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Quest Means Business

Trump Threatens India With Substantially Higher Tariffs; Trump Rules Out Bessent As Next Federal Reserve Chair; Coast Guard Releases Report On Titan Sub Implosion; U.S. to Ask Some Travelers To Post Bond For An Entry Visa; Parisians Complain About Increase In Visitors; Mexico's Computer Exports To U.S. Surpass Auto Shipments. Aired 4-4:45p ET

Aired August 05, 2025 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:16]

JIM SCIUTTO, CNN HOST: There is the closing bell on Wall Street. Major indices closed slightly lower today. Those are the markets and these are

the main headlines.

The U.S. President ratchets up pressure on India, saying higher tariffs are coming within 24 hours.

The U.S. Coast Guard finds safety and design failures behind the deadly implosion of the Titan submersible.

And some visitors to the U.S. may have to post bond up to $15,000.00 simply to enter the country.

Live from D.C., it is Tuesday, August 5th. I am Jim Sciutto, in again today for Richard Quest, and this is QUEST MEANS BUSINESS.

A very good evening to you. Tonight, U.S. President Donald Trump is threatening to hit India with substantially higher tariffs in the coming

hours. Trump told CNBC that he is unhappy with India's appetite for Russian oil.

He says, it is helping to fuel Russia's war machine in Ukraine. Trump had threatened a 25 percent tariff on Indian goods last week. Now, he says he

is willing to go even higher.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: We do very, very little business with India because their tariffs are so high, so India

has not been a good trading partner because they do a lot of business with us, but we don't do business with them.

So we settled on 25 percent, but I think I am going to raise that very substantially over the next 24 hours because they're buying Russian oil.

They're fueling the war machine. And if they're going to do that, then I am not going to be happy.

(END VIDEO CLIP)

SCIUTTO: Since Russia's full scale invasion, India has become one of the biggest markets for Russian crude. It is now second only to China. And last

month, those two countries accounted for most of Russia's oil exports. That would make them potential targets of secondary sanctions, which President

Trump has threatened to impose as well.

Anna Cooban joins me now live from London.

And these are two major world economies and these tariffs, with the President threatening there to raise them even far above 25 percent, which

would have an enormous impact.

ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Absolutely. This is essentially yet another import tax that Trump wants to slap on goods coming

into America from China, from India, major trading partners. And the irony is, is that this would impact the U.S. consumer, raising prices for the end

consumer.

And as one of Trump's stated mandates, is to keep inflation low, to pressure the Fed to cut interest rates. It is highly ironic and perhaps

quite counterproductive that he wants to be putting extra levies on imports into America.

SCIUTTO: Anna Cooban in London, thanks so much.

Well, India's Foreign Ministry released a statement saying it was being unfairly targeted by the U.S. It said, "It is revealing that the very

nations criticizing India are themselves indulging in trade with Russia. The targeting of India is unjustified and unreasonable."

Ravi Agrawal is the editor-in-chief of "Foreign Policy" previously served as CNN's New Delhi Bureau chief and he joins me now.

Ravi, good to have you here.

Watching Indian exports or imports rather of Russian oil over the last several years is truly remarkable. It now buys nearly half its oil from

Russia, up from really a rounding error 0.2 percent, I think, of its total oil imports, and it gets it at a discount, which is an enormous subsidy in

effect to the Indian economy.

I mean, is this something that India is willing to give up?

RAVI AGRAWAL, EDITOR-IN-CHIEF, "FOREIGN POLICY": If they have to, they will. I mean, India's stated position is that they'll buy the cheapest oil

they can find wherever it comes from. So if they have to move to Saudi or Iraq, their second and third biggest suppliers, they will do so.

They will say, they've been buying Russian oil because they were allowed to do so by the Americans, by the West. Much of what India is importing, it

uses; some of it, it actually refines into diesel and other crude related products that it then exports onwards to Europe.

So India's point has been for the last few years that first of all, it is buying the oil under the price cap that was set by the West. Second, if it

didn't do so, it would be buying oil from some other sources, which would then send the global crude prices up, which as we know, the West hasn't

wanted.

So India's stance is really right now one of puzzlement. It doesn't understand why Trump is bringing up something that previous American

administrations have not brought up.

SCIUTTO: One of Trump's favorite barometers of success is the gas price in the U.S., and if he does act on sanctions against Russia, that he has

threatened to impose from Friday or, in effect, to your point, force India to stop buying so much oil and potentially drive up the price of oil in

another way.

[16:05:17]

I mean, I wonder if Indian officials and others are betting to some degree that that's not a price that Trump is willing to pay and that he won't

follow through on these tariffs.

AGRAWAL: Yes, I think that's about right. I think Indian officials feel that Trump often pivots. So they're hoping that that might happen. There is

a lot of back channel activity going on to try and convince the United States otherwise from its current course of action.

But most of all, Indian imports of Russian crude have not stopped over the weekend. So India is betting that if Trump announces expanded tariffs on

Indian products, they might have to just withstand the pain. Remember, India has also struck Free Trade Agreements with the U.K., with other

countries. It is working on one with the E.U. that it is now expediting.

But then lastly, India is willing to just sustain some pain, wait it out, as it were, because this was not the unpredictability they had signed up

for.

SCIUTTO: And in part because the perception had been that Trump and Modi have a good personal relationship. Right? And as we watch President Trump,

he values personal relationships. I imagine there must be some surprise in India today, and perhaps even in Modi's inner circle, that the U.S.

President is targeting them so directly.

AGRAWAL: They are surprised. There is also anger. I think, you know, India felt like it really got along with Trump 1. What it may now be realizing is

that Trump 2 is quite different from Trump 1, and that the close personal friendship, perceived friendship between Trump and Modi doesn't count for

that much.

I will say one more thing, Jim. There is a security element here. When India and Pakistan clashed a few months ago, Trump has claimed that he made

a phone call that then sort of led to a ceasefire. India denies this, and India has always denied that there has been any foreign involvement in any

of its conflicts. This is a matter of immense national pride.

This disagreement between India and the United States, where Trump also then met a senior Pakistani general who then said, Mr. President, you

should get the Nobel Peace Prize for what you did. The Indian public opinion has really shifted on the United States. That imposes a lot of

upward pressure on Modi, which is considerable and may constrain his ability to strike a favorable deal with the United States.

SCIUTTO: Yes, that's interesting and we've seen this in other countries too, right? Trump's targeting of Canada, for instance, arguably one of the

liberals, the election there, and now were watching in Brazil, right, Trump targeting Brazil with tariffs because of the prosecution of Bolsonaro. You

see Brazilians rallying around their President despite, you know, real economic costs; same for Canada.

And I wonder, do you see a similar dynamic possibly playing out in India?

AGRAWAL: It is possible. Look, remember India imports 90 percent of its fuel. It needs energy. It will go find it wherever it needs to. Also, Modi

was just re-elected last year. He is not going back to the polls for four more years, if at all he runs again. So I don't think any of this is going

to move that quickly.

But in terms of India's ability to sustain pain, and inasmuch as that pain has to be passed on to people, I think there might be a little bit more

wiggle room than Trump might be imagining here. And also, you know, remember Indian relations with China have begun to thaw in recent weeks.

India is sending a delegation to Moscow.

Now, India likes to play all sides. It had been becoming a closer friend to the United States, but by no means is that guaranteed in the future.

SCIUTTO: The other issue that Trump has taken aim at is the fact that India buys the vast majority of its weapons from Russia, and Trump is often

interested in expanding the market for U.S. Defense manufacturers and producers. Is there any possibility of the U.S. working its way further

into that market? Because it takes a lot to turn -- to turn a ship, as it were, away from its long term supplier, in this case, Russia?

AGRAWAL: Yes, exactly. Look, there are two things here. there is purchasing new gear and equipment, aircraft, other stuff. And there is servicing older

stuff.

So inasmuch as the base of Indian product is mostly Soviet era, it still needs Russian supplies to service it, to get new arms and weaponry that

goes into it. They are weaning themselves off of Russia. That's going to take many, many years. It has been underway for a while, but again, India

is not going to put all of its eggs in the American basket.

It also buys French. It buys from Israel. It even buys from Turkey. So that diversification, it is hard to argue against it in a moment like this when

your supposed ally is treating you in a way that has left basically all of the Indian diplomatic class completely confused and befuddled.

SCIUTTO: Ravi Agrawal, thanks so much for joining.

AGRAWAL: Pleasure.

[16:10:30]

SCIUTTO: President Trump is providing more hints about who the next Federal Reserve Chair will be. In an interview with CNBC, Trump ruled out Treasury

Secretary Scott Bessent for the role. The President says Bessent is happy where he is. Trump did compliment Kevin Warsh, a former member of the Fed's

Board of Governors. The President also praised National Economic Council Chair Kevin Hassett.

(BEGIN VIDEO CLIP)

JOE KERNEN, CNBC: We had an extended interview with one of the prospective replacements, Kevin Warsh. Were you watching that day or --

TRUMP: I was. He is very tough. He's very good. He is very good. Sometimes they're all very good, until you put them in there, and then they don't do

so good.

But a lot of them, I think, I think he's a very good guy. I think -- I say Kevin and Kevin, both Kevins are very good, and there are other people that

are very good too.

(END VIDEO CLIP)

SCIUTTO: Trump says he is considering four people for the top job at the Fed. That would be those two Kevins and two unnamed candidates.

Vanessa Yurkevich is in New York. And Vanessa, you know, as you hear the President's comments there, his basic measure of competence is do they cut

rates when I want them to, it seems, and that's been the subject of his beef with Jerome Powell.

I mean, is that what we believe the President is looking for here?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Certainly. I mean, you see the people that he is mentioning and all of those people have

agreed that the Federal Reserve should have cut rates sooner this year, but it is really interesting that sort of the leading contender, Treasury

Secretary Scott Bessent, has really taken himself out of the running.

Also this morning you heard from President Trump talking about the two Kevins, as you mentioned, saying that they are both doing a good job. Both

those individuals agreeing with the President that rates should have been cut sooner. And then, of course, there are those two unnamed persons that

the President has floated.

One could assume that maybe they are in agreement with the President as well, that rates should have been cut sooner. But interesting that the

Treasury Secretary wasn't interested in the job.

Listen to Trump a little more earlier this morning.

(BEGIN VIDEO CLIP)

TRUMP: The two Kevins are doing well and I have two other people that are doing well. Look, it's in the end, there are numerous people that are

qualified.

I love Scott, but he wants to stay where he is. I will take him off, but because I asked him just last night, is this something you want? Nope, I

want to stay where I am.

(END VIDEO CLIP)

YURKEVICH: So Scott Bessent wanting to stay on as Treasury Secretary, not wanting that very high profile, high pressure job of Fed Chair. Jerome

Powell is heading out the door in May of 2026. So the President does have some time to make a decision.

But one thing he said he is going to be making a decision on very soon, Jim, is he is going to be appointing a new Fed Governor because just last

week, Fed Governor Adriana Kugler said that she is resigning four months earlier than her term is up in January. And the President saying, Jim, that

he is going to be making an appointment in the next few months, excuse me, few days rather, but that person will only be on for four months and he

said that person actually could be the next Fed Chair.

And these positions are very critical because these Fed governors are among 12 other people who are voting on what to do with interest rates. So, you

know, the President could make a big move by putting someone into that position for just four months, teeing them up to be the next chair of the

Federal Reserve -- Jim.

SCIUTTO: And of course, the big overriding question is it is designed to be free from political pressure and concerns that Trump might apply such

pressure going forward.

Vanessa Yurkevich, thanks so much.

Still to come, a damning report into the fatal Titan submersible disaster is out now. More on the failures of the company operating that vessel.

(COMMERCIAL BREAK)

[16:16:59]

SCIUTTO: A new report by the U.S. Coast Guard finds that the deaths of five people aboard the Titan submersible heading to the Titanic were,

"preventable." It blames the June 2023 implosion on inadequate design, maintenance and inspection. The report also points to the operators, "toxic

workplace culture" as a contributing factor.

Tom Foreman joins me now.

And, Tom, when you look at this report, beyond numerous failures opting out of third-party safety certification, ignoring internal warnings, is this

finding that had the CEO survived, he could have faced criminal charges for this?

TOM FOREMAN: Well, I don't think there is any doubt about this, Jim. I've looked at many, many reports about things like this, and big disasters, air

disasters, ship disasters over the years. This is about the most damning thing I've ever heard.

From top to bottom, it was saying in the engineering of this vessel, the testing of the vessel, the operation of the vessel, the safety reviews of

the vessel, in every way, this was a failure.

You mentioned before the key finding there, which I think we have is a graphic here. They looked at the notion of how this thing was operated, and

they essentially said, look, this was a failure top to bottom. They did not -- the board determined the primary contributing factors at Oceangate's

inadequate design, certification, maintenance and inspection process for the Titan.

That seems like a very sanitary way of saying what I just said before, but when you look at this, this was designed in such a way to basically get

around any outside interference, anybody from the outside who could look at this and say, you have problems. What's more, Jim, they were relying in

here on essentially a listening system to listen to the carbon fiber hull of this vessel for indications that the carbon fiber layers might be

delaminating.

Now, when I say that, it is important to bear in mind, carbon fiber is incredibly versatile, very valuable, very strong. But when it fails, it

fails completely. It doesn't slow give way so you can see it and work with it a lot. And this thing had been sending up signals, including on one rise

in a previous voyage they had taken. They heard a huge bang from inside this thing, and they never, according to the Coast Guard, never bothered to

find out what made that happen -- Jim.

SCIUTTO: Yes, I mean, the question is, it is one thing to identify safety failures after the fact, and I know that the company seem to go out of its

way to avoid safety oversight, but did the regulators miss something here? I mean, was there something that could have been done prior to all this?

FOREMAN: There were no regulators. I mean, because purposely they were in international waters. They're doing things where they were able to

basically say, nobody really has a say over this vessel. Could regulators now look back and say, we should have had a say and we should have insisted

more? I suppose they could have determined -- depending on how much they could get inside here.

[16:20:15]

But one of the problems really was with Stockton Rush, the CEO, according to this report, because he was called out. Remember, he was one of the five

people who died here. Look at what the Coast Guard had to say about Stockton Rush. They said, "... in his dual role as CEO and as the acting

master or pilot of the Titan submersible, he exhibited negligence that contributed to the deaths of four individuals."

What was that negligence? The indications in the report are that he was the person who basically pushed to say, let's not worry about these little

signals we are getting. That's just noise. That's not really a problem.

And what's more, if anybody makes too much noise about it, there is the implication that he implied they would be fired if they said too much about

it.

And yet, when you think about this, Jim, if you look at the design of this and I've talked to a lot of engineers since this happened, it was apparent

right from the beginning this was an incredibly fraught design put together with, you know, I hate to say, bailing wire and paper clips, but in terms

of a submarine, a submersible? Yes, this is nothing like other ones out there.

And, you know, when they were going down on this, the Coast Guard found their communication was this imperfect text messaging that was -- they were

having problems with that day. You could argue they should have come right back up when they could not communicate, but they were sending like little

one letter codes to say, we can't hear you or whatever. That's how they were trying to communicate.

And yet they went down to a pressure that at that moment they were so far down, about 2.3 miles down when this thing imploded, when all the pressure

gave way, when that carbon fiber just fell apart. It would have happened so fast, gratefully, I don't think anybody on board, unless they heard

something happening to the carbon fiber before it did, they would have no idea because this would have happened in a millisecond more than about

5,000 pounds of pressure on every inch of their bodies. So much pressure, such a huge collapse that people on the ship 2.3 miles above them in the

ocean, on the ship, heard the bang. That's how dramatic this was and that is why this Coast Guard report is so damning.

SCIUTTO: Multiple system failure. Tom Foreman, thanks so much.

FOREMAN: You're welcome.

SCIUTTO: Well, speaking of experimental vehicles, electric air taxi company Joby Aviation is now partnering with the airline ANA to bring its services

to Japan. The two companies plan to establish a joint venture to deploy 100 Joby aircraft within a new ecosystem, as they call it, across the country.

It comes just a day after Joby announced it would acquire the passenger division of the transportation company, Blade, that company, known for its

helicopter services in New York, as well as in the south of France, with seats costing up to $1,200.00.

Joby is currently set to launch its air taxi services in Dubai next year.

JoeBen Bevirt is the CEO of Joby Aviation and he joins me now.

Thanks so much for joining.

JOEBEN BEVIRT, CEO, JOBY AVIATION: Thanks so much for having me.

SCIUTTO: So first to our audience here who may not know where the technology stands on helicopter taxis, what exactly will they look like?

How will they operate?

BEVIRT: So what we are building is an electric vertical takeoff and landing aircraft. So this is an aircraft that has multiple motors and multiple

redundant systems. So we are really putting unprecedented levels of redundancy into a small aircraft. We have six propulsors, each propeller is

driven by two separate motors driven by two separate battery packs. And so we are employing layer on layer redundancy across all the different systems

on the aircraft.

We've had this aircraft in development for more than a decade, and we've been going through an extraordinarily rigorous certification process with

the FAA and really pleased with the progress on that.

Today, we are more than halfway complete with stage four of the five stages of certification, and we have multiple aircraft that are going through our

manufacturing process today, which are intended to be flown by FAA pilots in TIA flight testing.

So really pleased with the progress that we are making.

SCIUTTO: So with this acquisition of Blade, I wonder if it helps someone like me understand how this will actually work for consumers, because Blade

does trips from, say, New York out to the eastern end of Long Island or in the south of France. It is really -- it is not so much a taxi, it is not

like you're going to take it from, you know, 42nd and Second to, you know, Uptown, you know, a couple of miles in an urban area. It is more short

term, almost airline, right?

[16:25:18]

I mean, is that what we should think of it as, more so?

BEVIRT: Well, for example, yesterday I was in Manhattan and I was able to fly from the West 34th helipad to JFK in a little over five minutes instead

of being stuck in traffic for over an hour. And so this is a game changer for people. And as we transition to our electric aircraft, which are up to

a hundred times quieter than today's helicopters, also with a noise signature, which where we've designed it to sound more like the wind in the

trees than the whop-whop of a traditional helicopter, we expect to be able to install vertiports in more and more locations, and make this a more

integral part of people's daily commutes.

SCIUTTO: You're deploying more than a hundred air taxis in Japan, partnering with ANA, one of the airlines there. Why Japan?

BEVIRT: Japan is an absolutely incredible market and ANA is Japan's leading global airline. We've had a partnership with them for a number of years and

it is really exciting that today, we are announcing that that partnership is maturing and we are really getting down to the details of the specifics

around pilot training, around maintenance, around the takeoff and landing locations and building the holistic ecosystem for running that air taxi

service in Japan.

And Japan is one of the most incredible markets for our aircraft in the world, given the geography, we think that there is incredible value that we

can deliver to customers in saving time and also giving people the opportunity to see the beautiful country from the air.

SCIUTTO: Let me ask you this, because there is a great deal of attention in the U.S. right now on just the ability of the FAA and air traffic control

to keep track of the passenger planes already in the air, as well as the other aircraft that they interact with, military helicopters and aircraft

and so on.

With an air taxi like this, who would control, who would deconflict in effect, Joby air taxis from other air traffic?

BEVIRT: So on day one, we fit into the air traffic control system, just like any other aircraft today. But one of the really exciting things is the

steps that the FAA and the DoT are taking to modernize the air traffic control systems and tools and prepare us for this really exciting future

that's coming.

SCIUTTO: JoeBen Bevirt, exciting to discuss, thanks so much for joining.

BEVIRT: Thank you.

SCIUTTO: Well, President Donald Trump is now creating a task force for the 2028 Summer Olympics in Los Angeles. The Games are expected to draw tons of

tourists to the U.S., but Trump is testing out a program that would make it more difficult and more costly for some visitors to enter. We are going to

explain right after this.

(COMMERCIAL BREAK)

[16:31:52]

SCIUTTO: Any minute now U.S. President Donald Trump will create a task force for the 2028 Olympics. We're waiting on the president to sign that

executive order in an event. There's a spot there in Washington.

The city of Los Angeles is set to host the next summer games. President Trump expected to appoint several Cabinet members to that task force, which

will handle security as well as other issues. Los Angeles was officially awarded the summer games back in 2017.

The U.S. also set to co-host next year's FIFA World Cup as well. During that time, some travelers will need to post a bond to obtain an entry visa

to the U.S. The State Department's pilot project will run through next August. It will require a bond of up to $15,000 for certain kinds of travel

to the U.S. The State Department says it will only apply to two countries for now.

(BEGIN VIDEO CLIP)

TAMMY BRUCE, SPOKESPERSON, U.S. STATE DEPARTMENT: Beginning August 20th Nationals of Malawi and Zambia applying for b1, b2, business and tourist

visas will be required to post a bond of up to $15,000. This targeted commonsense measure reinforces the administration's commitment to U.S.

immigration law while deterring visa overstays.

(END VIDEO CLIP)

SCIUTTO: Alex Nowrasteh is vice president for Economic and Social Policy Studies at the CATO Institute.

Good for joining. First of all, Malawi and Zambia? Is this an urgent national need to begin asking them to post 15,000 bucks to come to this

country?

ALEX NOWRASTEH, VICE PRESIDENT FOR ECONOMIC AND SOCIAL POLICY STUDIES, CATO INSTITUTE: It certainly isn't. This is not a well-targeted or well-thought

out program. It rarely is when it comes to immigration policies coming out of this administration. But no, there are other countries that have higher

visa overstay rates. This is not an issue of national security. This is not a crisis. But this will certainly deter a lot of other people from coming

here.

SCIUTTO: Yes. I mean, if I was asked, demanded to pay $15,000 to, I mean, I just wouldn't go personally, just be -- I got a few kids, too, right?

NOWRASTEH: Yes.

SCIUTTO: I mean, what effect does this expected to have on? And not just, well, because it applies to tourist visas, but also business visas.

NOWRASTEH: Yes. I mean, it's going to have a big effect. Now Malawi and Zambia, you know, these are small countries that don't send a lot of people

here. But this is a pilot program. This is the first step. It's going to be expanded to other countries, countries with many fewer visa overstays to

the United States. So I think what it will do is eventually just deter people from coming here.

Tourism is already way down in the United States. This is just going to send it through the floor because people think, well, we got bonds now,

what's it going to be tomorrow? Are they going to change the rules while I'm in the middle of my vacation? What's going to happen?

SCIUTTO: Yes, and I mean, tourism is a U.S. export, correct? Right?

NOWRASTEH: That's right.

SCIUTTO: So this has trade balance implications.

NOWRASTEH: That's right. I mean, so many of this administration's trade policies are predicated on the goal of increasing exports relative to

imports. And tourism is one of the best exports this country has. This will just put the kibosh on a lot of that.

SCIUTTO: So there is -- there are visa overstays. That's long been a problem. I mean, is there any evidence that putting a bond up solves the

problem, right? I mean, has anybody tested this anywhere else? Does it --

[16:35:03]

NOWRASTEH: There was a pilot program in the U.S. that got started at the end of the last Trump administration, never really went into effect. Bonds,

we know, will at least reduce the number of travelers, which I think is the real goal of this, is to try to reduce migration to the United States, both

temporary and illegal immigration to the United States. That's the goal. So indirectly, just by reducing the number of travelers here, it will have an

effect on reducing the number of overstays.

SCIUTTO: The Trump has used tariffs not just to correct -- to correct trade imbalances, which is what one target, as stated of terrorists, but also to

punish countries. Right? I mean, you look, for instance, he's imposed these tariffs on Brazil, where the U.S. has a trade surplus because it doesn't

like the fact that they're prosecuting Jair Bolsonaro there. Could this become another tool, another chip, as it were, in some of these bilateral

negotiations?

NOWRASTEH: Yes. I mean, in addition to the Trump administration's bad economic theories having to do with trade, it has shown that this

administration is very committed to using its power to pursue its political ends when it comes to trade, where it has absolute power, unless the courts

change that. And immigration, it has even more power than it does on the trade. It can do whatever it wants according to the Supreme Court. So I

fear that they're going to use rules like these to chip away, to reduce and ultimately build an even higher legal wall around the United States.

SCIUTTO: Alex Nowrasteh, thanks so much for explaining it all to us.

NOWRASTEH: Thanks for having me.

SCIUTTO: Well, Paris has long, of course, been a magnet for visitors from around the world. Rightfully so. But this year the crowds seem noticeably

larger and not everyone is happy about it.

CNN's Melissa Bell looks at how some neighborhoods are now responding.

(BEGIN VIDEOTAPE)

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: Gay Paris in all of its cliched glory, concentrated in the world famous district of Montmartre.

Each year, millions of tourists flock through its narrow streets.

UNIDENTIFIED FEMALE: Oh, the energy, the art, the --

UNIDENTIFIED FEMALE: Architecture.

UNIDENTIFIED FEMALE: Yes. There's people from all over. I mean it's like obviously this is a big tourist draw.

UNIDENTIFIED FEMALE: So many shops and the scenery is very nice.

UNIDENTIFIED FEMALE: The view of the space, the architecture, the individuals, like the gravel streets.

BELL: But for some, Montmartre is home. And many here are not happy with what some locals are calling the Disneyfication of their neighborhood,

something they say that's only gotten worse as international tourism to the Paris region has grown nearly 18 percent between 2014 and 2024. One-third

of all apartments here are now Airbnbs, with 428 tourists per inhabitant, according to this resident's association president.

ANNE RENAUDIE, PRESIDENT, VIVRE A MONTMARTRE RESIDENTS ASSOCIATION (through translator): It's an invasion, in fact, but really an invasion. They come

by metro. Our metros are saturated. In coaches all around Montmartre. There are coaches everywhere, unloading tourists who come for three hours, who

throw garbage. Montmartre has become an amusement park. It's become a Disneyland.

BELL: At the very top of Montmartre, the Sacre Coeur. The most visited monument in Paris in 2024. But of course, there are so many others. What's

changed is that people used to come to the French capital to get pictures of the monuments themselves. Now they come to get photographs of themselves

in front of the monument. In fact, there are entire Web sites devoted to telling you where to go and get your iconic Paris selfie. And there are

currently more than 148 million hashtag Paris posts on Instagram alone.

(Voice-over): But French authorities want more. For them, the 71 billion euros in revenue made each year thanks to 100 million tourists is not

enough.

FRANCOIS BAYROU, FRENCH PRIME MINISTER (through translator): In the coming years, we think that we can grow the sector's performance by 30 percent.

The ideal objective is in five years isn't 71 billion euros, but 100 billion.

CHARLENE LITE, "PARIS BY EMILY" TOUR GUIDE: So they utilize this entire area. It is a real place, a real residence, which I love.

BELL: And that will mean not just more tourists in Montmartre, but in places like this once quiet square with tourism now driven by popular

culture. Like this "Emily in Paris" tour of the French capital.

LITE: When I first arrived here, I had to see where they filmed the show before I was giving tours and there was some graffiti right at the front

door of where they shoot her apartment that said, "Emily not welcome." But they've taken it off, obviously.

BELL: Back in Montmartre, too, "Emily in Paris" has driven crowds to the pink house in front of which she once ate. A new attraction in a part of

Paris where many residents had been hoping for less attention rather than more.

Melissa Bell, CNN, Paris.

(END VIDEOTAPE)

SCIUTTO: Maybe just look at the sights for a little bit.

Well, Mexico's auto industry has lost its position as the country's top exporter to the U.S. new data shows it has been surpassed now by computer

makers.

Valeria Leon has more.

[16:40:04]

(BEGIN VIDEOTAPE)

VALERIA LEON, CNN CORRESPONDENT (voice-over): For the first time in recent history Mexico is exporting more computer equipment to the U.S. as auto

exports start to show signs of decline.

"We've seen an average production drop of 8.5 percent," Francisco says, after a strong spike in November and December.

According to U.S. Department of Commerce data, in the first five months of the year, Mexico's computer equipment exports to the U.S. doubled compared

to the same period last year. In contrast, car exports have remained stable since 2017, with an average growth of just 8 percent.

As Mexico's computer manufacturing industry eclipses car exports, investors have had to catch up with the quickly changing commercial landscape.

(Voice-over): In 2024, Mexico reported one of the highest inflows of foreign direct investment in computer hardware manufacturing, $1.83

billion. This makes Mexico the second largest supplier to the U.S. market, just behind China.

"Trump has gotten more radical," Gabriela says. "He has nothing to lose. Since there is no upcoming term or election, this could put pressure on the

exchange rate and create uncertainty for the Mexican economy."

That uncertainty is already affecting consumer behavior in Mexico. A Nielsen survey found that 73 percent of consumers in the country's largest

cities are willing to pay more for locally made products in response to the new tariffs from Washington.

"Consumers are changing their habits," Eduardo says, "looking for lower prices, shopping at cheaper places, using social media and e-commerce to

inform their decisions."

As consumer habits change, a new trade agreement between Mexico and the U.S. is in the works, meant to replace the trade deal from the last Trump

administration.

Valeria Leon, CNN, Mexico City.

(END VIDEOTAPE)

SCIUTTO: And that is QUEST MEANS BUSINESS. I'm Jim Sciutto in Washington. Coming up next, "CONNECTING AFRICA."

(COMMERCIAL BREAK)

[16:45:49]

(CONNECTING AFRICA)

END