Return to Transcripts main page
Quest Means Business
Trump: Disgraceful that Mueller's Questions were Leaked; Police Arrest Hundreds at Paris May Day Protests; Actress Ashley Judd Sues Harvey Weinstein; Armenian Opposition Leader Fails in Bid to Become Prime Minister; U.S. Nuclear Watchdog Cast Doubt on the Israeli Prime Minister's Claim that Iran Lied about Wrapping Up its Nuclear Weapons Program; Israel PM: Sanctions will Pile Pressure on Iran; Apple Earnings Beat Expectations; Snap Inc. Shares Dive 17 Percent After Earnings; Rubio: Tax Cuts Helping Shareholders, not Workers; Avengers Infinity War Boosts IMAX. Aired 4-5p ET
Aired May 01, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BIANNA GOLODRYGA, CORRESPONDENT, CNN: And there you see it, the Dow is off the lows, but it's still a solid loss to start the month. It's Tuesday,
May 1st. Tonight, Donald Trump presses pause on some of his steel tariffs. Now, America's allies want a proper solution.
Wall Street is getting worried about Apple's latest results. They'll be released during the program.
And a CNN special investigation, how child labor is used to mine one of the world's most valuable metal.
I am Bianna Golodryga, and this is "Quest Means Business."
Tonight, America's allies are getting some extra breathing room on metal tariffs, but European leaders warn that business is already taking a hit.
Just hours before the midnight deadline, the US announced this extending negotiations with Canada, Mexico and the European Union until June 1st.
Argentina, Australia and Brazil on the other hand will get permanent exemptions.
Now, the European Commission is demanding a similar deal. It is claiming the temporary reprieve won't do enough to protect Europe's business from an
uncertain future. Germany's Economy Minister says the US must provide guarantees.
(START VIDEO CLIP)
PETER ALTMAIER, ECONOMIC MINISTER, GERMANY: (Through a translator). I would have wished to hear that the exemption was a definite and permanent
one and would now already be a possibility.
The persistent uncertainty is for many businesses, a big problem and that is why I want a good solution as soon as possible.
(END VIDEO CLIP)
GOLODRYGA: A lot of people want a good solution as soon as possible. Paula Newton is here to explain more of this.
So, not too much of a surprise that the US decided to kick the can down the road, what does that mean though for Europe over the next four months?
PAULA NEWTON, CORRESPONDENT, CNN: Well, it's going to be a tough slog...
GOLODRYGA: Four weeks.
NEWTON: Yes, four weeks. It's going to be a very tough slog, but you know, there is good news. Some countries have already come to an
agreement. The point is that they have to find a way to get to a political solution. This is not about getting a business solution. This is about
getting a political win and a political solution for the Trump White House.
I have to say, Bianna, in terms of doing that, I can tell you, Canadian negotiators are frustrated on every level because the gold post keep
moving.
So, if you're a European negotiator and you go in thinking one thing, all of a sudden, you'll be in the last hour of the meeting, something else has
rolled out and why? Because it doesn't seem to be acceptable to the West Wing.
Now, we know Larry Kudlow is the economic adviser to the President now, newly minted you would say. He is a free trader. They seem to be making
deals. At the end of the day, they have to be deals that the President can sell to his base because if they don't end up coming up with that kind of a
solution, it may make sense to everybody in terms of if you grind the numbers out, it does not make sense to the President.
GOLODRYGA: Especially with the EU now being our largest trading partner. You have European countries like you see the German Finance Minister
saying, "Why can't we get a permanent exemption the way that Latin American countries were able to.
NEWTON: But that's because of the concessions that the Trump administration is trying to extract. You can't be sitting there railing
against German cars in one political speech and then just say that you turned over on everything else.
You know, the United States is moving up the conversation. Some people will even say that they have basically tipped the WTO, the World Trade
Organization right into crisis mode because they're remaking all of these trade deals.
At the same time, it is a good opportunity to right many wrongs that are happening around the world when it comes to a lot of these trading
relationships, but this is being done in mock speed. It is throwing people over the edge.
Negotiators -- you know, as the Canadian Foreign Minister has said, if you see a negotiator, hug them. They hug. They're in desperate need of a hug.
You know, because there do not seem to be any easy solutions when you think of a give and take.
I've got another cliche word for you, tit for tat, and that's where we're going to be, Bianna, if this doesn't get solved in the next four weeks.
Those retaliation measures, many people have them at the ready and they will use them.
GOLODRYGA: And so many of these foreign leaders say the way to get to the President is to develop a solid relationship with him and develop that
bond. We see it with the French President Macron. We don't see it with Angela Merkel, yet that doesn't seem to apply when it comes to the EU and
he seems to be lumping them all together as one.
NEWTON: Yet, not of it seems to matter, and I can tell you, it doesn't matter with Mexico or Canada as well. They're in the middle of some tense
negotiations on NAFTA saying that perhaps now, they've only got two weeks to the deadline.
It doesn't matter how much they court the Trump administration or try and speak logic to them. Again, the gold post keep moving.
Listen, I think it's going to be a very rough summer when it comes to trade all way around the world and that is not to exclude what's going on with
Russia sanctions right now. When we talk about the aluminum industry, we've got Rusal, also sanctions against it. It exports 40 percent of its
aluminum. It goes into the European markets, so this is a significant chunk of that. It even goes to the United States.
GOLODRYGA: Yes.
NEWTON: All of this stuff is stuff that has affected by the Trump administration and how they want to reorganize their trading relationships
and is up ending everything.
GOLODRYGA: Not to mention the trade tariffs with China...
[16:05:12]
GOLODRYGA: ... and we're going to talk about this you.
NEWTON: And such a good point, Bianna. I mean, when I say the United States is up ending things, just wait until they hit China. Administration
officials in China right now, we'll see how far they can get with that.
GOLODRYGA: To be continued. Paula, great to have you on set. Thank you.
Well, one country that will bear the full brunt of US metal tariffs is China and Donald Trump is sending an economic team to China for trade talks
and says, he is sure they will get results. Cristina Alesci spoke to the leader of that delegation, Treasury Secretary, Steve Mnuchin who says he is
confident he can come up with the goods.
(START VIDEO CLIP)
CRISTINA ALESCI, CORRESPONDENT, CNN: How much pressure do you feel to bring a deal home?
STEVEN MNUCHIN, TREASURY SECRETARY, UNITED STATES: I don't feel any pressure whatsoever.
ALESCI: Are trade wars easy?
MNUCHIN: These are trade disputes, they are not easy. And any negotiation isn't easy. When you negotiate, I mean, look where we are with North
Korea? Six months ago people said the President was being too aggressive. We put the most -- the strongest sanctions ever on North Korea.
As the result of the maximum pressure campaign, they've come to the table and negotiated. They've now said, they will give up their nuclear weapons.
ALESCI: Absolutely, but the President is telling this as easy. He says that trade wars are good and easy. Is he telling the American public
something that isn't exactly true? You said yourself, they're not easy.
MNUCHIN: I think you, you know, he's already said we've lost to the trade war with China given the trade imbalance.
ALESCI: On the markets?
MNUCHIN: Yes.
ALESCI: The administration likes to take credit when the markets are doing well.
MNUCHIN: Absolutely. It's other people's fault when they go down.
ALESCI: Exactly, so who is responsible for the market? Is it the administration?
MNUCHIN: Well, I'm somewhat joking about that. So, let me just say, first of all, you know, what we are focused on is economic growth and as I've
said, what you should judge us on is can we hit 3 percent sustained GDP for this term? We believe we can get there and stay there. that is our focus.
(END VIDEO CLIP)
GOLODRYGA: A lot of optimism from the Treasury Secretary there. Trade war in the meantime continue to bug stock market. The Dow fell around 64
points, flirting with correction territory at one stage, though it did manage a modest comeback after a week start to the session.
Paul La Monica is here with more on that. We were watching it come down from a triple digit loss to just now down 64 points. Why the sudden
turnaround with regards to trading?
PAUL LA MONICA, CORRESPONDENT, CNN: Yes, I am not sure exactly what happened if there was a catalyst to really explain why things started to go
higher, but Apple, which we are going to get earnings from shortly, they were a strong performer today. They've helped lift the Dow most of the
day, so I think tech did have a pretty good day and that helped lead the broader market a little bit higher and bounced back from what was heading
to be a much more session earlier in the day on some of these trade concerns.
GOLODRYGA: Yes, I guess, we had been concerned that we would see a fall this morning, however, the news out of the White House that they were going
to be at least pushing back the deadline for the tariffs gave some reprieve to the market. Some Facebook news out today as well.
LA MONICA: Yes, Facebook which has been a company that has historically been very disruptive and some people worried that it can kill other
businesses looks like they're now going after the big online dating company, Match, and if you hear what Mark Zuckerberg had to say at the F8
Developer Conference today, he talked about a new dating service that they're going to be launching on the site.
(START VIDEO CLIP)
MARK ZUCKERBERG, CEO, FACEBOOK: I want to be clears that we've designed this with privacy and safety in mind from the beginning. Your friends
aren't going to see your profile. You're only going to be suggested people who are not your friends, who have opted in to dating, who fit your
preferences, although, I can't promise that you're going to get him, eh. It's a tough world.
(END VIDEO CLIP)
GOLODRYGA: Kind of brazen that he can laugh about the privacy and safety issues given that it's just been a few weeks since the Cambridge Analytica
scandal.
LA MONICA: You would think. It is a little bit odd and obviously, Zuckerberg has come under fire in the past for being a little bit too aloof
about some of these concerns, but definitely, investors were very worried. People that own match.com stocks...
GOLODRYGA: Tinder...
LA MONICA: Tinder is a company they own. They own OkCupid. Shares fell more than 20 percent on this news because now, all of a sudden, people are
worried that investors are, I am going to say it, I am sorry, swiped left...
GOLODRYGA: Swiped left...
(CROSSTALK)
LA MONICA: ... on match.com. I am happily married, so I haven't been swiping for now.
GOLODRYGA: You're really showing off that ring here though. It's kind of surprising that Facebook didn't jump in to the dating service earlier
though.
LA MONICA: Yes, it is a bit of a shock that it took them this long, but...
GOLODRYGA: But we shall see.
LA MONICA: Yes.
GOLODRYGA: Great to have you.
LA MONICA: Thank you.
GOLODRYGA: Thank you. Well, later in the hour, we will have earnings from Apple and Snap. We will bring you those as soon as we get them.
And when we return, cobalt is the fuel of the future. It's an essential ingredient in electric cars, but as a CNN investigation reveals, child
labor is being used to find it.
[16:10:00]
GOLODRYGA: Battery powered electric cars are driving the clean energy revolution, but a CNN investigation has uncovered a dirty secret at the
heart of these vehicles. Children are working in mines where the batteries key component, cobalt, is found.
Our report comes from Kolwezi in the Democratic Republic of Congo. It's the epicenter of a modern day cobalt gold rush.
(START VIDEO TAPE)
NIMA ELBAGIR, SENIOR INTERNATIONAL CORRESPONDENT, CNN: Christian (ph) and his friends are digging 20 meters down, taking turns at 24-hour shifts.
There's no light and little oxygen, but what they bring up is precious.
This is the start of the supply chain leading all the way from this make- shift mine to your luxury battery-powered cars.
The sacks are full of cobalt ore are crucial components in lithium ion batteries set to power the coming green energy revolution. But at what
cost?
There is growing evidence that the cobalt supply chain uses child labor. Companies say, they are working hard to verify the source of all their hand
mined artisanal cobalt, but that it's a difficult task.
We are here to follow the supply chain and see if we can do it for them. Before we set out, even the local governor warns us to expect to see
children at work.
We arrive at the Musonoi river mine where the cobalt ore is washed to grind it down. Although we've been given permission to film here, as soon as
they see us, officials begin to scare the children away. Not all of them though are fast enough. Some work on.
One young boy staggers under his load. His friends sees the camera and he drops his sack. He's clearly been warned.
A mining ministry official spots this boy carrying cobalt has been captured by our cameras. His response is brutal.
Later, we ask him why he struck the child. He refused to answer.
We have now witnessed for ourselves that children are working here, that they are involved with the production of cobalt and we've seen the products
of that child labor loaded on to a variety of different vehicles.
I am going to jump into this cart that is headed to one of the main public selling cobalt depots.
I'm told we're going to Kapata Market. This is where the cobalt is bought by brokers. It's where it first enters the supply chain.
The car company, Tesla for one said its cobalt sources are audited and issued with stiff (inaudible). They wouldn't say from where or how, but
there...
[16:15:16]
ELBAGIR: ... is no sign of certification here. We watched the brokers set the price and none of them ask where the cobalt is from or how it was
mined. Artisanal mining output tripled and the fear is even more children are being pressed into labor. Why? Because cobalt is skyrocketing in
price.
Supplying your green electric car comes at a cost.
We have permission to film here, but local mining officials once more try to stop us. The producer captures the scene on hidden camera. The
government says it is working to combat child labor, but the same mining ministry official's task with enforcing an ethical supply chain have been
the ones attempting to block our investigations.
A police officer arrives and we're told, we need to leave for our own safety. We do. But not before we spot a red truck loaded up and leaving
the very same market. It matches the distinctive red of the trucks used by one of the main international cobalt supply firms. China's Congo DongFang
Mining we see here. We decide to follow it.
We can't afford to lose him because where he delivers that cobalt load, that is the link between the children that you saw down there on the river
front and the global markets.
As the truck pulls in to its final destination, guards rush out to block our cameras. We later received a warning phone call. This facility is
under the protection of the Presidential Guard. We are told to stay away.
What's going on? That appeared to be a CDM truck, but this isn't a CDM facility. Fax records show it was declared nonoperational three years ago.
Rising smoke and export records show cobalt is still produced here. CDM's parent company, Huayou tells CNN they did have a relationship with the
facility, which ended only last year.
They're disturbed enough to launch investigation into our findings. Although, they state other companies also use red trucks.
CNN visited three sites to show how widespread the use of child labor is. At this mine, in spite of our permissions, we eventually had to resort to
filming undercover to capture the children.
We couldn't prove where exactly the dirty cobalt enters the international supply chain, but we witnessed that it does.
Mercedes Benz, Tesla, Fiat Chrysler among others say they have a zero tolerance policy for the use of child labor, but they acknowledge they are
unable to fully map their supply chain due to its complex nature.
Carmakers simply cannot promise consumers their products are 100 percent child labor free.
This is the artisanal mining cooperatives called tosu (ph). It's run by the main international supplier, CDM. Rows and rows of red trucks like the
one we followed await pick up here. Access and entry are controlled to block the presence of children and certificates of origin CDM say are
dispensed in controlled circumstances. This is what the big brand names who source their cobalt from Congo believe governs their supply.
But this is the exception, not the norm. The cobalt (inaudible) accounts for less than a quarter of the country's artisanal cobalt exports. Here,
the Ministry of Mining has countersigned the certificate of origin to be considered valid, so the very same entity whose official CNN found
complicit in hiding the presence of child labor at the artisanal mines we visited is responsible for certifying the cobalt here is child labor free.
After 10 days in Congo, our contacts advised us to leave for our own safety. What have we learned? At the main markets, nobody asks where the
cobalt for sales is mined or how. We followed a truck to an operation that is pumping dirty cobalt in to the international supply chain under the
egress of the Congolese Presidential Guard.
We witnessed Mining Ministry officials harassing children to hide them from our camera while others blocked our filming. All employed by the same
Congolese authority, carmakers in trust to issue the certification.
But from what we have witnessed, it's clear no manufacturer can...
[16:20:16]
ELBAGIR: ... fully assure you that your electric car is truly ethical. And as demand for essential cobalt soars, its children like this little boy
who are paying the real price.
(END VIDEO TAPE)
GOLODRYNA: It's heartbreaking and before the team left Congo, Nima spoke to the provincial governor, Richard Muyej about what CNN found on the
ground. He blamed interference and aggression at the mining sites on suspicions among the local population that foreigners and NGOs are trying
to bring down President Kabila's government.
The governor of Lualaba Province also added that there has been an improvement in the situation in recent years. He says, their goal is for
no children to be working in mines, but the progress is overshadowed by a high level of poverty.
And we will be speaking to Nima in just second. First though, Clare Sebastian has been looking into why this mineral has been so in demand from
companies all over the world.
(START VIDEO TAPE)
BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: Now, is the time to double down on renewable energy and biofuels, electric vehicles.
THERESA MAY, PRIME MINISTER OF THE UNITED KINGDOM: UK government with industries in the UK is supporting the growth of this industry.
CHRIS BERRY, FOUNDER, HOUSE MOUNTAIN PARTNERS If you take a look at what the Chinese are doing, they are talking about having seven million electric
vehicles on the roads by 2025. Today, they have maybe just over a million.
CLARE SEBASTIAN, CORRESPONDENT, CNN: The global rates for a low carbon future, governments and businesses from Silicon Valley to Tianjin are going
all in on electric cars and for one once obscure element, it's sparked a gold rush.
In the last two years, cobalt prices have spiked 300 percent and that's because experts say it has one specific property critical for electric
cars.
BERRY: It's really to prevent what's called thermal runaway and that's just the technical term for the battery getting hotter and hotter and
hotter and ultimately, exploding.
SEBASTIAN: Can you have an electric car without cobalt?
BERRY: You can, but it affects energy density. It affects the cycle life of the car overall.
SEBASTIAN: While electric cars need a lot of cobalt...
BERRY: If this is the typical Tesla model as it is 85 kilowatt hours, that's roughly about 112 pounds of lithium and about maybe 15 pounds of
cobalt.
SEBASTIAN: It's likely many of us are actually carrying a few grams right now inside our cell phones. The cobalt is buried deep in the battery's
chemistry not just of iPhones, but most modern cell phones.
How much cobalt would be in this iPhone?
BERRY: Probably three grams, three to four grams. I mean, think about the number of iPhones or the number of cell phones that are sold globally, it
starts to add up.
SEBASTIAN: And in the future which many believe is increasingly battery powered, the cobalt rush is not over yet.
Clare Sebastian, CNN Money, New York.
(END VIDEO TAPE)
GOLODRYGA: So there is a supply and then there is a demand. Nima Elbagir joins me now for more on this conversation. Such an important
conversation, such an important piece of investigative work. Thank you for bringing us that report, Nima. What was the most surprising thing that you
learned while filming this?
ELBAGIR: The most surprising thing is how much of this information is actually hiding in plain sight. If you're buying a TESLA, you're buying it
because you believe that this is a company that puts ethical -- the ethical values that you believe yourself to share at the forefront of its mission
and that goes for any electric car.
I think most people would agree, most consumers would agree that this is a kind of a valued driven purchase, and yet, in spite of that, you have to
really go through the small print. We have to go back and forth quite a bit with a number of these companies to drill down into whether they could
actually respond to what we found on the ground, namely that they can't trace their supply chain in a meaningful way.
And it took going into the SEC filings, going into financial statements where TESLA and Daimler, Benz and others acknowledge due to the nature of
the complexity of their supply chain. It is too difficult essentially to be able to follow that supply chain to its source.
The question that we had for them is, well, why don't the consumers know that? And that's one that companies have found very difficult to answer,
Bianna.
GOLODRYGA: Of course, I noted in your piece, you said car companies cannot guarantee that child labor was not used in the production of their
vehicles, which is stunning in 2018 that car companies from around the world, not just China, not just US, from around the world can't make that
guarantee and it seems like there really is a lack of accountability here and that children are ultimately paying the heavy price.
ELBAGIR: Well, we specifically looked at artisanal cobalt, which does account for an extraordinary amount of the cobalt that you're looking at,
but even if you're looking at something like industrial scale cobalt, you can't remove the Congo from the supply chain and you don't have to be a
serious investor to know what kind of issues that brings with it.
This is a country that for the last two years still hasn't had long awaited, long promised democratic elections. The due diligence factor is
necessary and companies are aware of the need for it, and yet...
[16:25:16]
ELBAGIR: ... on the ground, it is missing and they are relying on a government that can't even deliver democratic elections to its own people
to police their supply chains for them.
GOLODRYGA: And such important work on your part on bringing the story to life and showing us these images of these young children being slapped and
beaten up just because cameras caught the work that they do on a daily basis.
What is the ultimate solution or what is the next step that we can take as a society to at least start addressing this issue and fixing it if we can?
ELBAGIR: Well, first and foremost is transparency. Companies need to know that we as, consumers require and demand transparency and if you make the
direct correlation with conflict minerals, the three Ts and gold, that also come out of the Congo, there is a legal requirement because of the US
legislation and legislation around the world for transparency in terms of how much of the supply chain you can trace.
Something like cobalt doesn't have that, but companies should be more forthcoming because some are doing that, so BMW for example, Renault.
Apple has actually - they're not a carmaker, but they have stopped sourcing artisanal cobalt, hand-mined cobalt until they can guarantee they aren't in
the supply chain.
So, it is difficult, but others aren't doing it. We, as consumers need to make it clear to companies that this is what we demand in exchange for our
hard-earned cash.
GOLODRYGA: And we as reporters, like yourself need to continue bringing these stories to consumers. I am proud to work at CNN that brings us these
stories. CBS, my other employer also did a piece on this problem that continues to affect children at young, young ages. Thank you so much,
Nima. Thank you for your reporting.
ELBAGIR: Thank you.
GOLODRYGA: And coming up, Israel's Prime Minister tells CNN he has got concrete proof that Iran is violating its nuclear deal. Some experts
aren't so sure. I'll speak to Israel's representative to the UN, coming up, next.
Hello, I am Bianna Golodryga, coming up in the next half hour of "Quest Means Business," the IMAX CEO will be here in the sea suite as he feels the
"Avengers" effect and their latest results.
And Donald Trump says, tax cuts will lead to a wave of corporate spending. Now, some of his Republican colleagues aren't so sure.
First, these are the top news headlines we're following this hour.
Disgraceful is how US President Donald Trump is describing the leak of nearly 50 questions that Special Counsel Robert Mueller would like to ask
Mr. Trump as part of his Russia probe. Those questions were obtained and reported by the "New York Times". They relate to the 2016 campaign and key
figures in the administration. The mayor of Paris is condemning a May Day rally that turned violent.
Hundreds of hooded protesters set cars on fire and smashed the windows of a McDonald's Restaurant. France's Interior Minister says everything is being
done to find those behind the destruction.
The Hollywood actress Ashley Judd is suing the disgraced film executive Harvey Weinstein. She's alleging he hurt her career by making inflammatory
statements. Weinstein's spokesperson has denied smearing her by name.
Armenia's opposition leader who helped force the Prime Minister from power has failed in his bid to become the next Premier. Lawmakers voted against
making Nikol Pashinyan the next Prime Minister. If he's not elected in the second round of votes, parliament will be dissolved.
The U.S. nuclear watchdog is casting doubt on the Israeli Prime Minister's claim that Iran lied about wrapping up its nuclear weapons program, and
that the Iran deal, nuclear deal is based on lies.
The International Atomic Energy agency says it will look over the files Israel provided, but says there are no credible indications that Iran was
trying to develop nuclear weapons after 2009.
Israel's Prime Minister says the Iran nuclear deal must be scrapped in order to preserve peace in the Middle East. Foreign companies have signed
billions of dollars worth of deals with Iran since its government made a patch with western countries to curb its nuclear program.
Benjamin Netanyahu urged the west not to be fooled, telling CNN that scrapping the deal would pile economic pressure on Iran.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, PRIME MINISTER, ISRAEL: The whole premise that this deal somehow guarantees a safer, more moderate Iran is wrong. This deal
paves Iran's path to a nuclear arsenal.
If you got rid of it, the first thing that would happen is you would crash Iran's money machine in which it's pursuing its means of a conquest of an
empire. They're funding it with billions, tens of billions of dollars, their aggression throughout the region, and this deal facilitates it.
If you take away the deal, they're going to be in a huge economic problem.
(END VIDEO CLIP)
GOLODRYGA: Danny Danon is Israel's permanent representative to the U.S., he's joining us live from Los Angeles. Ambassador, thank you so much for
joining us. So let's get to what we just heard from the Prime Minister, saying that by getting out of a deal, they'll be piling pressure on Iran.
How exactly will that work if we're hearing that the counter parties to this deal would remain and the $1.7 billion that the U.S. returned back to
Iran would remain in Iran's hands. How much economic pressure would there actually be on the country?
DANNY DANON, PERMANENT REPRESENTATIVE OF ISRAEL TO THE UNITED NATIONS: Good afternoon Bianna. We all agree that it is a bad agreement, bad deal,
and we know that the fact that you cannot inspect what they're doing in Iran.
We regret that they were lying all the way and with the ballistic missile tests, there's no expiration date to this agreement. And yes, they have a
lot of money to sponsor terrorism. We believe that President Trump will decide on May 12 not to continue with this agreement, either countries will
follow the U.S.
It will not be easy at the beginning, but we saw in the past with the sanctions, once the U.S. shows leadership, other countries follow the U.S.,
and I believe that many countries in Europe if they will have to decide, whether to do business with the U.S. or Iran, I have no doubt that they
will choose to continue to walk with the American economy.
GOLODRYGA: The response to the press report yesterday from the Prime Minister Netanyahu's astonishment that Hassan was able to get this treasure
trove of information and actually get the copies, the hard copies as well.
Having said that as going through it, some people say that none of this information is new, that they knew that Iran had been lying about their
nuclear weapons program, but that all of this had stopped once the nuclear deal had been signed. Is that not the case?
DANON: Not at all. If they knew that they were lying all the way along, why did they continue to negotiate with them? And those documents,
thousands of documents prove that they lied in '99, in 2003, and they also lied in 2015 when they had to expose everything they did so far, they
didn't show everything.
Now we know for sure that they had an intention to develop weapons, to develop ballistic missiles carrying nuclear bombs. It is something they
denied all the way. We can see the footage coming there in the UN, the leaders who came to the UN when they spoke about their intentions.
So if they lied in the past, we believe that they're lying now, we believe that they'll continue to lie in the future.
[16:35:00] GOLODRYGA: Let me read you what John Kerry who obviously played a major role in that 2015 deal just tweeted, he said "every detail Prime
Minister Netanyahu presented yesterday was every reason the world came together to apply years of sanctions and negotiate the Iran nuclear
agreement.
Because the threat was real and had to be stopped, it's working. That's why Israeli security experts are speaking out."
What is your reaction to that?
DANON: That we sure are sinking. We know it's not the case, we know that if we look at the agreement today, in seven years, there's an expiration
date for the agreement and then Iran will continue to do exactly what they planned and the documents we are now providing to the world and experts are
coming to Israel now to see those documents, the proof that the Iranians intend to continue with their intentions to develop nuclear capability.
And for us, it is something we cannot allow. We believe that the president is aware that it is threat not only to Israel, it is a threat also for the
U.S.
GOLODRYGA: U.S. officials are pointing to an Israeli airstrike in Syria on Sunday, targeting arms delivered from Iran where two dozen Iranians are
said to have been killed. And "Nbc" is reporting that U.S. officials say that is an indication that Israel is moving closer to war with Iran,
obviously coupled with the announcement last night from the Prime Minister.
Is Israel moving closer to war with Iran?
DANON: I will not speak about specifically put, but I would tell you that today, that we will not allow Iran to build their bases in Syria. We will
not allow them to build air fields, and we know exactly what they want to do.
They want to take over Syria the same way they took over Lebanon to put forces, militia next to our border. It is something we will not allow, we
will do whatever is necessary to protect the citizens of Israel. And we proved in the past that when we have any intention, we know how to protect
our people.
GOLODRYGA: It is reported that Prime Minister Netanyahu presented the findings to President Trump earlier this year in January, and many are
implying that the reason that it took this long for him to come forward with it is specifically because of the upcoming May 12 decision where the
president has to decide whether or not he continues to recertify Iran's compliance with the deal.
Is that why -- was this a strategic move by Prime Minister Netanyahu?
DANON: Firstly, it is correct, we do share information and intelligence with our allies, mainly with the United States and we did it also in this
case. And that I think when we see European leaders coming to the U.S., coming to Washington, speaking about this relative agreement, about the
accomplishment of this agreement.
It is very important for us to show to the world with whom we are dealing, why we should not trust the Iranians today, and what would be the
consequences if we would sit idly by and allow them to continue with their plans.
GOLODRYGA: Danny Danon, a pleasure having you on, thank you so much for joining us today --
DANON: Thank you very much Bianna.
GOLODRYGA: Thank you. Apple's highly anticipated earnings are out, and investors are looking for clues about the Apple iPhone and the iCash Pile,
the numbers and what they mean are coming up after the break.
[16:40:00] (COMMERCIAL BREAK)
GOLODRYGA: And news just coming into CNN, Apple reports it sold 52 million iPhones in the first three months of the year, that's slightly less than
analysts expected. But revenue and profits did beat expectations.
Apple also announced plans to buy back $100 billion worth of stock and increase its dividends. Shareholders are liking that news. Apple shares
are up more than 4 percent in after-hours trading, the stock has come down over the past two weeks with reports from Apple's suppliers hinting at weak
demand for iPhones.
So with this just at teens, we need our tech expert Shelly Palmer to help us understand these numbers. I even saw you, your eyebrow still up when I
reported those numbers. Better than expected indeed, right?
SHELLY PALMER, ADVERTISING, MARKETING & TECHNOLOGY CONSULTANT: Better than expected. The stock buyback is fantastic, people are going to be happy,
but I'm not sure that's the story.
GOLODRYGA: So what's the story?
PALMER: I think the story is there were two possible futures for Apple. One, where handsets are still awesome and they start -- and they continue
to make a lot of money selling iPhones and things of iPhone.
And the other where the handset business sort of drips off because it's starting to just become iteration not innovation. They haven't had a smash
with the iPhone 10, although that's not, you know, one device, one iteration, one --
(CROSSTALK)
GOLODRYGA: It's not just a bomb, right --
PALMER: No, far from it, there's one here in my hand --
GOLODRYGA: Right --
PALMER: I mean, they're not -- it's far from a bomb.
GOLODRYGA: Yes.
PALMER: But at the end of the day, one has to wonder did Apple like -- is -- are their best days behind them or in front of them? And you can talk to
any group of investors and you're going to get arguments on both sides that are coaching, right?
One is that, look, these guys are a profit-making machine, they always mafia hardware up to the highest possible level. The price elasticity with
respect to Apple has just charged them as much as they can possibly take and then add a few bucks more to see if they just, you know, would buy it
anyway.
And then there's the other side of that, which is you know what? Handsets are over, you guys got the next thing because you used to have the next
thing. What's the next thing?
GOLODRYGA: Have we overcome that desire and insatiable need for the next thing versus --
PALMER: We haven't --
(CROSSTALK)
GOLODRYGA: Does it make what we have now great?
PALMER: No, we haven't because we're coming into a world of 5G, a data- driven world of augmented reality, there's no version of tomorrow with this less data than there is today available to turn into action.
And Apple is going to have to be all over them -- now, there's no indication that they aren't, they've always been very stealthful about
what's new, what's coming. There's some patents for iWear, is there going to be iWear contact lenses, implants?
Whatever the next thing is, you know, 5G data-driven world, who is going to own that the way Apple owns the 4G handset world. Those are the two --
that's the two Apples, and by the way, everybody that has Apple stock is probably doing a little bit of the Snoopy dance right now, it's not a bad
day.
GOLODRYGA: You know, who is not doing the Snoopy dance stock?
PALMER: Yes --
GOLODRYGA: Snap shareholders.
PALMER: Yes.
GOLODRYGA: It's not a great earnings report from them, weren't expecting a good one either, but this one came in worst than expected.
PALMER: They don't have a story to tell at Snap. You know, this is -- their product redesign at SnapChat, even the loyalist of loyalist went to
that redesign and went, what? So the people who love it, don't love it, the people who didn't care, don't care.
Their advertising revenue isn't what it should be, it's just not in the decision tree anymore for advertisers, it was the cool thing, it's not cool
now. They have an incredibly long road to go if they're going to find their way back.
Look, at any time, you can have a hit, at anytime, you can do something --
GOLODRYGA: Right --
PALMER: That makes people go, yes! But at the moment, yes --
GOLODRYGA: Yes, but --
PALMER: Snap does not surprise --
GOLODRYGA: As long as people still want to go, yes, right? I mean, this is a sigh of relief for Facebook and that they owned Instagram --
PALMER: They do --
GOLODRYGA: Instagram is eating Snap's lunch, it's been doing that for a while now, and I guess it continues to, given this report.
PALMER: Yes, and if you (INAUDIBLE) you'll find out there's 3D photos coming in the new dating app. Of all the things that you might have needed
in your life, a Facebook dating app is in your future.
GOLODRYGA: Not mine, not mine, I'm happily married.
PALMER: Probably not mine either, but that's not the point, it's coming.
GOLODRYGA: It's coming --
PALMER: It's your phone near you.
GOLODRYGA: Oh, Shelly, so entertaining, great to have you on --
PALMER: Great to --
GOLODRYGA: Very informative as well --
PALMER: Thank you --
GOLODRYGA: Thanks. Well, Apple is planning to use $100 billion of its cash pile to buy back shares. That's far from the only company to do that.
The Republican tax plan was supposed to prompt companies to invest in workers and equipment.
But a prominent member of President Trump's party says too many companies are using the cash to reward to shareholders instead. Senator Marco Rubio
says there's no evidence that workers have benefitted.
Members from the Commerce Department show business investment has not picked up since the tax cuts came into effect. So-called non-residential
fix investment grew at a rate of 6.1 percent, still healthy but lower than in previous quarters.
Stephen Moore helped design the tax plan, he served as an economic adviser to the Trump campaign. Stephen, great to have you on. Let me guess,
you're saying it's too early to judge.
[16:45:00] STEPHEN MOORE, ECONOMIST: Oh, no, it's not too early to judge. I mean, this tax cut -- I saw the president two weeks ago and we were just
marveling at the amazing impact this economy -- this tax cut has already had way ahead of schedule.
I mean, we've seen now the latest numbers about 5.5 million workers have gotten bonuses and pay raises, so it certainly pour down on no class
workers --
GOLODRYGA: I know -- isolated --
MOORE: We now have 14 states --
GOLODRYGA: Aren't those isolated --
MOORE: What did you say?
GOLODRYGA: Aren't those isolated incidents? I mean, obviously anybody would love --
MOORE: Well, there's a lot of --
GOLODRYGA: A cash bonus, but --
MOORE: Yes --
GOLODRYGA: From the larger scheme of things, you're not seeing --
MOORE: Yes --
GOLODRYGA: Wages overall going up the way that this administration --
MOORE: Oh, yes --
GOLODRYGA: Had promised it would. Incremental --
MOORE: No --
GOLODRYGA: At best.
MOORE: Well, look, I mean, the tax cut is only four months old, so I mean -- you know, we -- but we have seen 5 million workers who have more money
in their pockets today as a result of bonuses, not even including the tax cut.
We also have about 14 states, this is amazing statistic. Fourteen states have the lowest unemployment rate that they've ever had since in recorded
history. This is amazing. So we've got the economy booming, we've got the hottest jobs market we've had probably in 30 years.
We now have 6 million more jobs in the United States than we have people that fill the jobs. We have manufacturing report just came out last week,
that 90 percent of manufacturers are confident in the future and talking about expanding their operations.
That's up from about less than half during the Obama years. So almost every indicator is very positive, we're back on a 3 percent growth path --
and you mentioned the most important thing which was really the key to the tax bill which is getting investment open, and we've seen, you know, big
increases in what we call CAPEX.
Business spending on nonresidential equipment facilities, warehouses -- and I believe that's the best barometer of where the economy is headed.
GOLODRYGA: So why wasn't the tax bill just sold that way? I mean, you heard what Democrats saying that the tax bill would benefit the rich, the
companies would reinvest in share buybacks, and that does seem to be some of the headlines that we're seeing from Apple just --
MOORE: Sure --
GOLODRYGA: Moments ago as well, and I want to play --
MOORE: Yes --
GOLODRYGA: For you this now infamous video from the "Wall Street Journal" where Gary Cohn when he was the economic adviser asked CEOs what they would
do with that money and was a bit surprised by --
MOORE: Yes --
GOLODRYGA: Their response.
(BEGIN VIDEO CLIP)
GARY COHN, FORMER DIRECTOR, U.S. NATIONAL ECONOMIC COUNCIL: If the tax reform bill goes through, do you plan to increase investment -- your
companies' investment, capital investment.
Let's see show of hands if the tax reform goes through? OK --
UNIDENTIFIED MALE: Why are the other hands up?
UNIDENTIFIED MALE: Why are the other hands up?
(END VIDEO CLIP)
GOLODRYGA: Why don't you sell it that way? Was that a mistake? I mean, the economy is doing very well, but did you oversell something --
MOORE: Yes --
GOLODRYGA: To the point where now investors and soon-to-be voters say, listen, it didn't turn out the way the president promised it would.
MOORE: Well, I mean, to be honest, I think under sold it. I mean, I just write it off, these statistics about how strong the economy is. I mean, my
goodness, there was a big article in the "New York Times" this weekend, talking about how the American economy is growing so rapidly.
There's such a demand for workers that the economy is overheating. We just got a report out, you know, the GDP report suggests that wages are rising
faster than any time in six years.
I mean, show me any negative thing about this tax -- and now awesome businesses using this money to pay out dividends to their shareholders,
sure. But we have 100 million Americans who want stock in this country, that's a great thing, I mean, is that they will have more money in their
pockets that they can use for other things or invest in other companies.
So I mean, I would challenge anyone to show me anything that's not working about the tax bill so far in terms of the strength of the overall U.S.
economy --
GOLODRYGA: Yes, you have economists like Paul Krugman saying that that money should have been used for infrastructure spending, you have Rubio,
Senator Rubio as we mentioned --
MOORE: Yes --
GOLODRYGA: Earlier and the call right now, saying tax cuts are helping shareholders, not workers --
MOORE: Yes --
GOLODRYGA: Are you concerned at all that that's what voters are going to have in mind when they go to the polls in November?
MOORE: Well, sure, I think elections are always about the economy, and I think Trump has a strong case to make that the economy -- you know, the
economy was growing at 1.6 percent rate, growth rate under Obama.
And this last year, the last four quarters, the economy has grown just a little less than 3 percent, that's a -- that's almost a doubling of the
pace of growth. I think Trump has a very positive case to make.
But I think Republicans need to do a better case of making it. By the way, Paul Krugman is also the economist who said the day after the election that
Donald Trump would crash the stock market, we've seen about a 35 percent increase in stocks since Trump was elected.
So I don't know if Paul Krugman is the best person to ask for investment advice.
GOLODRYGA: Well, we will have him on the show tomorrow, he's actually booked, so maybe we'll ask him that question specifically --
MOORE: Ask him why he said -- ask him, yes, I'd love to be on with him.
GOLODRYGA: OK, my producers will call you, Stephen Moore --
(CROSSTALK)
Thanks, great to see you.
MOORE: Thank you.
[16:50:00] GOLODRYGA: End of "Star Wars", congratulations to "Avengers" for the biggest opening weekend at the Box Office. We'll look at how the
latest installment of the superhero franchise is helping IMAX deliver results which are, you guessed it, out of this world.
(COMMERCIAL BREAK)
GOLODRYGA: Well, the global Box Office for "Avengers: Infinity War" has risen to three quarters of a billion dollars. The "Avengers" effect of
helping companies ride across the movie sector including IMAX.
Both "Avengers" and the "Black Panther" movie helped IMAX beat estimates on Q1 earnings. "Avengers" was the first commercial film to be purely shot
with IMAX cameras. IMAX says "Avengers" was the third best opening ever for IMAX film.
And despite all that, Wall Street was not impressed. IMAX stock closed down nearly 7 percent here in New York. Tough crowd. Rich Gelfond is the
CEO of IMAX and he is joining me now in the C-Suite. Great to have you on.
RICHARD GELFOND, CHIEF EXECUTIVE OFFICER, IMAX: Nice to be here, thank you --
GOLODRYGA: It's just some huge numbers. So what is it the Wall Street is still looking for? I mean, is it the opening in China?
GELFOND: You know, Wall Street is a funny game with respect to our stock, there's a lot of hedge funds who are in it, and I think they play for the
opening, so they buy on Thursday and they sell on Monday or Tuesday, the next week.
So what's more important to us is the long term pattern of our company and we just delivered results this morning where we pretty much double what our
consensus was or revenues drop in China, 27 percent year-over-year.
Our worldwide Box Office was up 16 percent year-over-year, so it feels quite good, virtually every line we beat the Street, and you know, let the
people go to the casino, play their short-term game, we're in it for a longer period of time --
GOLODRYGA: You don't follow the stock on a day by day?
GELFOND: Oh, I follow it on the minute --
GOLODRYGA: Minute by minute, OK --
GELFOND: I'm not saying it makes me happy --
GOLODRYGA: Right --
GELFOND: But you know, I've been doing this for a very long time, and when you do right by shareholders in the long run, the price reflects, and in a
day, they're always like yesterday's newspaper.
GOLODRYGA: Yes, of course, so the news happens by the minute. "Avengers" recorded $41.5 million over the weekend, as we mentioned, it hasn't opened
in China yet, what are some of the estimates that we can expect out of China once it opens?
GELFOND: China is still a week away from this Friday. So it's a long time. What I can tell you is that our advance sale Box Office, we have a
fairly large footprint of about 500 screens in China and we usually do about 10 percent of China's Box Office when we're involved in a film.
But it's the highest it's ever been for any film in China for us and it's over $4 million, so that bodes very well for its opening.
GOLODRYGA: We --
GELFOND: Not every Hollywood film works in China as you know --
GOLODRYGA: Yes --
GELFOND: And the closest (INAUDIBLE) area is Taiwan, and "Avengers" also did extremely well in Taiwan. So we're pretty optimistic --
GOLODRYGA: Yes, and you look at the success of "Black Panther", these action movies seem to be an outlier when it comes to success at Box Office
as across the country. Because we're seeing competitors coming in from cables, right, to Netflix and the sort, Hulu.
[16:55:00] What is it about these action movies that you think draws viewers specifically to theaters and IMAX versus watching it at home?
GELFOND: Well, IMAX is in the blockbuster business versus regular cinema which has to fill 20 screens all the time. We're just looking for the
biggest and best out of home experience. But I think what works is something you can't replicate at home.
So could you imagine watching "Black Panther" or "Avengers" in the home? I can't. I mean, on a small screen, it's not only the way it looks, but I
think it's also the social experience is a big part of it. You want to go with your kids --
GOLODRYGA: Family and friends, right --
GELFOND: Or a few friends, it's a family experience and obviously "Disney" is fantastic at mastering that and the Russo Brothers created a great film
here, and you want to share with everyone and you want to get on social media and talk about it.
You want to be the first one to see it. These really are events more than they are a movie.
GOLODRYGA: And you don't just see it once, so many people go back for second and third screening. So latest adventure as we said was shot 100
percent with IMAX cameras. How isolated is that? Is this a onetime kind of thing or do you think they're going to be doing more of this, and how
costly is it?
GELFOND: Well, the sequel has been shot with IMAX camera, so we have that. There are a number of other movies, Chris Nolan's "Dunkirk" was shot mostly
with IMAX cameras, Chris is a big fan of IMAX --
GOLODRYGA: Yes, it was beautiful, beautiful to watch it --
GELFOND: Thank you, and pioneered the use of those cameras years ago. Part of the next "Star Wars" is likely to have some IMAX footage, the next
"Wonder Woman", Patty Jenkins is using --
GOLODRYGA: So there's more to come --
GELFOND: There's a lot more to come --
GOLODRYGA: Oh, I'm looking forward to it. Richard, it's great to have you here on set --
GELFOND: Thank you --
GOLODRYGA: Thank you so much.
GELFOND: Thank you.
GOLODRYGA: And that is QUEST MEANS BUSINESS, I'm Bianna Golodryga, the news as always continues here on CNN. Thank you.
(COMMERCIAL BREAK)
END
