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Quest Means Business
Trump Unveils Merit-Based Immigration Proposal; Trump's Financial Report Shows He Made At Least $479 Million in 2018; EU Fines Five Banks $1.2 Billion for Currency Trade Rigging. Aired 3-4p ET
Aired May 16, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN INTERNATIONAL ANCHOR: ... merit based immigration system. Essentially, he is saying that the preferred immigrants to the United
States will be those with degrees, those with special skills, rather than those who are coming here because of family connections.
He is saying that he is going to have tougher restrictions on asylum seekers. And also what he's focusing on is making sure that immigrants are
fully assimilated and integrated into the U.S. economy, and that immigrants will be required to learn English. What he is referring to as a merit -
based immigration system.
I want to go straight to our Stephen Collison, who is joining us live now. So Stephen, this immigration policy also appears doomed to fail. Just
explain to our audience why?
STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER:" Well, one of the reasons, Zain, is because it seems to include all of the things that President Trump
would like from an immigration reform, and none of the things which Democrats want to see. And it's impossible to get this through the
Congress without getting Democratic votes.
Firstly, of course, because Democrats have the House, but you need a supermajority of 60 votes to get anything done on immigration in the
Senate. That's one of the reasons why President Obama and President George W. Bush failed on immigration reform.
I think the most significant omission from this plan is the absence of any help for DACA recipients. These are people who were brought to the U.S.
illegally as children who've constructed lives here and to all intents and purposes, other than their passport, are Americans.
Those are the people who are the priority of Democrats and some Republicans, and the fact that this plan does not address them, but talks
about border security, asylum, a change to the immigration system on a points basis that means that there is not any support for this in Congress.
And that's one reason why most people are looking at this, and even President Trump there right at the end talking about the election. This is
more of an election plan than a realistic effort reform the immigration system.
ASHER: So you mentioned that Democrats are unlikely to vote for this, because obviously Democrats control the House, but just in terms of other
Republicans in the Senate, what would it take to really get the vast majority of Republicans on board with this?
COLLINSON: So you're going to have to have some kind of compromise. There are many Republicans, for example, who don't even support the Trump
administration's changes to legal immigration. You're going to have to get the, you know, the wall funded somehow.
But to get the wall funded, you need Democrats to sign on. You have to give Democrats something. A lot of people have said that this plan is
effort to rally Republicans around a set of positions and use that as a bargaining position with Democrats.
The problem is that this plan was already presented to Republicans on Capitol Hill over the last few days by Jared Kushner, among other
officials, the President's son-in-law, and even Republicans were underwhelmed by the plan and criticized it as lacking substance.
So you can see why, you know, this looks like yet another failed effort to reform the U.S. immigration system. And you know, you have to say now,
after sort of 12-14 years of trying to do this, is this a problem that is beyond the U.S. political system, given its current polarization?
ASHER: So why is it -- I mean, you know, everyone talks about the Gang of Eight and how that didn't work out. Why is the U.S. immigration system
just so difficult to reform? Is it just because there's so many stakeholders and so difficult to agree on a path forward for the country
when it comes to immigration?
COLLINSON: I think one of the reasons is that immigration has become about more than immigration. It is a huge political symbol. Immigration was
used by President Trump at the core of his election campaign. You talk about immigration, it brings up all these issues of outsiders coming in to
change U.S. culture.
We've seen that, you know, not just in the United States, but also in Europe. And it becomes a proxy for all sorts of other political issues and
sentiments. People have criticized the President, of course, for demagoguing immigration.
From the Democratic side, you know, Democrats got a lot of support from Hispanic voters. That's a huge -- immigration is a hugely important issue
for that community. So they really have a limited area for compromise, too.
So you can see that, you can talk about immigration and reform in isolation. But when it comes to actually looking for votes, it's very
difficult. Democrats thought they had a compromise with President Trump a few years ago, which included help for DACA recipients in return for
billions of dollars of funding for his border wall.
In the end, the President walked away from that deal because he was criticized from his right. He was worried about the impact on his base and
that just showed us just what a difficult issue this is and is the reason why a lot of people think it's insoluble in the current political climate.
ASHER: But as you mentioned, this is likely an election immigration plan; obviously, 2020 is around the corner. Stephen Collinson live for us there.
Thank you so much. Appreciate that.
[15:05:09] ASHER: Okay, so the vast majority of immigrants to the United States come here because of family ties. Sixty six percent gain permission
because they have relatives already in the country. Twelve percent of visas are skills based and 22 percent are given out on humanitarian
grounds.
The White House wants the number of skilled based immigrants to increase and the number of family and humanitarian immigrants to essentially
decrease.
A few moments ago Mr. Trump called his plan pro-American and pro-immigrant, and said it will build on growth already created in the country.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Our policies have turbocharged our economy. Now, we must implement an immigration system
that will allow our citizens to prosper for generations to come.
(END VIDEO CLIP)
ASHER: All right, Randy Capps is Director of Research at the Immigration Policy Institute. Randy, thank you so much for being with us. So how does
hiring extremely well-qualified, well-educated immigrants fit in with Trump's America first policies?
RANDY CAPPS, DIRECTOR OF RESEARCH, IMMIGRATION POLICY INSTITUTE: Well, first of all, we need workers, we need more workers in the U.S. economy.
Immigrants are going to contribute to most of our labor force growth in the future.
So it's really important to keep the level of immigration at around a million people or higher. But secondly, we're in competition for high
skilled immigrants with the rest of the world right now. It's really important to attract talent. It's really important to retain the
exceptional students that the President mentioned.
But we also need low-skilled workers. It's not just the high-skilled area where we have labor shortages. Right now, we have shortages in
construction, in agriculture and hospitality and in other industries. And the fact of the matter is, if we don't let people in for lower skilled
jobs, legally, then they're likely to come illegally.
Families also help people to integrate. The President mentioned, it is important to have a pro-American, pro-integration strategy. Right now,
families are the linchpin of that having a family member here helps show people the ropes, helps them find jobs, get some support, so they don't
rely on the government for assistance.
And then finally, I mean, we are in a period of strong economic growth at this juncture. The economy is very strong. But that could change. And if
we have a recession, we're going to need a way to adjust those numbers up or down.
ASHER: So what would be the impact on wages? I mean, if the President is focusing on bringing in super highly-skilled foreign workers, what sort of
impact would that have on wages in the United States, do you think?
CAPPS: Well, most of the studies show that if you have more highly educated immigrants that they are compliments, not competitors with U.S.
workers, and that that creates more jobs and economic activity that actually does help the economy generally and can help wages generally, that
can be true for lower skilled workers as well, particularly when we have a strong economy like we do right now.
ASHER: Is there ever a temptation? Just because I'm an immigrant to the United States and obviously have a lot of friends? Is there ever
temptation for employers to pay foreign workers less, despite the fact that they're super qualified and well-educated?
Because a lot of foreign workers are very keen to immigrate to the United States, and if that is the case, how would that affect wages in this case?
CAPPS: Well, I think for sure, if the workers are working under the table, because they don't have legal status that undercuts American workers,
there's no doubt about that. And if they're here on a temporary visa, then they're also subject to exploitation. They may be attached to a particular
employer with that visa, and there are fewer worker protections.
So that's why I think it's really important for lower wage workers also to be included in these permanent legal immigration streams. And right now, a
lot of them are coming through family immigration streams, and in a way that kind of protects the low-wage workers in the U.S.
ASHER: So if you have more immigrants that are being let in who are highly skilled and fewer immigrants who are coming here because of family ties,
how does that affect the overall immigration numbers to the United States? And if the numbers are lower, how does that impact the U.S. economy?
CAPPS: Well, my understanding having not seen the details yet of the plan is that it would be neutral in terms of total immigration. As I mentioned,
at the beginning, it's really important that we keep up substantial numbers of legal immigration because we need workers and most of the projections
show that the workforce comprised of people born in the U.S. to nonimmigrant parents is going to decrease in the future.
So without immigrants and their children, then you would see a shrinkage. It's the opposite of what you described, fewer workers providing less money
for the economy, paying less in taxes, and that will hurt overall economic growth.
So lowering the total number of immigrants is not a good idea, economically speaking.
ASHER: Right. Randy Capps, live for us there. Thank you so much. Appreciate that.
CAPPS: Thank you.
ASHER: Okay, so elsewhere in Washington, Huawei says the Trump administration is only hurting Americans with a new ban on the company's
equipment.
[15:10:07] ASHER: Donald Trump signed an executive order on Wednesday banning U.S. firms from using telecoms gears from sources which might
threaten national security. And the Commerce Department added Huawei to its so-called entity list. Meaning it's covered by that order, too.
A spokesperson for the Chinese Ministry of Commerce says it is protectionism masquerading as national security.
(BEGIN VIDEO CLIP)
GAO FENG, CHINESE MINISTRY OF COMMERCE SPOKESPERSON (through translator): China has stressed many times that the concept of national security should
not be abused and should not become a tool for trade protectionism. We hope that relevant countries can respect market rules.
(END VIDEO CLIP)
ASHER: The move on Huawei has shades of the Trump administration's tough stance on another Chinese telecom, ZTE. Early last year, the U.S. slapped
an export ban on ZTE for violating sanctions that led to a complete crisis for the company.
The ban was lifted once ZTE gave in. It paid a massive fine, overhauled its executive leadership and brought in an American monitoring team.
Republicans in Washington are talking a B game this time around.
Senator Tom Cotton tweeted, "Huawei, 5G, RIP." Samuel Burke is following the story live for us from London. So Samuel, Huawei says this move by
Donald Trump to essentially ban them is only hurting Americans. Are they right?
SAMUEL BURKE, CNN BUSINESS TECHNOLOGY CORRESPONDENT: Well, in one sense, they're right because in so many facets of technology, Huawei's equipment
is not only more advanced, it's also less expensive. And I'm talking both about their phones and their 5G equipment.
So when they make statements like that, I think most tech analysts would agree with them that if you don't have 5G from Huawei, you'll have to go to
somebody else whose equipment won't be as good, and it will be much more expensive. So that means less people will be able to have 5G.
And to that point, there are a lot of rural carriers in the United States that were going to be using the Huawei equipment which may not have it,
though it is interesting because this decision from the Trump administration won't just hurt Huawei, it is already hurting American
companies like Qualcomm.
That company's stock has been down more than 4 percent at times today and if we just put that up on the screen, you'll see that it's trading just
below 4 percent right now down. And the interesting thing here is, Qualcomm sells parts to Huawei, and under these new rules that the Trump
administration is talking about, Qualcomm would have to get an export license.
And as you can see from those numbers there, Zain, the market isn't quite sure that they'll get that to be able to continue selling American goods to
this Chinese company.
ASHER: So just in terms of China's threat to retaliate, what are their options?
BURKE: Well, that's the interesting part here, because it's China that really needs the United States in this sense. They could target Apple,
though we've never really seen any sign of that. But it is interesting that on the one hand, Chinese companies want to get into the U.S. so badly.
But then these American companies can't get in. Apple is really one of the few if you look at Facebook, Twitter, Google, all these tech behemoths all
over the world, but not in China. So there are options out there. And this is what makes it so difficult, is that once you start making these
types of moves in the trade war, it's very hard to walk it back.
And of course, the line here between the trade war and national security concerns has become so blurred. We remember that Donald Trump said at one
point he might be able to help the CFO of Huawei, the founder's daughter who is under house arrest in Canada, and so right there, if he is able to
help her as part of the trade war negotiations, then where does the trade war end and where do these security concerns about Huawei actually begin?
There's a big question mark over that.
ASHER: All right, Samuel Burke, live for us. Thank you so much.
A spokesperson for Theresa May says the British government is still reviewing its stance on Huawei. The former head of MI-6 says it's a risk
the U.K. cannot afford to take.
In a new report, Richard Dearlove writes, "A post-Brexit government must not worry about giving a fence to China by going back on the decision. If
Australia can black ball Huawei as its 5G provider, the U.K. can certainly do the same without undue concern about the consequences."
Bob Seely is a Conservative MP who co-authored that report on Huawei. He's on the Isle of Wight in England. So President Macron is actually also
chiming in on the controversy surrounding Huawei saying that Europe will not block Huawei. Do you feel that's a mistake? If so why?
BOB SEELY, BRITISH MEMBER OF PARLIAMENT, CONSERVATIVE PARTY: Yes, I do. I think it's a mistake and I think President Macron should speak to the place
he was elected to represent, which is France, and not to speak to the people in the European Union that he wasn't elected to represent. So just
stick with his elected democracy and not far from him.
ASHER: And also, you have Huawei chiming after President Trump signed that order. Huawei is charming in saying this move will only hurt Americans
because of 5G and just how important that is to the U.S. economy. What are your thoughts on that? Do they have a point at all?
[15:15:06] SEELY: Yes, they do. Huawei is a very impressive company. In many ways, it makes a very attractive kick and it's a very comprehensive
company in terms of its offer. However, it is, in many ways it -- I mean, one of the things in our report, we looked at the ownership of Huawei. The
Huawei company is 97 percent owned -- or sorry, 98.7 percent owned by a holding company belonging to Chinese trades unions.
And in a one-party, state trade unions are part of the state. So Huawei, it's difficult to accept the argument that Huawei is trying to make in the
west that it is a private company.
For me, it's simply doesn't wash. It's an effectively a mercantilist arm of the Chinese state and they undercut Western producers to aggressively
get themselves into market economic advantage, but also the geopolitical strategic advantage, defense advantage and security advantage, and Chinese
military theory, the warfare as a battle of operation systems, and not just arms.
So they're building up a capability and although it doesn't intend to, they have the potential to harm us and data and comms I think are vital in who
controls this power in the future.
China is very different than the West in its approach to human rights and approach to civil freedom. We should really get on with China, really get
on with Beijing, we need to protect our freedoms and protect these civil rights.
ASHER: Okay, just in terms of protecting, just going back to Huawei, is there a middle ground, whereby the U.K., Germany or France uses Huawei
technology? But then, in some way, shape or form, they monitor very, very closely to make sure Huawei isn't giving the country's secrets to the
Chinese government?
SEELY: Yes, so you're describing what the British government says it's going to do. The British government hasn't yet made a choice. So what I'm
doing is contributing to that debate.
They say we can monitor it and we can have -- and our security services say that we think we can do enough to keep tabs on it to make sure they don't
abuse their power. I think that's a risky assumption because you can never guarantee it.
And the antenna that Huawei may be providing are complex bits of hardware and software mixed together, this is not dumb kid, a really intelligent
kid. And it can be it can be probed or it can be adjusted.
So I think we need to respect our Five Eyes partners like United States, like Australia, those are the countries like Japan and India who have also
said no to Huawei kit. So 5G, the infrastructure of our comm systems, I think we need to be safer rather than sorry.
ASHER: All right, Bob Seely live for us. Thank you so much. Appreciate you joining us. All right, still to come here on QUEST MEANS BUSINESS,
Walmart earnings are helping to steady the ship as Wall Street looks to make it four strong days out of five. We will tell you why right ahead.
(COMMERCIAL BREAK)
[15:20:25] ASHER: Swiss President Ueli Maurer is visiting Washington amid U.S. efforts, sources say to establish a channel that would allow officials
to speak to Iran. President Maurer joins us live now from Washington. So President Maurer, Donald Trump wants Iran to call him. Should they make
that call?
UELI MAURER, SWISS PRESIDENT: We have this mandate -- protection mandate in Iran for the United State. That's two points, open relations and
protection of the U.S. citizens in Iran. That's our mandate and not more.
ASHER: Your meeting with President Trump today, what was discussed specifically about Iran and the U.S. opening up a diplomatic channel or
talking to Iran?
MAURER: I think our mandate is confidential and I have not the possibility to inform you.
ASHER: What was your specific message to President Trump today?
MAURER: Oh, we have not -- it was not concrete. It's nothing for the publicity.
ASHER: If there are no direct communications between the United States and Iran, what role can the Swiss government play in at least de-escalating
tensions right now between the U.S. and Iran?
MAURER: We have not the role to play. Switzerland is not a global political player. We have this mandate, these two points and not more.
ASHER: The fact that you are actually meeting President Trump right now amid the crisis between the U.S. and Iran, should we interpret that as a
possible sign of hope that things between the United States and Iran may indeed get better?
MAURER: That was not the reason to our visit here. We had this free trade agreement, bilateral contracts in economy. And of course, we have this
mandate for Iran. We have perhaps the mandate for Venezuela. We have this mandate for Cuba. And that's the quality of Switzerland, but it was not
the reason for our visit today.
ASHER: Okay. Also, much of a nuclear deal was actually negotiated in Switzerland. Do you feel that those years of hard work are now being lost?
UNIDENTIFIED MALE: Can you -- can you repeat, please?
ASHER: Of course. Now I was just saying that much of the nuclear deal -- I can repeat the question, that's not a problem at all -- much of the
nuclear deal was negotiated in Switzerland. Do you feel that those years of hard work have now been lost?
MAURER: I cannot -- I have nothing to say to this issue.
ASHER: All right, President Maurer, thank you so much for joining us. Appreciate that.
MAURER: You're welcome.
ASHER: Okay, so turning back to business news in the stock market, it is all about the earnings. But unexpected results are giving Wall Street a
boost. The Dow is up triple digits for four of the last five sessions, up earnings from Cisco are certainly helping boost the market. The network
gear makers says its minimal sales exposure to China is cushioning the impact of the trade dispute.
Walmart says its prices will go up because of the Trump administration's tariffs on Chinese goods. The Dow components first quarter earnings beat
estimates on U.S. sales growth, and that's sending Walmart shares higher.
Paul La Monica is standing by on America's largest retailer. So Paul, it's such a difficult decision that retailers have to make right now in terms of
how much to pass on the higher costs from tariffs to consumers or vendors. Just walk us through what Walmart is saying about this.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, Walmart has indicated, Zain that costs will go up. Prices will rise because of the tariffs. They
didn't specify just how much and specifically what types of products, but I think if you are a Walmart shopper, you can expect to see prices going up.
The question is going to be will they go up so dramatically that they hurt spending revenue and earnings going forward in future quarters or will they
be now incremental price increases that consumers are able to absorb.
[15:25:11] LA MONICA: And keep in mind, many other retailers are probably going to be raising prices as well. So consumers are basically just going
to have to say, well, we can still shop at Walmart or we just have to cut back on spending. They're probably not going to cut back on spending is my
guess.
ASHER: So the fact that Walmart actually made this announcement, I mean, how much of a -- how much pressure does that put on the Trump
administration to fast track a deal?
LA MONICA: Yes, I think clearly, there's going to be more pressure on the Trump administration as well as China to come to a deal that would make the
markets very happy. I think consumers would be happy, American farmers would probably be happy if there is a deal.
But at the end of the day, the weird sort of situation we find ourselves in right now is that the market has been volatile, but it has held up
reasonably well, despite some of these hiccups related to trade headlines.
So the U.S. hand in some respects, the Trump administration's cards are strengthened as long as Wall Street shows that they're not that worried.
And you have a company like Walmart today, even though they did mention, you know, tariffs and the trade war prominently, the stock is up because
consumers kept shopping and particularly online, digital sales up 37 percent.
ASHER: So do we know what sorts of products specifically are much more likely to see price increases because of the tariffs than others?
LA MONICA: Yes, I think anything obviously made in China will, of course, be something that will likely be hit with higher tariffs. You've had
Macy's yesterday talking about furniture, for example, being something that, you know, you could expect to see some prices going up on. I think a
lot of people are going to be looking at clothing as well.
But, you know, it's a wide swath of product categories that the Trump administration has slapped higher tariffs on. So anything that has a
higher tariff that's coming from China is likely to be something that's sold in Walmart and Target and other big prominent retailers. Those prices
could go up. Target reports earnings next week, so it will be interesting to see what they have to say as well.
ASHER: Right. Paul La Monica live for us there. Thank you so much. Appreciate that. All right, so the E.U. slaps a billion dollar fine on
five banks over rigging foreign currency trade, and apparently, they've used some interesting chat rooms to coordinate their actions. We'll have
details on that coming up next.
(COMMERCIAL BREAK)
[15:30:00] ZAIN ASHER, HOST, QUEST MEANS BUSINESS: Hello everyone, I'm Zain Asher. Coming up on the next half hour of QUEST MEANS BUSINESS, we've
got new details of how much money Donald Trump made for himself last year. The disclosure documents have just been released. And the European Union
fines big banks a billion dollars after some bad behavior in online chat rooms. But first though, these are the headlines on CNN at this hour.
President Donald Trump has unveiled a proposed point-based immigration system for the United States. Those with more job skills and education
would get higher priority. They outline several other steps, including requiring new arrivals to learn English. Immigration was of course his
main campaign issue.
Meantime, we're told Mr. Trump is increasingly irritated with his national security adviser John Bolton's aggressive stand on Iran. Mr. Trump denies
any in-fighting and calls for talks with Iran. The Iranian Foreign Minister says that won't happen.
Former London Mayor Boris Johnson will be a candidate to succeed Theresa May as British Prime Minister and leader of the Conservative Party.
Johnson wants Britain to leave the European Union without a deal and has criticized Mrs. May's Brexit negotiations.
The timetable for selecting a new leader of the Conservative Party is expected to be announced next month. And New York City Mayor Bill de
Blasio officially announced his U.S. presidential bid today, becoming the 23rd Democrat to enter the 2020 race.
In his announcement video, he called President Trump a bully and touted his policy wins as mayor including universal pre-kindergarten and raising the
minimum wage. A rabbit sculpture by Jeff Koons set a new record on Wednesday when it became the most expensive piece of art by a living artist
to be sold at an auction. The stainless steel figure sold for more than $91 million at Christie's in New York.
The EU has hit five banks with a total fine of $1.2 billion for running cartels that coordinated currency trading. The five are JPMorgan Chase and
Citi in the U.S., Barclays and Royal Bank of Scotland from the U.K. and Japan's MUFG, Switzerland's UBS was actually not fined because it blew the
lid off the case.
According to the European Commission, the traders discussed their actions in professional chat rooms that had names like Three Way Banana Split or
Essex Express 'n the Jimmy. Matt Egan joins us live now from New York. So Matt, just give us more details on what these bank employees are actually
guilty of.
MATT EGAN, CNN BUSINESS SENIOR WRITER: So Zain, Europe's competition watchdogs is accusing the banks of coordinating to rig the $5 trillion
foreign exchange market. And what they're being accused of doing is using these chat rooms on Bloomberg Terminals to swap sensitive information and
then to coordinate on when to buy and sell currencies and which currencies to actually transact in.
It was 11 different currencies that were involved. It was over between 2007 and 2013. As you mentioned, the five banks were fined a total of $1.2
billion. It was JPMorgan, Citigroup, Barclays, RBS and MUFG, which is Japan's largest bank. And you know, I found it really interesting about
the names of these chat rooms and the names of these cartels, as you mentioned.
One of them is called Three Way Banana Split, another one was called the Essex Express. Now, it's really just the latest development in a multi-
year probe to get to the bottom of what has happened here. The U.S. Justice Department has already fined some of these large banks for these
actions. And as you mentioned, one bank that was apparently involved, but hasn't been fined is UBS.
The Swiss Bank received full immunity and avoided a $300 million fine because it was the whistleblower and it actually alerted authorities to the
existence of these cartels.
ASHER: So overrule, what does this mean for trust in the banking sector, do you think?
EGAN: It doesn't help. I think what's really interesting is that we talk a lot about fines. To this day, banks are still being settling fines with
major regulators for things that happened in 2005 and 2006, 2007, 2008. But this actually mostly occurred post-crisis.
[15:35:00] And one of the interesting statements that the banks came out with, you know, a lot of them said, hey, listen, this is something that's
happened in the past, we've changed our practices. But RBS actually came out with the most interesting statement, and they said that, you know, this
is a further reminder of how badly the bank lost its way in the past.
And I think, Zain, that's an interesting statement.
ASHER: So just going forward, what are the banks doing to absolutely guarantee that there's no way that this can possibly ever happen again?
EGAN: It's a good question. I don't think that there's any way to guarantee it because there's always new technology, there's new ways that
people are communicating, there's new social media platforms and apps. And so there's no real way that I don't think guarantee it.
But what is interesting is that some banks -- actually many banks on Wall Street, they are investing more in next-generation technology to actually
try to sniff out when some of their employees are maybe doing things that they shouldn't be doing. They're using artificial intelligence and
machine-learning to comb-through internal communications.
And the hope is that maybe if they spend more money on technology, you know, they can avoid some of these hefty fines that we're seeing today.
ASHER: All right, Matt Egan live for us, thank you so much.
EGAN: Thanks, Zain.
ASHER: It was a very good day for European markets. There were strong gains across the board especially in Germany and Switzerland. It comes as
Europol and the U.S. Justice Department have dismantled a multi-national cyber crime network which stole bank log in details of more than 40,000
people.
President Trump's fortune keeps on growing. And we got a rare insight into just how much. We'll discuss the latest in his financial disclosure, next.
(COMMERCIAL BREAK)
ASHER: We are getting a rare inside look into the hidden fortune of Donald Trump. The president's latest financial disclosure form has just been
released from the Office of Government Ethics. It shows he made at least $479 million last year. Cristina Alesci has been digging into the numbers.
So Cristina, what more are we learning specifically about the president's finances?
CRISTINA ALESCI, CNN CORRESPONDENT: Well, it doesn't seem like there's a big change up or down compared to last year, we're just finalizing those
numbers to get a better comparison. But I think what this report shows is that we really need to see the president's tax returns in order to really
understand, you know, how wealthy he is and how much income he's generating off of his businesses, his various businesses.
[15:40:00] You know, one of the things about this report that's very unique is that the government doesn't require the filer in this case,
Trump, to really list accurate numbers. It requires the filer to list both income and valuation in ranges.
So you know, we can have a range on the forum, for example, I was just looking at the most common ranges, you know, 5 to 25 million, that's a big
range. So -- but what we do get to see here is a glimpse into how potentially some of his properties are doing.
So in Washington D.C., he has of course a name-sake hotel that's very controversial. We see he's still generating, you know, $40 million off of
that. That's about the same as his -- the last time he filed his financial disclosures. Mar-a-Lago, a big property that gets a lot of attention, and
that he spends a lot of time at, that seems to have lost about $3 million compared to last year's statement.
So we get a sense of how his business is doing, but really, not as much detail as we would see in his tax returns which is why there's such a big
push on the Hill to get those documents.
ASHER: OK, so -- but just in terms of specifics, what more would we get from, say, a U.S. tax return, for example, especially from the president?
ALESCI: Well, the biggest thing would be the actual numbers of income which we don't have from this. We have ranges. So it could be a range
from 5 to 25 million or over 50 million. So that would be the biggest thing. We would potentially see where his income was coming from.
It's very hard to tell on this form where the income is actually coming from, what is foreign, what is domestic, so you might be able to see that
from his tax returns. And those are -- those are the biggest things. I mean, I'm not going to sit here and tell you you'll get all the answers you
want from President Trump's tax returns. But I would certainly illuminate his net worth and his income, more so his income than this form does.
ASHER: So Friday is a deadline for the White House to respond to a subpoena for six years of the president's tax returns. Steve Mnuchin has
been commenting on this, how are they likely to respond to that?
ALESCI: Steve Mnuchin said something along the lines of, you know, you could take a guess as to how he's going to respond to that subpoena. So
I don't think there's going to be -- I don't think this is going to be easy and I don't think we're going to see the president's tax returns for a very
long time because it's going to have to go to court at this point and a judge is probably going to have to decide what happens on that front.
ASHER: All right, Cristina Alesci live for us there, thank you so much.
ALESCI: Of course.
ASHER: All right, so some news just into CNN, Boeing says it has actually finished the development of a software fix to its troubled 737 Max planes.
The company says it has flown the Max with the updated software on 207 flights and more than 360 hours. And the plane was grounded around the
world after two crashes and a total of 346 deaths.
The escalating trade war -- tariff war rather, between the U.S. and China is making business owners in both countries extremely nervous. We'll have
more now on the other side of this break.
[15:45:00] (COMMERCIAL BREAK)
ASHER: Right, more now on that news just into CNN. Boeing has actually finished the development of a software fix to its troubled 737 Max plane.
The plane was grounded around the world after two crashes and 346 deaths. So I want to bring in Tom Foreman, he's been covering the story from the
very beginning. So Tom, just give us more specifics about this actual software fix and what it involves.
TOM FOREMAN, CNN CORRESPONDENT: The software fix has gone through a bit of an evolution from the start as more details of the plane's problems became
known. As we would understand it now, one of the things that this would overcome is some of the ability to shut off this MCAS system which remember
was an automated leveling system on the plane which is implicated in both the Indonesia and in the Ethiopian crash in making the plane sort of nose-
down in an uncontrolled way until it crashed.
So it will make a little bit easier for them to control that system when they had to just shut it off when they had to, and it would automatically
include not as an added feature but as a standard feature, a readout in the cockpit that would let these pilots know if these things kicked in.
They say in the updated software, they've flown it 207 flights, more than 360 hours and the CEO of Boeing Dennis Muilenburg who's really been on the
hot seat over all of this says that we're making clear and steady progress and we're confident the 737 Max with updated MCAS software will be one of
the safest airplanes ever to fly.
He can say that, but they still have to get it past the FAA and not just the FAA, but also air regulators around the world who at this point may not
be so keen to take the U.S.' certification of this plane as being OK since it took the FAA longer than almost anyone else to pull it from the sky.
ASHER: So if they don't take the U.S.' certification of this plane as being OK, if they don't take their word for it, what is the approval
process from the FAA going to be like?
FOREMAN: Well, the approval process will be as -- I would think in this case, because of what we've heard, a bit more rigorous than normal
processes because everybody loses if this does not come out properly here. So I think what's going to happen is, if you base it on what we
heard from the hearing yesterday about this, the FAA will to some degree be in lock step with Boeing.
And saying, here's what we did, here's how it was tested, here's the proof that this works. I just think there's going to be some political
reluctance from other governments around the world who are going to say, listen, you certified it in the first place, when it got into trouble, you
took longer than anyone else to make these things park.
We're going to look at this with our own eyes, and it probably won't keep it out of the sky if it gets to that point, but it could delay it a little
bit longer and truthfully, for Boeing right now, every single day, their delayed is yet more money on this airplane lost and more opportunities.
ASHER: Yes, some airlines are seeking compensation for the planes they have to --
FOREMAN: Yes, absolutely --
ASHER: Keep grounded.
FOREMAN: Not to mention the possible lawsuit from the 346 people --
ASHER: Exactly --
FOREMAN: Whose lives were lost in these two accidents.
ASHER: Exactly, Tom Foreman live for us, thank you so much --
FOREMAN: You're welcome --
ASHER: Appreciate that. Cisco CEO says it's important to put the U.S.- China trade route into perspective. He spoke to CNN earlier today as well as the head of Citroen who is responding to that expected delay in Trump's
administration's older tariff's decision. Here's what they told our Julia Chatterley.
(BEGIN VIDEO CLIP)
CHUCK ROBBINS, CHAIRMAN & CEO, CISCO: When I talk to the White House, I'm simply talking to them about the effects of tariffs on our business. I'll
leave the broader political debates for our politicians. But I think that, you know, when you look at the size of the U.S. economy, what is it?
Eighteen, $19 trillion, and we're talking about $800 billion.
So you do have to keep it in perspective. And I've seen many economists debating this topic over the last couple of weeks. You know, look, this is
something that I haven't seen in my lifetime, so it's very difficult for me to understand what the impact will be. But I do think we have to keep it
in perspective relative to the size of our total economy and how much of these imports that would have tariffs on them.
LINDA JACKSON, CEO, CITROEN: Obviously, anything that delays is instability. So I don't actually export vehicles to North America, but
obviously that has an effect for many other industries.
[15:50:00] So of course, anything that is not certain and delays decisions which we thought we were going to get obviously is instability. Everybody
wants to find a solution, but at the end of the day, we have to wait and see what's going to happen and what the politicians do.
(END VIDEO CLIP)
ASHER: And as the trade dispute between the U.S. and China deepens, the pain of higher tariffs is being felt across those two continents by
businesses large and small. CNN's Matt Rivers reports from a food trade fair in Shanghai where almost everybody is finding tariffs a little bit too
hard to stomach.
(BEGIN VIDEOTAPE)
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT (voice-over): If you want to talk international trade, this is a good spot, a giant conference in
Shanghai packed with people who import and export food as the U.S.-China trade war heats up, they're feeling it because most products here are now
facing steep tariffs either from Beijing or Washington.
ANDY HOROWITZ, RESTAURANT OWNER: I'm hoping that it doesn't -- the pork doesn't get much more expensive than it is.
RIVERS: Andy Horowitz runs a restaurant in Beijing, China put a 25 percent tariff on the American pork he sells, so he profits took a hit.
(on camera): Why then keep buying American pork?
HOROWITZ: We want to support American farmers and what they're trying to do as well.
RIVERS (voice-over): Most Americans we spoke to here are just trying to ride out the storm until a deal is struck, whenever that might be.
ANDY ANDERSON, WESTERN U.S. AGRICULTURAL TRADE ASSOCIATION: Everybody is going to have a group hug and we're going to move forward, and then, oh,
no, sorry, false alarm.
RIVERS: Just two weeks ago, it did look like a deal was in the works, but the White House says China reneged on commitments which China denied, but a
pair of tweets from President Trump sparked a sudden escalation and within eight days, both sides announced new tariffs. But no matter who's to
blame, the uncertainty is a problem for Americans.
ANDERSON: Chinese buyers are saying, you know, I like your product, I would like to buy your product, but tomorrow, it might be an additional 25
percent.
RIVERS: Buyers like Liu Yanming who wants to buy U.S. blueberries, but just can't.
LIU YANMING, CHINESE BUYER: The tariff has gone from 10 percent to 25 percent, so of course we can't buy from the U.S., we'd lose money. It's
irrational.
RIVERS: A set of new tariffs kicks in around June 1st, but a deal is unlikely before that. So more pain is likely which some are OK with if
it's temporary.
RALF LUNDGREN, WASHINGTON STATE RASPBERRY FARMER: I voted for him, I guess and I believe in what he's doing.
RIVERS: Washington State raspberry farmer Ralf Lundgren says even if the trade war hurts a bit now, in the long run, it's for the best.
LUNDGREN: If we have to sacrifice a little bit today, so that our kids and grandkids have a better life going forward, I'm willing to put up with a
little bit today.
RIVERS: Matt Rivers, CNN, Shanghai.
(END VIDEOTAPE)
ASHER: That's the view from China. Here in the United States, there's just as much anxiety. I want to go straight to our Clare Sebastian, he's
joining us live now from a trade show in New York. So Clare, I mean, the businesses that you are speaking to, how likely are they to pass on higher
costs from tariffs straight to consumers?
CLARE SEBASTIAN, CNN REPORTER: They are very likely, Zain. This is something that pretty much all of the small and medium-sized businesses
that we've spoken to are having to do. This is a creative packaging trade show. There's a lot of stuff here that's impacted by these tariffs.
And I will say, just like Matt found in China, 10 percent was one thing, 25 percent tariffs is a whole different ball game. People are really starting
to scramble. Those business behind me, they say they've got a shipment that's already in the works that they're going to have an awkward
conversation with their customers about sharing in the higher costs, that 25 percent tax.
And there's this business behind me here, the question of whether or not they should shift production. Some of their plastic bottles are made in
China and will be subject to the higher tariffs. So I put that question to their director of sales, is it even possible to shift production out of
China?
(BEGIN VIDEO CLIP)
MICHAEL WARFORD, DIRECTOR OF SALES, ABA PACKAGING: We buy on quality, service, support, price is a factor as well, but it's not the primary. So
when we get a project, we're looking at all regions, all sources to see where is the best for us and we go to the best source. And we have valued
partners we've had for decades, and some of those are in China as well.
(END VIDEO CLIP)
SEBASTIAN: So you can see it's just not that easy for many people to shift production. They say that they just can't find the same quality elsewhere,
so they will have to pass on the cost to their customers and then ultimately it will go to consumers.
But there is, Zain, a flip side to this as well. I've spoken to more than one business today who doesn't manufacture in China, perhaps the
manufacture in the U.S. or in Indonesia, and they've seen a real up-tick in their business as a assault of this one company that produces their product
in the U.S. told me they've even seen a concrete, you know, new order today, take a listen.
(BEGIN VIDEO CLIP)
JOSEPH BRODNER, PRESIDENT, OLCOTT PLASTICS: Today, we've had one port for 750,000 pieces. That is emergency order. But they're now -- because the
extra 25 percent makes it very difficult for them to be able to supply that to a dollar store and add 25 percent to it.
(END VIDEO CLIP)
[15:55:00] ASHER: A long lag time --
SEBASTIAN: You can see, Zain, that the --
ASHER: Yes, I was just saying --
SEBASTIAN: Issues are rippling throughout the economy and then pretty much everyone here is affected.
ASHER: I'm so sorry, we were talking over each other there, I apologize. But I was just going to say that there is a long lag time sometimes between
order and delivery. So does that give businesses sort of a leeway to be able to protect themselves from the tariffs?
SEBASTIAN: It does. I think in some cases that will help, but I think as I said, you know, some are having to have awkward conversations with their
customers about shipments that are already manufactured in China, but haven't yet been delivered, that will be subject for these tariffs.
And I think the issue for a lot of these businesses is the uncertainty still remains. Even though we see these new tariffs, there's no -- there's
no real clarity at over how much further this will go, whether it will even be dialed back if a deal is met. So how are they supposed to plan? Do they
start to move production and then risk, you know, putting their productions somewhere else and this all going away or do they wait it out?
I think that's a question that many people here are grappling with today, Zain.
ASHER: Because a lot of people think that eventually in the long run, the trade mess with China will be resolved. But obviously between now and
then, they do have to make plans, businesses do have to figure out what they're going to do. Clare Sebastian live for us there, thank you so much.
OK, the big rebound on Wall Street rolls on, a final check on the Dow just before the closing bell, that's next.
(COMMERCIAL BREAK)
ASHER: Right, the last few minutes of trade on Wall Street, and as you can see behind me, this market is proving to be very resilient despite the
trade war. We had that 600-point drop on Monday, but as you can see, the Dow is up triple digits. In fact, it's been up triple digits four out of
the past five sessions.
This time, this Thursday, it's actually getting a lot of help from stronger-than-expected earnings from two blue chip companies, and speaking
specifically about Cisco and Wal-Mart. Cisco, take a look here behind me, you can actually see, is actually leading the Dow components, it's up more
than 6 percent right now.
Investors were heartened when the tech giant said it has limited exposure to China and the trade dispute, that's why that stock is up. Wal-Mart is
also rallying, but America's largest retailer says that prices at the check-out will be going up because of the tariffs.
So that company is actually going to be passing on higher prices from this trade war to their consumers if this trade war does end up continuing.
(BELL RINGING)
All right, that is QUEST MEANS BUSINESS, I am Zain Asher, "THE LEAD" with Jake Tapper starts right now.
END
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