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Quest Means Business
Donald Trump Says The Strongest Economy In History Now Needs Emergency Stimulus; British Prime Minister Has Written To The European Union To Request Another Delay; France Pushes Back as U.K. Requests Brexit Delay; WikiLeaks Says its Founder's Discharge from Ecuador Embassy is Imminent; Ethiopian Airlines: Undecided on Canceling 737 Max Order; More Companies Boycott Brunei Hotels Over Anti-Gay Laws; Mick Jagger Recovering After Heart Valve Replacement; Brazilian Football Legend Pele Responds to Treatment in Paris Hospital; Trump Visits U.S.-Mexico Border Amid Tariff Threats; World Bank Approves David Malpass as President; A New Zealand Family Discovers a Hidden Camera at an Irish Airbnb; Wall Street Lifted By U.S. Jobs Report. Aired 3-4p ET
Aired April 05, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, INTERNATIONAL CORRESPONDENT, CNN: The Dow is just about hanging on to its gains as we head into the final hour of trade. This is what was
moving the market on Friday, the fifth of April.
A QE come back: Donald Trump says the strongest economy in history now needs emergency stimulus. Lucky number seven, U.S. job numbers are sending
stocks on to another winning streak; and the never ending story. Theresa May wants a new Brexit deal, France just isn't so sure.
I am Isa Soares in for Richard Quest, and I too, mean business.
A very good evening tonight. Party like it's 2009, Donald Trump calls on the fair to go back to the financial crisis emergency measures even as new
signs point to U.S. economy in tip top health, Mr. Trump is still not satisfied. Well, stocks are closing in on record highs.
The Dow is up for the fourth time in fact this week and the S&P 500 is on track for its longest winning streak in over a year. So you can see the
Dow doing pretty well off, pretty far at the moment, but had a very good day today.
Meanwhile, the job market just keeps chugging along. U.S. employers added 196,000 jobs in March, unemployment sits at 3.8 percent. Despite all of
that, Mr. Trump is calling for the Fed to go to do something it hasn't done in years. He wants to restart quantitative easing. Take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I personally think the Fed to drop rates. I think they really slowed us down. There's no inflation.
I would say in terms of quantitative tightening, it should actually now be quantitative easing. Very little if any inflation and I think they should
drop rates and they should get rid of quantitative tightening. You would see a rocket ship.
(END VIDEO CLIP)
SOARES: Adding stimulus to a hot economy goes against really conventional wisdom. If rates are low, when the economy is strong, it leaves the Fed
with really few weapons when a crisis strikes. QE if you remember was launched at the height of the financial crisis. We covered it in depth
here on "Quest Means Business." The Fed spent trillions buying assets to prop up the stock market.
Since times are better, the Fed had been slowly selling off. Now Trump is trying to put his own stamp on the Fed. He has nominated Herman Cain to
the Board, as well Cain, as you know is a former Republican candidate for President who made his fortune really running a pizza chain and then
Stephen Moore, he's been a Trump adviser and was a CNN economic analyst, a well-known face here on the show.
Now JPMorgan CEO, Jamie Dimon says he's not sure in fact that these two men are the right picks. Take a listen.
(BEGIN VIDEO CLIP)
JAMIE DIMON, CEO, JPMORGAN CHASE: I know them from seeing them on TV, you know, so I've never sat down and had a long conversation. And now they
don't seem like the right people to put on the Fed.
Look, they should put professional people there. Those, I think their jobs will have to go through confirmation. Let the senators do their homework.
(END VIDEO CLIP)
SOARES: Well, more has called for the resignation of Fed Chair, Jay Powell who Trump picked for the job last year, if you remember, and he and Cain
are both known for advocating a return to the gold standard.
So plenty of us to chew this evening, Diane Swonk, the chief economist at Grant Thornton is in Chicago for us; and Ken Rogoff is at Harvard. He's an
economics professor, and is a former chief economist for the IMF. Two faces you know very well here on this show. Very good evening to you both.
Diane, if I can start with you, those comments that we heard from President Trump that we just played out really raising some eyebrows, because of
course, like we said, quantitative easing, use the moments when the economy needs a bit of a jumpstart. So how do you read his comments? How
dangerous is this?
DIANE SWONK, CHIEF ECONOMIST, GRANT THORNTON: I think the real danger is it's now becoming okay for an administration to overtly look like they're
intervening on monetary policy. There's many traders out there that are smart traders that are actually believe the Fed capitulated because of the
President's comments, when actually they were reacting to the policies that were wreaking havoc like tariff man, the scares of a trade war with China
in December, which forced them to back to the sidelines along with weaker global growth. They're responding to the environment, which was in part
created by the administration. So it's kind of ironic that now the administration wants their help.
On the other side of it, I think it's really important with these two nominees is you're bringing in political ideologues to an institution where
they check their politics at the door. It's not unprecedented to have someone who's more political at the table, but to have this level is and it
will further confuse and undermine the credibility of an institution ...
[15:05:05]
SWONK: ... even as they continue to behave in the same way they have, the perception becomes reality, and that's what I worry about is eroding that
perception of independence by the Federal Reserve.
SOARES: And Ken, we'll talk about a bit these nominees in just a second, but I want to get back to what President Trump said. He basically is
saying that the economy would take off like a rocket ship, I think were his words, it Fed cut rates. Is there a case to be made for cuts?
KEN ROGOFF, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: No, I mean, the economy is doing extremely well, at the moment. I mean, he might want it
to be hyperventilating. But I think the Fed has actually gone to a neutral position, a slightly soft position. I think it's in the right place. It
would be very erratic.
I think the Fed is going to ignore his comments. But Diane is right. It undermines credibility. I think the Fed changed its policies after getting
it wrong in December because of what happened and what was going on abroad, how the markets were reacting.
But there are a lot of people who insist it was because of President Trump, that's not good in the long run for credibility. It hasn't hurt now, but
it could hurt a lot ending up in much higher inflation expectations if it keeps going down this road.
SOARES: And Diane, I mean, you touched on that in your first answer. But how worried should we be at the potential - the potential politicization of
the Fed, of monetary policy?
SWONK: I think we should be very worried. This is something -- first of all, if it's okay, for one administration to be this blatant, in terms of
what they think the Fed should do, we've got, you know, a left wing of the Democratic Party talking about a lot of different ideas on what the Fed
should be doing as well, that makes it okay for any administration to interfere.
There's a long history that is littered with, you know, banks - central banks that are controlled by the government and the whims of politicians
ruining the economy. So you know, Ken knows that better than I do, he studied it well. This a something we don't -- a road we don't want to go
down. But we are already down it.
The other risk is that if these two nominees do get to the Fed Board, and we have the next President is this President, he could actually nominate
them to replace Powell down the road, which would be the complete and utter political corruption of the Fed.
SOARES: And can one of those two nominees, they are political loyalists, as we've been saying, as Diane was saying just now, but putting that aside,
do you think that they're the right men for the job?
ROGOFF: Well, I think Central Banks around the world ...
SWONK: I mean, no --
ROGOFF: ... have done very well, by nominating professionals, by nominating, you know, people who are experts in monetary policy. But you
know, that said the founding of the Federal Reserve was there was supposed to be a diverse group of people. So I think the problem is much more on
being ideologues.
Going back to the gold standard is just a disaster. I kind of hope that if they join the board, they'll be socialized and end up being constructive.
But of course, until now, Trump has actually made pretty good appointments to the Federal Reserve. Let's bear that in mind.
That surprised me. I thought this would happen sooner. I didn't think it would take this long. But yes, it's an erosion of the Federal Reserve
having such political appointments, but it's not unprecedented.
SOARES: Diane, you want -- let me put the same question to you. Do you believe these two individuals are the right people for the job?
SWONK: No, and you know, I think the wrong answer, and I think Ken really alluded to this, the wrong answer is that no, they don't have PhDs, and
they're not, you know, PhD economists. There's a lot of people in the Fed that are not. Jay Powell is not and they add something very valuable to
the table, whether it be through regulation, through other issues, that they bring, other expertise they bring to the table.
But these are people, who, it's easy for them to be armchair Fed critics. They've never even been involved in advising the Fed. They don't know how
the Fed works. And I agree with Ken, there is some socialization. It's a lot easier to be an armchair Fed critic than it is to sit in the seat of
that of a Fed governor.
SOARES: And really my question -- this question to either of you, for an international audience, we've seen the Fed come under pressure from
previous administrations, but what we've seen is public campaign from this administration has been pretty relentless. How unprecedented is this?
ROGOFF: Oh, goodness, I mean, it's not unprecedented. Nixon put the squeeze on his Fed Chairman, and that led to the inflation of the 1970s.
This has happened a lot, but we've gotten away from it in recent years. And I want to underscore what Diane said, it's not just about Trump.
If the left wing of the Democratic Party comes in, they have even more experimental ideas. There could be even more pressure. Trump would have
broken the barrier, and they'll jump right through it.
SOARES: Diane?
SWONK: I agree. I mean, as Ken points out, Nixon. There's been many cases where Presidents, in fact, I don't know many Presidents that behind
scenes once the Fed started tightening, didn't get angry with the Fed.
[15:10:05]
SWONK: That said, this public sort of aspect of it is the new aspect of it is the new aspect of it. Actually, it was fairly effective what Nixon did
and as Ken pointed out, it ended up in fairly disastrous outcomes. And so that should be the cautionary tale is when, you know, it's in the tapes -
Watergate tapes that you know, Nixon actually had Alan Greenspan deliver the message to Arthur Burns and say, "You've got to ease to ensure my
reelection," and that helped seed the stagflation, among other things of the 1970s.
SOARES: Diane Swonk, Ken Rogoff, thank you to both. Thank you for taking the time to speak to us here on "Quest Means Business" this Friday.
ROGOFF: Thank you.
SWONK: Thank you.
SOARES: Now U.S. jobs report ease Wall Street's phase of an economic slowdown. The three major indices all higher. If we look at the Dow, it
is up about a hundred points at one stage led by Walgreens and Pfizer, as you can see. It's dropped back, but it's still modestly higher.
The S&P is on its seventh straight day of gains. Its longest winning streak in fact since October 2017. Friday's intraday high was its best
since October of last year, just shy, in fact of a record.
Paul La Monica is in New York and, Paul, before we about the markets and I want to get your take on what we heard from President Trump saying the
economy could have grown faster if the Fed hadn't put the brakes on the economy last year, of course, at a time when many economists worried the
economy was at the risk of overheating. Does the data then today suggest perhaps the threat may have gone too far?
PAUL LA MONICA, REPORTER, CNN BUSINESS: I don't know if the Fed went too far for the economy, per se, but he clearly went too far for the markets
and the markets had a bit of a hissy fit, which is what they do best whenever the Fed is tightening and that's been something that's happened
historically.
I think what is a little bit curious that President Trump is now amping up his criticism of the Fed is look at these jobs numbers today. There's
little to complain about. You add stronger than expected jobs growth, the unemployment rate is still very low, wage gains even though they came down
a little bit are still, you know, pretty robust and ahead of inflation.
This is a Fed that probably should be applauded instead of criticized if you ask me, which you did.
SOARES: Let's look in that case at the S&P. You talked about today's data, pretty solid. S&P really enjoying a winning streak. What is behind
that?
LA MONICA: Yes, I think that right now, there is this growing expectation that the U.S. economy is still in relatively good shape even if it cools
off a little bit, a lot of people like to point out that acronym of TINA - There Is No Alternative. The U.S. still looks better than China for
example, it looks better than Germany, Italy and the rest of the E.U.
So when you look at emerging and emerged markets, the U.S. kind of stands out as one where there's steady economic growth and still pretty solid
profit growth. Even though earnings are likely to fall in the first quarter; that might be just a blip and then that for the rest of the year,
we'll see profits rebound.
SOARES: You touched on this, let's look to the new earnings season. What should we be keeping our eyes on here?
LA MONICA: I think it really is going to be all about the guidance even more than it usually is. We know that first quarter profits barring a
miracle are likely to fall for the S&P 500, but I think that's already priced into the market, so everyone wants to hear whether or not things are
going to improve in the second half of the year because right now, there are expectations for growth to return to, you know, a little over 8 percent
in the fourth quarter and that's going to pull up the whole year's profits.
So if we don't get any expectations that there are things improving in the latter half of the year and ahead to 2020, then that could be a bad sign
for the markets.
SOARES: Yes, and mentioning that key word there -- key date rather, I should say, 2020. Paul La Monica, good to see you. Thanks very much.
LA MONICA: Thank you.
SOARES: And coming up right here on the show, another delay to Brexit could be on the calendar. Britain's neighbors are saying they want a bit
more clarity. We'll get more clarity on the government's intentions, and then later, a hidden camera watching your every move. We'll be speaking to
a family who discovered their Airbnb host was filming them without their consent. How would you feel? You can listen to their stories after a very
short break.
(COMMERCIAL BREAK)
[15:15:00]
SOARES: The Brexit saga looks like it could be extended even further. The British Prime Minister has written to the European Union to request another
delay to the U.K.'s withdrawal, this time to June the 30th.
Now, the French government has responded saying that the E.U. can't agree to an extension without hearing a clear plan -- we've heard that before --
from the U.K. The default option is still that Britain leaves in seven days' time and right now, it has no deal in place.
Theresa May's Foreign Secretary says a no-deal Brexit could trigger a recession. Take a listen.
(BEGIN VIDEO CLIP)
JEREMY HUNT, BRITISH FOREIGN SECRETARY: I mean, the truth is first of all, no deal outcome is bad for the U.K. It's also very bad for the European
Union. None of our economies are growing fast enough to guarantee that a no-deal scenario wouldn't push us into recession. So it's a bad outcome
all around and I think the French understand that. I think the Germans understand that.
(END VIDEO CLIP)
SOARES: Hadas Gold is this following the story from London, Erin McLaughlin has the latest from Brussels. I want to start with Erin, if I
can. Erin, how is Theresa May's letter - how is that being received by E.U. leaders?
ERIN MCLAUGHLIN, CORRESPONDENT, CNN: Well, they would have liked to see more detail. They would have liked to see a concrete plan backed by a
parliamentary majority. But given the way things have gone there in Westminster that does not of course seem to be in the cards. Her letter
was actually preempted by a proposal according to an E.U. source tabled by Donald Tusk, the President of the European Council. He was is advocating a
flexible extension, giving the United Kingdom a 12-month extension once the withdrawal agreement is finally ratified by Westminster, that extension
could then be shortened accordingly.
But that's not a consensus view here in Brussels. There was a meeting of Ambassadors today. They discussed the topic of an extension. Two
diplomatic sources telling me that France went so far as to float the idea of a two-week extension to allow the markets to prepare for no deal.
Others had different views, Germany more in line with what Donald Tusk had tabled, although they'd like to see more detail from the U.K. as well.
But this is very much an ongoing discussion as the different member states are sort of gaming out the different options at this point. All eyes still
on Theresa May as she enters those talks with the leader of the opposition there, Jeremy Corbyn to see what emerges out of those negotiations.
All of this, though, has to be decided going into that Summit, critical EUCo Summit in Brussels of Wednesday when the 27 leaders would all sitting
around the table and take the historic decision of what kind of extension to grant the United Kingdom.
SOARES: Erin, stay with us because I want to bring in Hadas because Hadas like Erin was saying we've seen the cross Party talks between Labour and
the Conservative Party. How did they go today? Because they've been pretty entrenched in their positions, their view of how pure Brexit, how
Brexit should be.
HADAS GOLD, REPORTER, CNN: Right. There has been a big question about what sort of compromises each side would have on some of these red line
issues like a Customs Union or even a second referendum.
[15:20:00]
GOLD: Now, although they had initially called these talks constructive on both sides, this afternoon and into this evening, we've been getting some
statements from both sides, which probably are not going to make the E.U. very happy or very confident that they will be able to come to some sort of
consensus that they could then put forward to the European Union.
I'll read you just a little bit of the Labour Party statement, they said, "We are disappointed that the government has not offered real change or
compromise. We urge the Prime Minister to come forward with genuine changes to her deal in an effort to find an alternative that can win
support."
And then Downing Street came out with a statement just about an hour or so after that saying, "Hey, we've made serious proposals and talks this week
and we are prepared to pursue changes to the political declaration in order to deliver a deal."
Now they notably go on to say that part of this is trying to avoid participation in the European Parliamentary election. Because if you look
at the timeline, and as Theresa May noted in that letter to Donald Tusk, they will have -- U.K. will have to send candidates to stand for those
European Parliamentary elections taking place in May, because if you are part of the E.U., you have to send candidates --
SOARES: It's something the E.U. always wanted, yes.
GOLD: Exactly, and this is Downing Street saying we want to avoid that. But I don't see how the timing works out where they somehow get this deal
together with Jeremy Corbyn, and then maybe get it to the E.U. if there's huge changes to the withdrawal agreement. It's a little -- I don't exactly
see how they can avoid those parliamentary elections.
SOARES: And what I also don't understand is why they're putting out two separate statements. Why don't they just -- it didn't seem to be any
cohesion between them both. Both sides, really, just something that we've seen all along, but stay with us Hadas.
Erin, Europe, you've touched on this slightly, but I want to go into more detail if we can. We've always painted the U.K., you have always painted
Theresa May's Party and Labour, pretty much very divided within each party. But it does seem as well, from what you're saying that Europe is not
speaking from the same hymn sheet. Talk us through the divisions there are within Europe.
MCLAUGHLIN: Yes, there's no consensus yet on the question of an extension, Isa. That debate is very much in play right now. Different camps have
different thinking. You have on the one side, you have Donald Tusk, the President of the Council being a more moderate voice in all of this,
advocating for a long extension for the U.K. to essentially get its act together.
On the other hand, you have France wanting to see concrete steps from the United Kingdom, a majority for something, a plan to make all of this work
recognizing the costs of a long extension. Giving a long extension to the United Kingdom comes with a fair bit of risk to the European Union. You
have the impact on the elections. You also have an impact on the institutions and decision making during that time period.
All of that is really being factored into this ongoing debate. They are simultaneously keeping an eye on those negotiations that you were just
talking about. They're seeing what comes out of that and then on Wednesday, the 27th, will take that decision.
One diplomat telling me that he believes there will be a long term extension that's the direction that all of this is moving and at the end of
the day, you know, there might be talk of a short extension to that no deal scenario, but all sides recognize that history will be judging that moment
next week. They'll be looking, the markets will be looking, the world will be looking to see how the E.U. acts and no member state is going to be the
one to pull the plug, so to speak, and push the U.K. off that cliff edge.
SOARES: A very good point. No one wants to be blamed for it right, Erin? Erin McLaughlin there for us in Brussels. Thanks very much, good to see.
And Hadas Gold is with me. And Hadas, I know you've been traveling up and down the country for several weeks now trying to get a gauge of the mood.
In one particular town you went to, you looked at them -- Brexiteers, they are pro-Brexit and they are mostly pro-Brexit, but also a key industry for
this town? What did you find?
GOLD: So this is up in Northeast England. It's an area called Teesside and while the politicians here in London and in Brussels are trying to hash
it out, they are looking at this debate very closely, not just because this area voted overwhelmingly to leave, but also because they see Brexit as
their economic salvation as a way to regenerate this area because the mayor of this place called Teesside has an idea for what's called a free port and
they think that this is the way that the struggling -- it used to be a steel town -- steel industry used to be a major part of their economy. It
has since collapsed. This could be the way to bring back what they think could be thousands of jobs. Take a listen.
(BEGIN VIDEO TAPE)
GOLD (voice over): It stretches 1,600 acres, double the size of Central Park. The carcass of a steel plant that as a local saying goes, helped
build the world and powered the economy of Northeast England for decades.
It's steel holding up global landmarks like the Sydney Harbor Bridge.
(BEGIN VIDEO CLIP)
GOLD (on camera): When this plant abruptly closed in 2015, more than 2,000 people lost what were well-paid and secure jobs. It's laid dormant ever
since.
MAYOR BEN HOUCHEN, TEESSIDE, ENGLAND: Such a huge wrench for a community that has been based in steelmaking for more than a hundred years.
(END VIDEO CLIP)
GOLD (voice over): Thirty two-year-old Mayor Ben Houchen was born and raised here. Two years ago, he was elected to the newly created role
overseeing a cluster of cities in a region known as Teesside.
[15:25:07]
(BEGIN VIDEO CLIP)
GOLD (on camera): What was it like growing up here?
HOUCHEN: It was an amazing place. It still is an amazing place, but we just need to reinvent ourselves.
(END VIDEO CLIP)
GOLD (voice over): A reinvention he believes starts with Brexit. Only by breaking up with Brussels, Houchen said can U.K. Government act on his
proposal, turning the old plant site side and its surroundings into a special tax free zone called a free port.
(BEGIN VIDEO CLIP)
HOUCHEN: Having a free port based here would mean potentially zero tariffs, zero duties.
GOLD: Wouldn't it be easier to attract manufacturers if the U.K. just stayed in a Customs Union?
HOUCHEN: Well, ultimately, 70 percent of people in the local area voted to leave the European Union. And I think one of the reasons was because the
government wasn't able to intervene, for example, to save the local steel works.
(END VIDEO CLIP)
GOLD (voice over): Houcehen said turning Teesside into a free report could generate tens of thousands of new jobs in a region that desperately needs
them. Unemployment in some areas of the Tees Valley is more than double the national average.
(BEGIN VIDEO CLIP)
FRANKIE WALES, FOUNDER, REDCAR AMATEUR BOXING CLUB: They can't possibly take anything else from here because everything is gone.
(END VIDEO CLIP)
GOLD (voice over): Frankie Wales worked in the steel plant for 15 years. He now runs an amateur boxing gym in the Teesside town of Redcar. For
years he's watched as men of working age were knocked down by factory closures, with the steel works delivering the final blow.
(BEGIN VIDEO CLIP)
WALES: It's quite disheartening to see 55 or 60- year-old men who know they are never going to work again. We've been trained to be the finest
steelmakers in the world who now make lattes and coffee.
(END VIDEO CLIP)
GOLD (voice over): A gym rat turned Town Ambassador, Wales leads initiatives to get young men here in Redcar off the street and into
fruitful employment.
(BEGIN VIDEO CLIP)
GOLD (on camera): Having heard of this free port idea that Mayor Ben has, what is your take on that?
WALES: It is an opportunity that is going to bring 10,000 jobs, a thousand jobs, a hundred jobs. That's better than no jobs at all.
MEREDITH CROWLEY, ECONOMIST, CAMBRIDGE UNIVERSITY: The jobs won't arrive on the level at which some of the politicians who support the idea are
hoping.
(END VIDEO CLIP)
GOLD (voice over): Economists like Cambridge's Meredith Crowley say it's unlikely a free port will help Teesside overcome the negative the effects
of Brexit.
(BEGIN VIDEO CLIP)
CROWLEY: Where you see big job growth would be in a country like China, where you have very, very low skilled workers earning very, very low wages.
So they're opening a free port that will create a lot of employment opportunities. But British workers don't have that. They're much more
skilled.
(END VIDEO CLIP)
GOLD (voice over): The U.K. Government projected Brexit could shrink the North East economy by as much as 16%. But Houchen is pushing ahead. He
said more than 100 foreign firms have expressed interest in the free port site, a consortium of oil companies including BP and Shell how proposed
building a clean energy plant.
(BEGIN VIDEO CLIP)
GOLD (on camera): Do you ever think you're promising too much?
HOUCHEN: Look, the plan that we have, yes, it is ambitious. Yes, it's hopeful. But the proof is in the pudding and there is evidence of it
starting to come to fruition.
(END VIDEO CLIP)
GOLD (voice over): They say that Teesside built the world. The factory town now hoping Brexit will bring the world back to them.
(END VIDEO TAPE)
GOLD: And Isa, Mayor Houchen said he will be sending this proposal to the Treasury Department in the coming weeks. Of course, this proposal cannot
get going until Brexit actually happens and as we've seen, it's not clear when or if that will.
SOARES: How long will this be going on for? Hadas Gold. Thank you very much. Excellent piece there. And when we return here on the show,
President Trump pays a visit to the southern border touting the wall and saying he'll play economic hardball. We are live for you, next.
(COMMERCIAL BREAK)
[15:30:00] ISA SOARES, HOST, QUEST MEANS BUSINESS: Hello, I'm Isa Soares, coming up in the next half hour of QUEST MEANS BUSINESS, the World Bank
makes it official with a new man in charge. We'll tell you about the controversy surrounding Donald Trump's pick. And imagine checking into an
Airbnb only for a hidden camera to livestream your holiday. It happened to one family, I'll be speaking to them in just a moment.
First, these are the headlines we're following for you at this hour on CNN. Britain to the European Union to request another delay to Brexit, this time
to June, the 30th. The French government has responded, saying there can be no extension without a clear plan from the U.K..
The lawyers for Julian Assange say it could be illegal for Ecuador to expel him from its London embassy. Ecuador has refused to comment on whether or
not it will kick the WikiLeaks founder out. WikiLeaks claimed on Twitter that Ecuador would expel Assange within hours to days.
Ethiopian Airlines said it hasn't decided yet whether to cancel an order for more 737 Max passenger planes. Boeing's CEO has acknowledged the anti-
stall software on the jet, played a role in both the Ethiopian Airlines and Lion Air crashes. Three hundred and forty six people died in both those
crashes.
Brunei is facing a growing boycott of its businesses over new laws that make gay sex and adultery punishable by stoning to death. Deutsche Bank
says its employees will no longer use Dorchester hotels owned by the Sultan of Brunei. A British TV awards show is also shunning the hotel chain.
Mick Jagger of the Rolling Stones is now recovering from a heart valve replacement procedure. A spokesperson says the singer is expected to make
a full recovery. The Rolling Stones had to postpone their North American tour that was supposed to kick off on April the 20th.
And Brazilian football legend Pele is also recovering in hospital after being treated for a urinary tract infection. Pele said on Twitter that his
antibiotics are working and that he feels much better.
Now, President Trump is visiting the U.S.-Mexico border in California. He arrived in California a few minutes ago. Any moment now, he's due to
appear at a roundtable discussion on border security. We'll keep an eye on those images for you.
At the same time, he's threatening to impose economic penalties on Mexico. He says that will happen if Mexico doesn't stop drugs being smuggled across
the border. He's also proposing a 25 percent tariff on cars imported from Mexico if more migrants aren't stopped at the border.
He says that would override the USMCA trade deal which is yet to be ratified. And he's still isn't ruling out closing the border entirely if
those measures simply just don't work. I want to bring in Paula Newton who has been following this story for us from Mexico City.
Paula, President Trump walking back somewhat, I think it's fair to say in his threat to shut down the border. But the economic pressures remain with
those tariffs potentially being slapped on. Has the Mexican government, Paula, changed or is considering changing its policies in light of this?
PAULA NEWTON, CNN CORRESPONDENT: You know, openly, they won't say. So, they say, look, our policy remains the same. Remember, they've been in
government nearly four months now and it is the same as far as they're concerned. Behind the scenes they have been working really hard to
communicate with the Trump administration and communicate with Homeland Security.
What are they doing? They're giving them hourly, daily updates on those apprehensions of the migrants in the south of Mexico, and that has been
key. And one of the reasons why Donald Trump decided to climb down from that threat to close the border.
[15:35:00] But Isa, I have to explain here that when you talk about the USMCA, remember, this was two years of negotiation as one Mexican
commentator put it, it's essentially like a missile through that negotiation right now.
And whether it's Mexico, whether it's other countries around the world, they have learned to take the president seriously when he makes these kinds
of threats, and for that reason, whatever is going on right now, those borders will continue to really affect investment not just in the short
term or the next few days, but really what the calculus is and those quarters upcoming for businesses that do that kind of a cross-border
investment. Isa?
SOARES: Yes, exactly. You made a very fair point, Paula. USMCA is a deal that really, he was one of the architects of, but raises questions about
any other deal that takes place, whether it would be China-U.S. deal or European deal with the U.S., whether he can be taken at his word.
But let's focus on what's happening on the ground there, Paula. If indeed, a border was to close down, talk us through the impact on both sides of the
border?
NEWTON: They would be catastrophic, and they would be immediate. And remember, Isa, that comes on top of the fact that even though the border is
completely open now, there is a lot of pressure on the border and you continue to see anecdotal evidence on the ground that it takes a long time
to clear whether it is a package, whether it is a person.
It is taking a long time to clear that border, and this has many people concerned because even a one-day closure in terms of the way these
businesses operate would be catastrophic. But as I was pointing out, Isa, the point is investment. If you are a Mexican or if you are an American
business right now, what are you saying to yourself about having that kind of cross-border investment?
Those supply chains right now embedded in the fact that you can get your goods across a day after day, hour after hour. Donald Trump has turned
that entire model on its head, and to it -- it's like he has not made a secret of the fact that he wants American businesses to focus more
inwardly.
He wants them to turn away from Mexico and for that point of view, in fact, this is kind of working into his hands because this is what he wants at
this point in time to talk about trade. We've already seen it work to some extent even with his negotiations on China and trade, and for that reason
--
SOARES: Yes --
NEWTON: He takes those threats seriously and continues to use the language that all options are on the table, no matter the effect of closing the
border even for a short period of time.
SOARES: Yes, we'll be speaking here on the show to a gentleman who does business on both sides. Paula Newton there for us in Mexico City, good to
see you, Paula, thanks very much. Of course, we want to know -- we want you to join the conversation, get out your phones and go to cnn.com-slash-
join. Tonight, we're asking you this, which trade talks should Donald Trump be most worried about? Mexico, China or the European Union?
Go to cnn.com-slash-join and vote now and we'll see the results on your screen now. When it comes to a border closure, my next guest says the
dairy industry could be hit particularly hard. Tom Vilsack is a former U.S. Agriculture Secretary and is now president and CEO of U.S. Dairy
Export Council. He joins me now from West Des Moines.
Tom, good to see you, a very good afternoon to you. We've seen President Trump backpedal somewhat, but for an international audience tonight,
explain why shutting down the border -- what would it do to the U.S. dairy industry from your point of view?
TOM VILSACK, FORMER UNITED STATES AGRICULTURE SECRETARY: It would be incredibly disruptive. Thirty percent of all of the dairy products that
are exported by the U.S. go to Mexico, 75 percent of all imports in dairy come from the U.S. in Mexico, $3.8 million of product crosses the border
from the U.S. to Mexico every single day, supports 16,500 jobs.
Farm income would be impacted, jobs would be impacted, and the relationship between the two countries would be impacted. That's why it would be indeed
a catastrophic decision by the president if he were to shut the border down.
SOARES: What would it do on the other side to Mexican farmers?
VILSACK: Well, I think it would -- the reality is, we have developed a good relationship with the Mexican dairy industry. We're trying to build
consumption among Mexican consumers for dairy products. The reality of not being able to meet the demand might basically create some confusion and
some questioning about consumers and whether or not dairy is something that they should be consuming.
So, it impacts Mexican consumers, it impacts the processors in Mexico, it impacts dairy producers in Mexico, and I think it undercuts the confidence
that we're trying to establish between the two countries with the negotiation of the USMCA, and I think it obviously will complicate --
SOARES: Yes --
VILSACK: Whether or not the USMCA gets passed either in Mexico or the U.S.
SOARES: We'll talk about the politics in just a moment, but what I found fascinating because I was reading that more than seven dairy farms close
each day in the United States. When farmers hear comments by President Trump putting up a wall, what are they telling you? Give me a sense, Tom,
of the frustration of this nervousness around this?
[15:40:00] VILSACK: Well, they're deeply concerned. They obviously have given the president the benefit of the doubt over the last couple of years,
but I think their patience is beginning to wear thin. I think they're beginning to demand some action, some positive forward movement.
We've talked about tariffs in Mexico, the tariffs in China have been disruptive to American agriculture, pulling out of the Trans-Pacific
Partnership agreement also disruptive to American agriculture. So there have been a lot of steps that have been taken by this administration that
have created some real challenges in the Ag economy.
And I think farmers were willing to give the president time, but I think there now is a desire to see some results, some positive results coming
from these discussions and negotiations.
SOARES: Tom, you said something that really struck me when I was reading some of my notes, you said, "we cannot condone limiting access to food as a
bargaining chip in solving the immigration issues." How politically motivated is this?
VILSACK: Well, I think the president obviously would like to create the impression that there are serious problems at the border. There are
problems. Whether it's a crisis or an emergency or not, I think it certainly opens the question. I think he obviously wants to build support
for any legal challenge to the wall that he's trying to construct.
So to a certain extent, a lot of this may be politically motivated. The problem is it sends very difficult and confusing signals to industries
across the board, and certainly in agriculture, there's deep concern about the idea of closures and deep concern about retaliatory tariffs, even
concern about the auto tariff threat because that also could disrupt a relationship between Mexico and the U.S. in terms of the USMCA which we do
think --
SOARES: Oh, I think we've lost -- unfortunately, I think we've lost Tom Vilsack there, making very strong points there against what we heard from
President Trump and his idea of pushing for a wall. And as he was speaking, we were seeing live images -- I don't know if we will have them
up, of President Trump at a border security roundtable meeting.
I don't know if I've still got you, Tom. Do you want to finish your thoughts? No, he's gone, OK. Well, we'll try and reconnect with him, but I
think you heard how he feels very strongly about keeping that wall down and any kind of strong regulation against the U.S. industry and the business it
does in the border.
Now, the World Bank's new chief is a man perhaps best known for attacking it. David Malpass was confirmed as World Bank president earlier today,
we'll have more on his records and his views in fact when we come back.
(COMMERCIAL BREAK)
[15:45:00] SOARES: Once showed you earlier, Donald Trump speaking right now at a border security event in California. Of course, we're keeping an
eye on that roundtable for you, and we'll let you know if Donald Trump breaks any news in his plans for trade relations with Mexico.
But these are live images coming to you from Calexico, California, where President Trump is meeting border security -- having a border security
roundtable meeting. Keep an eye on those images and what he says, and if it's anything groundbreaking, breaking news on it, we of course will bring
it to you.
Now, meanwhile, he may not be a household name, but David Malpass just became one of the most powerful bankers on the planet. Today, the World
Bank unanimously approved Malpass as its new president. His five-year term starts next week and Richard Quest has all the details for you.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN (voice-over): The new World Bank president is a man people either love or hate.
DAVID MALPASS, PRESIDENT, WORLD BANK: Thank you so -- thank you so very much President Trump --
QUEST: As chief economist of the now defunct Bear Stearns, David Malpass argued investors shouldn't panic about problems in the housing and credit
markets. He did so right before they largely led to the financial crisis.
MALPASS: I'm not in the camp that is worried about the consumer running out of money or a housing crashing. I think we've got some weakness in
housing right now, but that may be good for the rest of the economy.
QUEST: After his nomination, many of those against his appointment seized on Malpass' history of criticizing the very institution he'll now lead.
MALPASS: Twenty five years literally, I've been an opponent of the IMF and of the World Bank.
QUEST: In congressional testimony, Malpass described multi-lateral institutions by the bank as inefficient, often corrupt and benefiting
advisors who fly in first class instead of regular people.
SCOTT MORRIS, SENIOR FELLOW, CENTER FOR GLOBAL DEVELOPMENT: I have a hard time seeing someone with that basic attitude towards the institution
actually running the place. But based on the reassurances that I think he has been trying to provide to his electors, I tend to think that he will
not be breaking a lot of eggs in the job, at least initially.
QUEST: Malpass' supporters argue he brings a wealth of experience. He served in the Trump, Bush and Reagan administrations, and that his feeling
towards the World Bank signals he'll bring a healthy dose of much-needed reform. One topic Malpass is expected to question, whether the $2 billion
a year the bank lends to China could be better spent in poorer economies.
Malpass ran unopposed and that's disappointing those who had hoped after a competitive 2012 race that the World Bank was moving away from its closed
U.S.-dominated selection process.
MORRIS: It's time for a process that recognizes the merits of the individual, whether they're American or non-American. I don't think we
need to have any rule that it must be a non-American, but it's very clearly at this point in history a problem that in 75 years, it has only ever been
an American.
QUEST: As president of the World Bank, David Malpass says he wants to focus on improving living standards in developing countries. Exactly how
he plans to do that and to change the World Bank in the process remains unclear. His election is raising uncertainty about the future of the
world's largest development institution. Richard Quest, CNN, New York.
(END VIDEOTAPE)
SOARES: And coming up here on the show, a New Zealand family was vacationing in Ireland when they discovered their Airbnb was under secret
surveillance. I'll be speaking to them after the break.
[15:50:00] (COMMERCIAL BREAK)
SOARES: Now, imagine checking into a holiday home with your family only to discover that you actually in fact are being watched. That's what happened
to my next guest at a house she booked on Airbnb. New Zealanders Nealie and Andre (ph) Barker found cameras live-streaming from their living room
soon after arriving at a house in Cork, Ireland.
Look at the photo they took. The camera was hidden inside what appeared to be a smoke alarm. They say the experience along when an ineffective as
well as delayed response from Airbnb highlighted the risks that come with booking into unregulated accommodation by the so-called sharing economy.
Now, Airbnb has now apologized to the family. It says "company policy strictly prohibits hidden cameras, and that it takes reports of any
violation extremely seriously." Nealie Barker joins me on the phone from Budapest, Hungary where she and her family are staying in another Airbnb --
I know you'll continue your holiday, Nealie, thank you very much for taking the time to speak to us on the show.
For our audience right around the world, explain to us how you came across it or yourself or your husband came across the live-streaming of this
camera?
NEALIE BARKER, TOURIST WHO FOUND HIDDEN CAMERA IN AIRBNB (via telephone): Yes, it's an interesting story. We checked in late in the evening to an
Airbnb property with our children in total. We settled into the property, everyone chose their bedrooms, we unpacked all of our kitchen belongings
and bits and pieces and then we settled down to get on to the house's Wi-Fi network.
My husband who is a security consultant by trade just sort of has a force of habit, and that is that he often scans house Wi-Fi networks everywhere
we go just to have a look at what's happening on the network. Genuinely, you see your own devices, you see your children's mobile phones or laptops
--
SOARES: Yes --
BARKER: And your own. And in this case, he found a device called an IP camera which certainly was not ours.
SOARES: Clearly, the owner wasn't expecting anyone to discover it. What was your first reaction, your husband's first reaction when you saw that
appear on your Wi-Fi?
BARKER: All right, it was one of those sort of adrenaline-rush moments, he looked at me across the table and I could see him -- I could see that he'd
seen something shocking on his mobile phone screen and I peered over to have a look, and I saw essentially myself looking at his mobile phone at
the kitchen table, so it was such a shock.
SOARES: And for your children, we're looking at a photo there of the family. How did they take to it?
BARKER: Different reactions. They're a fair mix of ages, but it's safe to say that a couple of them were actually really worried and afraid this
particular home had quite a sophisticated IT system and he could also access the front door remotely and open it, and I guess worst case scenario
sort of things went straight to their mind and never were quite worried.
SOARES: Do you know any at all from the owner why he even installed this? What did they have -- what did he say? What did the owner say when you
asked about this camera, this hidden camera?
BARKER: Yes, look, the truth is we had a tiny bit of sympathy for this problem and for Airbnb hosts generally. His response to us was that the
camera was there to protect his asset, and I guess by that he means any potential damage that could come from having a property listed on Airbnb,
he would want some sort of evidential proof of that.
SOARES: Yes, but that's what you have insurance surely.
BARKER: That's exactly right. And we are landlords ourselves, we understand the risk of renting a property, damage is a risk of turning your
property into a business and it certainly doesn't negate his responsibility to firstly let people know that they're being surveilled, and that they're
being --
[15:55:00] SOARES: Yes --
BARKER: Surveilled in the privacy of a residence that they've paid to rent.
SOARES: What was Airbnb's reaction when you approached them, you told them this?
BARKER: I think this was the most disappointing thing, we really love Airbnb, we're avid Airbnb users, and so it was a bit of a shock to us to
receive on the evening absolutely no advice at all from their customer service support. The lady we spoke to kept referring to the regular terms
and conditions of cancellations.
She sort of refused to, accept, I guess, what we were telling her about the camera. So we took it upon ourselves to gather some evidence and to
relocate ourselves to some emergency accommodation. Subsequently, it took Airbnb close to three weeks, actually just over three weeks --
SOARES: Wow --
BARKER: To complete what they considered to be a thorough investigation.
SOARES: And but you're still I believe using Airbnb. You're in Budapest, Hungary, that hasn't put this whole experience, that hasn't changed your
mind about Airbnb. What do you still -- does your husband still carry out these checks or have you changed the way, you know, you look at Airbnb at
all?
BARKER: Yes, we're in a slightly tricky situation. We're traveling through Europe for 12 months and we've committed to largely Airbnb
accommodation for a good portion of that. And as I've said before, we've for the most part had absolutely no problems with the platform, but we have
continued to use it. And we accept that there are some risks that come as you mentioned previously in this --
SOARES: Yes --
BARKER: Unregulated, you know, accommodation market so we scan carefully the network at all the houses that we arrive at, and I do a physical check
of all the properties as well.
SOARES: Nealie Barker, thank you so much for taking the time to speak to us on QUEST MEANS BUSINESS. So enjoy the rest your trip throughout Europe,
I hope it all goes well for yourself as well as the family, thank you.
BARKER: And coming up, we're into the final few minutes in fact of trading on Wall Street. We'll be right back with all the numbers for you.
(COMMERCIAL BREAK)
SOARES: Welcome back. Well, let's have a look at the last few minutes of trade on Wall Street -- if we bring up the big board, there you go, all
green at the moment, up 30 points or so. Closing slightly as you can see, although, it has retreated somewhat from those triple-digit gains earlier
in the session.
Markets have been lifted by today U.S. job reports, a pretty solid numbers we saw coming in today and to, of course, the Dow's delight as well. So
ending the week on a positive note here. Now, I want to bring you some other news that we have been following -- oh, no, we're not, we're good.
(BELL RINGING)
We're just ending, in fact, with the bell. And that does it for QUEST MEANS BUSINESS.
I'm Isa Soares in London. I'll have the closing bell - actually is ringing now on Wall Street.
THE LEAD, in fact, is next, with Jake Tapper.
END
