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Quest Means Business
China Is Calling It The Biggest Trade War In History And It Is Now Underway; The First Semifinal Of The 2018 World Cup Is Now Set; London Streets Are A Lot More Colorful Today Than Usual As The City Prepares For Tomorrow's Pride Parade; State Funeral Held in Thailand for Diver Killed in Rescue Effort; U.S. Secretary of State in North Korea for Nuclear Talks; Trump to Skip London During U.K. Trip; U.K. Cabinet Accepts May's Brexit Plan; Thirty Five-Year-Old Running for President of Nigeria; Hawaii to Ban Some Sunscreens to Protect Coral Reef. Aired 4-5p ET
Aired July 06, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CORRESPONDENT, CNN: And that is the US Army closing out Independence Week here, a pretty good day for the Dow, trade war - what
trade war? We are up triple digits to end that week. It's Friday, July the 6th. Tonight, the biggest trade war in history is here, US-China
tariffs are finally in effect.
Some breaking news on Brexit, Theresa May finally makes the deal with her own Cabinet and bedlam in Brussels, Belgium beats Brazil at the World Cup,
stunning everyone there. I'm Paula Newton and this is "Quest Means Business."
China is calling it the biggest trade war in history and it is now underway. The opening shot from the United States quickly matched by the
Chinese government. Some 1,300 goods are more expensive when traded across borders than they were just yesterday. Now, they include Chinese machinery
and auto parts and American SUVs and food. Now, China has warned, the war will not end here.
(START VIDEO CLIP)
LU KANG, SPOKESMAN, CHINESE FOREIGN MINISTRY: (Through an interpreter). The Chinese government has always opposed unilateralism and trade and
investment protectionism. Any attempt to unilaterally exert pressure on China will be in vain and no one should have such illusions in this regard.
(END VIDEO CLIP)
NEWTON: Now, here's where the trade war stands, China has responded to Trump administration's tariffs on $34 billion worth of goods with an equal
amount of its own. Now, the US is due to impose duties on another $16 billion worth of goods in two weeks' time. China has promised to respond
in kind, bringing the value of trade affected on each side, each side to $50 billion.
Now, economists say if it stops there, okay, economic damage may in fact be limited, but President Trump says he will respond to the retaliation with a
massive escalation of tariffs on up to, wait for it, $500 billion worth of Chinese goods. It'll be interesting to see what he does with that threat,
China won't be able to match that of course, they'd only imported $170 billion worth of American goods last year, but it's unlikely to go
unanswered. Joining me now, Carla Hills served as the United States trade representative under President H.W. Bush and I thank you for joining us.
Many people will say that, "Look, the complaints about China are valid and very material," considering the health of the US economy, why not do this
here and now and really open up a trade which might actually settle something.
CARLA HILLS, UNITED STATES TRADE REPRESENTATIVE UNDER PRESIDENT H.W. BUSH: I worry that the trade war won't settle something, and I'd be much more in
favor of trying to have a plan, a strategy for what we can do sitting down with China to work out our differences. It's tragic that we didn't join
hands with our allies - Europe, Canada, Mexico, Japan, South Korea - all of whom have the same complaints as we do, against China and sat at the table
and said, "Okay, you agreed not to discriminate when you joined the WTO - the World Trade Organization, you agreed to give us national treatment.
You're not doing that. Let's have a plan so you can get your economy on the right link so that you are a good member." And I don't think the
tariffs are a way to do it.
NEWTON: Understood, Ambassador Hills, but the issue here is that the Trump administration is betting that any kind of incrementalism, even with the
allies will not work, and they think that this kind of maximum pressure tactic will - can they win a trade war?
HILLS: I don't think either side wins in a trade war. We're going to take a hit to our investors, our companies. In your earlier segment, you showed
the number of tariffs that will be applied to products coming into the United States from China, 60% of those are intermediate products that make
our products that we produce more competitive globally, so that we will be less competitive in the world at large.
This isn't a win-win. What we need to do is sit down and find a plan that will show how we can get China to abide by the rules that we think they
agreed to.
NEWTON: And I want to talk to you about that because I think the problem here seems to be when you speak to analysts or even some of the negotiators
at the table, they do not see where that compromise exists right now. In your distinguished career as a trade representative, where do you think
that exists in terms of where do you go forward from here?
[16:05:04]
HILLS: China has to change its economic policy from strict investment and exports, more to a service economy. It knows that. It's been trying
gradually to do this since Deng Xiaoping in the late '70s, and it's leveled off, but China is worried about laying off workers for cement, steel, iron
- you name it - and so, the question is, how do they go about it? And we could sit and talk to them about it. I really think that being at the
negotiating table trying to understand what their difficulties are and having them understand what the pitfalls are if they don't move forward.
If the rest of the world were to stand up and confront China, we would be much more powerful, the United States doing it unilaterally, and they're
making it worse. We have brought or steel and aluminum tariffs against our closest allies, which under - claiming national security.
We really are worried that Canada is going to invade us? Our largest importer from - of steel? I don't think so.
NEWTON: But if you allow me for a minute, the Trump administration will say to you, "Your negotiation in decades of negotiation, your nothing has
worked." This might be for dramatic effect and it might be a very good negotiating tactic.
HILLS: The negotiations that we have with China actually did work. They lifted about 400 million people out of poverty and China is today, our
third largest trading partner behind Canada who is number one and Mexico, the number two. So, that we have millions of jobs connected with our trade
with China. I think we want to keep the good news and get rid of the discrimination and the failure to give us national treatment.
NEWTON: And you make such a good point and the fact that if we look at decades of trade here and especially the way it has gone to the WTO, it is
true livelihoods - it's been to the betterment of livelihoods around the world, and yet, we are at this tipping point right now, where we could be
on the edge of a trade war. What do you think at the end of the day that it is going to take in order to get beyond here, because the escalation
that we just set out here at the top of our show, I mean, half a trillion dollars?
And everybody knows that they will take the President literally that there is no - it is not a bluff on his part. He can and will do it.
HILLS: I'm worried. I'm very worried that the path that they've chosen will not produce the outcome that we all want, and I think they just have
to sit down and get a strategy, understand well what are the problems that China feels that it is confronting. What do we want them to do and again,
I would join hands with my allies. It's shocking to me that China has joined with our allies to bring a case against us for claiming national
security interest in restricting the entry of steel and aluminum. I mean, we built the World Trade Organization and we won 90% of the cases that
we've brought. Why are we taking this?
NEWTON: It is such a good point, and China did do that and in fact, joining hands with what were traditional US allies, but I want to ask you
something, when it comes to WTO reform, again, doesn't the Trump administration have a point in that they really think that they're going to
get any kind of reform unless they take these drastic measures?
HILLS: Well, if you talk about reform at the World Trade Organization, I would use the word "modernize." We launched the World Trade Organization
in 1994 and so much has changed in terms of our economy. We didn't have digital flows. We didn't have services that we have now. What we need to
do is upgrade, modernize the World Trade Organization and we also need to help maintain the dispute settlement mechanism. That's what's helped us
keep for the last 40 years peace and tranquility in the trade regime. People have abided by the rules.
We talk about rule of law, the World Trade Organization has rules of trade which are the law of trade and we want to keep those.
NEWTON: Yes, and I guess the problem is that some people just - do not see that that is a balance worth keeping at this point in time that the WTO as
a referee has not worked. Ambassador Hills, thank you so much for all your time today. We will continue to cover this issue that continues to
escalate seems every day. Appreciate it.
HILLS: A pleasure to be with you.
NEWTON: Okay, now something that's distracted all of us at the office today, the first semifinal of the 2018 World Cup is now set after going up
two nil in the first half, Belgium held off a second half onslaught of Neymar and Brazil, oh gosh, it was so tense in those last few minutes, but
the Red Devils advance after a 2-1 victory. Yes, it is - must be right now, bedlam in Brussels. These were the scenes right there.
[16:10:13]
NEWTON: Belgium will now take on France - what a game - who made quick work of Uruguay in the game earlier today. Don Riddell is here, I mean, I
could barely get any work done today. Honestly, I kept looking up. I mean, with Brazil out, I can't even compute. I was aghast.
DON RIDDELL, HOST, WORLD SPORT: Hey, it's been a tournament where the big teams have gone out and anybody who underestimated Belgium should have
known that something like this might happen because the Belgian team for many years has been an exciting team, Premier League fans were recognized;
almost all of the players, some of the biggest names in the Premier League play in the Belgian side, and they went into this game against the five-
time World Champions as the leading scorers in this tournament.
And let me show you the highlights because Belgium got a really good start in this game. It was end to end. It was wildly berthed, so that goal
there from Fernandino set the Belgians on their way and whilst Brazil still had chances, look at this from Kevin De Bruyne, that is an absolutely
superb strike. It really stunned the Brazilian team and as Paula, you were saying there, the Brazilians did make a good go of it in the second half,
they had plenty of chances. They will not want to see Thibaut Courtois, the Belgian goalkeeper again for some time because he kept Belgium in it,
and that is it. As you say, a really, really compelling semifinal coming up now between Belgium and France.
NEWTON: And can we then go back - I was like looking at that, thinking "What highlight did I miss?"
RIDDELL: There you go. There you go. So nowhere, only European teams left. It's giving me an all European final, whatever happens, but this -
let's show you how France got to this point. This was also a really intriguing game. Uruguay unfortunately, missing one of their top strikers,
Edison Cavani and - but he was a French with their very depth when he had taken a hit from Raphael Varane who got the French team ahead in that game.
Tell you what, just a couple of minutes later, Uruguay could have had an equalizer, look at this save from Hugo Lloris, one of the best saves of the
tournament to keep the play (inaudible). And it's - yes, really well done, Martin Caceres denied there with a header, but this was the moment that
really put this game to bed, Antoine Griezmann with a shot. He had moved in the air. It completely flummoxed the Euro guy goalkeeper, a lot of
sympathy for him.
But look at the score of Griezmann in there in the middle. He is not celebrating either. He actually identifies with the Uruguayan team even
though he is a Frenchman because many of his friends at Atletico Madrid are from Uruguay. And some of them were on the other team there. In fact, one
of them is the godfather to his daughter, so mixed emotions for Griezmann, but he has had a great turnout with three goals now and the French going on
echoes of 1998. Of course when they won the World Cup tournament that they were hosting. They're looking good this year.
NEWTON: Talk about crossed loyalties there. I mean, thank you. I thought it was tense for me, but Don, we'll continue to watch very closely. Thanks
so much. Now, English football fans are expected to down an extra eight million pints of beer as they cheer on their team on Saturday in the worst
possible economic boost to Britain, if the World Cup comes home.
[16:15:00]
NEWTON: Hey, if you looked at US markets on Friday, you wouldn't have even known there was a trade war on. We have been saying this for several weeks
and the Dow again ever resilient. Look at that, the Dow closed up nearly 100 points. Investors focused on a strong US jobs report. The US economy
added 213,000 jobs in June, now we have to say that the unemployment rate did tick up slightly, but that's because more Americans entered the labor
market, which is of course, a good thing.
Now, stock markets are shrugging off as we said, all of those trade war fears, consumers though - that's right, you and I - will feel the pinch.
The speaker company Sonos based on California is filing for an IPO, on Friday, it warned tariffs could force it to raise prices. Sonos says that
could cause - drive consumers - it could cause consumers to drive away and harm its company's reputation. You know, they're only one of quite a few
companies with problems.
This is really crucial. Ford says it will absorb the cost of the tariffs, but for now, it says it has no plans to raise prices on US-made cars in
China. BMW meantime will pass on at least some of the tariff. Last year, China imported nearly 100,000 SUVs from BMW's factory in South Carolina.
Now, Grover Norquist says tariffs are attacks and a dangerous tool to use. He's the President of the Americans for Tax Reform, and he joins me now.
You of course, have been cheering for months on tax reform, and the fact that the tax cut is there, do you fear now that any kind of savings from
that will be completely eaten up by this trade war?
GROVER NORQUIST, PRESIDENT OF THE AMERICANS FOR TAX REFORM: It completely - no, I mean, the lower rates are permanent, the kerfuffle here on the
tariffs is temporary. Now, temporary can still be too long. It is something if we get through in the next month or two, and we get settled
back and have a better discussion of what our tariffs ought to look like and how we can have - the President is quite right in saying, "We need to
get to more open trade."
The tool of threatening tariffs worries me because the Chinese response, the European Union response doesn't necessarily have to drive you in that
direction. The advantage the President has is with the lower rates, with the stronger growth, with more people coming to the work force and more
people working, we're in a pretty strong position to absorb some temporary pain, but it's not free and we don't know how temporary.
NEWTON: And not only isn't that pretty, but it is angering some of Trump's own supporters, especially if you look to American farmers, and yet, what
would American farmers say - one thing that you hear and you've heard it even from the President is like, "Let's just abolish all tariffs." Do you
think that's a serious discussion moving forward and what would you think of that?
NORQUIST: Well, I think we should move towards abolishing all tariffs and just have open trade. We can compete with the rest of the world with - if
we had no tariffs on the way in and there are no tariffs on the way out, you do have to police non-tariff barriers, the Japanese say they don't like
the look of our rice or something, there are some things that aren't tariffs, but still ...
NEWTON: Well, there's a million excuses, Mr. Norquist, and as you've seen, it's pretty ridiculous on how to categorize all of that. As you said,
everyone plays games including the United States.
NORQUIST: Yes, yes, and we are not without fault on this. We've done it. Other people have done it. I think if we go to zero, zero that we are some
of the big gainers, a lot of the problems that we have on international trade are self induced. We were at a 35% corporate rate for decades,
communist China was at 25%, right? We're at 35%, the socialists are at 25%, Germany was at 25%, they could out compete us because we took 35% of
anything you earned, and they only took a quarter. That's not a bad head start if you are a firm in Germany or China.
Our tort law is a mess. We need to have tort reform. And our regulatory barriers are kind of cluttered up, and there are ways to do some of the
same things we want to do on safety and environment that don't cost quite so much. So, we have our own house to clean up, the President has been
moving in the right direction on deregulation and on taxes.
NEWTON: Just to interrupt you there for a minute though, but are you really - are you going to stand by him when you are a conservative in
America with your ear to the ground? Are you going to stand by him and this trade war if it really costs - takes on some collateral damage in
places where conservatives have a lot of support?
[16:20:14]
NORQUIST: But, I think the President understands that, certainly in farm country which is very free trade, it's very important there. My sense is
that this begins to get wrapped up sooner rather than later. The Republicans in Congress have talked to the President about both the upsides
and the downsides of the trade conflict. I expect that we will begin to wrap up what's happening with NAFTA and with China, with Europe. We may do
Europe first. I mean, if China is left by itself, it may be easier to do that negotiation.
I guess, if I was in charge, I wouldn't have picked the three-front war to have a trade war. I'd pick one at a time, but I am not the President and
he has decided to try and rethink how we're doing.
NEWTON: Okay, but Mr. Norquist, what is the damage that can be done. Economically but also politically?
NORQUIST: Sure, well, of course, because the Chinese and the Europeans target their tariffs that they have put up in response to our tariffs on
steel and aluminum, and they do it to target political pain. That's not what we did to China. We are trying to solve a particular problem on over
capacity and how they sell through third countries. But the Chinese response is not based on some sort of sense that we're doing something
wrong. But to have the most pain involved.
The Chinese don't have elections. They don't have an election in November. The American government has an election in November.
NEWTON: But you are kind of stating the obvious. I guess, what I am trying to ask you is what is the patience for conservatives for this? The
Republicans at one time always stool proudly and staunchly for free trade, that's not what we have here. So, how much patience do you and other
conservatives in America have for this trade war?
NORQUIST: Oh, I'm completely for free trade and the Republicans in the House and Senate are and people like Larry Kudlow ...
NEWTON: They're not sounding like it. They're certainly not coming up against the President on it.
NORQUIST: Well, what you are doing is - I mean, the President has made it clear from the beginning, his goal is to get to lower tariffs and lower
barriers for our goods and services. The weapon he's used and to get people's attention, the punch in the nose are tariffs. I don't know that
that's the best tool that you use, but it is the one that he chose. His stated goal is exactly what the Republicans in the House and Senate want,
which is to get to lower tariffs.
The danger of course is, the Chinese and the Europeans don't necessarily have to go along with that. We've got a potentially radical new government
in Mexico, which may decide to go in any direction, who knows what direction they may want to go and there are real risks involved in getting
into a trade conflict. If this gets settled again in the next month or two, I think we'll see the stock market shoot up because there is some
concern. That said, the fundamentals from tax reform and deregulation are so strong that the President has a lot more leverage and political support
than you'd otherwise have.
If you did this at the beginning of the administration, before the stock market moved up, before you had higher growth, it'll be different - I don't
know if they ...
NEWTON: And that is certainly what the Trump administration is betting on. Mr. Norquist, we will continue to watch very closely. Thank you for your
time.
NORQUIST: We'll see.
NEWTON: Bye. We want to turn now to Europe. Stocks finished Friday's sessions with those modest gains. Shares of Europe's largest auto makers
fell though of course. They rallied earlier in the week on hopes of a tariff bargain between the United States and Europe. Now, London streets
are a lot more colorful today than usual as the city prepares for tomorrow's Pride Parade. More and more major companies like Costa, H&M and
Coutts Bank are displaying their support for the LGBT community.
Paul Donovan, the Chief Economist at UBS believes companies and countries that continue to discriminate are costing themselves money. He joins me
now. I want to talk to you about this because some of this does go against conventional wisdom, right? Politicians are always urged to stay out of
the bedroom of voters, and couldn't it be said the same for businesses regardless of where you are? Can you not just remain to use the term
agnostic on this issue? You're saying, you can't.
PAUL DONOVAN, CHIEF ECONOMIST, UBS: No, you really can't. I mean, we're in a situation now where roughly 10% of the global population are not
heterosexual and there is clear evidence of that, and we have two-thirds of the United Nations where it's legal to discriminate against somebody who is
LGBTQ - who is not heterosexual.
In fact, in 4% of the United Nations, it is legal to kill people for being non-heterosexual. So, if you are a global company trying to do global
business, you want to put the best people possible into the job in order to maximize your profits, in order to maximize your return. A global company
like UBS can't do that necessarily because there are parts of the United States where we really would struggle to send somebody who wasn't
heterosexual because they would be treated as a second-class citizen and there are parts of the world where we absolutely couldn't send ...
[16:25:15]
DONOVAN: ... someone who wasn't heterosexual even if they're the best person for the job because their life would be in danger.
NEWTON: Extraordinary really when you think of that in terms of inalienable rights to all human beings and yet, we are talking about this
in economic terms. Is there a way forward here where companies can actually lead?
DONOVAN: Well, I think there is a way. I mean, we have to recognize of course that this is about society at large, and there are a number of ways
that companies can lead. I think companies can do more on education and that's something that we at UBS are trying to do and others are trying to
do. I think, particularly, actually the financial sector can lead a lot here. because the financial sector is entirely dependent on the skills of
its people, the talents of its workers that make the financial sector efficient.
And that means that being able to put the right person in the right job is extremely important for us. I think we can lead in terms of lobbying. We
can file Amicus briefs before the Supreme Court as UBS did over same sex marriage, we can lobby politicians to say, "Actually, this isn't right. We
want to be able to move our people around the country and around the world." And we can also, to some extent provide a safe harbor in countries
where people are treated as second class citizens.
We can say, "Well, look, you work for us. You're the same as everybody else," and that helps to get better economic efficiency which is what I as
an economist care about, but it also helps society.
NEWTON: And what about putting that economic pressure on the countries and the governments themselves, can that work in terms of corporate leadership?
DONOVAN: Well, I think we can put pressure on by explaining the consequences of actions, so if you have a society that is prejudiced, a
global company is going to think twice about investing there. It's certainly going to think twice about moving headquarters there and we've
seen that with some of the states in the United States over the last couple of years where companies have very visibly said, "Well, if that's what you
want to do, you go ahead and do that, but we're not going to invest in a country or a state which doesn't enable us to put the best people into the
jobs that we need them to do."
So, there are ways that you can do that and these are ways which are perfectly rational for a company to do. Companies want to maximize
profits, that's what companies are here for, and they're not going to maximize profits if they are saying, "Well, yes, we are going to invest
here, but we can't put the right person in to run the business."
NEWTON: And quickly before I let you go, very quickly, we have that landmark ruling in Hong Kong, same sex partner won the case in order to
have a visa. Did you see that really as a landmark case?
DONOVAN: I think it is - it is part of a global trend that is coming through. We are seeing more and more countries emerge where discrimination
is fading, where equal rights are coming through and I think for somewhere like Hong Kong in Asia, this is a significant step forward.
NEWTON: Yes, absolutely. It certainly was a stunning rule. We thank you for all your time, and I so appreciate you putting a fine point on it in
human terms and what it means to people in that position and how they are discriminated against. Really appreciate it.
DONOVAN: Thank you.
NEWTON: And now, we go to something completely different, the beers are on ice and England's jerseys are laundered as fans prepare for two more
quarterfinals in Russia. Economists though are adding up the impact on World Cup goods.
(COMMERCIAL BREAK)
[16:30:00] PAULA NEWTON, HOST, QUEST MEANS BUSINESS: Hello, I'm Paula Newton, coming up in the next half hour of QUEST MEANS BUSINESS, we will
speak to the start-up entrepreneur who wants to be Nigeria's next president, and Theresa May's ministers were told not to expect a government
car if they dare spoil her Brexit retreat.
You want to listen to this, I'll speak to the MP who offered to give them a ride. First though, these are the top news headlines we're following this
hour. The body of a former Thai Navy SEAL was put on a plane for Bangkok where a royal-sponsored funeral will be held.
Saman Kunan drowned while trying to rescue those 12 boys and their football coach trapped for 2 weeks in flooded cave in northern Thailand. In
Pyongyang, the U.S. Secretary of State is expected to meet North Korean leader Kim Jong-un for nuclear talks.
Mike Pompeo met with a top North Korean official earlier Friday. American intelligence dealt with Kim's stated intentions of dismantling his nuclear
and missile programs.
Donald Trump's visit to the U.K. is now finalized. The U.S. president will visit Theresa May at the Prime Minister's country's estate before heading
to Windsor Castle to meet the queen, he'll also attend a black tie dinner at Buckingham Palace.
The U.S. ambassador to the U.K. denies that Mr. Trump is avoiding London and the large protests are fine. And we want to bring you some breaking
news from the U.K. The British cabinet has now agreed to a new Brexit plan backed by Prime Minister May.
Now, under this proposal, the U.K. will suggest creating a single market with the EU for goods which will have to conform to existing EU rules. But
Britain and the EU could diverge on services and the free movement of people between Britain and the EU would end.
Conservative MP Peter Bone joins me now from London. I am just going to get your reaction right off the bat to that because does this sit well with
you just in terms of the kind of positions that were, you know, pretty much very contentious even around that cabinet table.
PETER BONE, MEMBER OF PARLIAMENT OF THE UNITED KINGDOM: Well, we've only had this statement for half an hour. Of course, one of the important
things is where we would have to do a trade deal with the U.S. The future growth of the world economy is outside the European Union and biggest
single country we trade with is United States.
So we have to make sure that there's nothing there that would hinder such a trade deal. I'm afraid it's too early to know because we have to look into
the small pen, but I want to make sure that we are globally looking and not inward looking towards the EU.
NEWTON: You do seem skeptical, maybe even a little bit surprised, I mean, obviously, this was something that was hashed out, they couldn't have done
it just in the hours at Chequers. What do you think, given Boris Johnson's position and then perhaps what's happened on the other side of the cabinet
table. What do you -- what kind of an accommodation do you think they've come to that the EU will actually agree to?
BONE: Well, that's the point, I don't think the EU will agree to whatsoever. They have a very firm position on free movement and I don't
think they will agree to this. I think what will happen is that we will probably come out of the European Union on global trade rules which is
exactly the way we trade with the United States of America.
So once this was an interesting and an important meeting at Chequers, I don't really think it moves things forward. The interesting thing was
attached in the very last paragraph where it said we are going to step up preparations for a global trade arrangement.
They -- so the government recognizes that there's a significant chance that we will not deal with the EU. I suppose in one way it's a step forward.
NEWTON: A step forward, although, I would say we're right back to step one, because a crash out still seems likely -- and Mr. Bone, I want to know
--
[16:35:00] BONE: No, I'm not letting you get away with crash out. You know --
NEWTON: Go for it --
BONE: Full well --
NEWTON: Go for it --
BONE: That's not the case, we would actually be trading with the European Union and the way we trade with yourself, China and everyone else in the
world, and it's based on well, trade rules and of course, the whole purpose of world trade rules is to increase trade and reduce tariffs.
So I don't think we have anything to fear by doing that. What we probably have to worry about is being tied into the European Union with their rules
which are restrictive and very worrying if we can't do international trade deals.
We're welcoming President Trump here next week and we're looking forward to seeing him, and I expect some of the discussions will be how we improve the
trade between our two great nations.
NEWTON: Yes, well, check with the allies about how that's going with them so far with President Trump. But I do want to move on to one thing that
piqued our interest today, you had said that if there was any kind of dissenting voices around that cabinet table, the government warned them,
your ministers car won't be ready and waiting for you outside of Chequers.
You would pick them up a mile away, they would have to walk a mile, you would pick them up there though and drive them home. I mean, it's funny
and I appreciate it that you made the offer and yet, it underscores really the great break in that cabinet still.
The fact that they themselves are a reflection of Brexit and how contentious it still is in the country.
BONE: Well, certainly a contentious issue, but of course the people decided, the people voted to come out of the European Union and I have my
car keys here ready to go to Chequers if any of the cabinet ministers do decide to resolve, and it looks unlikely as you say.
But you know, as I'm only about an hour away now and I'll be there if they need picking up.
(LAUGHTER)
NEWTON: The cars filled with petrol, is it? Yes, of course.
BONE: I surely, I -- filled with diesel.
(LAUGHTER)
NEWTON: Old diesel, good one. I do want to ask you though, again, the rousing cabinet, we -- I mean, how long do you think Theresa May and Boris
Johnson can continue to exist in this cabinet together?
BONE: Well, I'd like to see more Brexiteers in the government, the position of the government is that all ministers are now supposed to be
Brexiteers.
The Prime Minister so far has set a number of red lines which I thought we support, not paying billions of pounds each and every year to the European
Union, ending the free movement of people, making our own laws in our own country judged by our own judges, having our own independent trade policy
and regaining our territory waters.
Now, if we maintain that all the way through and achieve that, that I think the British people will be happy. If we don't and we betray them, then we
will let the British people down and we will be hammered at the ballot box if we do that.
NEWTON: So before I let you go, the EU has just welcomed this in some measure, Mr. Barmer(ph) has on Twitter. Do you -- I get the sense and
perhaps you correct me if you think I'm wrong that they pretty -- the EU pretty much knew what was going to be presented to the U.K. cabinet before
they sat down and it sounds like they're ready to deal.
BONE: Well, I understand the German chancellor was showing some days ago before British cabinet ministers which is incredible. But I would be
willing to have a 10 p bet review that the European Union will reject this proposal and at the end of the day, I think we will come out on well trade
rules and the sooner we come to that conclusion, I think the better.
NEWTON: You are a more courageous man than I am, but I'm not taking that, but -- because I have no idea where this is going to go.
(LAUGHTER)
Peter Bone, I can't --
BONE: Very wise --
NEWTON: Thank you enough as we've had this breaking news, it's been very good to get your insights, appreciate it.
BONE: Thank you.
NEWTON: Now, after the break, a 35-year-old living in New York is running for president of Nigeria. You heard that right, living in New York. This
is the man, he'll probably have to beat 75-year-old Muhammadu Buhari; the current president.
We'll meet the man who said it's time to (INAUDIBLE).
[16:40:00] (COMMERCIAL BREAK)
NEWTON: So, a 35-year-old tech entrepreneur who lives in the United States says he's challenging Nigerian President Muhammadu Buhari in elections next
year. Chike Ukaegbu is the founder of the Startup52 and that's right here in New York.
Now, he says technology, education and entrepreneurship can be the keys to unlock Nigeria's potential. I want to show you a clip here of his TED talk
a few years ago.
(BEGIN VIDEO CLIP)
CHIKA UKAEGBU, ENTREPRENEUR: What will happen is this, if you know the thing of (INAUDIBLE), give a man his fish, he's getting ready(ph), you can
teach him to fish, you help him for the life time, I've seen that a little bit on my blog, teach him to fish and to sell the fish.
If you handle that, this thing leads for a lifetime.
(END VIDEO CLIP)
NEWTON: All right, our very own Zain Asher spoke to him and asked him why he thinks he is the person to lead Nigeria.
(BEGIN VIDEO CLIP)
UKAEGBU: First, and so I'm 35 and we know two-thirds of the population is actually under 35. So by default, I represent over 60 percent of the
population, that's one too. The current president was the same president the year I was born, 35 years ago.
ZAIN ASHER, CNN: Me too --
UKAEGBU: Oh, look at that. Right, so it's sort of asking or rather driving into AI future with analog systems, right? Not even digital. So
it's important that the future of the nation is driven by someone who understands the needs of the people, the needs of the young people because
20 years from now, we'll be the ones and the workforce still.
ASHER: OK, but that's not enough. You mentioned that there are a huge number of Nigerians that are young, I'm young, I'm Nigerian, should I run
for president too? Obviously, Buhari was also president when I was born as well.
UKAEGBU: Right --
ASHER: Unless there's actually something more --
UKAEGBU: Right --
ASHER: That you're bringing to the table.
UKAEGBU: Sure, there's a whole lot more, right? So like I did say, there are three things -- three colors that I'm running on, that's tech,
education and entrepreneurship. And I'll tell you why? Education is extremely important to teach the young people to identify the problems and
the solutions to the problems we have.
Technology amplifies the revolutionary and advancements we need to solve this problems. And entrepreneurships help system monetize the solutions,
all right, for ourselves and for the world. Now, with all three, Nigeria lags behind.
And these are the three things that I have been focusing on for the past decade, all right? I have worked with untapped and disconnected or you
know, underserved communities and empowering young people through tech, education and entrepreneurship.
In fact, I have a green card from the United States from doing all of this stuff. And a few times I tried going back home to set up institutions
there to solve these things, and there was so many things that stopped me. You know, the corruption, the environment, the stifling business
environment.
And so for us to move our nation forward, I think we will be -- we're short-changing ourselves, asking people who do not understand these three
things to soar leaders into the future.
ASHER: OK, there's obviously one point that I really do agree on with you, and that is just this idea that Nigeria has so much untapped potential --
UKAEGBU: Yes --
ASHER: Every leader that comes to power in Nigeria promises everybody the world. They promised the world, we're going to fix this, we're going to
fix that and still nothing really changes. So how are you so sure that it's going to be you?
You talk about corruption, you know, that's not just new to the president, there are so many elements in Nigeria that we're aware corruption exists.
How is it going to be just you one that's going to reform all of it?
UKAEGBU: All right, so I'll say this, I usually tell people corruption is actually not our main problem, corruption is everywhere --
ASHER: It's one --
UKAEGBU: Yes --
ASHER: Yes, it's one of our problems --
UKAEGBU: Right, now it's -- for us to solve the problem, we have to understand it. So when a policeman stands on the street and collects 10
naira, 20 naira from cars passing by, it's not because he wants to do that, it's because he has mouths at home to feed --
ASHER: Of course, of course --
UKAEGBU: Zain, it would teach us, the same thing with healthcare professionals.
[16:45:00] So if we start by making sure that we can build -- we can gain back the trust of our people in the nation as some of these negative
outcomes like the corruption, we're able to start curbing that, we're not doing that.
Because most of the people who have ran the country do not understand the problem. You've been out for too long, you don't understand --
ASHER: Exactly, that was my question, you've been out for 16 years, it's a huge amount of -- a lot has changed in Nigeria since then.
UKAEGBU: That does not mean I'm not in touch with what's going on. So my ability actually being out here has given me a different perspective to be
able to look at the condition back home and understand that the quality of life is extremely important because I've been able to live both of them.
ASHER: OK --
UKAEGBU: So when I go back, I'm not going back to solve the problems, no, it's engaging the people to sit down and say, OK, here are the solutions
you're coming up with, here are some of the solutions that we can apply to your solutions to come up with enriched or better solutions for our people.
ASHER: OK --
UKAEGBU: So it's having a different perspective, this all then enriches what we come up with at home.
ASHER: OK, I like to be a very positive person --
UKAEGBU: Sure --
ASHER: And typically in politics, you have opponents just you know, ripping(ph) intelligent friends(ph), tell me three things that Buhari has
done right.
UKAEGBU: Done right?
ASHER: Done right, yes.
UKAEGBU: I have to think really long and hard.
ASHER: Come on, three things that Buhari has done right.
UKAEGBU: The fact that I can't even tell you I think is a problem. I don't know how many Nigerians that can tell you that.
ASHER: Do you think that -- I mean, obviously, he was president when we were born --
UKAEGBU: Yes --
ASHER: He was a disciplinarian, right? Growing up, he was a very strict sort of disciplinarian. Isn't that something that he brings to the table
in terms of leading Nigeria?
UKAEGBU: How far has it gotten us?
ASHER: OK, so you clearly, you have nothing nice to say about Buhari at all?
UKAEGBU: I have nothing negative to say as well. The only --
ASHER: OK --
UKAEGBU: Thing I'm saying is Buhari is older than the nation, Nigeria is only 58, right? Buhari is close to 80, right? And he doesn't -- and I
respect my elders, I respect him --
ASHER: OK --
UKAEGBU: As an elder, but Buhari does not have what it takes to lead Nigerians into the fourth industrial revolution, that's what I'm saying.
ASHER: OK --
UKAEGBU: And not just him, but our current crop of leaders.
ASHER: You know, a lot of people look at you and just say, you know, this is great, obviously, he's well educated, he's got a lot of accolades, he's
well traveled and he's idealistic, but you know, he's just a kid, he's only in his 30s, what can he really bring to the table?
Given that perception of you already, what is going to be your campaign strategy?
UKAEGBU: So we -- I mean, I can't talk about technology, education and entrepreneurship and try to do politics like Nigerian politicians, right?
So our strategy is technology-focus, it's very heavy on technology. And coming up with brilliant novel strategies for the lack of a better word, in
making sure we get our message across.
There's a high penetration, a mobile penetration in Nigeria about 140 to 160 million people are connected online. So this election, actually, my
opinion would be on social media, right? But it's also important to understand that you have to reach the grassroots people.
So I have a team back home right now, we're making sure that our capacity to reach everyone that we need to talk to and is on point. At least, the
18 to 35-year-olds. The older ones can join us as well if they want to, but our focus right now is 18-35-year-olds and making sure they engage,
they understand the importance of this election and their future and how it's going to affect their futures and hey, let's make history together.
(END VIDEO CLIP)
NEWTON: We will see if he does, now if you want to stay on top of the day's business headlines in just 90 seconds and try our daily briefing
podcast, it's updated twice a day before the opening bell on Wall Street, and after the close, you can just ask Alexa -- you won't catch me doing
that though or your Google home device for your CnnMoney flash briefing every weekday.
Now everyone is free to wear a sunscreen unless though you are in Hawaii in the next few years. The states banning some sunscreens to try and protect
the environment. One group is extremely upset and I will speak to them next.
[16:50:00] (COMMERCIAL BREAK)
NEWTON: Now, this week, Hawaii became the first state to ban some sunscreens. Now, a study found some sunscreens contain ingredients that
can damage coral reefs. Now, Hawaii will ban them starting in 2021. The Consumer Healthcare Products Association which represents some big
sunscreen brands is very upset about this.
It says it moves -- its moves ignores the real causes of coral decline and puts people at higher risk of getting skin cancer. Scott Melville is their
CEO. And Scott, I will ask you, some extraordinary debate because you're literally pinning the environmentalist against the public health policy
advocates.
What -- these are people who really assume that the environment will be harmed with that. The point that you make is that, what? The environment
isn't harmed by sunscreens or that really is a mitigating factor when you consider how many people may not wear sunscreen now and obviously increase
their cancer risk.
SCOTT MELVILLE, PRESIDENT, CONSUMER HEALTHCARE PRODUCTS ASSOCIATION: Well, Paula, I appreciate the opportunity to provide a different perspective to
this debate. This has been positioned largely as an environmental issue.
And I think we can all agree that the future of the coral reef is something that we all want to support and get behind. They're under a lot of stress,
not just in Hawaii, but globally. Unfortunately, I think what's been lost in this debate is the public health implications of this decision.
The scientific evidence is overwhelming that exposure to sunlight can cause premature age and can cause cancer. Skin cancer is the number one form of
cancer in the United States, and it's -- we sure as a nation should be doing everything possible to encourage consumers, citizens to be taking
precautions.
Like using broad spectrum sunscreens, UB resistant clothing, getting out of the sun, those are the things we should be doing. And instead, Hawaii has
taken a different approach and with good intentions has been the two most popular ingredients of sunscreen, dextro oxybenzone and octo oxybenzone.
And the problem is that those products will no longer be able to be used, starting in 2021 in Hawaii.
NEWTON: OK, but I want to stop -- I want to stop you here just so people understand why do these two ingredients, these -- what people consider to
be toxins have to be in the sunscreen. Why can't you change the formula?
MELVILLE: So the FDA approves sunscreen ingredients, there are 16 available. These are the two most popular sunscreen ingredients. They're
using over 70 percent of sunscreens, so they're very popular.
We've learned long ago that the most effective sunscreen --
NEWTON: OK, but popular -- I'm sorry, I'm sorry to interrupt again, but popular to me says corporate interest. Meaning they use it, why not just
substitute those ingredients. There are sunscreens that you can use that do not have those two ingredients in them.
MELVILLE: We absolutely can do that. And there are options for consumers, but the use of the sunscreen is a very personal decision. Consumers have
preferences and the worst sunscreen you can have is one that is not used.
And so it's important to have options for consumers and the state of Hawaii is taking two options away from their consumers.
NEWTON: Yes, and again, I just don't see why the formula isn't changed. And they're giving you a lot of time, right? I mean, 2021, there's time
there to change the formula.
MELVILLE: Well, there're a reason they're the most popular sunscreen ingredients because consumers do prefer these or at least a large number of
them do. So there's time to suddenly change, but look, this law is unenforceable.
First of all, it bans the sale in Hawaii that it doesn't ban tourists from coming to Hawaii, bringing the sunscreens from other parts of the world or
other states. So it's really unenforceable. And the scientific basis they're pinning this ban is very weak.
[16:55:00] One study in a laboratory in Virginia is the basis for moving forward with this new law.
NEWTON: OK, I'm going to have to move on from there to debate, we will continue to follow, appreciate your time today.
MELVILLE: Thank you.
NEWTON: Now, that's almost it for QUEST MEANS BUSINESS, I am Paula Newton in England, I hope Richard has packed up sunscreen, you know that he does,
still have a profitable moment from the Long Island after the break.
(COMMERCIAL BREAK)
RICHARD QUEST, CNN: Tonight's profitable moment, containment or escalation? The two options now open to the United States and the other
trading partners as the first shot in the trade war are fired. It would be relatively easy to contain this at just the level so far.
And if that happens, then the economic damage is relatively limited. But President Trump has already said both in the case of China and in the U.S.
and Europe, he will go for more tariffs. For example, with the EU, he's going to go for automobiles, and the EU has already said you do that and we
will go under 250-plus billion more.
You can see how this is going to get out of hand quite quickly. If you can see how difficult it is to now start to roll back without losing face. But
we are on the precipice of a major trade war and that will have long-term economic implications.
So it does move both sides to sort of step back, take a breath and maybe come to a more reason-negotiated decision. But at the moment, it seems the
president of the United States is hell bent on trade war. Make no bones about it, getting out of this will be extremely tricky for both sides
especially if one side is hell-bent on winning at any cost.
And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest, whatever you're up to in the hours ahead, I hope it's profitable.
END
