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Quest Means Business

Trump Lets Chipmakers Sell In China For 15 Percent Revenue; Trump Placing Washington, D.C. Police Under Federal Control; Trump: Will Tell Putin, "You've Gotta End This War"; Big Banks Warn Clients That U.S. Stocks Could Soon Fall; Flexport Offers Tool To Help Companies Calculate Tariff Costs; Donald Trump Slaps 25 Percent Tariff On Indian Exports With Rate Set To Double To 50 Percent. Aired 4-5p ET

Aired August 11, 2025 - 16:00   ET

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

[16:00:08]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. The Dow is down. It fell very sharply towards the

close. Take a look and you'll see.

We were down most of the session, but then it really knocked off quite a bit as the closing bell rang. And now, we are going to have the bell. I

think we are to have a good one from Floor & Decor.

Oh well, I was wrong.

Start a new week together. A bit of a tepid -- I think I am going to call that a tepid tap that brought trading to an end. The markets and the main

event that we are talking about today.

It is an unprecedented quid pro quo. NVIDIA and AMD agreed to give the U.S., and I mean give the U.S. 15 percent of revenues from China chip sales

so that they can export. I will explain.

President Trump is putting the D.C. Police under federal control.

And importers are already looking elsewhere. An India spice and tea seller on his struggle under the new U.S. tariffs.

We start a new week together on Monday. It is August the 11th. I am Richard Quest and I mean business.

Good evening.

Tonight, Donald Trump says more deals for chip sales could be coming after striking an unprecedented agreement with top U.S. chipmakers. The President

said he negotiated with NVIDIA's chief executive, Jensen Huang, to sell the company's H20 chip in China. Mr. Trump calls the chip model obsolete, even

so, NVIDIA has agreed to pay the U.S. government 15 percent of its revenues from those sales. AMD has reached a similar arrangement.

Together, they sell around $20 billion worth of chips in China, and the President says he is open to discussing the sale of more advanced chips as

well.

This is -- it is so unusual that we need to dissect it. Clare Duffy is with me.

We will talk more about the structure of the deal. But as I understand it, essentially they weren't allowed to sell the chips; now, they are allowed

to sell the chips, but they've agreed to pay a 15 percent commission, if you will.

CLARE DUFFY, CNN BUSINESS WRITER: Yes, Richard, this is highly unusual, as I've talked to trade and tech policy experts about this deal today. They

tell me they can't think of a historical precedent for this kind of agreement in the United States, and it is a significant flip-flop from

Trump's White House.

The H20 chip from NVIDIA was released by the company last year to maintain access to the China market in the face of Biden era export restrictions.

Then the Trump White House came in this year and further cracked down on sales of those H20s. Now, it is apparently going to allow both NVIDIA and

AMD to export their A.I. chips to China in exchange for this 15 percent commission and what U.S. official is telling CNN is essentially that they

felt it was better for U.S. companies to be able to sell to China through legitimate channels than to potentially have Chinese rivals developing

their own technology, which sounds a lot like the argument that we've heard from NVIDIA CEO, Jensen Huang in recent months.

QUEST: Right. I can get that bit that it is better to allow them to do it. It is the 15 percent commission that -- my phrase -- commission. Why was

that -- I mean, at the best.

So, all right, so let's just say it brings in $3 billion, $4 billion or $5 billion. That's the rounding error on a deficit.

DUFFY: Yes, I mean that's exactly right. I mean, the one analyst is estimating it would bring in around $5 billion for the U.S. government. But

I think the big question is what caused this turnaround when we are talking about National Security.

These export restrictions were put in place for ostensibly for National Security reasons, and so if it is no longer a National Security concern,

then why are you taking that 15 percent? Why not just let these companies sell freely to China? And if it is a National Security concern, I think

there are big questions about why a 15 percent commission would address that concern.

There is also a legality question here. The U.S. Constitution prohibits taxes on exports. And so, The White House and, you know, and these

companies are essentially saying that this is a voluntary 15 percent that they're going to be paying, potentially to get around that constitutional

language. But I think the legality question is a real legitimate one as well.

QUEST: Clare, voluntary as in its a very nice chip maker you've got. Shame if something nasty were to happen to it.

DUFFY: Yes.

QUEST: All right, thank you, Clare Duffy.

The structure is unusual as Clare was saying, the U.S. Constitution specifically forbids taxes on exports. U.S. officials say the terms have

been structured as a voluntary agreement. It won't be considered a tax or a tariff, and the two companies will send funds to the U.S. government and

have no say on how the money is spent.

[16:05:07]

Tomas Philipson served as acting Chair of the Council of Economic Advisers during President Trump's first term. Now, Professor at the University of

Chicago.

This is weird. This deal is strange. It is not a tax. It is not a tariff. What is it?

TOMAS PHILIPSON, FORMER WHITE HOUSE COUNCIL ON ECONOMIC ADVISERS CHAIRMAN: Well, I think it is easier to see why they're opening up this. I think

that's more of a part, it is easier to see when you're inside certainly than outside. It was a lot easier for me when we were inside these trade

deals, but from the outside, my guess is that this is sort of a trade within the trade deal, meaning U.S. A.I. helps Chinese companies and

consumers in many ways, including the military. But Chinese rare earth minerals have the same effect on us.

I think, you know, this trade in these trade deals. We are very afraid of them stopping rare earth. Maybe they're giving in on this, on the A.I.

coming their way. It is also maybe potentially -- maybe a potential trade to get them to back off buying Russian oil, which obviously is financing

the Russian war against Ukraine.

QUEST: That is , if you will, the Chinese part of the equation. It is this 15 percent fee, extortion -- what "The New York Times" refers to it as or

potentially has. And at the end of the day, the U.S. government is not supposed to have an economic interest other than taxation in companies,

individual contracts with clients.

PHILIPSON: I tend to agree with you on that actually, because this is a very hyper micromanaged deal by the government coming in and taking this 15

percent. I tend to believe I am a free market economist. I tend to believe the masses of the markets always beats any set of, you know, central

planners in allocating capital.

So the 15 percent that the government takes could have either gone into NVIDIA's reinvesting it, or its shareholders reinvesting it if they paid it

in dividends or their workers getting richer and probably being better off than what the government can do with those 15 percent.

But it is not unique. It is unique for the U.S., but many countries have export taxes, but they don't have company specific and country specific

export taxes, and that is what is unique here.

QUEST: I am interested in the way in which you phrased your answer, because you've put it into free market terms, which is a free marketeer. You know,

you see it in those terms. I guess I am putting it in terms that it is just sort of, it is wrong in a sense. The U.S. government should not be having

that sort of interest and worse, in a sense, I saw one example today.

What happens if Lockheed Martin says, do you know something? We will give you 50 percent of our profits and we will sell F-35s to China. In other

words, these are -- there are other issues other than commercial that have to weigh on government's decision making.

PHILIPSON: I don't think this is going to be a generalized pattern. Why? Because export taxes presumably decreases exports, increases trade

deficits, which certainly is not something Trump is interested in. So I think this is very unique to chips or A.I. in general.

I don't think it is going to translate to many other industries, given Trump's stance on that, rightly or wrongly, but he does care about the

trade deficit.

QUEST: What do you think prompted them to do this -- to take the money? Is it just this idea that we do have a very transactional President with a

very transactional administration? And I suppose the argument could be, well, we were going to let them sell the chips anyway, so we thought we

might as well get a buck or two into the Treasury on the way.

PHILIPSON: I think we are going to learn more about it, but clearly from NVIDIA's point of view, they'd rather have 85 percent of revenues than

nothing. Right?

So yes, it is very clear from them why they took the deal, why the administration set it up this way. I don't think this is the last word on

this. I think there must be some offsetting issue here which we haven't learned yet, which is going to creep up, I think, in particular in these

Chinese trade deals.

It is not clear exactly how this particular action fits in into the overall trade deal, which is being postponed again, as you know.

QUEST: I am grateful, sir. Thank you very much for joining us.

PHILIPSON: Thank you.

QUEST: Crime in D.C. is ending and ending today, and with those words, the U.S. Attorney General and along with the President announced a federal

takeover of law enforcement in the U.S. nation's capital.

Mr. Trump is placing the Washington, D.C. Police Department under his control or to be more specific, the Attorney General's control.

[16:10:07]

He is deploying 800 members of the National Guard to the city, and says he could even send in active duty military. The President claims crime in

Washington and other cities is out-of-control.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: You look at Chicago how bad it is. You look at Los Angeles how bad it is. We have other

cities that are very bad. New York has a problem.

And then you have, of course, Baltimore and Oakland. We don't even mention that anymore. They are so far gone.

We are not going to let it happen. We are not going to lose our cities over this. And this will go further. We are starting very strongly with D.C.,

and we are going to clean it up real quick.

(END VIDEO CLIP)

QUEST: The Mayor of Washington, Muriel Bowser held a news conference a short time ago where she highlighted that crime indices actually down

compared to previous years.

(BEGIN VIDEO CLIP)

MAYOR MURIEL BOWSER (D), WASHINGTON, D.C.: This year, crime isn't just down from 2023, it is also down from 2019 before the pandemic and we are at a

30-year violent crime low.

We are not satisfied. We haven't taken our foot off the gas and we continue to look for ways to make our city safer.

(END VIDEO CLIP)

QUEST: Kevin Liptak -- Kevin, we start a new week together with this.

I mean, what is going on here? What is really behind it?

Because on pure numbers alone, there is no justification for what the President is doing.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: I mean, I think that's true and the numbers do show that crime is ticking down. But I don't think

anyone who lives in Washington is going to deny that crime is a problem here.

Crime, violent crime specifically does affect people's lives. And, you know, you talk about murders. They've been down 12 percent year over year.

There has still been 99 murders in Washington, and there have been 223 days in the year. So it is about one every two nights.

Violent crime, there have 1,586 violent crimes this year in Washington. That's about seven a day. So no one is denying necessarily that crime is an

issue here, and Muriel Bowser certainly isn't denying that either, but at the same time, when President Trump puts this kind of dystopian hellscape

picture of Washington saying that there are bloodthirsty criminals running around, that there are roving mobs of wild youth, that they're drugged out

maniacs, that also doesn't necessarily comport with the lived reality of people who are in the nation's capital.

And so I think what the President is really trying to do here is to create sort of a pretext for trying to use Washington as something of a guinea

pig, to try and use Washington as a place where this aggressive policing tactics that he laid out in that press conference earlier today are tested

to see if they do bring the crime rate down.

And you heard him in that clip say that it is possible he could try and extend this to other Democrat-led cities like New York, like Los Angeles,

like Chicago. He will, in reality, have a lot harder time doing that.

Washington is a unique city. It is not inside a state. He does have unique abilities to use the federal government to take over law enforcement here.

So it is not exactly clear how he plans to do that in other states. But I think what you're hearing him do is try and use D.C. as a place to test

whether these more aggressive police tactics actually work.

QUEST: To what end though? To what end in a sense, because is it -- you know, is it the militarization of large parts of the U.S. law enforcement?

The cities that the President was talking about New York, Chicago, Los Angeles, San Francisco, they all have exceptionally advanced, well-trained,

well-documented law enforcement.

LIPTAK: I think his goal is to change some of their rules of how they engage with criminals. And so in Washington, for example, there is a rule

that if a police officer finds a carjacking in progress that they can't chase after the car once it has been stolen. The President seems to want to

have a much more aggressive view of how police engage with criminals. And in his view, and in the view of his advisers, that is a better way to

combat crime than some of the way that these police departments, particularly in blue cities around the nation, have been doing it.

Whether that is actually the case, whether that pans out, whether that causes crime to decrease, will, I think -- this will be the test, whether

in Washington, the President has success in doing that. But that, I think, is what the president's end goal here is to try and test out his theory of

the case that more aggressive policing actually brings down crime.

QUEST: Kevin, grateful. Thank you, sir.

[16:15:00]

So here we have a President describing what he describes as a dire public safety crisis when although there is crime in Washington, we actually know

the statistics show that crime is falling.

When I heard all of this, it reminded me of the 1997 film "Wag the Dog." The facts aren't straight the same, but in that film, of course, a

President manufacturers a crisis to distract the public, if you will.

Brian Stelter is with me.

You've also -- you remember the film. Look, to listen to the President today. It just reminded me, oh, there is a crisis. I mean, crime is bad,

but it is not just at the levels justifying this. So what's going on in your view?

BRIAN STELTER, CNN CHIEF MEDIA ANALYST: Right. Today, journalists are trying to bring facts to a feelings fight. This is a fight over feelings

about how people feel, whether they sense that they are safe in cities like Washington. And I think most of the journalists who have been covering this

today, most of the commentators, most of the mayors of these cities, most elected officials, they keep trying to point out the facts, and yet trump

is playing to something different.

He is playing to people's fantasies or their fears. He wrote about this decades ago in the "Art of the Deal." He said, I play to people's

fantasies. He talked about truthful hyperbole, and that's exactly what he is doing today.

And I am glad you brought up "Wag the Dog." This is that 1997 film with Dustin Hoffman and Robert de Niro. This is where The White House concocts a

fake war in order to distract from a real sex scandal.

So the movie is so telling for the following reason. Well, first of all, the Clinton impeachment crisis happened just a few months later. So the

phrase, "Wag the Dog" for distracting from a sex scandal became legend. But you know what happens at the end of the movie, "Wag the Dog"? That fake war

that The White House imagined, it starts to become real. It starts to become real.

And that is the danger with something like this in Washington today, that what begins as a P.R. stunt with President Trump wanting to get some nice

pictures on Fox News, turns into something more serious over time.

QUEST: And with that, it is this idea that you can turn -- I mean, the facts -- look, Kevin Liptak did say that crime is not good. Crime is bad in

Washington as it is in New York. But you create your own reality with the facts that you wish. And since you've discredited to a large extent

ourselves and others through your repeated mentioning of fake news, you create your own reality.

STELTER: Trump understands the art of repetition, and he has been telling his fans for a decade that cities are dangerous, that Democrats don't know

how to run cities, that these are the wild places full of crime. And you see this on MAGA media as well. Fox News is headquartered here in New York,

but it is constantly telling viewers how dangerous New York is.

Of course, the anchors and the commentators are mostly in New York, and they know the truth, they know that it is relatively safe, and the city

used to be a lot more trouble than it is today. But that idea of repetition is core to what Trump is doing.

And we have seen in the past a crackdown on crime is a common pretext for a wannabe autocrat who wants to seize power. In the case of Washington, D.C.,

Trump has a lot of power. He doesn't have to go to extra legal means to do anything. He already has the power, and he is taking advantage of it.

And Richard, I think it is all about the pictures. He wants these pictures. He wants these videos. He wants people outside D.C. to see these images of

crime suddenly being decreased, of soldiers or at least of law enforcement on the streets enmasse. He wants the pictures.

And in the short term, he is going to get the pictures he wants.

QUEST: Brian, I am grateful. Thank you, Brian Stelter joining me in crime- ridden New York. Get home safely, Brian.

STELTER: That's right.

QUEST: And as we continue tonight, some European leaders fear they will be an afterthought at Friday's Summit between Presidents Trump and Putin. The

President today, whether the Ukrainian President Zelenskyy will even be in the room, will even be in Alaska. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[16:21:37]

QUEST: President Trump has been laying out today what he will tell Vladimir Putin when he meets the Russian President at their Summit in Alaska on

Friday.

(BEGIN VIDEO CLIP)

TRUMP: I am going in to speak to Vladimir Putin, and I am going to be telling him, you've got to end this war. You've got to end it. And he

wasn't going to mess with me.

The next meeting will be with Zelenskyy and Putin or Zelenskyy and Putin.

There will be some swapping. There will be some changes in land. And the word that they will use is, you know, they make changes. We are going to

change the lines, the battle lines.

I am then going to call up President Zelenskyy and the European leaders right after the meeting, yes, and I am going to tell them what kind of a

deal. I am not going to make a deal. It is not up to me to make a deal. I think a deal should be made.

(END VIDEO CLIP)

QUEST: Now. President Trump also said that Mr. Zelenskyy could attend Friday's Summit, but suggested that would be pointless. He said he may end

up speaking with the Ukrainian President before then. You're getting an idea.

The German Chancellor, Friedrich Merz, has invited Presidents Trump, Zelenskyy and European leaders to a virtual meeting on Wednesday as E.U.

officials worry they will be sidelined.

Joining me now is the former Lithuanian Foreign Minister Gabrielius Landsbergis, who is a veritable academic and expert in all of these

matters. You're joining us tonight from Greece.

I know, sir, you are worried as a student of history, you are worried that carving up land in postwar settlements never ends well. Am I right?

GABRIELIUS LANDSBERGIS, FORMER LITHUANIAN FOREIGN MINISTER: You're absolutely right, and especially in Central and Eastern Europe. We've been

here before. We've been here in 1938. We've been there in 1945, after the war, when, half of Europe was left to Stalin and was left to endure the

occupation for decades, actually, for more than 60 years.

And when we hear now people -- leaders of countries speaking, you know, it sounds very much like 1945 Conference of Yalta, one example.

QUEST: Okay, so let's just assume that Putin and Trump, two strongmen come to some sort of arrangement. But Zelenskyy won't go for it either legally,

because he has got to put it to his Parliament or it is a land -- you know, it is the Donbas and it is Kharkiv and it is the Eastern part, and

Zelenskyy won't go for it.

But he does need Trump. He needs the arms. So pressure gets put to bear. What should Europe do in that scenario? Because we've got the potential

here for classic Euro fudge.

LANDSBERGIS: Well, you know, I was reminded of one particular historic event when Stalin asked Churchill to give up Poland. And then Churchill

felt that he does not have power to withstand Stalin's pressure. So he gave all the pressure to Poland. You know, he pressured Poles to give in to

Stalin's requests.

So I hope that Europe is not going to repeat Churchill's mistake meaning that they would, instead of helping Ukraine, should not put pressure on

Ukraine.

[16:25:02]

QUEST: But should Europe -- right -- but what should Europe do if Trump is putting pressure on Zelenskyy to do a land -- a deal for land that

Zelenskyy, you know, do or die -- what does the E.U. position take?

LANDSBERGIS: Well, help Zelenskyy resist the pact. Help Zelenskyy resist the deal. Just, you know, don't take it. Don't agree with it.

You know, if the United States decides that it wants to participate in something as shameful as a pact with Putin, well, I mean, maybe there is no

way to stop it. But, you know, let's not be part of it.

And Europe needs to be reminded and not forget that it is also a power. It has ability to help Ukraine in many ways that, you know, that have not been

tried. One of them is taking the Russian frozen assets that are lying there in Belgian banks, 190 billion euros that could help Ukraine to sustain

their defense effort for years to come. This is what Europe can do.

QUEST: But you know better than I do, Europe has the power and can do that but won't either because its structures of decision making are so

antiquated, sclerotic, or you end up with an Orban in Hungary that won't go along from it, and then Von Der Leyen and Costa have to do side deals and

run around the continent trying to do things off the table.

LANDSBERGIS: Well, on one side you are right. But you know, one example could be the so-called Coalition of the Willing, which also, you know,

leaves a lot to be desired. But, I mean, if European Union cannot achieve results and maybe a group of countries could achieve results, there were

talks, for example, about sending troops to Ukraine to sustain the peace, to give more leverage on Ukrainian side, right?

So you don't need European Union for that. The countries that gathered in London, in Paris, had several meetings could decide these sort of things.

If they don't, if Europe is unable, well then, you know, I am sorry, but then we are headed for a disaster.

Then, you know, Putin will just not stop in Ukraine, and then Europe will be forced to wake up. But in a very, very brutal manner.

QUEST: Gabrielius, you're in Greece. I hope we can come back to you in the days ahead when we see how this is playing out. And I mean, you are one of

the world's experts on these areas. I am grateful to you for joining us tonight. Thank you, sir.

So now to the Middle East where funerals have been held in Gaza City for the seven lives that were lost in an Israeli strike over the weekend. Five

were staff members of the Al Jazeera Network. The correspondent Anas Al- Sharif was among those killed.

The IDF targeted Al-Sharif after accusing him of leading a Hamas cell in Gaza last month. Now we've not been able to independently verify any of

these claims.

Earlier, we spoke to the news director at Al Jazeera English.

(BEGIN VIDEO CLIP)

SALAH NEGM, DIRECTOR OF NEWS, AL JAZEERA NEWS: Every journalist in Gaza is writing his own obituary because if you are in Gaza, you are not safe

anywhere. Whether you are a journalist or a normal citizen, 60,000 people die. Every morning, you have something like between 50 and 100 people

killed by Israeli bullets or drones or whatever.

So yes, they live in danger all the time.

(END VIDEO CLIP)

QUEST: Now, let me just show you what's been happening in markets. Quite a run over the last few weeks and months. Morgan Stanley and Deutsche Bank

say this might all be about to come to a sorry end.

Are we in line for a correction? Ken Fisher, founder of Fisher Investments, now I am shameless, Ken. When we speak to you after the break, I will be

wanting to know what you think and what might happen next.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[16:32:18]

QUEST: Together we have a new week. QUEST MEANS BUSINESS, there's more of it in a moment.

Some major banks say a market correction is on the horizon. Is it time to sell? I'll ask the investing go to Ken Fisher.

And Indian spice exporters are in a pinch, a pinch of spice with U.S. tariffs, which is really threatening the business. We are talking to the

owner of a New Delhi spice market only after the headlines, because this is CNN, and here the news always comes first.

Washington, D.C., America's capital, the police force is now under the control of the U.S. federal government, the president cited a safety

emergency and has deployed hundreds of National Guard members and federal agents to the city. It's despite police data that actually shows a decrease

in crime in the past two years.

Funerals have taken place for a group of journalists who were killed by an Israeli attack on Gaza City. The Palestinian report is among seven people

who was killed by its strike on Sunday. U.N. describes the attack as a grave breach of humanitarian law.

Investigations are continuing after an explosion of the steel coking plant near pencil -- Pittsburgh in Pennsylvania. The authorities say one person

has died and another is still missing. Several people have been taken to local hospital with injuries.

Strategists at Morgan Stanley and Deutsche Bank are warning that U.S. stocks could take a turn for the worse. The S&P 500 has climbed nearly 30

percent since April. It's trading near record highs, yet Morgan and Deutsche believe equity valuations could take a hit if more weak economic

data arrives, we'll have an inflation report tomorrow. Investors are watching to see if the tariffs are translating to higher prices for

consumer.

Ken Fisher is the man we need. Ken is the founder of Fisher Investments, joins me now. First of all, I mean, a correction is always around the

corner somewhere by somehow, are you looking at a correction potentially?

KEN FISHER, FOUNDER, FISHER INVESTMENTS: First, Richard, thanks for having me always, always great to be with you. No one has ever consistently be

able to predict corrections. Corrections come at any time for any reason or no reason at all, and they are often just like somebody yelling fire for no

reason in a crowded movie theater. It's all about sentiment and scare, and they tend to come and go pretty quick. That's different than a bear market,

and my advice is to ignore such warnings.

[16:35:05]

QUEST: Well, yes, OK, assuming I ignore it, but I saw sort of have to take advantage. You know, this issue of when to sell is always difficult,

particularly if you think that the market is going to go down and A, you could be facing taxes. You know, you don't want to create a taxable event

unnecessarily, but at the same time, you do want to protect gains that you've made. So, how does one balance that?

FISHER: So first, let me just say simply that when major indexes around the world have hit bull market highs, all-time highs, like they have in the

last few weeks, whether the FTSE-100 Australia, Canada, the MSCI, Europe as a whole -- or the MSI world as a whole, you don't want to sell very

quickly, because an age old saying, which is largely true, is that bull markets die with a whimper, not with a bang. They roll over relatively

slowly at first, giving you time to analyze.

So, the fact that we've just had market peaks around the world tells you don't rush into anything to sell. A general rule about bear markets that

I've written about for almost 40 years now is that two thirds of the drop happens in the last one third of the time. Two thirds of the time is only

about one third of the drop. Be slow. Be patient.

And then the key is, do you see bad things that aren't what everyone else is yakking about? Because what everyone else is yakking about is exactly

what's already been priced into stocks.

QUEST: Right. So, Ken, there's two big issues that I can see. The first is what one might describe as the issue du jour, it is tariffs, it is slow

down of growth. It's all the stuff that might take the froth off the market and create a correction.

But the second is long term debt. And there are more and more people who are saying that the U.S. is on an unsustainable trajectory. Now, the

problem with the longer term bit is there's never a good moment on a random Monday in August for the market to turn turtle.

You know, the big long term stuff, it's always going to be dealt with tomorrow. How does one handle it?

FISHER: So, first, Richard, and this is a ubiquitous question that people have been talking about as you say pretty much as long as I can remember

about you as debt.

But the fact is, people that are saying it now don't do their arithmetic right. Let me take you through that really quickly.

If you look at the so called bill was passed by Congress, the so called big, beautiful bill, it's going to increase debt over a decade by about $4

trillion but if you look at what the Fed wants, which is two percent a year inflation over that decade, well, since we start off with 3.7 trillion,

it's going to eat up all of that debt and more over that time period.

QUEST: Yes, except it has to be funded. The ongoing debt has to be funded, and it's eating a larger percentage of the GDP, and indeed of the federal -

- of the federal budget.

FISHER: But said differently, the repayment of the debt is decreasing in value by that inflation. The fact of the matter is, if you take the two

percent on $37 trillion at $750 billion a year of decrease in the value of all of the accumulated debts at this point in time.

QUEST: Fundamentally, are you still bullish on this market? And I'll give you a range of options here, Ken, are you still bullish, are you cautious,

or are you wait and see?

FISHER: I'm bullish. I don't believe this bull market has begun to run out of steam. It runs out of steam when people aren't worried about all of

these things, and instead are starting to talk about things like which I don't believe they are yet. Why A.I. will bring us to a whole new,

beautiful future better than before? Why it's different this time? Why the wonderful world ahead is no longer going to be leading us to corrections

and imminent bear markets and fear of this, that and the other that are all the yak, yak things everybody talks about.

QUEST: And on tariffs, do you think that there is an inflation shock? That's a very dramatic word, but you know what I mean. Waiting to hit us.

FISHER: First, everybody's looking at them. Secondarily, I've been writing, been very vocal, been a critic of Trump on all of this, tariffs are always

bad. They're worse for the country that imposes them than the countries they're imposed upon, which is exactly why, as I say commonly, the U.S. is

lagging most of the world this year in terms of the stock market.

[16:40:09]

But they're not as bad as people fear because there's so many ways to wiggle around them. Tariffs are consistently coming in at about 40 percent

of the sticker rate of the tariff, because there's so many ways to wiggle around (INAUDIBLE).

QUEST: I'm going to squeeze the asset one more time so I'm getting one more bit of information out of you. Of all the global markets at the moment,

which one do you like the best?

FISHER: I don't think I really want to go there, because I believe people ought to think globally. First, which you do really well.

And secondly, there's lots of opportunities. If you look at world this year, I mean, Spain's had all time highs just recently, Canada, Australia,

you can go on and on, and I think people ought to think about all of that, because if you focus on one, you're taking way too big a risk.

QUEST: Ken, it's a treat and a pleasure and an honor for us to have you on the program, and I'm always grateful you find time to join us. Thank you.

QUEST MEANS BUSINESS in just a moment, President Trump is extending his trade truce with China. The news provided no relief to market. Now there's

a chief executive. I'm surprised he hasn't gone gray, or at least he's still got his hair. He's from a supply chain logistics company, Flexport.

He'll be with us after the break. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Now, in the last few hours, President Trump has signed an executive order extending the tariff truce with China. During a news conference, he

said he's been dealing very nicely with Chinese President Xi. It's critical to business. This trade between the two countries has come to a virtual

halt before the original truce took effect. The uncertainty is making it difficult for everybody to understand.

Flexport now offers a free tool on its website to help businesses calculate their costs. Ryan Petersen is the chief executive of supply chain logistics

Flexport. Always good to see you, sir.

[16:45:06]

Ryan, well, here we go. I decided to put video games consoles tables, including pinball, blah, blah, blah, blah, blah, toys. I've got the HTS

code shipment value, tail, minion country of origin, China entry date is near Christmas and the tariff, my goodness, six duty rate is 61.5 percent?

Extraordinary.

RYAN PETERSEN, CEO, FLEXPORT: Well, I should note, I don't predict the future. So I don't know what the future date, you know, you put in near

Christmas. We'll find out what it really is when that comes around, so.

QUEST: But this is as it looks at the moment. Let's talk about that the ground has settled. We know where most countries are, which, although that

might not be brilliant, in terms of the individual exporter or importer, at least there's an element of certainty. Is that right?

PETERSEN: There's more certainty than there was in the last, you know, 60 days or so. But I still think there's a probably a fair amount of wiggle

room on some of these things.

I mean, looking at India, where it's currently, you're paying a higher rate to import from India than from China, which I don't know, I don't really

think that's where it settles. So there's probably some movement that happens.

But by and large, yes, companies are feeling more able to plan, which was the biggest problem that they had, even higher than duties being high was

it's just really hard to figure out where you should how you should react.

QUEST: And what do you think is now, where, who is paying the tariff? We're getting an average tariff of anywhere of around 17 to 19 percent sometimes

bit more, sometimes a bit less. But who's paying it? Who's ultimately eating it?

PETERSEN: Yes, I mean, it's going to be a balance between the importer and the exporter, and then ultimately it will flow through to the consumer

through higher prices.

There are cases where the exporter pays the tariff. Actually, it's called a foreign importer of record, and it's one of the biggest sort of angles in

all of this is for a foreign company that doesn't have any LLC or entity in the United States, can still import goods the United States, they pay the

duties in that case, about 60 percent of all the sellers on Amazon are such companies.

So, there are a lot of cases where that -- where that is the case. That said, the end of the day, either there's only a couple things that can

happen, either the companies make less money, or the prices go up for the consumers. And we all know what companies are going to choose when given

choice.

QUEST: Right. But until now, there's been a sort of an unwritten understanding that the companies are until they got to a certain point,

they were prepared to eat it. Now we're starting to see more companies put the toe in the water of saying, no, we are going to pass this on. I suppose

the, you know, hunting in a herd, there's safety in numbers. Do you expect more companies to do that?

PETERSEN: Yes, and I think it's also partly points back to what you were saying earlier about certainty. I mean, if you thought these tariffs were

super temporary, then you probably don't want to change your pricing strategy, which is a bit longer term than that. Now that it started to

settle, and you get a better picture for where things are going to land, I think more companies are comfortable.

There's also an element of like, hey, wait, if you're an apparel company, for example, wait till the next season's line comes along and raise prices

then, rather than doing it mid-season.

But yours, yes, you are seeing prices go up, especially in the e-comm space, in DTC, direct to consumer e-comm.

QUEST: And this de minimis, this loss of de minimis. I mean, I was reading your note about the options available post de minimis going, they're all

bureaucratic nightmares for relatively small sums of money.

PETERSEN: I mean, it depends on the company, like, how big of a deal it is and how big of a sum it is. But to give you a sense, about 30 percent of

all of the top e-commerce merchants were using this. Some people call it a loophole. I mean, it was just the regulations how they written which but it

allowed you to fulfill from overseas and ship it direct to consumer in the U.S.

And that was especially true, you know, famously, it's these big Chinese e- comm brand Shein and Temu but also regular e-comm brands that you wouldn't think of were shipping out of Tijuana, Mexico and other parts of Canada,

Mexico, directing house from overseas to avoid tariffs. Some of these brands, you know, millions and millions of dollars, and these aren't

massive companies. That can be a really big difference, that's gone away now, effective August 29th that will end. So these companies are in a

symbol to put fulfillment in the U.S.

QUEST: I'm grateful, sir. We'll talk more as you have to battle on towards Christmas. Thank you very much for joining us. I'm grateful. Thank you.

Now, Donald Trump's already placed a 25 percent tariff on India, it'll double in a couple of weeks. Anshu Kumar, who exports spices from India,

and I asked him tariffs and how they are affecting his business. QUEST MEANS BUSINESS with a touch of spice.

(COMMERCIAL BREAK)

[16:52:32]

QUEST: I've been playing around with this tariff calculator with spices from India, and you start to realize the tariff of 50 percent is going to

become extremely difficult.

Well, the White House is up to 25 percent extra, as you know, and it's going to double later in the week, which is what we've been playing around

with.

I caught up with Anshu Kumar, who exports spices from India. And I asked him, he's the owner of a Mehar Chand, sells spices and teas, amongst other

things. And I asked him again, how he's going to cope with the tariffs.

(BEGIN VIDEO CLIP)

ANSHU KUMAR, OWNER, MEHAR CHAND AND SONS: In commodities where a single digit difference can bring about lot of differences, lot of variations.

We're looking at 50 percent tariff. That's a huge number, not just commodities. Even if it were a value added product, it would bring about a

huge difference in the way things play out.

We already got importers who are pausing or halting their purchases, waiting to see if the tariffs can soften up. Some of these people have

already started looking up elsewhere. The forward contracts have already stopped. That means there are no more happening, not to mention the cash

flows which are also getting stressed out.

QUEST: Does this essentially mean for businesses like yourselves, who may be exporting into the United States, or for apparel manufacturers,

essentially, the U.S. is no longer -- if these tariffs come in, the U.S. is no longer a valid market.

KUMAR: Well, by all means, yes, it's no longer the market which they could look forward to, not to mention the alternative markets. You cannot raise

them in one go or a few months. It takes time, and the value addition cannot take place in as in few months either it takes time again.

So, it will be a while before things play out and things go in the right direction. But till then, things are quite uncertain.

QUEST: In India itself, how much anger do you feel -- think there is from your fellow business leaders, your fellow businessmen and women? Are they

blaming Mr. Modi? Are they blaming the President Trump? Are they blaming everybody? Is it a plague on all houses?

[16:55:12]

KUMAR: Well, no matter who they blame, but they are the ones who have to bear it out. So, when it comes to people who are into direct exports, they

could blame either of these two people, but there are people who are yet to bear these costs, who are yet to come on terms with the realities, and it'd

be a while before they actually know, and by that, by the time they know it'd be quite late.

QUEST: If you take off the 25 percent for the secondary sanctions, and you're just left with the 25 percent original number, is that a number that

people like you can live with, a 25 percent tariff?

KUMAR: Well, when it comes to commodity space, I guess not. But when it comes to value added space, when we have products, when the producer can

absorb some of the cost and some of it may be passed on to the consumer, I guess things may just work out for the near term.

In the long run, though, it boils down to the other cost also, because it's not just the raw material cost by itself. There are so many other costs

involved, including logistics, including capital costs, including resource and development.

QUEST: So, I've got a bunch of spices in front of me. What are you going to do? Are you going to look for new markets?

KUMAR: Well, as long as you're not able to replace them with the flavors that you like to get on, I guess I still have some market left in U.S.,

which I could keep looking forward to.

(END VIDEO CLIP)

QUEST: More spices, and you can see more of my travels in Delhi and "QUEST'S WORLD OF WONDER" this weekend, Saturday 11:30, London at 12:30,

Berlin begin on Sunday in the morning, 8:00 and 9:00 -- 8:30 and 9:30.

We'll take a profitable moment, you and me after the break.

(COMMERCIAL BREAK)

QUEST: During the break, tonight's profitable moment. During the break, I was playing around with the Flexport tariff calculator, t-shirts from

Bangladesh, spices from India, microwaves from China. You get the sort of thing. And the calculator brings up the various tariffs, and it shows you

how it all breaks out in terms of the new tariffs from this latest round from the Trump tariffs. No business can withstand these sort of 20, 30

percent tariffs and remain profitable, in a sense, without passing it on down the value chain, from the manufacturer to the exporter to the importer

to the ultimate wholesaler and the consumer.

Otherwise, margins are going to be eaten up. And at the end of the day, people will say, well, why will I bother trading there if I'm not going to

make any money.

It's fine to say that the U.S. is the biggest market in the world, and everybody wants to play here, but people also want to make money while

they're doing so. And so, what these tariffs will do will be a massive rewiring of global trade, which I suspect could well be to the United

States detriment, which is exactly what Ken Fisher said to us tonight.

[17:00:09]

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I do hope it's profitable. You

and me, I'll send you more this week.

END