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Quest Means Business
Trump To Slap Tariffs On The US's Three Main Allies, Two Main Anti- Establishment Parties Have Actually Agreed To Form A Coalition Government After Weeks Of Political Uncertainty That Has Rocked The Markets In Italy, It Is Full Steam Ahead In The Driverless Car Industry; India Has Failed To Find A Single Prospective Buyer For Its National Airline; Emirates to Launch Premium Economy by 2020; Pompeo: North Korea-U.S. Relationship in a Pivotal Moment; Trump's Tariffs Slammed on Capitol Hill; Former White House Chief Strategist Steve Bannon Talks to CNN; U.K. Denies Chelsea Owner Abramovich Visa; New York Hosts Major Expo Promoting Cannabis Industry. Aired: 4:5p ET
Aired May 31, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CORRESPONDENT, CNN: All right, all of those smiles and those lovely applause basically, pretty much a color obviously of how the market
is feeling. It has been - take a look here, a complete sea of red, the Dow ended the day down 250 points, mainly I should say, or pretty much the sole
reason was Trump's decision to slap tariffs on the US's three main allies.
My friends, it is Thursday, the 31st of May. The trade war begins tonight. Donald Trump is bringing the tariff's hammer on his closest allies.
And take two for the Five Star Movement in Italy, as yet another brand new government and blue is the color that's calling the game. Chelsea is
pulling the plug on a brand new billion dollar sale. I am going to be talking about Roman Abramovich later on in the show.
Hello, everyone, I am Zain Asher and this is "Quest Means Business."
All right, it has certainly been quite an eventful day when it comes to US economy and trade negotiations around the world because those negotiations
have actually failed. The truce is over and some might say, the global trade war is set to begin within hours. That's because tariff exemptions
to some of America's strongest allies are set to expire in about, I would say eight hours from now at midnight, local time, and they are fighting
back.
So, in terms of retaliation, Europe, Canada, Mexico - all fighting back America's first third on four largest trading partners. Steel and aluminum
from those countries will no longer be able to flow freely into the United States.
Their reactions have been absolutely furious. Canada's Prime Minister called the US measures an affront. Take a listen.
(START VIDEO CLIP)
JUSTIN TRUDEAU, CANADA'S PRIME MINISTER: Let me be clear, these tariffs are totally unacceptable. These tariffs are affront to the longstanding
security partnership between Canada and the United States and in particular, an affront to the thousands of Canadians who have fought and
died alongside their American brothers in arms.
(END VIDEO CLIP)
ASHER: While America's trading partners are fighting back with more than just words, they are actually imposing tariffs of their own. They are
retaliating and that pushed down industrial and consumer stocks on Wall Street.
Let's take a look here. As I mentioned, the Dow closed with 250 points down in the red just off the lows of the day. We will have more on the
market reaction in just a moment with Paul La Monica.
The bleep though, the bleep you see around two o'clock where it really went down was just as Canada - just as Justin Trudeau announced, their response
about it that they were planning to retaliate as well.
Canada says that it will impose dollar for dollar tariffs on American goods including steel and aluminum, those go into effect on July 1st, about a
month from now, and Mexico announced equivalent measures on items like steel, pork, and produce - those remained enforced until the US drops its
own tariffs and the EU is moving ahead with tariffs on some $7.5 billion worth of American goods. It will also lodge a case at the WTO as well.
The President of the European Commission, Jean-Claude Juncker said Europe simply could not let US action go unanswered.
(START VIDEO CLIP)
JEAN-CLAUDE JUNCKER, PRESIDENT OF THE EUROPEAN COMMISSION: This is a bad day for the world trade. What they can do, we are able to do exactly the
same. It's totally unacceptable that a country is imposing unilateral measures when it comes to world trade.
(END VIDEO CLIP)
ASHER: And on top of all of this, President Trump wants new measures on German car makers. According to a report, it sent the country's auto
stocks plunging into the red. You see Volkswagen there down to 2.25%, BMW down about 1%, Daimler also down about 2% as well. Let's get the reaction
from Europe and Canada. We have got Atika Shubert who is joining us live now in Berlin. Paula Newton though is joining from Ottawa.
So, Paula, let me begin with you because one of Will Ross's main complaints was that, we slapped on tariffs because negotiations in terms of NAFTA was
taking far longer than he had anticipated.
I am just curious, aside from the whole national security argument, what has Canada's reaction been to the rationale behind these tariffs?
PAULA NEWTON, CORRESPONDENT, CNN: Well, they say that there absolutely is no rationale, but it has changed this. Today, we saw a marked change in
the way Canada will now handle the Trump administration, and you will see that Europe will react that way as well. What am I talking about? Well,
Justin Trudeau has been known to box. He has taken the gloves off.
Now, he refrained from any kind of name-calling or being that too hard against the Trump administration, but when asked bluntly, "Why do you think
they did this after months of trying to negotiate?" He just said, "I don't know. You're going to have to ask the President."
[16:05:08]
NEWTON: He made it clear that, "Look, the United States exports more than 50% of all its steel where? To Canada." Now, that steel will have a 25%
tariff on it as well. What does it mean, Zain? It means, for a trade war, game on.
What was really key here though going back to NAFTA, Zain was the fact that you know, Justin Trudeau let it all on the table. I was willing to go to
Washington this week, try and sign up a NAFTA deal, Trump and I sitting down at the table getting it all worked out. He got a call from Mike Pence
he said, that look, without a sunset clause, something that Canada is totally against meant that the NAFTA deal would expire every five years or
so, Mike Pence told him there would be no deal.
And so, Justin Trudeau was left hanging and he knew where this retaliation would go from there.
ASHER: So, Paula then, what happens next? Because Wilbur Ross has made it clear that even though these tariffs are being put in place, technically,
he wants the NAFTA negotiations to continue, so from the Canadian perspective, are they still holding up hope at this point?
NEWTON: Oh, absolutely, and they will continue to negotiate. This is all a bargaining tactic, and unfortunately, industries on both sides of the
border quite frankly, throughout the world - consumers and businesses - will now be on the hook because they will be paying more for certain goods.
Zain, this is a lot about the midterms in November, and Donald Trump wanted to make sure he had some cred on the campaign trail, he is terrified that
the Democrats will take over the House. He wants this credibility in the rustbelt. He wants some of those tight races to go the Republican way. I
think he is going to take his chances over the next few months, unless he can prove that he really did get the best deal possible from his trading
partners on NAFTA.
ASHER: All right, Paula Newton live for us there, thank you so much. Actually, joining me live now on the phone is Finance - France's economy
minister, Bruno Le Maire who joins us live.
So, Bruno can you hear me?
BRUNO LE MAIRE, ECONOMY MINISTER OF FRANCE: Yes, I can hear you.
ASHER: Okay, thank you so much for joining us at such notice. So, my first question to you is, listen, we've had basically whiplash over the
past couple of months. At first, Europe was going to get major exemptions from this. There has been a back and forth obviously. President Trump
wanted time to negotiate, and now here we are with the President of the United States announcing tariffs on the EU.
Over the past two months, given that you were in the room with Wilbur Ross, what have you learned about what it's like to negotiate with someone like
President Trump?
LE MAIRE: You know, we have made it very clear to the Trump administration and including this morning during my meeting with Wilbur Ross that we were
ready to discuss about many topics with our American friends who were ready as Emmanuel Macron expressed yesterday to discuss about the future of the
WTO on the necessity to improve the trade system, we were able and ready to discuss about the best way of handling with China.
So, we made a lot of proposals to the American administration and the single response that we had this morning is a decision from the Trump
administration on tariffs on steel and aluminum, and I want to make very clear that this decision taken today by the American administration is
really unacceptable.
It is unjustified - unjustifiable and it will have dangerous consequences for global growth. So, we have really done our best to try to avoid that
situation and to try to avoid any kind of conflict between the EU and the United States, but as you said, here we are, the Trump administration has
decided to put tariffs on steel and aluminum on the EU nation, so we don't have any other choice, but to respond.
ASHER: Okay, so you're obviously going to respond, you're going to retaliate. Just in terms of the sorts of goods you're going to slap
tariffs on, in exchange, a lot of people have talked about the fact that the EU is planning to slap tariffs on things like bourbon and Levi jeans,
are you specifically going after Trump voters to sort of get back at him in terms of politics?
LE MAIRE: It will be as to the Commission to decide what kind of measures will be taken, but once again, we warned the USA really in advance, and now
it is up to the European Commission to lead the response, but we will take full necessary measures. We are thinking about counterbalancing measures,
whilst thinking of putting the case to the WTO so we have a lot of very concrete measures that are now on the table and it will be up to the
Commission to decide what kind of measures are the most appropriate.
But as you can see, there is a common response from the EU countries under the leadership of the Commission and we will see what are the most
appropriate ones.
[16:10:09]
LE MAIRE: Once again, we do not want any kind of escalation. We don't want any trade war, and President Emmanuel Macron made very clear yesterday
that we do not want a trade war. A trade war will make losers in the United States and in the EU, but it is up to the United States now to take
the right decision and the right decision is a full and permanent exemption on tariffs on steel and aluminum for EU countries.
ASHER: But Minister, you know, you are saying that you don't want a trade war, but surely, you must know that if you are going to respond and
retaliate, that could likely escalate and grow into a trade war.
I am curious, do you think that the Eurozone economy, given now that you have seen a slowdown in growth in the Eurozone, is the Eurozone economy
over rules strong enough to handle the consequences of a potential trade war escalation?
LE MAIRE: Yes, we are fully aware of the risk limits to the escalation and as I told you, there is a risk on the growth of the United States and for
Europe. Though I am just asking the question, who is the first one who decided to put tariffs on steel and aluminum? What is the reason why the
United States decided to put those tariffs on steel and aluminum? We share the same point of view under shared assessment on the concern about the
over capacities in steel and aluminum.
But over capacity that is coming from China, they are not coming from the EU countries, and that is why, we do not understand the decision that has
been taken by the Trump administration because we share the same assessment. We were ready to discuss about the concern linked to the over
capacities on steel and aluminum. We have done our best to try to accommodate the difficulties raised by the Trump administration, but the
right answer is not to put tariffs on the EU countries.
The right answer is not to put tariffs on the closest allies of the United States. The right answer would have been to try to enter into discussion
with the EU countries so that we can fix the issue of over capacities.
ASHER: And Minister, there are reports floating around that Donald Trump actually has talked about specifically targeting German car companies until
and I am quoting from sort of second hand sources here, "Until there are no more sort of German cars rolling down Fifth Avenue in Manhattan."
I am just curious to your response to that. Are you taking those reports with a pinch of salt or are you looking into it closely?
LE MAIRE: I think that there will still be German cars on the Fifth Avenue in New York and also in Paris Avenue and also in Le (inaudible) because
that's international trade, and if Germany is producing a good car and if American consumers wants to buy a good car coming from Germany - produced
in Germany or in France or anywhere else, that's free trade, and I thought that the United States were in favor of free trade like the EU.
But just obliged to see that they - the American administration is going another way, but frankly speaking, I hope we will be able in the coming
weeks and in the coming months to go out of this situation, because this situation of tension between the United States and EU on trade is really in
the interest of nobody. Nobody has any interest into opening a trade war. Nobody has any interest in the decisions that might weaken and jeopardize
the growth in the United States and in the EU.
I will have a meeting in a few hours we set during the G7 in Canada with my counterpart - my American counterparts, Steven Mnuchin. I have made some
personal relationship with Steven and I hope that we will be able to think about the future and to pave the way for going out of that situation.
ASHER: Minister, I wish you the best of luck with that meeting with Steve Mnuchin. Do let us know how it goes and just thank you so much for jumping
on the phone with us so quickly and giving us your side of the story.
LE MAIRE: Thank you.
ASHER: Appreciate that.
LE MAIRE: Thank you and have a good day. Bye-bye.
ASHER: All right, Economy Minister of France, Bruno Le Maire basically saying that you know, nobody wants a trade war. Trade wars certainly does
not benefit anyone. It is a lose-lose situation for all sides. He hopes that it does not end up escalating.
I actually want to bring Atika Shubert and Atika, I am going to post to you and get you to hop on the back of the last question I posed to the
Minister, which is all about this report that Trump wants to target German car companies, specifically, in his words, according to a report, "Until
there are no more German car companies rolling down Fifth Avenue."
What's been the response in Germany to that report?
[16:15:16]
ATIKA SHUBERT: Obviously, Germany is not very happy about this. They don't want to see any sort of tariffs being put on its cars, but you know,
I have to point out that Trump seems to have had a longstanding problem with German cars.
In a 1990 "Playboy" interview for example, he said that he would, "Tax every Mercedes Benz rolling into the United States." So, this is a
longstanding thing with him, and what will be interesting to see is you know, how he is going to justify any tariffs imposed on these cars, and we
are talking about BMW that owns Rolls Royce, Mercedes Benz of course, but also Volkswagen that owns Bentley, Porsche and Audi.
Now, he has already set up an investigation saying, "Listen, how can we justify tariffs on luxury cars," and he wanted to do it on the issue of
national security, which for Germany sounds - it sounds ridiculous, and at the same time, Germany is very angry to see the tariffs imposed on aluminum
and steel.
They've said, they are illegal and incomprehensible, and that's why they are going to be joining in this WTO legal action tomorrow, but at the same
time, they don't want to see an escalation because they are worried that it could mean that President Trump goes even further and puts these tariffs on
Germany's luxury cars.
ASHER: All right, so they are going to make a complaint to the WTO, but you know, a complaint to the WTO, Atika could take one year, maybe two
years, maybe even more than that to resolve, so it could be a long time before we get an answer.
And then, once you do get an answer, either side could end up appealing, so it could be a really long time. I mean, how long is the EU prepared to
wait to resolve all of these?
SHUBERT: That's a good question, and I don't know if they are really expecting the WTO to put the pressure on the United States or if they are
thinking that the retaliation tariffs that may put on American goods are more likely to inflict some damage in this trade war. In fact, you were
talking about those products earlier. I actually printed out a list of the products they are considering putting on.
This is a 10-page list, a very fine print and it includes you know, everything from sweet corn, which is the first item on here, to playing
cards at the end, with hundreds of American products in between. So, I think this is much more likely to have an impact in pressuring the US in
that sense. The question is, what kind of duties are they going to put on these products? Will it be as high as 25% such as the US is doing with
steel or something less?
And that's going to be the really fine balance that the EU and Germany are going to have to find, just enough to say, "Listen, we are making a point
and defending our own products," but not enough to sort of get to escalate the war any further with the United States.
ASHER: All right, Atika Shubert, live for us there. Thank you so much. Atika Shubert on just how the EU plans to respond to this imposition of
tariffs that we just got this morning.
Let's return to Wall Street. Remember, I told you at the top of the show that most stocks moved lower over the course of the session. Take a look
here, you can see it was pretty much in the red all day. It sort of bounced around in the red, the session low, I think it was down like 250
points; at the end of the day, roughly around the same area, too.
Caterpillar, Boeing - two of America's largest exporters were actually among the worst affected. Shares of consumer goods companies fell as well.
They will need to pay more for their raw materials, and then the tariffs. The Mexican peso fell 1% against the dollar. There were some winners
though, US steel shares rose as much as 8% early in the session. They fell back later in the session and closed off with a gain of 1.8%.
So, Paul La Monica is tracking all of these for us. So, Paul, you know, you and I - I bumped to you in the elevator today and the first question I
asked you, right, was why aren't we down even more today given the announcement of tariffs?
You would expect that with the potential trade war looming that we would be down, you know, 700 to 800 points...
PAUL LA MONICA, EMERGING MARKETS EDITOR, CNN: Right, and not just with China, with all of our allies - Canada, Mexico and the EU - I think Zain,
it really comes down to the boy who cried wolf or maybe boy who tweeted wolf phenomenon in the case of our President.
I think the markets have woken up to the fact that nothing is set in stone with President Trump and...
ASHER: The markets awoke...
LA MONICA: ... his economic team. This is really all about a constant negotiation, so I think the investors are waiting to see just how bad
things might get before they really panic, but it's also where we are running that the volatility is back.
ASHER: All right, are you basically saying that there is hope because Wilbur Ross talked about, "Listen, you know, there is still room for
negotiation here." Let's hope that this is not the final - this is not the end of it.
LA MONICA: Yes, I think that is clearly the case. I mean, it wasn't that long ago that we were talking about a likely deal that would be coming with
China because all of the tough talk was going to be put on hold and now, that is obviously in the rear view mirror for the time being until who
knows what President Trump will wind up tweeting...
[16:20:16]
LA MONICA: ... next or what Steve Mnuchin will say or what Wilbur Ross will say about a possible resumption of trade talks.
ASHER: Very, very quickly, yes or no. Were you expecting this today? I mean, we knew the deadline was tomorrow, but were you actually expecting
this?
LA MONICA: I wasn't expecting this. I thought we were...
ASHER: I am not the only one.
LA MONICA: ... would have been extension, maybe a little bit of a softer tone, not the hammer...
ASHER: Not the hammer.
LA MONICA: ... getting hit...
ASHER: Right, I was talking but I was shocked as well. Paul La Monica live for us there, thank you so much.
LA MONICA: Thank you.
ASHER: Okay, I want to turn now to Italy where the two main anti- establishment parties have actually agreed to form a coalition government after weeks of political uncertainty that has rocked the markets. I want
to bring in Delia Gallagher who is joining us live now from Rome.
So Delia, just explain to us how this agreement was actually reached? I mean, there has been so much back and forth, there is so much uncertainty
when it comes to Italy's physical climate. Give us a sense to sort of behind the peak - behind the scenes look at how negotiations are reached?
DELIA GALLAGHER, CORRESPONDENT, CNN: Well, listen, Zain, you don't have to look much farther than last Sunday because the government that just has
been announced tonight is essentially the government that was proposed last Sunday and vetoed by the President setting off lots of tension and calls
for his impeachment, indeed and the man who called for his impeachment is now one of the Ministers in the government.
This is a right-wing populist government coalition between the Five-Star and the League with - as their Prime Minister, a man called Giuseppe Conte
who is a relative unknown. He is a lawyer and law professor from Florence and he is their choice.
But last Sunday, they had also included in their program ministers, a Euro skeptic Finance Minister and that did not sit well with the President and
so he said no to this government. There was a lot of back and forth throughout the week, and finally, just about a half an hour ago, they
announced that indeed, they would go forward. The coalition - with this government, but with a different Finance Minister, Zain.
ASHER: All right, so Giuseppe Conte up for a role as Prime Minister, we will wait and see what happens. All right, Delia Gallagher live for us
there. Thank you so much, appreciate that.
All right, still to come here on "Quest Means Business," it is full steam ahead in the driverless car industry. We will have some potential tie ups
coming up after the break. Don't go away.
All right, the driverless car market is moving right now. Today, GM shares closed up over 12%. That after SoftBank said it is investing more than $2
billion in GM's self-driving car technology. Uber's CEO says it is discussing using Waymo tech in Uber's apps, brand new partnership would
mark a shift in relations after the firm's legal disputes earlier this year.
In the meantime, Uber's efforts reportedly caught the eye of billionaire investor, Warren Buffett. Earlier this year, he reportedly offered to pump
about $3 billion into Uber, then negotiations fell apart.
[16:25:12]
ASHER: So, let's talk more about this with Peter Valdes-Dapena, our resident car expert, so I am curious about the partnership between Uber and
Waymo because my oh my, how things change so quickly. It wasn't long ago - I was on this program talking to Samuel Burke about the lawsuits and Waymo
accusing Uber of stealing from them, and now here, they are almost the best of friends. I mean, they are forming a partnership. What happened?
PETER VALDES-DAPENA, SENIOR AUTOMOTIVE WRITER, CNN: Well, it goes to show what happens when there is money to be made and certainly...
ASHER: It all boils down to that then?
VALDES-DAPENA: Well, it makes sense. It makes sense. Waymo is very advanced in creating self-driving cars. Uber has also been working in that
same arena, that's why they worried about it in the first place, but it might seem like it might make sense if Waymo is so far along that Uber
should work with them.
Clearly, automation for a company that has to pay drivers, self-driving cars make a lot of sense for them, and it's definitely in a direction that
Uber wants to move in and Waymo could certainly use their network to get more people into Waymo cars.
ASHER: So, this field of driverless cars is getting more and more crowded. You've got Apple involved, Samsung, Tesla - the fact that Uber and Waymo
are joining forces, how does that affect the rest of the market in terms of competitors?
VALDES-DAPENA: Well, it does mean -if let us to say, and just to say in here, if these two companies were to work together, that would be great for
them, and that would be one big company in this ride sharing area, by the way, some companies you didn't mention, were the automakers such as General
Motors.
We talked about earlier, General Motors wants to use (inaudible)...
(CROSSTALK)
ASHER: They've got the SoftBank investment that I was going to bring up, but go ahead.
VALDES-DAPENA: That's right. They've got a big investor, another company with a SoftBank investment is Uber, so again, there are all of these
connections starting to happen. It is going to be very interesting to see what technology ends up where and who ends up working together.
I think a lot of these companies will end up in the end finding ways to work together.
ASHER: Yes, I am curious how quickly this will go to market because obviously, we have seen these you know, you kind of see the headlines,
there's been all of these fatal accidents and people are so nervous about the technology, but we'll see what happens.
Peter Valdes-Dapena, thank you so much. Appreciate that. All right, so India has failed to find a single prospective buyer for its national
airline. Selling India was one of the government's top economic priorities for the year. For more, I want to bring in Simon Calder who is a travel
editor of "The Independent." He joins us live now from London.
So, Simom, my first question is, should the government be surprised that no one made a bid? I mean, if loses money continuously year after year.
SIMON CALDER, TRAVEL EDITOR, THE INDEPENDENT: Well, yes, they were very surprised and disappointed. They had already extended the deadline. It
was due to expire on the 14th of May. They extended it until the end of May, and still nobody came forward and it's very sad for a legacy carrier
with quite a heritage behind it, but no one to be interested.
But I am afraid it is fairly predictable, partly as you say because the finances of Air India don't bear too much scrutiny, partly because the
government was going to retain the 24% stake and partly because they said, "Well, yes, you are taking on over $5 billion of debt, and by the way,
you've also got 27,000 employees and you're not allowed to change their contracts."
So, airlines who might have been interested would have seen what happened to Etihad when they bought disastrous stakes in Air Berlin and El Italia of
Italy, and just thought, "We're not going to do this," and anybody who was thinking of moving into the airline industry - are you really going to go
for an airline which clearly has quite a number of deep seated problems or are you going to invest in an airline which is actually prospering?
ASHER: All right, so what we're saying is that there are no surprises here. They lose money constantly, why would anybody want to buy it? So,
my question to you is that, we know that the India Air sort of market is quite competitive. There have been pressures from rivals such as SpiceJet,
Indigo - what on earth - I guess, long term, do you think is going to happen there in Air India in the long run?
CALDER: Well, my suspicion is that what they will now do is effectively put it through a kind of version of Chapter XI bankruptcy. It has got to
be completely restructured. The government then has to say, "Okay, we are going to sell 100% of Air India," and then, I mean, airlines historically
have always performed, always prospered when they have been exposed to real competition, and for far too long, the Indian government has been very,
very protectionist of its airline, Air India in a way that has really left it behind in Asia, where you've got an awful lot of very, very intense
competition. Great for the consumer, great for airlines, which are efficient and well run.
ASHER: I want to switch gears now and talk about Emirates because we now know that they are going to be launching a premium economy class, just walk
us through what --
[16:30:15]
CALDER: A lot of very intense competition, great for the consumer, great for airlines which are efficient and well run.
ASHER: I want to switch gears now and talk about Emirates because we now know that they're going to be launching a premium economy class. Just walk
us through what -- from this decision and also, you know, they've said listen, it's going to be special, we know it's going to be special --
CALDER: Yes --
ASHER: But what are the specific features that we can expect a premium economy class of Emirates. I'm taking high standards for them.
CALDER: Oh, yes, and look, it's a really interesting move because while other airlines, many of them have said, yes, we're going to slot in an
extra class between business and economy because we know this, people prepare to trade up, so we'll exploit this and some airlines say it's the
most profitable real estate on the entire aircraft.
But Emirates, they always said, we're going to have a really premium business class and we're going to have a very good economy class, great in-
flight entertainment, we don't need anything in the middle.
So what they're now doing is saying, we've got 20 or actually probably 36 A380s coming in from 2020 onwards, we are going to create a sub-fleet, 777,
then we get to form a number of specific routes probably to the U.S. and so on.
ASHER: All right --
CALDER: But they think they can make it work --
ASHER: Simon, I could talk about this all day, I've flown Emirates and enjoyed it very much, but I have to go, thank you so much. Simon Calder
live for us there, thank you. All right, still to come in the show, a lot more, we'll have more news after the break.
(COMMERCIAL BREAK)
ASHER: Hello everyone, I'm Zain Asher. Coming up in the next half hour of QUEST MEANS BUSINESS, Roman Abramovich can't get a visa to work in London,
and now Chelsea will not be getting any stadium there either.
And it's a few minutes past 4:20 here in New York, we'll be live at one of the country's biggest marijuana exhibition to that. Clare Sebastian as the
first only to top headlines we're following at this hour.
All right, the top U.S. diplomat says real progress came out of his meetings with the vice chairman of North Korea's ruling party. Now, the
two parties are at a pivotal moment and that it would be nothing short of tragic to waste this opportunity for leaders summit.
North Korea's Kim Yong-Chol is expected to deliver a deliver a letter from Kim Jong-un to President Trump on Friday. And Italy's two anti-
establishment parties have agreed to form a coalition government led by Giuseppe Conte on the Five Star Movement.
Its attempt to form a government last weekend was halted by President Sergio Mattarella who turned down the nomination of an Eurosceptic economy
minister. And Spain's Prime Minister is poised to lose a confidence vote scheduled for Friday.
[16:35:00] Majority of opposition members of parliament have declared they will reject Mariano Rajoy; the leader of Spain's main opposition party
filed a confidence motion after a court convicted Rajoy's former aide of running slash funds to help finance election campaigns.
All right, Donald Trump's new tariffs have come under fire from the president's Republican colleagues on Capitol Hill, leading U.S. House
Republican Kevin Brady says -- let me read for you here. "This action puts American workers and families at risk whose jobs depend on fairly traded
products from these import trading -- imported rather, trading partners."
Republican Senator Ben Sasse says "this is dumb, blanket protectionism is a big part of why America had a great depression. Make America great again
shouldn't mean make America 1929 again."
I want to bring in Charlie Dent; he dubs as a Republican Congressman from Pennsylvania, he joins us live now from Washington. So Mr. Dent, you know,
it's interesting because no matter how hard Republicans try, they simply can't seem to rein President Donald Trump in.
Given that they've repeatedly told him, listen, we don't want a trade war, we don't want protectionism, given the president made this move today, what
recourse do Republicans have now?
FMR. REP. CHARLIE DENT (R), PENNSYLVANIA: Well, right now, look, first, let me just say this. I think the president's trade agenda is
strategically and economically incoherent. I believe right now, Republicans are going to have to step up and try to rein the president in.
That's tricky. I mean, for example, the Congress can do one thing I tried to do before I left was to basically give Congress the authority to vote on
any exiting from a trade agreement that was entered into. Right now, the president can unilaterally pull out of say NAFTA or any other bilateral or
multilateral trade agreement.
That's something that we -- that Congress should step in and do right now. Look, right now, the president needs to refocus his trade agenda. He needs
to focus on intellectual property theft. He needs to focus on forced technology transfers and excess capacity in metals and dumping by the
Chinese.
Levying tariffs right now on friends and allies really makes it more difficult to collectively battle China, confront China at the WTO. That's
what we need to be doing on those issues right now. Not going after our friends and our allies who are users of these products of steel and
aluminum are going to be far more impacted than in a negative way.
They're going to lose far more jobs -- the users than of the producers of steel and aluminum.
ASHER: I mean, listen, people talk about A, prices going up in the United States, but B, also equally as important if there are retaliation or
retaliatory measures from the U.S. trading partners then that will hurt American jobs as well.
I'm curious from your perspective, how will this actually impact the mid- terms if it does end up hurting American consumers and American workers. Because after all, that is something that Donald Trump does care about very
much, sir.
DENT: Well, protectionism ordinarily is not politically that dangerous of a position, until you comprehend the impacts. You know, in my former
Congressional district, I represented Hershey, Pennsylvania, you know, it's the sweetest place on earth.
They produce a lot of candy, 70 million kisses a day, those Hershey's Kisses wrapped, all wrapped in a very thin aluminum foil. They really
aren't domestic producers for them. And in an honest impact on them, I have beer producers, Yuengling and Sam Adams, aluminum cans, the only beer
can manufacturer in the United States is a few miles from my home.
They get shut down over these proposed steel tariffs. So there are real impacts. And I live in an area too where we used to produce a lot of
steel. But again, the right way to deal with this is by working with our friends and allies and confronting China on those issues of excess capacity
of metals and dumping and IP theft as well as technology transfers that are forced.
That's how we should be dealing with this, not going after our friends and allies.
ASHER: Yes, I mean, I actually just spoke Bruno Le Maire who was saying, listen, this is about the U.S.' relationship with the Chinese, why are you
bringing us into it. But I do want to ask you, one of the U.S.' justifications for these tariffs is of course national security concerns.
A lot of people have scratched their heads at the fact that Trump administration is citing national security concerns, what do you make of
that argument?
DENT: I think it's a real stretch to say that Canada is a national security threat or our friends in the European Union, most of whom are
members of NATO as is Canada. You know, Brazil and other countries that's friendly to us, they're not subject to the tariffs, but quotas. And I'll
tell you, that's another issue too. In Pennsylvania, we export a lot of coal to countries like Brazil.
[16:40:00] This coal is used for the manufacturing of steel and other purposes. And so the point I'm trying to make here is that our friends and
allies are not national security threats.
We run no risks receiving steel or aluminum products from Canada or Mexico or South Korea and other ally or Japan.
ASHER: All right, former Congressman Charlie Dent live for us, thank you so much, appreciate you coming on the show, thank you --
DENT: Yes, thanks for having me, great to be with you.
ASHER: Of course, OK, so this Friday, Cnn's Fareed Zakaria is going to be sitting down with former White House Chief Strategist Steve Bannon, he
talks about his hopes for the mid-term elections and his plans for populism around the world.
He also discusses the role of deputy Attorney General Rod Rosenstein and the Michael Cohen case. I want you to take a listen.
(BEGIN VIDEO CLIP)
STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: I think the question with Rosenstein, particularly we get the southern district of Manhattan
involved in this whole Cohen thing, it looks like the southern district of Manhattan is involved in the Trump organization, now they refuse -- he
refuses to give some sort of briefing to the gang of eight.
They refuse to give these documents to Nunes. I think now that Rosenstein ought to be -- I think he ought to be given a direct order, very simple.
You turn every document associated with this spy over in Cambridge and whatever foreign institution was involved with its MI5, MI6 or anybody
else.
You give whatever the FBI did, you give whatever the CIA did. You see Clapper and these guys on TV every night -- and Brennan, they're just
bitter old men. You turn over every document, and if he doesn't turn it over, you give him 24 hours, he doesn't turn it over, I would fire him.
And that's not obstruction of justice. That's giving a law enforcement officer a direct order to turn over documents to Capitol Hill, and if he
doesn't do it, I'll fire him.
(END VIDEO CLIP)
ASHER: All right, so as you can see there, trust me, that is an interview you will not want to miss. Very passionate Steve Bannon there speaking to
us with Zakaria. The interview will be airing Friday, this Friday at 9:00 p.m., that's New York time, 1:00 a.m. London time.
Of course, where else? Only here on Cnn. All right, still to come here on QUEST MEANS BUSINESS, the Russian oligarch Roman Abramovich doesn't have a
U.K. visa, and now his football club Chelsea might not get a new stadium, we'll explain why after the break.
(COMMERCIAL BREAK)
ASHER: Welcome back everybody. Chelsea Football Club is halting its brand new 60,000 capacity stadium in London blaming what it calls an unfavorable
environment to invest. The club actually declined to comment when asked by Cnn if that decision was related to Roman Abramovich's visa problems.
The Russian oligarch who purchased the club back in 2003 has faced delays in renewing his U.K. visa. I want to bring in Simon Kuper who is the co-
author of "Soccernomics", he joins us live now from Paris. So Simon, thank you so much for being with us.
[16:45:00] So is this about revenge on the path of Roman Abramovich not wanting to spend his time and money upgrading the stadium.
SIMON KUPER, AUTHOR: I think he can't really live in Britain anymore. I mean, it seems he's not going to get a visa and he's withdrawn his visa
application. All this goes back to the attack on the Russian -- ex Russian spy Sergei Skripal that Russians attacked him with the kind of poison gas
in Britain, that caused huge eruption between Britain and Russia.
The Brits have now cracked down on Russian oligarchs who like to live in London, chief among them, Abramovich. And so he is not really able to live
there anymore, so why would he invest in a football club which he can't even go to watch?
ASHER: But when you think about just how much the U.K. is losing, the number of jobs that that would be created with this billion-dollar upgrade
of a stadium. I mean, is this individual case with Roman Abramovich enough for the U.K. government to sort of rethink its decision or at least make
some kind of an exception?
KUPER: I don't think so. Abramovich is very close to Putin, U.K. is very angry with Putin, partly over Skripal, partly over other things. I think
the likely upshot is that Abramovich sells the club in the next few months to an equally rich person who will probably come from somewhere like China
or the Gulf who will then build the stadium which makes total sense for a club like Chelsea in a big rich city like London's built.
ASHER: But Chelsea is also -- I mean, Roman Abramovich as the owner and Chelsea the club, they're both losing out here because part of the reasons
for the standard stadium is to -- was to increase revenues on match day, and now that's less likely to happen.
So I mean, who is the real loser here? Is it Chelsea or is it the U.K. as a whole?
KUPER: I think the main loser is Abramovich. Chelsea in short-term turmoil. I mean, the club have been very dependent on Abramovich since he
took them over 15 years ago. But there are so many people who want to buy into English football clubs.
Chelsea is one of the big five or six. They're not going to be short of buyers. There's going to be a lot of people who want the glamour and
prestige that Abramovich has had the last 15 years of owning Chelsea.
And over the long term, the stadium will pay for itself. The three other big London clubs have also recently in the last few years built or
rebuilding their stadiums, building bigger stadiums, there's a lot of money in London, there's a lot of potential fans.
So I don't think this stadium dies with Abramovich, I think somebody else will build it.
ASHER: All right, Simon Kuper, thank you so much, appreciate that, thank you. All right, it's been unofficially named the Bunnies of Weed, this
palace of part in New York is selling medical marijuana as the city hosts a major conference showing out other entrepreneurs can do the same.
We'll take you out there next.
(COMMERCIAL BREAK)
ASHER: So the question we are asking ourselves today is, how do you grow an industry that are at odds with federal law. Cannabis conference right
here in New York is promoting exactly that.
[16:50:00] The expo is being held in Manhattan where medical Cannabis especially has just opened on 5th Avenue.
From there is our Clare Sebastian with more.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN (voice-over): The first glance definitely looks out of place amongst the 5th Avenue department stores and designer boutiques,
that is until you find out what's inside.
UNIDENTIFIED MALE: Guess what? We're selling legal weed.
SEBASTIAN: MedMen, one of the largest Cannabis companies in the U.S. is trying to normalize weed.
UNIDENTIFIED MALE: It's a big step to go from something being not available on illicit to something being mainstream and available. I mean,
that's a big gap to bridge. But you bridge it with a store like this on a street like this.
SEBASTIAN: The high tech retail experience is part of that, iPads guide you through a menu of products and formulas, each designed to treat
different, in some cases life-threatening illnesses.
UNIDENTIFIED MALE: There are only three product types: drops, pills and papins(ph). But within each product type, you have different ratios,
right? In a different ratio of CBD and THC will have different effects.
SEBASTIAN: That's specific to New York State law. In California, where recreational Cannabis is legal, MedMen's stores look very different, and
that's part of the challenge that Joshua Laterman; CEO of the National Association of Cannabis Businesses, a self regulatory body for the
industry.
He's trying to create national standards which currently don't exist.
JOSHUA LATERMAN, CHIEF EXECUTIVE OFFICER, NATIONAL ASSOCIATION OF CANNABIS BUSINESSES: Cannabis is governed by past work of exclusive state laws
which are not doing the job right now.
SEBASTIAN: Currently, all but four states in the U.S. have some kind of medical marijuana program and nine plus D.C. have legalized recreational
use. But legal(ph) Cannabis is still a scheduled one drug, the same as heroin.
And the current administration isn't budging.
JEFF SESSIONS, ATTORNEY GENERAL, UNITED STATES: It's not new that the use of marijuana is detrimental.
LATERMAN: With Sessions, we have a bit more of an aggressive enforcer than people have expected. And therefore the institutional money which was
beginning to come to the table to support Cannabis has been shield.
SEBASTIAN (on camera): So how many federal laws are you breaking here?
UNIDENTIFIED MALE: Well, I tend not to look at it that way. The way I look at it is we are absolutely abiding by every law here in the city of
New York, in the state of New York. This is where the medicine is housed.
SEBASTIAN (voice-over): It's the state of limbo that continues to define this industry even as the green rush gets its first foothold on the 5th.
(END VIDEOTAPE)
ASHER: And Clare Sebastian joins us live now from the Cannabis World Congress in New York. So Clare, is the U.S. going to eventually figure out
the discrepancy between state and federal laws. How important will the marijuana industry be to the U.S. economy as a whole, do you think?
SEBASTIAN: Yes, Zain, extremely important, what they've certainly done here today. Is that it's about much more than just a plant itself. There
are dozens of industries that are growing up around this.
So look over here, we've got products that are made with CBD, that's the non-psychoactive version of cannabis, you've got gummy there, so even over
here, these are wraps(ph) to treat some pets.
But we're also getting, you know, bigger and bigger companies in this space. And I want to bring in Kevin Murphy; he's the CEO of Anchorage
Holdings, which is a big investment firm and operations firm in this area.
You operate in 11, 12 states --
KEVIN MURPHY, CHIEF EXECUTIVE OFFICER, ANCHORAGE HOLDINGS: More than 12 states, all right --
SEBASTIAN: Oh, you began your career on Wall Street in running management, and you made your first investment in marijuana in 2011?
MURPHY: Correct.
SEBASTIAN: Why did you do that?
MURPHY: Why can't this? Why then?
SEBASTIAN: Yes.
MURPHY: I had gotten involved in a cannabis space back in 2011, a friend of mine introduced me to the space and I have to self admit I was a bit
skeptical, but when I learned of the medicinal value of the plant, that's what really drew me in to the opportunity.
It was really a combination of that and the operational leverage in the business that had me wanted to make that first investment.
SEBASTIAN: And that was very early back, you must have been pretty sure that things were going to start --
MURPHY: Yes --
SEBASTIAN: To fire.
MURPHY: It was very early, and very few people in the United States believed cannabis should be illegal at the time. Today, 94 percent of the
country believes that marijuana should be available for medical use and 64 percent believes that it should be available for adult use.
SEBASTIAN: And speaking of changing minds, you just recruited the former House Speaker John Boehner to your board, you used to be against legalizing
marijuana. You also got the former Governor of Massachusetts Bill Weld.
How important is it to have that kind of political sell-out in this industry?
MURPHY: Well, it's important to us to have both the governor and the speaker part of our conversation, purely because they're remarkable men,
first and foremost. You know, Speaker Boehner had been a naysayer and at the current to change his mind. And when you talk to Speaker Boehner about
why he changed, he represented the people of this country for his entire career.
[16:55:00] And when 94 percent of the country believes that Cannabis should be available for medical use, that was enough to have him re-think his
position on cannabis.
SEBASTIAN: I mean, we're still -- we're still in a position where it's federally illegal. We've spoken to people here today who, you know, have
had real trouble of getting a bank account, there's the issue of compliance for companies that aren't as big as yours --
MURPHY: Sure --
SEBASTIAN: With the past record of laws across all the states, what are the biggest risks though there? What are the biggest challenges for --
MURPHY: The biggest risks for us is time. We believe that given its federally illegal, we have a head-start on the competition. Is our goal to
really grow nationally, today, we have the largest national footprint in this country.
But for us, we really want this to be rescheduled or de-scheduled more importantly. Users are the veterans of this country that need access --
for veterans, it's rather states rights issue, the VA is a federal issue.
And we need to bring change, predictable medicine to the 23 million veterans in this country.
SEBASTIAN: Kevin, thank you so much, it really is, appreciate it --
MURPHY: It's a pleasure and thank you for having me on the show.
SEBASTIAN: Absolutely, so Zain, you know, a lot of opportunities out here, a lot of optimism, but you can't see it, but just over my shoulder over
there is a sign of just how many challenges there still are in this industry. And Ahmed Khar(ph) by a security company there, there are still
people out there who have to use cash, who can't get bank accounts.
So we have this limbo as I said, you know, still a lot of opportunity, a lot of money pouring in, but to major challenges while it remains federally
illegal.
ASHER: Yes, and that is such a big issue, the discrepancy between federal and state laws. But great job Clare Sebastian on the floor of that Expo
there, appreciate you joining us. OK, and that my friends is QUEST MEANS BUSINESS, I'm Zain Asher in New York, the news continues right here on Cnn,
don't go away.
END
