recruit and
retain better as an industry in the areas of Port truck driving, and warehousing. These are the locations where we've really got to step up and
make sure that we can bring people into these jobs to handle the flow of cargo on a regular basis.
Many folks left for different parts of transportation, different sectors all together got to bring folks into these two areas. We boast more than 2
billion square feet 200 million square meters of warehousing from the shores of the Pacific out to the desert region of Southern California. It's
the largest in the world and deserves strong emphasis from a talent development standpoint.
CHATTERLEY: Absolutely sounds like good news for workers if you have to pay those more to incentivize them. Gene the challenges continue. Thank you for
the work you and your team are doing great to chat to you, Gene Seroka there, Executive Director of the Port of Los Angeles.
OK, now here's an example of a supply chain crunch whichever way you slice it. In Australia, KFC is warning consumers it will have to add cabbage to
some of its products because of a lettuce shortage. The fast food giant blaming recent floods with lettuce prices up 300 percent in recent months,
but the company says if you don't like cabbage, you can opt out.
Yes, after the break the controversial Saudi backed Golf Tour kicks off this week in London find out which pro golfers are teeing up and why the
PGA is not so happy? Stay with us next.
(COMMERCIAL BREAK)
[09:45:00]
CHATTERLEY: Welcome back! Power plays in the world of golf and - Golfer Dustin Johnson says he's resigning from the PGA in order to play for Saudi
backed Liv Golf Series. And Champion Phil Mickelson is breaking his haters to jump on board as well. Because then previously criticized Saudi Arabia
for its human rights record but said he looked past the abuses if their tool gave him leverage over the PGA.
World Sports Alex Thomas joins me now. Oh, Alex, there is everything in this story, money, politics, plenty of controversy, which we can talk about
too. But it perhaps is as much about who is joining the Saudi backed series as who isn't quite frankly, in the what, up to a billion dollars that Tiger
Woods was perhaps offered to lure him in?
ALEX THOMAS, WORLD SPORTS: And maybe not quite that much Julia. But certainly, report said that the Liv Goal CEO Greg Norman admitted to them
that they give him a high nine figure sum to join. And if that's true, then it's fair to assume that Dustin Johnson and Phil Mickelson, the biggest
stars to sign up so far, are getting more for signing up for a year of Liv Golf or even just this tournament alone that starts on Thursday than they
have done in their entire careers or indeed the Tiger Woods has earned and his entire career on the PGA Tour.
So that shows that it's not just about more money, it's about jaw dropping the large sums of money all backed by Saudi Arabia, their public investment
fund, of course, and all the controversy that goes without.
Let's have a listen to Dustin Johnson, he's definitely the most high profile name to join so far, just because of his age really, he's 37 still
is peak for a golfer. And world number one as recently as last year, this is what he said at the Centurion Club just outside London earlier today.
(BEGIN VIDEO CLIP)
DUSTING JOHNSON, AMERICAN GOLFER: Obviously, at this time, it's you know, it's hard to speak on what the consequences will be. But you know, for
right now, you know, I resigned my membership from the tour. I'm going to play here, you know, for now, and that's the plan.
You know, but what the consequences are going to be? Obviously, I can't comment on how the tour is going to handle. Again, I can't answer for the
majors, but, you know, hopefully they're going to allow us to play obviously, I'm exempt for the major. So I plan on playing there.
(END VIDEO CLIP)
THOMAS: Johnson the latest to actually quit the PGA Tour Julia because that avoids any chances of any sanctions whatsoever, he said expects to be able
to play in the majors, which are run slightly separately to the regular tour events throughout the year, a bit like in tennis and their grand slam
events.
And any legal challenges that come up will of course be met by all the billions of dollars behind Liv golf so it could fundamentally change the
way professional men's golf is played. Why are players taking the risk at all? Well, it's obvious really. They're earning far more I need to play far
fewer events so less travel no halfway cuts and it means as well that they're only 54 holes to be played they're playing less golf getting much
more.
[09:50:00]
THOMAS: Johnson saying at another stage in that press conference that he doesn't want to play golf his entire life. It'd be quite nice to just rake
it in over the next few years and then focus on something else with him and his family.
CHATTERLEY: Yes, it's interesting. It's I think Tiger Woods said it was the idea was polarizing, but to your point, I think it's an interesting one,
perhaps you go here to semi retire and move on and sort of split the difference. Who knows? Nice if you can get it Alex Thomas, great to have
you with us. Thank you.
All right, up next, the same money, fewer hours thousands of workers trout a four day work week up full pay that's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". And just breaking the World Bank has announced that it's lowering its global economic growth forecast once
again due in part to China's COVID lockdowns and the war in Ukraine.
The World Bank now seeing growth of 2.9 percent this year, much lower than the 4.1 percent rate it projected back in January, the World Bank sees
recessions in many countries will be hard to avoid and so the world faces a quote protracted period of feeble growth and elevated inflation in other
words, stagflation.
Now there are a few things better than a four day weekend as the Brits of course just enjoyed, but a four day workweek might be one of them.
Thousands of workers have become the world's biggest trialing cutting working hours without cutting pay. Rahel Solomon joins me now.
So this is effectively a 20 percent pay increase than if you're only working four days a week. Where do I sign? Rahel, tell me us--
RAHEL SOLOMON, CNN CORRESPONDENT: Well Julia, it might be a while before you and I get that option exactly. But with 3300 people in the UK, yes,
they are embarking on this largest trial we have seen as of yet for this four day work week.
Here's how it's going to work. It's for six months at 70 companies across the UK, and really across industries, companies in retail and healthcare,
in financial services in banks. So again, six months. But here's the deal, Julia, it's 100 percent of your pay, but for 80 percent of the work week,
but 100 percent of the productivity.
So the question is can workers work smarter, as opposed to harder? And presumably, if we saw this option, folks would be cheering like these folks
on your screen right here on the left. So there have been studies before in places like New Zealand, where they have looked at the efficacy of a four
day workweek and the producers of the study say that they saw increased productivity in New Zealand they saw increased well-being also recruitment.
Couldn't that be good for some of the American companies who are struggling to find workers? And look, critics say, however, that if you pull back
hours for example to 35 from 40, Julia becomes a lot harder to move it back up to 37 even if it is still a net decrease. So that's sort of one of the
concerns among some companies that look if you go in that direction it's going to be hard to go any bit closer to 40.
[09:55:00]
SOLOMON: But the results are clear that it increases productivity in some studies. And I think there would be a lot of support among employees for
this type of idea.
CHATTERLEY: It sounds like a gimmick to me. I have to say, oh, great to have you. Do you know, I'm thinking I wish I'd taken up golf as a childhood
sport?
SOLOMON: Golf?
CHATTERLEY: Yes. If you didn't want to talk about my viewers do. Thank you for that. Finally, carry out those drawers of mystery cables because the
European Union is officially adopting a common charger. The USBC Apple is required to adapt its products by late 2024.
It's reportedly already testing the port in iPhones I'm very happy about this just yesterday Apple unveiled Iowa 16 which is also bringing in
sweeping changes to devices those of us who often send embarrassing typos can finally rest easy in the new operating system will I messages be edited
or recalled all together? Yes, one or two of those in my life. That's it for the show. "Connect the World" with Becky Anderson is up next I'll see
you tomorrow.
[10:00:00]
END
