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Quest Means Business
President Trump Threatens Iran with Obliteration if it Attacks Anything American; Head of U.S. Customs and Border Protection Steps Down; FedEx Sues U.S. Government Over Huawei Ban. Aired 3-4p ET
Aired June 25, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: Last hour of trade on Wall Street, we've been down throughout the whole of the session,
as you can see. Some particular low points just after 10 o'clock, one o'clock and now, just around 2:30. So in this last hour, it will be
fascinating and interesting to see whether or not those losses accelerate.
Those are the markets and these are the reason why. The summer blockbusters: A new giant merger for Wall Street to digest. We need to
understand exactly what underneath it, and whether more will follow.
Donald Trump's Agriculture Secretary admits American farmers are suffering in the China trade war. They are the casualties.
And Jared Kushner lays out a $50 billion plan for peace in the Middle East. The question is whether anyone one is buying it. Live from London. It is
Tuesday. It is the 25th of June. I am Richard Quest. I mean business.
And a very good evening and a warm welcome from London. A blockbuster merger starts us off tonight. In the U.S. pharmaceutical sector, a giant
is giving itself a shot of Botox by buying the Irish maker of the famous drug.
Now the parties involved, AbbVie has announced it will buy Allergan for $63 billion. Shares of both companies are going in opposite directions, which
is interesting. The acquiree is up 26 percent, the acquirer is down 15 percent. It's the latest in a raft of big deals in what has been a busy
year for mergers and acquisitions across all sectors.
Here are some of the other proposed tie ups. In January, we had Bristol- Myers-Squibb announcing it would buy Celgene for $74 billion, and Bristol- Myers stock tumbled on Monday, when they announced the deal, it could face antitrust immunity. And out of pharma, you've got UT, United Technologies
that's hoping to snap up Raytheon. They're joining forces. It will be an aerospace powerhouse. The combined value is more than $160 billion.
So what's driving these deals? Matt Egan is in New York and he joins me now. Matt, let's look first of all at the AbbVie-Allergan deal and then
reverse backwards, if you like. Why does this deal make sense?
MATT EGAN, CNN BUSINESS LEAD WRITER: This deal is all about diversification. AbbVie was under enormous pressure because its biggest
drug, Humira is losing patent protection in 2023. And that is a big deal because not only is it the world's top selling drug, it's an anti-arthritis
treatment. But it also made up two thirds of AbbVie sales.
So what they've done is they've gone out, they spent a lot of money, and they've acquired Allergan, which obviously is the company behind Botox, and
so the aim of this is to make AbbVie a more diversified company, but what I think you're seeing is there is some concern in the market, about just how
costly this is.
If you include debt, Richard, this is an $85 billion deal. It's the second biggest pharma deal in history according to Deal Logic.
QUEST: All right, if we look at that, and we ask ourselves, AbbVie needs heft. It needs a new ways forwards, but does Allergan provide it?
EGAN: The market is telling you maybe not, right, because we've seen such a sharp decline, 16 percent down for AbbVie and I think that's because one
-- there's two real issues here with this deal. One, is that there isn't really that much of an overlap between these two companies. So that could
reduce some of the synergies and cost reductions that they could wring out when they join forces.
The other issue is that Allergan's pipeline is not really all that robust. If you look at the press release, you know, AbbVie didn't even talk about
Allergan's pipeline, and so that raises some concern. And one other point is that Botox itself will be facing competition in the coming years.
QUEST: So all these other deals, Raytheon-UT, the Bristol Myers deal. I mean, they're large numbers, but are they -- do we see that it's actually
any better, bigger or worse than in previous years in terms of M&A activity?
EGAN: So there's no doubt that we are seeing a flurry of M&A deals, particularly these days big blockbuster monster deals, I'll add another one
to your list, and that is the bidding war that we saw over Occidental Petroleum between -- I am sorry, the bidding war over Anadarko and that was
obviously won by Occidental Petroleum.
[15:05:12] EGAN: So I mean, I think the question is does this signal some sort of confidence from the C-suite? Because you have to think, you know,
they're not going to go out and spend all this money and take on all this debt if they see a recession coming. So maybe it is a sign of confidence.
On the other hand, you know, if you look back at history, sometimes it's been a sign of hubris. The last time there was a pharma of this size or
bigger was Pfizer's deal in 1999. And that, of course, was very near the top of that market.
QUEST: You're too young to remember that. Thank you.
EGAN: Thank you, Richard.
QUEST: Matt Egan joining me from New York, unfortunately, I do remember it. Thank you. Now, the Dow is falling, shattering hopes of a record high
close.
The loss is accelerated after the U.S. Fed Chairman Jerome Powell spoke. He said economic risks appear to have grown and the Fed is quote,
"grappling with whether the uncertainties will persist, thus forcing the Fed to act." It is well worth remembering, of course, that the market is
pricing in a rate cut in July, probably two rate cuts this year, and maybe even two more next year, which we're just about almost not quite reverse
much of the rate hikes that's been seen since the tightening cycle began.
And worries on the trade war on the Feds' list, Donald Trump is preparing to meet his Chinese counterpart at the G20 this Week in Osaka in Japan.
Meanwhile, his U.S. Agriculture Secretary is admitting what the White House won't that U.S. farmers are suffering as a result of tensions.
(BEGIN VIDEO CLIP)
SONNY PERDUE, U.S. SECRETARY OF AGRICULTURE: Well, I've told the President and the President understands, you can't pay the bills with patriotism. We
know that. And certainly he knows that and that's why he is trying to supplement the damage they're having from trade disruptions with this money
-- market facilitation.
(END VIDEO CLIP)
QUEST: Now, Sonny Purdue admits U.S. farmers are the casualties. He was speaking exclusively to CNN's Vanessa Yurkevich who joins me now from
Council Bluffs in Iowa. Vanessa, the fact he admitted what everybody knows is noteworthy in itself. But does he have a plan for what to do to help
the farmers since he doesn't expect a trade deal imminently?
VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT: Well, Richard, part of the bailout that was offered to farmers this year, $16 billion, just this year
alone is part of that help that he is trying to get to farmers who badly need it here in Iowa. They were hit with historic levels of flooding.
They're still recovering from that.
But I asked the Secretary in an interview directly, when does he think this trade war will end?
(BEGIN VIDEOTAPE)
YURKEVICH (voice over): It's a sunny day in Iowa for the great tractor ride, a welcome sight after heavy rains last week brought more flooding to
farmlands.
Secretary of Agriculture Sonny Perdue brought his own tractor up for the ride and a message from the President.
(BEGIN VIDEO CLIP)
PERDUE: President Trump has a lot of respect for farmers and ranchers across this country. He appreciates your patience. He understands it's
tough out there.
(END VIDEO CLIP)
YURKEVICH (voice over): The U.S. has been in a trade war with China for almost a year. Farmers have felt the brunt of it with tariffs driving down
their crop prices.
(BEGIN VIDEO CLIP)
YURKEVICH (on camera): Is the American farmer the casualty in this trade war?
PERDUE: I think they are one of the casualties there of the trade disruption, yes.
(END VIDEO CLIP)
YURKEVICH (voice-over): The President is headed to the G20 Summit in Japan this week where he'll meet with China's President Xi Jinping to try to get
trade talks back on track after a deal fell apart last month.
(BEGIN VIDEO CLIP)
YURKEVICH (on camera): Well, the President is going to speak with the President of China later this week.
RUTH DE BRUIN, IOWA FARMER: Yes.
YURKEVICH: You seem excited.
DE BRUIN: Yes. Yes.
YURKEVICH: What are you hoping comes out of that conversation?
DE BRUIN: Wouldn't it be great if they could get a deal?
PERDUE: I don't think he'll come home with a deal, but I think he could come home with the beginning of, let's really get serious about
negotiations.
YURKEVICH: How long do you think it will go on?
PERDUE: I'd love to see a resolution by the end of this year.
(END VIDEO CLIP)
YURKEVICH (voice-over): But that might be too long for some. Farm bankruptcies are up 20 percent last year, the highest in almost a decade.
(BEGIN VIDEO CLIP)
DE BRUIN: We have to pay the bills. We can't just keep going. The bank isn't going to keep letting us go, right? You know, you've got to get to
that point where you say, okay, what do we do now?
(END VIDEO CLIP)
YURKEVICH (voice over): Last month, the President approved another bailout package for farmers, $16 billion for 2019.
(BEGIN VIDEO CLIP)
DUANE BRANDT, IOWA FARMER: What they're doing this year is going to help a bunch. It's going to help me a bunch. But --
YURKEVICH (on camera): So you wouldn't be able to make ends meet if you didn't have these government subsidies?
BRANDT: They would have been very, very slim.
(END VIDEO CLIP)
YURKEVICH (voice-over): Farmers here hoping this lifeline continues.
(BEGIN VIDEO CLIP)
PERDUE: Yes, I think President Trump has demonstrated they can count on him. Obviously, we don't have nothing promised.
[15:10:09] YURKEVICH (on camera): So ultimately, can they count on getting those funds from the Federal government if this trade war continues?
PERDUE: Again, this is a 2019 program. I'm not going to promise anything for 2020.
(END VIDEOTAPE)
YURKEVICH: Despite this trade war, many of the farmers we've spoken to here in Iowa still very much support the President, but they will be paying
very close attention to that meeting later this week between President Trump and between President Xi to see if they can make any progress at all,
Richard, on this important trade deal for them.
QUEST: So why do they still support the President in this? I can understand there may be bigger issues, but when their own economic
wellbeing is being seriously hurt?
YURKEVICH: It's a really good question and the reason that they're supporting this President is because they feel like he is one of the only
Presidents in recent decades that actually has turned the spotlight on them that has made them a focal point of his administration, of his plan.
They feel like even though they're going through a little bit of pain right now, the end result that because the President is pushing so hard for a
better deal for them, that it is worth that pain right now for gain in the future -- Richard.
QUEST: Thank you. Beautiful part of the world and it looks -- it looks like it's an absolutely idyllic surroundings where you are in Iowa.
Now the White House has a plan for Middle East peace. It's more of a real estate deal than a political solution. The Palestinians say five star
hotels under occupation won't work for them.
And FedEx is caught in the middle of a U.S.-China trade war. The delivery company is suing the U.S. government over the Huawei export bans. In a
moment.
(COMMERCIAL BREAK)
QUEST: Donald Trump's long awaited economic plan for the Middle East was revealed today. It was at a conference in Bahrain, where the President's
son-in-law and senior adviser, Jared Kushner, debuted the approach to solving the conflict between Israel and the Palestinians.
Many government officials from the region went to Manama to hear the proposals. The Palestinians refused to go as the Israelis didn't turn up
either. Jared Kushner says he has the Palestinians interests -- best interests -- at heart.
(BEGIN VIDEO CLIP)
[15:15:01] JARED KUSHNER, SENIOR ADVISER TO DONALD TRUMP: My direct message to the Palestinian people is that despite what those who have let
you down in the past tell you, President Trump and America have not given up on you. This workshop is for you.
The vision we developed and released, if executed correctly, will lead to a better future for the Palestinian people. A future of dignity, prosperity,
and opportunity.
(END VIDEO CLIP)
QUEST: "Dignity, prosperity and opportunity" predicated on development. Because the White House's olive branch to the Palestinians, the core of it
is this $50 billion worth of development projects meant to lift their economy and it all makes perfect sense.
It's to be bankrolled by the wealthy Arab neighbors, and it will be a combination of grants, low interest loans, and private investments and
private public partnerships.
In essence, it seems Donald Trump essentially wants to make Gaza City look more like Tel Aviv in terms of real estate development, and in terms of
perhaps tourism.
Now, it was a similar strategy with North Korea, where Donald Trump sought to end a half century of conflict by promising a post nuclear economic
boom. He showed Kim Jong-un this promotional video on an iPad -- great beaches, Mr. Trump said. You could have the best hotels in the world.
And it's a similar matter and similar message perhaps to the Iranians. Only yesterday, as he was signing new sanctions aimed at crippling their
economy and targeted specifically at the Supreme Leader, President Trump remarked on Iran's huge business potential.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I think Iran potentially has a phenomenal future. Just -- and I say that about North Korea, too.
I've said it about North Korea. I think North Korea has a phenomenal future. And I think Iran also has a phenomenal future. And I would like
to -- I think a lot of people would like to see them get to work on that great future.
(END VIDEO CLIP)
QUEST: Jeremy Diamond, who is that the Peace to Prosperity Conference in Manama. This idea of a phenomenal future, there does seem to be a common
theme to it, which is build, develop, private enterprise open up. There's nothing revolutionary about all of this. But there's not much policy
behind it.
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Look, this is something that has been attempted in the past in terms of discussing the economic
possibilities for Palestinians, if there is to be an Israeli-Palestinian agreement.
I think what is different this time, Richard is the way that the White House and Jared Kushner have sought to frame this. They've framed it as
intrinsically linked and a part and parcel of a broader Middle East peace plan that this administration has been crafting for the last two and a half
years.
We heard Jared Kushner today make clear that none of this economic plan, this $50 billion in investment, mostly for the Palestinian territories, but
also for surrounding countries, that none of this investment would actually flow to the region unless there is a peace agreement.
And at the same time, he made it clear that a green to an economic pathway to show a better future for Palestinians is a necessary precondition to
actually getting that peace agreements in hand.
And it was in fact, Richard taking on many of Jared Kushner's critics head on who have been arguing over the last several days that you cannot simply
address the economic aspects of this, talk about the economic aspects of this without addressing those core political issues.
But Jared Kushner did just that today making clear that he is not going -- that he is simply going to address the economic portion of this during this
two-day summit, and none of the political issues are being discussed.
QUEST: Jeremy, many of the people in that room are very savvy investors. They control tens of billions of dollars' worth of sovereign funds. They
know, but were they rolling their eyes at this, or were they thinking, "This is the right deal, this is the right thing and we want to get you in
on it."
DIAMOND: Look, first you have to keep in mind the people who came here, right, are the people who are at least open to hearing what this
administration is talking about.
There were the Palestinians, the Lebanese, several others who decided to boycott to not attend this economic conference here in Bahrain, they were
not here for us to gauge their reactions.
But the people who we did speak to who are attending this conference -- investors and Arab leaders from the region -- the message that we mainly
heard from them is look, we are open to hearing this. We are supportive of anything that could potentially bring economic prosperity to the
Palestinians.
But there's also this hesitancy to really fully endorse this initiative from the White House, because they're not seeing the political details of
this.
So again, I think that a lot of the support that we may be seeing here is very much conditional on what more they will see from this White House.
But the problem, of course, Richard, is that we're not expected to see the political portion of this agreement for another four or five months after
the next round of Israeli elections.
[15:20:11] QUEST: All right, thank you, Jeremy Diamond there. The Palestinians say they caught be bought off. In their words, they don't
want to live in a five-star hotels under occupation.
The Palestinian Prime Minister says the conflict is about politics, not economics.
(BEGIN VIDEO CLIP)
MOHAMMAD SHTAYYEH, PALESTINIAN AUTHORITY PRIME MINISTER: The figures are so exaggerated to the extent that we don't believe it, first. Secondly,
this economic workshop is totally diverse from any political dimension.
The economic problem in Palestine has nothing to do with the economic policy of anybody. The economic problem here or financial crisis that we
are in, it has to do with the Israeli measures that has been imposed on the Palestinian economy on one hand, and the financial war that has been
declared by this American administration on the Palestinian people under Palestinian authority and United Nation were in association for the
Palestinian refugees.
So the issue is really not an economic issue. The Palestinians are hoping for independence, sovereign state and occupation. The issue for us is not
about economic issues.
When we speak about investment and improving living conditions, without really tackling the roots and the causes of the problem, I think the whole
workshop is totally misleading and it is just simply an intellectual exercise.
As I said earlier, the best part of it will be only the coffee break.
(END VIDEO CLIP)
QUEST: Fawaz Gerges is with me, the Chair of the Contemporary Middle East Studies at the LSE. His book, "Making the Arab World." Good to see you.
FAWAZ GERGES, CHAIRMAN, CONTEMPORARY MIDDLE EAST STUDIES, LONDON SCHOOL OF ECONOMICS: Thank you. Thanks.
QUEST: Before we talk about that. Do you agree with the tenet, the fundamental point that Jared Kushner is making that the best way forward --
put political aside for two seconds that the economic development is what this really needs to be about?
GERGES: The underlying premises of the so-called economic summit in Bahrain are misleading, are simplistic, are misguided. Why? Because
Donald Trump and his son-in-law, Jared Kushner treat the Israeli- Palestinian piece of process, like a real estate venture.
They mistakenly believe that the Palestinians will give up their aspirations for freedom and a state of their own for $28 billion. They
underestimate -- they underestimate the depth of Palestinians for freedom and the end of Israeli occupation.
QUEST: All right, so you can go -- but put that to one side for one second, I just want to concentrate on what Kushner actually said, which is,
if you think about this, the way forward is through a better economy in the region. And that will require --
GERGES: Richard, the way forward is through a peace process that resolves the 100-year conflict between Israel and the Palestinians by establishing a
two-state solution. Two states, a Palestinian state and an Israeli state, living side by side in peace.
Why privilege the economic track, Richard, you say the political track will come in five months from now, right? That's what Jared Kushner has said.
We already have the political track.
Donald Trump unilaterally recognized Jerusalem as Israel's capital, Donald Trump unilaterally moved the U.S. Embassy to Jerusalem.
QUEST: All right, but this reminds me greatly if the Northern Ireland problem with all of that peace process, and I remember the 70s and 80s.
Meanwhile, the rest of the world was catching on with it. The internet was coming along. Other nations were managing to improve their education,
their services.
Meanwhile in Northern Ireland, they were still arguing about -- and fighting and killing each other for battles of centuries gone, and that's
exactly the same.
GERGES: Richard, let me address --
QUEST: Surely, Jared Kushner deserves a certain amount of credit for coming up with an economic plan that will actually improve lives.
GERGES: Nonsense, why? The money, Richard is aspirational, in fact, the $28 billion for the Palestinians are peanuts. They cannot do a great deal
of good for the Palestinian state. And guess why? Donald Trump has not invested a single dollar in the so-called peaceful prosperity.
He is not leading by example, neither multinational corporations nor the Gulf States will provide money without peace. How can you improve the
quality of life of the Palestinians without a state of their own? Without getting rid of the borders? How can you?
So even the economic -- the so-called economic initiative is not based on any concrete, really foundation?
QUEST: Isn't there a validity that would say, look, if we -- if the Palestinian people, which I think you'll agree. The Palestinian Authority
is hardly the best run and most transparent of organizations.
GERGES: You're absolutely correct, but the Palestinian, Richard, let's not -- what we're talking about here, you and I, we are not disagreeing. What
we're talking about here, how can the Palestinians and the Israelis live at peace?
How can we resolve this particular conflict? Right? That's right question. And you cannot -- you cannot talk about the economic track
without resolving the political track.
QUEST: Sure, and all roads -- and all roads would eventually lead you back to Jerusalem. And the question of final status?
GERGES: What did Donald Trump do in Jerusalem?
QUEST: And right of return?
GERGES: And what did he do? So this -- Richard, you have already answered your question.
QUEST: I agree.
GERGES: On the two most important -- so let's say, if I am -- if I want a Palestinian, I say what's left to discuss? There's nothing left for the
Palestinians to discuss.
QUEST: I suppose the administration would say, "Fine, whilst we deal with all these other things, at least improve the lot of your own people who are
living under a corrupt regime."
GERGES: So why not Donald Trump -- I say to Donald Trump, why not invest? Why press the Palestinians? You know what he has been doing on the past
here, Richard. Donald Trump has been deepening Palestinian despair.
He has targeted Palestinians. He is forcing the Palestinians and these are not my words, whether -- most of the institutions, he expelled the
Palestinian office from Washington. He has engaged in a systemic campaign to force the Palestinians to surrender and accept his terms.
QUEST: If all of this continues as it looks like it is going to, we're talking about no improvement in the Middle East peace process, at least not
from the American side, which begs the question, sir, which other interlocutor could come in and try and build something? The Russians? The
Europeans? Highly unlikely.
GERGES: Sadly and tragically, without American leadership nothing will happen. And this particular problem will be with us until Donald Trump
leaves the office.
The question is, Richard, and I'm being really very analytical. How much damage has Donald Trump done? In fact, he has really deepened the divide
between the Israelis and the Palestinians. He has made the peace process much more difficult for his successor.
QUEST: Always good to have you with us, sir.
GERGES: Same here. Thanks for having me.
QUEST: Thank you very much indeed. Much appreciated. FedEx delivers a lawsuit to the U.S. government. The company alleges it is forced to become
a law enforcement agency. This is QUEST MEANS BUSINESS tonight live from London.
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. We're going to
take you inside the only rare earth mine in the United States, it's a crucial time when the U.S.-China trade war with talks taking place later in
Japan.
And FedEx versus the federal government -- Federal Express versus the federal government itself as corporate America gets involved with a Huawei
controversy. As we continue, this is CNN, and on this network, the facts always come first.
Donald Trump is threatening Iran with obliteration if it attacks anything American. The U.S. president says he doesn't need an exit strategy from
the increasingly tense standoff, but he's also leaving the door open to negotiations saying when Iran is ready, it should let him know.
U.S. Secretary of State Mike Pompeo says the Pentagon is prepared to remove American troops from Afghanistan. No timeline has been set. It was during
an announced stop in Kabul today that Mr. Pompeo said real progress has been made in peace talks with the Taliban.
The man in charge of the U.S. Border Patrol has resigned. The acting Commissioner John Sanders didn't say why he was stepping down from Customs
and Border Protection, his agency has been under fire for deplorable conditions at detention centers holding migrant children.
A potentially dangerous heat wave is set to engulf Europe this week and temperatures expected to climb up to 40 degrees in some cities. Scientists
are blaming climate change for extreme heat like this. Italy wasn't supposed to be one of the better teams at the Women's World Cup, but
they've reached the quarter finals just a short time ago by beating China 2-0.
The Italians will play the winner of Japan and the Netherlands which is being played right now. The delivery company FedEx is to report quarterly
results after the bell in just about half an hour, 40 minutes from now. The company has filed a lawsuit against the U.S. government related to
issues caused by Huawei export bans.
FedEx shares have taken a hit, Paul La Monica has the details. And so why exactly are FedEx suing the federal government?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, Richard, FedEx basically doesn't want to be a global policeman. They say that they've essentially
been deputized because of the Trump administration's ban on Huawei to try and police what packages are being shipped, and that, it is not their job
to do so.
And obviously, this is something that has caused not just consternation within, you know, the U.S. political circles, but of course, with China as
well. Huawei has taken issue about the fact that FedEx did not ship apparently a Huawei smartphone that was sent from the U.K. to some offices
in New York for "PC Magazine" for a product review. And this is something that Huawei is taking issue with, that they believe FedEx is prohibiting
Huawei products from being shipped globally and that they shouldn't be doing so.
QUEST: Whether or not -- I mean, in the individual cases, there's also some confusion whether it was just a mistake or a misunderstanding. But
the wider point is there that the U.S. government will say, well, I'm sorry, FedEx, those are the rules, you choose to deliver them, if you
can't, run your business properly, then you'll have to sort something out.
LA MONICA: Yes, I think that is a valid point, but then it begs the question, what is running your business properly actually mean? FedEx is
making the argument that maybe the U.S. does not have legal grounds to force an American company from prohibiting shipments of certain products,
and it's going to be interesting to see if it winds up going to court.
How that bans -- how that plays out. But I think the bigger issue, Richard, is that FedEx and other American companies are collateral damage
in this U.S. ban on Huawei. There are many companies that depend on Huawei equipment that are being hurt as a result of the ban, and obviously, I
think a lot of big tech companies in the U.S. that want to do more business in China are being hurt by China's retaliatory responses.
[15:35:00] QUEST: Paul La Monica in New York, thank you. Now, to a different kind of delivery from deep underground. Exports of rare earth
magnets from China to the United States jumped 20 percent in May. Now, it was all on fears that Beijing will soon cut off shipments. China controls
most of the world's rare earth minerals.
You'll see everything from medicine to military. As the trade war rose on, one U.S. company -- by the way, these are the rare earths in the periodic
table which I don't really understand, in fact, not really, I don't understand at all. But I'm told, these are the important ones and become
ever more important in the trade war.
Now, one U.S. company is working to boost its own reserves. CNN's Clare Sebastian reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Three, two, one, fire in the hole.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice-over): Blasting through the rock --
UNIDENTIFIED MALE: Very good --
SEBASTIAN: To reach the precious metals underneath.
UNIDENTIFIED MALE: It's a beautiful sight to see.
SEBASTIAN: These are busy times here in Mountain Pass, California. A mine thrown into the spotlight by the U.S.-China trade dispute.
(on camera): Is this the busiest you've known it?
UNIDENTIFIED MALE: Right now it is and we continue to accelerate more and more each day.
SEBASTIAN: This is the only rare earth mine in the United States. But just two years ago, it was sitting idle after the previous owners went
bankrupt. Now, though, it's well and truly back up and running, the current owners say it accounts for more than 10 percent of global rare
earth supplies.
(voice-over): Rare earths are 17 naturally occurring elements, crucial ingredients in everything from cellphones to electric cars.
UNIDENTIFIED MALE: This is a very valuable product right there.
SEBASTIAN: The co-chairman of the mine James Litinsky is aware he's leading a lone U.S. competitor in an industry dominated by China where
labor costs are cheaper and environmental rules less strict.
JAMES LITINSKY, CO-CHAIRMAN, MP MATERIALS: If there's going to be an American rare earth industry, it's going to be led by us. We're it.
UNIDENTIFIED MALE: So, this is actually the product, this is the concentrate coming out of the mill. And we will package this into those
containers over there, and that is currently the product that we're shipping.
SEBASTIAN (on camera): So, right now everything you produce, everything goes to China.
UNIDENTIFIED MALE: Yes, that's correct.
SEBASTIAN (voice-over): That's because China processes much of the material from other countries currently producing 90 percent of the world's
supply. Beijing recently threatened to use that dominance as leverage in the trade dispute, hinting it could restrict rare earth's exports, cutting
off not only U.S. companies, but also the military which uses rare earth in jet engines, satellite and missile defense systems.
The Pentagon told us they're quote, "working closely with the president, Congress and the industrial base to mitigate U.S. reliance on China for
rare earths."
UNIDENTIFIED MALE: My first reaction is wow, what have we bought?
SEBASTIAN: Mountain Pass has its own plans to reduce its reliance on China, this massive processing facility that they plan to get up and
running by next year.
UNIDENTIFIED MALE: There really is nothing like this facility in the world. The scale of the demand of investment that has gone into it, and
there were a lot of people who doubted that we could get this thing going again.
SEBASTIAN (on camera): Has the trade war provided more impetus to get this off the ground?
UNIDENTIFIED MALE: Soon, there's definitely a greater sense of urgency.
SEBASTIAN (voice-over): This pound would allow them to sell separated rare earths directly to global companies. Litinsky says it's a mission he feels
the U.S. government needs to support.
LITINSKY: And if the United States of America is going to be a leading power in the world, we need to continue to grow our economy. And so, there
needs to be a recognition that the industries of the future drive GDP, they drive employment, and ultimately that will drive your military budgets.
And so, as a matter of national security, we need to lead in these industries of tomorrow.
SEBASTIAN: A recognition that could help turn this mineral rich soil into an American rare earth's revival and a viable alternative to China. Clare
Sebastian, CNN, Mountain Pass, California.
(END VIDEOTAPE)
QUEST: Obliteration and mental disability, those are the two threats and biting comments between the United States and Iran as they're switching new
levels. Now, the former British Ambassador for U.S. and Turkey will be with me next to discuss it all.
[15:40:00] (COMMERCIAL BREAK)
QUEST: Insults are flying between the White House and Tehran. The U.S. Secretary of State Mike Pompeo says the Trump administration will keep up
the economic pressure on Iran. Remember, only yesterday, they put sanctions on the supreme leader. Tehran is questioning the sanity of the
U.S. position, and to that, the Secretary of State says Iran needs to grow up.
(BEGIN VIDEO CLIP)
MIKE POMPEO, SECRETARY OF STATE: If you're representation of what they said today is right, that's a bit immature and child-like. But know that
the United States will remain steadfast in undertaking the actions that the president laid out in his strategy to create civility throughout the Middle
East which includes the campaign that we have, the economic campaign, the pressure campaign that we have on the Islamic Republic of Iran.
(END VIDEO CLIP)
QUEST: All right, so Peter Westmacott is a former British ambassador to the United States and to Turkey, and he started his career in Iran --
anyway, all right, this -- how serious is really this war of words and rhetoric between the two sides?
PETER WESTMACOTT, FORMER BRITISH AMBASSADOR TO THE UNITED STATES: Yes, I think it is serious. At the moment I think both sides are playing a bit of
chicken, probably hoping it's not going to end in tears, but it might. There's a long and a difficult history.
QUEST: But where do the tears come from? I mean, you know, the president decided not to bomb for what he says was disproportionate --
WESTMACOTT: Yes --
QUEST: He's taken this stand against -- I told you, you now see these insults. How does it -- how does it deteriorate?
WESTMACOTT: Already, the Iranians are reacting to the ratcheting up of the pressure by Donald Trump beginning with tearing up a nuclear deal and the
rest of it. They are worried that the effect for sanctions is very dramatic or let's put, plummeting in the currencies in terrible shape.
They're also worrying that some of the people around Donald Trump might want to lord some sort of Wagner dog military action against them in order
to get him re-elected in 2020.
That's the way they're beginning to think. What are they doing? They are retaliating by showing the locals that they will be paying the price too if
there's any sort of conflict between Iran and America. In other words, the gulf exporters of oil who have been urging them on are going to get caught
up with this.
So, they are raising the stakes, but they don't actually want a conflict.
QUEST: And you believe Iran was behind the tankers.
WESTMACOTT: It looks as though they were behind some of them. The rest of it, I haven't seen the intelligence, so I can't tell.
QUEST: Right --
WESTMACOTT: Probably, yes.
QUEST: The region is feeble, and the last thing it needs is any more instability. Let's just take Turkey for example that you were talking
about now, the loss of -- I mean, President Erdogan congratulates the opposition, the mayor who finally takes over which I suppose arguably shows
that Turkey's democracy is alive and well.
They had a fixed rerun of a vote and the same man won.
WESTMACOTT: It is, I think a very encouraging development, Richard, because most people thought when Erdogan had the first round of the
elections, the first results canceled --
QUEST: Right --
WESTMACOTT: He only had done that because he was sure he would win the second time.
QUEST: You thought that?
WESTMACOTT: I thought that, and a lot of my Turkish friends thought that, but he failed to rig it or he let the thing happen, and there was a
landslide victory, 54 percent of the vote for his opponent. And after a pause, President Erdogan has now said, congratulations, I look forward to
working with you.
[15:45:00] Now, if he has actually decided that he's going to let democracy rule and that Istanbul which is after all, almost 40 percent of
the GDP of the whole country can be in somebody else's hands. This is a good sign for Turkish democracy and inclusion.
QUEST: Right, and a good sign for those who are doing business in Turkey - -
WESTMACOTT: Yes --
QUEST: Because there had been enormous fears that these draconian measures would drive away business.
WESTMACOTT: They were --
QUEST: But it's early days.
WESTMACOTT: It's early days, already, foreign investment had dried up, there was a lot of debt amongst the corporate. Banks were on the edge, the
currency was collapsing. This ought to provide quite a boost because what it signals is a return of confidence and rule of law and hopefully
democracy and freedom of expression.
QUEST: Peter, you had many ambassadorial and diplomatic posts, which means you're well-versed in the world, which means we bring you to Brexit. Boris
Johnson and Jeremy Hunt, who is going to get it at the moment do you think? Do you think -- do you think Boris Johnson has been held beneath the water
line because of his refusal to talk about the incident at his flat with his girlfriend.
WESTMACOTT: It looks as though it is going to be Boris despite everything. That's what I am hearing from people who are seeing a private polling.
QUEST: If Boris Johnson becomes Prime Minister, sketch out what you think that means.
WESTMACOTT: Well, that's a very tough question. What bothers me and a lot of other people about big personality, the big bear in the room that is
Boris is that he talks with great optimism and flamboyance about what he's going to do. But people who know about the details of the single most
important thing he's got to do, which is to express it think that he's talking nonsense.
And a certain amount of what he is saying about implementation periods if there isn't an agreement and about going to WGO rules which will be just
fine, which actually it won't be, does not make much sense. There's a story about the GATT article 24 might dispute solution, well, it has to be
mutual and it has to apply to all of your trading partners.
So, what worries me about it is that he will be there, he would want to be the Prime Minister, he'll be thrilled to be having the job, but most of the
talk at the moment on the single most important thing first in the U.K. at the moment about Brexit doesn't make any sense.
QUEST: OK, except there's a strong argument that says the rest of them is a mess and Jeremy Hunt has not really had a strong view on many things.
And you know, a remainer to begin with. Maybe, it is time for the British government to let loose a hardened Brexiteer who will look Europe down
there and say, fine, this is what we're going to do.
WESTMACOTT: It might work, but it's that --
QUEST: And that might be the only moment when Europeans will turn around and say, oh, well, we can work a deal.
WESTMACOTT: And probably Boris Johnson is the only person who haven't done that, and if he realizes that he fails, will be politically capable of
standing on his head and saying sorry, we're going to have to do something quite different.
QUEST: Well, that's already -- you've already priced in failure.
WESTMACOTT: No, I've priced in flexibility and the fact that he is somebody who could turn it around and probably still his supporters will
vote for it --
QUEST: But he says, you know, there's a certain attraction in this country to when he says we are leaving on October the 31st, come hell or high water
--
WESTMACOTT: Yes --
QUEST: And the British people having now had three, it will be four years or whatever -- three and a half years since the referendum, legitimately
would turn around and say, thank God, at least somebody is doing something.
WESTMACOTT: Some of them would say that. I think the nearer the 31st of October comes, if he has failed to repackage the deal, the more likely it
is that he will say this is not a good idea because crashing out with no deal on the 31st, which I think by the way is impossible even with a no
deal because the legislative and the other timetable means you need more time to put any sort of Brexit.
I think he could actually change his mind. The problem he might have is that you end up facing no deal and by then Boris Johnson will have realized
it's a catastrophe for the United Kingdom, and he might conclude that they rather have a general election which the Tories could lose.
That the right thing to say to the British people, OK, do you want Brexit - -
QUEST: Right --
WESTMACOTT: With no deal or no Brexit? That is not impossible.
QUEST: Good to see you. Of all those areas we talked about, which do you find most interesting, Iran, Turkey or Brexit?
WESTMACOTT: Dear God, they're all fascinating.
QUEST: Fine, plead the Fifth --
(BELL RINGS)
Thank you, Peter, good to see you. From fitness to leave to fitness to work, there are ways to keep young and beautiful while keeping up a career.
Top tips in a moment.
[15:50:00] (COMMERCIAL BREAK)
QUEST: If you're like me, you spend a lot of time stuck behind the desk or in planes or just basically in long dinners and lunches where the food is
rich and the bills are high, there are various ways that you can keep fit. Now, for instance, there's the Ron Burgundy approach.
(BEGIN VIDEO CLIP)
RON BURGUNDY, FILM CHARACTER: I have very little time to get to the gym, so I have to sculpt my guns at the office --
UNIDENTIFIED FEMALE: Oh, stop, trying your arms --
(END VIDEO CLIP)
QUEST: I don't call my arms guns and then there's my approach, this was at Barry's Boot Camp last year. I have to say, I was suffering from a bit of
sciatica and a indulging knee, but it was all exhausting. Apparently, it's about combining time management and exercise program and good nutrition.
If it was that easy, we'd all do it.
But my next guest says he can bring it all together. It's called "The Lean Exec", it's Neil David Watson who joins me now. What is the secret?
NEILL DAVID WATSON, AUTHOR: What is the secret? I think you just got to be active and not let the -- everything get in the way, you try to jump out
there and just get stuck in. I think the biggest mistake you can do is be lazy, stop doing things and stop thinking about it. That's the --
QUEST: Right, but when you are faced with a mountain of meetings, conference calls at weird hours, you know, the wrong diet, how do you
reverse the rot?
WATSON: Well, the first thing you got to do, you've got to find the time. And there's no other way of looking at it. I mean, you have people like
Richard Branson coming out and saying how important it is to actually exercise in the morning, you know, before he starts the day.
You know, if you don't find that time, your health is going to suffer and then ultimately your business is going to suffer. So, yes, you might have
a busy day at meetings, but you've got to find that time, squeeze in that exercise --
QUEST: And what about the eating component of all of this? Because it is difficult. Either one is traveling and strange foods or, you know --
although I have to say airlines have gotten a lot better with healthy options --
WATSON: Absolutely --
QUEST: But it's still quite hard and difficult with big meals.
WATSON: Yes, it definitely is, but at the end of the day, if you think about it in a business context, most people wouldn't go into doing
something in business without preparation, any kind of preparing of some of the things they're going to do for that particular meeting or for that
particular presentation or whatever it might be. So, it's no different with nutrition. You just got to think in advance about what you need to
do, think about your snacking, stuff like that.
QUEST: So, is your book an idea to sort of get the six pack and look good or is it a sort of -- does it have slightly more modest implications which
is just try and stay alive and don't have a heart attack?
WATSON: No, it's for anyone in any of those ranges to be honest. I mean, in my case -- in my case, it wasn't actually about six packs and bulging
biceps, it's about health, it's about fitness and recovering my health --
QUEST: I think we got -- there we go --
WATSON: So --
QUEST: There we go. No, let's go back to the first one, David Cunningham(ph), the -- so -- oh, good Lord. So that was 27 and that -- so,
how long did it take you to get from one to the other?
[15:55:00] WATSON: So, there was two parts of my journey. When I was younger in my 20s, I was relatively in good shape, good fitness. I got
into obviously a career, long hours, struggling with exercise, got a lot of problems with stress, had some issues which stopped me, actually
exercising, stopped me eating correctly, all these sorts of things and I let the work take over, didn't find time for it.
And I put on weight, particularly --
QUEST: Yes --
WATSON: Sorry, you were going to say?
QUEST: Well, if there's one piece of advice you would give, the one thing that more than anything else that one has to do, what would it be?
WATSON: So, I say to the people that haven't got there yet, you need to get cracking, you need to do it now. Don't waste any time. If you're
already there, and you're already in that position where you're -- things are going the wrong way, start tomorrow. You need to get started straight
away.
Get exercising, get active, start thinking about your diet. That's the only way to do it.
QUEST: Well, we will, I think I'll follow this all right, we'll put it to the test. "The Lean Exec", let's see what I can do. A strong athletic
physique in just three hours a week. What else can you do in three hours a week? The last few moments of trading on Wall Street and the three indices
are all down in the red.
We're selling this sort of round about 195, 180, the Dow at one point slipping in the session's lows. The Fed's chief's comments, Jerome Powell
says risks appeared to have grown and the Fed is grappling with whether uncertainties will continue. U.S.-China of course, don't forget we have
the Osaka G-20 later in this week. I'll have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, I watched Jared Kushner present his plan for peace and economics and it was fascinating. It would have turned
an investment banker proud from any of the major houses. Everything was in the right place, the profits, the GDP, the goals. And indeed he's probably
right, economic benefit is the way forward to grow the prosperity for all sides.
But as you heard on this program tonight, you can -- you can only do a deal if both sides want to do it, and at the moment, one side is feeling badly
done to, the Palestinians and perhaps not surprisingly don't want to talk. So, while Mr. Kushner can put as many plans as he likes on the table, he is
simply wasting his time.
Because until they deal with the political side, there's a reason why they haven't managed to solve it so far, it's the hardest part, and that's the
bit that needs to come first. And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in London, whatever you're up to in the hours ahead, I
hope it is profitable.
(BELL RINGING)
The bell is ringing, the Dow is down, the day is done.
END
END
