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Quest Means Business

Fed Governor Lisa Cook To Fight Her Firing by Trump In Court; Trump Tests Legal Limits As He Tries To Fire Fed Governor; Taylor Swift And Travis Kelce Announce Engagement; U.S. Tariff On Indian Goods To Double; Scania Doubles Down On China Investment With $2 Billion Plant; Protests Across Israel Demanding Ceasefire-Hostage Deal; Banned U.K. Vapes Repurposed For Ukraine Troops. Aired 4-5p ET

Aired August 26, 2025 - 16:00   ET

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

[16:00:04]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street after a -- let's have a good Dow -- trading and how

the market has been moving over the course of the session. Busy day with a lot happening and a late rally at the end of the day -- of the trade of 143

-- well not, 134 points.

The gavel is gaveled. The market is closed. Those are the markets and these are the main events we are talking about this hour.

Pitting presidential power against the independence of the Fed. The Fed Governor Lisa Cook is suing over President Trump's attempt to fire her.

French stocks are falling on fears of another French government collapse.

And trading the bracelets for wedding rings, Taylor Swift and Travis Kelce are engaged.

Live from London on Tuesday, August the 26th. I am Richard Quest and I mean business.

Good evening.

It seems the battle over the Federal Reserve's independence appears headed for the courts. The Fed Governor Lisa Cook is challenging President Trump's

efforts to fire her. Her lawyer says there is no factual or legal reason for her to be dismissed.

The Fed itself released a statement saying long tenures for governors are, in its words, a vital safeguard. It also said the bank -- the Central Bank,

will abide by any court decision.

Mr. Trump says Cook is being fired for cause, citing allegations of mortgage fraud. He said at today's Cabinet meeting, Fed officials must be

beyond reproach.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: No, she seems to have had an infraction and she can't have an infraction, especially that

infraction, because she is in charge of, if you think about it, mortgages and we need people that are a hundred percent above board and it doesn't

seem like she was.

(END VIDEO CLIP)

QUEST: Kevin is with me. Kevin Liptak at The White House.

They are going for it. I mean, they're treading -- for the first time in 111 years, a Fed governor being fired for cause on what by any standard, is

a very thin read, bearing in mind the allegation hasn't been proven.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, and the President himself called it an infraction, which is not necessarily how you would

describe gross misconduct, which is what a cause normally relates to when you're talking about firing someone from the Federal Reserve.

And you have seen how the President has been building up to this. Over time, he has tried publicly cajoling the Fed to lower rates. He tried

public humiliation with Jay Powell at that sort of photo op that he had at the Fed headquarters earlier this summer.

But this step that the President has taken is clearly much further than he has gone before, and it was interesting listening to him in the Cabinet

meeting today. Yes, he is talking about firing her for what he calls an infraction, but he really did lay out all of the cards about what his

ultimate goal is here, when he says we will have a majority very shortly, talking about the seven member Federal Reserve Board, saying that once we

have a majority, housing is going to swing, making very explicit what his goal in all of this is, which is to get all of his appointees onto this

board because he thinks that that will cause -- excuse me, the economy to sort of skyrocket.

And the President making very explicit that he sees that as the ultimate objective as he goes about what he is doing with the Fed.

QUEST: I am glad you talked about that, because that was going to be my next point about this idea, we will have a majority very shortly. These are

phrases and words you almost never hear about the Fed, because you appoint the people as they come up.

Now, Scott Bessent said something equally remarkable at Cabinet. Have a listen to it and you know what he said, but I want our dear viewer to hear

it.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, U.S. TREASURY SECRETARY: The Federal Reserve's independence comes from a political arrangement between itself and the American public.

Having the public's trust is the only thing that gives it credibility. And you, sir, are restoring trust to government.

(END VIDEO CLIP)

QUEST: I've never heard the independence of the Fed in any Central Bank as being described as a political arrangement. Extraordinary!

LIPTAK: Yes, it is extraordinary and particularly coming from someone like Scott Bessent, who is a serious individual. He knows how these things work.

He is of the of the financial ilk. He has been around these issues for a long time. And so it is particularly striking to hear him, one kind of

dismiss the independence of the fed as merely a political arrangement and not sort of the entire underpinning of the Central Bank.

[16:05:16]

But also tacitly endorsing the President's decision to fire Lisa Cook. That was sort of the context in which he brought this up, and it does raise the

question of whether anyone inside this building is pushing back on what the President is doing here. It doesn't appear as if that's the case.

You also haven't heard, really, from any sort of prominent Republican former Fed Chairs or former Treasury Secretaries questioning this decision

and it all leads to the question of what potentially could cause the President to pull back here.

Clearly, I think the only thing that would cause the President to rethink all of this is turmoil in the financial markets, which we really haven't

seen, particularly turmoil in the bond market.

You haven't seen anything that would suggest that investors are concerned about this in any way, which when you talk to people close to Trump, say

that that would probably be the one thing that would lead him to question this decision to pull back potentially in some of these moves.

But clearly taking the step of firing Lisa Cook is kind of jumping off the deep end here for the President. It does raise the prospect of this

prolonged legal battle. Certainly, it is going to extend well past the Fed's next meeting in mid-September, during which we already expected

Powell and the board to lower rates somewhat.

It could potentially extend well beyond that into when the Republican Congress starts to consider some of the President's appointees to fill

these vacant seats. This is unchartered territory, really, for the Fed and for the courts and the President really going at this in ways that I think

a lot of people just didn't expect him to do.

Clearly, he has bucked all of those expectations.

QUEST: Kevin, I am grateful you put that succinctly. Thank you, sir. Kevin Liptak.

Now, we know that the President can remove a board member for cause. That's the key word, for cause. So what is the cause here?

Well, the controversy started last week when a member of Trump's administration said that he called for a criminal investigation of Lisa

Cook, saying she bought two properties in a two-week period and described both of them as her primary residences. Significance of that? Primary

residences tend to have lower rates than rental properties.

The Justice Department has said the situation requires further examination. Lisa Cook herself has said that she is going into great detail to find out

and look back at the paperwork and see the transactions.

Tom Foreman is in Washington.

The only question, Tom, for cause. Is this for cause?

TOM FOREMAN, CNN CORRESPONDENT: For cause. Well, the question is by cause, do you mean was there a serious infraction that requires someone to be

removed? Or is this because she was appointed by Joe Biden and Donald Trump wants someone appointed by him? Is that the cause?

You described it very well. What she did in 2021 when she bought a home in Michigan and a few weeks later, bought a home in Georgia. In each case, on

the mortgage documents, which CNN reviewed, these were listed as the primary residence.

Now, the challenge here is, as you know, Richard, many business documents are very complicated, very involved. There are a lot of things to check off

there. It is fully possible that in a court of law, she could ultimately just say, hey, you know what? Busy time, a lot of stuff going on. Wasn't

sure what my plans were. I just -- I just made a mistake. I didn't mean to do that in both places. And that could be in front of the right judge or

the right people enough.

They could say, look, there was no -- you didn't seem to get any real advantage out of this. Maybe some advantage somewhere, but not something

that is extraordinary. So that's what the issue is here, but this has become sort of a truncheon by the Trump administration.

They're going after California Senator Adam Schiff saying he committed some kind of mortgage fraud. They're going after Letitia James, the Attorney

General of New York, who convicted Trump of falsifying records, claiming mortgage fraud. It sort of echoes something we see very much in the Trump

world. Whatever he gets held to task on, he starts trying to hold other people to task on it, whether or not he has got the goods.

QUEST: This particular one is really difficult because in 111 years, no governor has ever been removed for cause, and to do it this way on at best,

a thin case is remarkable particularly, and I want your take on this because you've been around Washington a year or two I shall be diplomatic.

You just heard Kevin Liptak. You know, the truth that dare not speak its name, Trump says he wants a majority on the Fed. We've never heard

presidents talking of a majority of governors.

[16:10:10]

FOREMAN: Trump in a very open way, he makes it very clear that, just like he is not real fond of independent journalists or factcheckers looking at

what he says and saying, is it true or false? He also seems to be not very fond of scales, anything that measures anything in a real way. He wants his

thumb on the scales.

He is making that clear, like, I want my tariffs to work and if that means I have to be able to manipulate the mortgage or the inflation rate by

controlling the interest rate, great! That's the way it ought to be. It is actually very interesting to watch because he seems so much to believe in

this sort of thing, that at times he comes off as he is almost befuddled by the notion that people would say, no, that's not really a good way to do

this, because he seems to see it so much as well. That's what I want and isn't that good enough?

And if everything is done my way, I think, it will work.

QUEST: Tom, I am grateful. Tom Foreman in Washington, thank you, sir.

FOREMAN: Good seeing you.

QUEST: Now, the feud between the President and the Fed is testing the very nature of the bank. The Fed's mandate is set by Congress, not by the White

House. We always talk about the dual mandate, full employment and price stability. The board of governors, of course, is led by, Jay Powell and

carries out its missions independently. There are seven members of the board. Don't forget, there is also the various regional presidents, and

they vote as well.

Now, whilst the President nominates Fed Chair and its governors, the Central Bank is historically left to set monetary policy on its own. So his

role is to nominate this lot. Congress then confirms with the advice and consent of the Senate, and that's how we get to where we are.

However, remember what I said about cause. It is Section X of the Federal Reserve Act. There we go: A Fed governor can only be removed by the

president for cause. It is crucial. And remember as well, the Fed, as the Fed says in its statement that the governors are appointed for 14-year

terms, specifically so that there can be no cross suggestions.

Christine Chabot is the Associate Professor of Law at Marquette University, joins me now.

Professor, good to see you. This is --

CHRISTINE CHABOT, ASSOCIATE PROFESSOR OF LAW, MARQUETTE UNIVERSITY: Hello.

QUEST: I mean, knowing what you know of the facts, does it seem as if there are cause sufficient to break the virginity of 111 years of no Fed governor

being removed for cause.

CHABOT: Sure, sure. And I think this is actually something that is uncharted territory, because we are breaking a norm where presidents have

generally left the governors of the Federal Reserve alone, and there are a distinct set of legal questions.

As you know, Trump has engaged in other firings of other heads of different agencies, but the Federal Reserve is different for three reasons or this

particular firing is different for three reasons.

First of all, there is a legal question under the statute as to what does cause mean? Does it include the type of conduct that Trump has alleged

here? There is a further question as to the facts. Has Governor Cook, in fact committed the alleged mortgage fraud as President Trump claims? And

third, there is really going to be a question, I think, legally, as to the balance of the equities, to the extent that Governor Cook seeks

reinstatement, like other fired officers have sought.

In general now, the Supreme Court has not been receptive to claims for reinstatement during the pendency of litigation. They've said its for

someone to be removed during that period. So you might question whether that same kind of principle will apply to Cook. However, in Trump versus

Wilcox, they did have a carve out for the Federal Reserve, and to the extent the Supreme Court feels that Trump's assertion of cause is really a

pretext designed to bully members of the Federal Reserve to comply with his policy preferences, maybe there will be a different balance of the equities

here.

QUEST: And I want to take that point, because the carve out to which you refer was very specific, they didn't need to make -- they didn't need to

say that, but they are so -- the Supremes -- they were so aware of the sensitivities, which I suppose arguably might have given a different

president pause for thought that if this ends up at the Supremes, he is going to lose.

CHABOT: Yes, and I think it is important to understand there might be two different claims that Trump would raise here. One would be a constitutional

claim, arguing that Article II empowers him to remove any officer, notwithstanding statutory protections. That is the claim that the court

rejected in Trump versus Wilcox. Here, he is making a second claim that he is operating pursuant to the statute that the statute allows him to remove

for cause and cause exists.

But that doesn't mean he will show cause exists.

QUEST: Can I just sort of -- let's take away the strict legal and look more at the jurisprudential side of it. How dangerous and risky is it to the

system when it starts getting tested like this? With the independence of the Fed?

I mean, nobody has ever had cause to question it on this point before. And whilst he might be technically, you know, he can do it jurisprudentially,

should they be testing it like this?

CHABOT: Sure. I think the question here is really one of financial instability and whether a Fed that is now politically beholden potentially

to a president is going to be able to perform the same function and guarantee long-term stability of prices in the same way it could if the

governors were independent and isolated, as they are supposed to be under the statute.

So I think that's the larger picture, the larger consequences that are at issue here and certainly, President Trump's action puts all of that at risk

because he is attempting to do what presidents have not done before. He is asserting that there is cause to fire a governor and trying to put someone

out of office. And again, there will be questions, for example, of what is cause as a matter of law, what are the facts on the ground? All of those

things will have to be determined by a court, but certainly just the act of making that allegation and attempting to remove Governor Cook creates a

different dynamic.

QUEST: I am grateful. Thank you so much for taking the time to talk to us and putting it into perspective, just what we needed to hear tonight. Thank

you, ma'am.

Now Swifties, well, you know, frenzy over the announcement, the Taylor Swift engagement, in a moment.

(COMMERCIAL BREAK)

[16:20:22]

QUEST: Entertainment fans around the world have been waiting for this moment. Its happened. Taylor Swift and Travis Kelce are engaged. I think

that's worth a --

The pop icon and the football star announced the news on Instagram. It was a joint post: "Your English teacher and your Gym teacher are getting

married." The accompanying photos show Travis down on one knee in a flower filled garden. How convenient the flowers were there and the camera just

happened to be there and the two embracing as Taylor sports her new diamond ring.

Lisa Respers France has been tracking reaction. Off the charts, really, isn't it? Off the charts!

LISA RESPERS FRANCE, SENIOR WRITER FOR CNN DIGITAL ENTERTAINMENT: It is completely off the charts, Richard. People are so excited. I don't think

anyone is more excited than the NFL, however, because this is just what they need right before football season starts and kicks off. Because, oh,

see what I did there? Kicks off? Because Taylor Swift of course, brings her entire fandom, the Swifties over to football season because when she is at

a game, the Swifties are tuning in just to catch a glimpse of her cheering her man on.

And now that they are officially engaged, people could not be more thrilled -- Richard.

QUEST: Oh, I love it! Love it! The way you've taken a straight into the business side of it. You've got the gist of what we are interested in.

Never mind all that soppy romance business. I mean, the fact is that in his own right, he is a sizable profit center that makes a fortune. You add them

together. I mean, this can be amortized in a thousand or a million in one different ways. And they actually seem to quite like each other.

FRANCE: They do. They really seem like they're in love with each other and people are happy for them. But also, if you think about it, in the United

States, two of our biggest loves are music and sports. So you literally have a marriage of these two things coming together. And I just hear, ka-

ching! Ka-ching! Ka-ching!

QUEST: Yes, well, my director tonight, Mick the Man, who is never knowingly, not to spot the obvious point, he says, but will there be a

prenup in my ear? So tell Mick the Man, will there be a prenup?

FRANCE: You know, I think they are both very smart business people, so I imagine that there probably will be a prenup because they, as you point

out, they both have sizable assets. But keep in mind that even though Travis Kelce is a huge football star and makes a lot of money, Taylor Swift

is up there when it comes to the amount of money that she makes.

So, you know, I mean, it is not shabby at all. She is a billionaire. So let us keep that in mind. So I think that they are both very smart. I think

they both understand the industry. They understand how it works.

QUEST: Sure.

FRANCE: And so I don't think there is going to be any problems when it comes to the prenup situation.

QUEST: One of the interesting thing is what they all do next. In a sense, Travis has got his podcast, which of course, is where he put out there that

he wanted to meet her. Now, his playing days are numbered simply by age.

FRANCE: Right.

QUEST: So he has to find something else to do later on -- podcasts, films, movies, whatever. She, of course, has to have another tour. How do you beat

that or who knows? What is she going to do next?

FRANCE: Well, she has got her new album that will be coming out, so we are eagerly awaiting that. We already see Travis doing some acting, so it seems

like he is already ready to roll into his post-football career, and she is the perfect partner for this because, as they pointed out during their

podcast appearance, they have very similar lives. They both train, they both work very hard. They both -- you know, have the glare of the spotlight

on them at all times.

And so this really does feel like a match made in Hollywood heaven, Richard. It really does.

QUEST: Oh, a bit of romance right at the end. Thank you very much. Good to see you as always.

FRANCE: Good to see you. Thank you.

QUEST: Thank you. Perfect.

From a marriage that's about to happen to a collapse that may be around the corner, I thought that was quite well done.

The French government is risking collapse in two weeks after the French Prime Minister announced a confidence vote over his plan for sweeping

budget cuts. Remember, Emmanuel Macron is head of the country, the Prime Minister is head of the government in a sense.

The three main opposition parties say they will not back Francois Bayrou in the vote on September the 8th. The Prime Minister's minority government

hinges on the socialist, the won't back him unless he changes the budget. And if he does that, well, then of course his economics fall apart. He says

the prime minister says France's future is at stake.

[16:25:02]

(BEGIN VIDEO CLIP)

FRANCOIS BAYROU, FRENCH PRIME MINISTER (through translator): And an immediate danger weighs on us which we have to face not tomorrow or the day

after, but today, without any kind of delay, without which the future will be taken from us in the present, harshly and heavily worsened.

Our country is in danger because we are at risk of over indebtedness.

(END VIDEO CLIP)

QUEST: Now, President Macron lost his previous Prime Minister in a no confidence vote because of the budget dispute. France's blue chip index,

the CAC 40 dropped more than 1.5 percent, look there, you can see how it has fallen. It is now down three percent on the week.

Yael Selfin is the Vice Chair and Chief Economist at KPMG U.K.

All right, the market is telegraphing what? They want the budget to go through. They want certainty.

YAEL SELFIN, VICE CHAIR AND CHIEF ECONOMIST, KPMG U.K.: Well, they want resolution in terms of plans that are credible to deal with the debt and

the deficit and it is unclear whether we are closer -- anywhere closer to getting that.

QUEST: The put forward by a Prime Minister though deal with it. It makes them -- what was the phrase he used when he announced earlier in the year -

- he used some very inflammatory language to describe how serious was the situation.

Now, lawmakers, when they go for the vote of no confidence, what do they gain by voting him down?

SELFIN: Well, I think they have their own plan, essentially what they want is new election because quite a lot -- or quite a number of these parties

think they may be able to win the next election. So that is really what the play at and what is at stake.

QUEST: So this would be to vote him down. Macron can't get another government. Essentially he has to go to the country, which he has already

said he is not going to do.

SELFIN: Yes and that's still a possibility. He may try and get another Prime Minister and another budget approved and ultimately what you will

need to do is negotiate better. You need someone who will be able to negotiate better in order to convince the Parliamentarians.

QUEST: You have Barnier, you've this chap. These are some of the most sophisticated negotiators in the business. They could charm the birds out

of the trees.

SELFIN: Yes, but ultimately what you have in France is a fiscal situation that needs hard, very tough decisions to be made. You need to convince the

French public that they do need to go through these choices and they're not ready.

QUEST: Right.

SELFIN: Talking about being ready. What do you make of the independence of the Fed? It is tempting to say, of course, it is still independent, of

course. But when you see the sort of shenanigans that we are seeing today and you see -- you hear President Trump say, he specifically says we will

have a majority. Is the financial world, people in your position, are you now starting to question the independence of the Fed?

SELFIN: I mean, I think it is unfortunate, especially given the timing. And if you look at it from an economist perspective, I would say we are already

worrying about inflationary pressures in the U.S. because of the tariffs and lack of credibility of Central Bank will just make worries increase.

So, it is extremely unhelpful and that is what you've seen in the markets with yields -- long-term yields going up and that is costing all of us

especially U.S. citizens more money in terms of paying for the debt.

QUEST: Finally, on this whole question though, of what is going on within France, the idea that a government -- that the government falls, a new one

comes in, how much power does Macron have anymore?

I mean, he has still got the name and the title and all of that, but he doesn't seem to be able to get anything done.

SELFIN: Well, it is it is almost impossible to have anything done in the sense of economic plan and a strategy to deal with the key issues that the

government needs to deal with if you don't have the majority.

QUEST: Thank you very much indeed. You will help us understand. Thank you very much indeed.

Now Scania is set to open a $2 billion factory in China this October. The chief exec says it is critical to stay close to the competition. He will be

with me after the break.

(COMMERCIAL BREAK)

[16:32:58]

QUEST: Hello, I'm Richard Quest. Together we'll have more QUEST MEANS BUSINESS. We're going to hear from the CEO of Scania, who explains why the

truck maker is doubling down on production in China despite the U.S.-China trade war. And they say one man's trash is another man's treasure. A

charity here in the U.K. is turning recently banned e-cigarettes into energy sources for the troops in Ukraine's front line.

Do you know I've never vaped? And before you ask, I'm not about to do that on this program. I did smoke about 40 cigarettes a day for some years ago,

but that's another story for another day. We'll only get to those bits after the news headlines because this is CNN and here, the news always

comes first.

President Trump has taken the unprecedented step of trying to fire a Federal Reserve governor. Lawyer for Lisa Cook says she will challenge the

move in court. The Federal Reserve said in a statement it is committed to its independence and said it will abide by any eventual court decision.

Nationwide protests have been taking place in Israel calling for a ceasefire in Gaza and the return of the remaining hostages. Demonstrators

filled the streets at one point, blocking the main highway that connects Tel Aviv with Jerusalem. Israel's security cabinet met today but did not

discuss the ceasefire proposal agreed to by Hamas last week.

A towering wall of dust known as haboob swallowed parts of Phoenix, Arizona, on Monday. Drivers were warned to pull aside to stay alive as some

areas were plunged to zero visibility. The dust storm was quickly followed by severe thunderstorms. Once it passed 60,000 homes and businesses in

Arizona were left without power.

Seven hours or so from now and India will face one of the highest tariffs ever levied by the United States. President Trump originally had a 25

percent duty on India and then an additional 25 percent, which will come for punishing India for buying Russian oil.

[16:35:12]

Anna Cooban is with me. Explain.

ANNA COOBAN, CNN BUSINESS AND ECONOMICS CORRESPONDENT: Yes. Well, you've just pointed out that whopping 50 percent tariff there, Richard. That's a

pretty painful number for a lot of Indian economists to be looking at today.

Now, in reality, this will become an effective tariff rate. So what this means is that once you account for all of the product specific exemptions,

like smartphones, for example, they don't have a reciprocal tariff on them. You get a rate of about 35 percent, which is still an eye-watering number

for Indian products.

Now, the reason we're talking about all of this is what happened around three years ago when Russia invaded Ukraine, its full scale invasion.

Europe was a massive customer of Russian oil, and then it instituted a seaborne ban on oil. And then Russia started pivoting and sending its

barrels to China. Here you see around 47 percent of Russian barrels went to China since the war up to June, and then around 38 percent to India.

Russia went from being one of a few -- one of many suppliers to being the primary supplier of oil to India. Now Trump's logic is that if you penalize

a country like India which buys this oil, you will then discourage it from buying the oil. It will then limit the money going to Moscow and then force

Putin by dint of economic necessity to the negotiating table to end the war. So only time will tell if that makes a difference.

But then the impact on India's GDP we'll have to kind of wait and see. It's not going to be as severe maybe as Trump would hope. We can see that India

here, this is a prediction by Capital Economics. It predicts that within about, you know, this year and next that its GDP growth will be stunted by

around 0.8 percent.

Now, when you compare this to like Mexico and Canada, these are countries whose economies are very much reliant on consumer demand in the U.S. India

is slightly less -- slightly more insulated from that.

Now this chart will give you a sense as to why. India is a huge exporter of engineering goods of electronic goods. Those smartphones I mentioned

earlier. Look at the blue bar. That is the value of the products being exported from India to the rest of the world minus the United States. This

orange bar is the United States. It's significant, but it's not the whole story. India is still a burgeoning economy, with many customers around the

world. It does not want these tariffs, these secondary sanctions, but it won't be fatal.

QUEST: OK. One quick question to you. One quick question. The -- this argument that everybody wanted India to buy the stuff in the first place,

and we're now being very unfair in penalizing them. Is that -- is that valid?

COOBAN: I think many people might look at the fact that India is continuing to buy Russian oil and as is China. China is not being subject to these

secondary sanctions, and it's anyone's guess as to why. And India has very much made the point that Europe, which obviously has, you know, massively

divested from Russian oil, has still imported liquefied natural gas in its droves. India has said that it needs Russia's oil, relatively cheap barrels

of oil, to power its economy and its massive population.

And Europe has done something similar in buying liquefied natural gas. So it's obvious as to why India might feel a bit aggrieved by this.

QUEST: I'm grateful to you. Thank you very much indeed.

The world's largest commercial vehicle company is doubling down on China. Scania's $2 billion factory in the city of Rugao will open in October.

According to CEO Christian Levin, it's about keeping his enemies closer. He says it's good to be near his rivals in China as they compete over

technology. And China also has more free trade agreements than the E.U. Scania plans to export half the trucks it builds at the new plant.

The chief executive of Scania, Christian, is with me now.

Good evening, sir. Thank you for joining us. I'm very grateful. And the difficulties, the trading difficulties is obvious bearing in mind tariffs

in one, battles with another. But this new plant that you're doing in China is so huge and is of such strategic importance for you, isn't it?

CHRISTIAN LEVIN, CEO, SCANIA: It is, Richard. Thanks for having me on your program. Yes, so, Scania's business model is built very much around being

able to tailor make products and services and deliver with short lead times. That's how we built our success in Europe. And later on in, in the

Americas and in Asia, we were not -- never really successful because it just takes too long a time to ship a big truck from Europe over to Asia

Pacific.

So getting close to customer, choosing the market, it was actually easy to decide for China. It is the world's biggest market. It is a market, as you

mentioned, with really good trade agreements with neighboring countries.

[16:40:00]

And on top of that, it has been proven, I think, in the last year, that technology is developing at the speed of light in China, and we need to be

part of that. We need to be faced with that competition, and we need to team up with suppliers, partners, universities, researchers, engineers in

order to bring that technology also in to our products. So for Scania, it's a big thing that is happening here.

QUEST: There's always been an element, I mean, from the time man first made any form of goods. There's always been a political element to where you put

your factory, how you trade, where you trade. But that's become ever more important particularly vis a vis the United States, where we're hearing now

from more and more people, and I'm sure yourselves, that the trading in the U.S. is almost at the point where it's difficult to make money.

LEVIN: Yes. So of course, recent years have taught us that we cannot take anything for granted. And we're exposed to one shock after the other in

this geopolitical difficult situation we're in. And then flexibility becomes of the utmost importance. So we try to build our system around

maximum flexibility. And then being with a third leg in China where we can shift supplies relatively quickly between our big entities, Europe, Latin

America and China, I think is of utmost importance for the future.

I mean, who knows which ways global trade are going in the future and then not being in Asia, I think, would actually be quite dangerous for us. This

was perhaps not part of our decision basis when we took this decision six years ago. But today, I think it's playing in our favor.

Now this is interesting because that raises the important point that you can't make major strategic decisions on the basis of, if you will, today. I

mean, not in your case because it costs billions. It takes years to do so the way policy might be now, you can't let that affect you. You have to

base it on other factors. Is that correct?

LEVIN: No. You're fully right. So this is not something that we're doing for the upcoming three, four, five years.

QUEST: Right.

LEVIN: I mean when we went into Brazil in the '50s, that was a thing that we did for generations. And it has been tremendously important to us. And

we think in a hope, of course, that this step into Asia, into Asia-Pacific, based on China will give us the same advantages. And then, of course, you

never know in this situation. But I think this is actually more of an insurance to us than a risk.

QUEST: Thank you for joining us. If I'm not mistaken, I've driven one of your big, large trucks, and it was enormous fun to do so.

LEVIN: An electric one actually.

QUEST: It was -- it was electric.

LEVIN: Yes. You were a good driver, Richard.

QUEST: No, you're just being very charitable. Thankfully nobody got hurt. Look forward to seeing you again when we can drive another one. Thank you,

sir.

LEVIN: Thanks.

QUEST: Now still to come, QUEST MEANS BUSINESS, a day of protests in Israel. Demonstrators are pushing for a ceasefire to bring home hostages

still held by Hamas.

(COMMERCIAL BREAK)

[16:46:24]

QUEST: Protests were held across Israel today as demonstrators continue to demand a ceasefire in Gaza that would return the remaining hostages.

Participants blocked roads and set tires on fire and then gathered for a massive rally in Hostage Square. All as Israel faces a global outcry for

launching a deadly attack on Gaza hospitals on Monday.

Oren Liebermann reports from Tel Aviv.

(BEGIN VIDEOTAPE)

OREN LIEBERMANN, CNN JERUSALEM BUREAU CHIEF (voice-over): The fires on the roads burned as hot as the anger on the streets. Across Israel protesters

blocked major highways, torching tires and shutting down traffic. This sign in Tel Aviv says, "We're stopping everything until everyone returns."

The demonstrations marked the beginning of what organizers called a day of disruption, demanding an end to the war and the return of the remaining 50

hostages held in Gaza. Yehuda Cohen's son, Nimrod, is among the 20 hostages believed to be alive.

YEHUDA COHEN, FATHER OF ISRAELI HOSTAGE NIMROD COHEN: Another day for protest, another day to make sure the issue of the hostages stays in high

priority. Another day to pressure Netanyahu and force him to end the war and get a hostage deal.

LIEBERMANN: Prime Minister Benjamin Netanyahu held a two-hour security cabinet meeting Tuesday afternoon, according to two sources familiar with

the discussion, but the latest ceasefire proposal was not on the agenda.

HAIM WEISS, ISRAELI PROTESTER: This is a shame. This is -- this is beyond words, beyond words. There are no words to describe this government

anymore. This government should be dealing with one and only thing, ending the war and bringing back the hostages.

LIEBERMANN: On Monday, President Donald Trump said in the Oval Office there's a diplomatic push underway to end the war.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think within the next two to three weeks, you're going to have pretty good conclusive -- conclusive

ending.

LIEBERMANN: But it's a promise these protesters have heard too many times to believe. Even so, Idit Ohel holding a sign with the face of her hostage

son Alon says it's up to Trump.

IDIT OHEL, MOTHER OF ISRAELI HOSTAGE ALON OHEL: We still need the, you know, the United States to be with us. We still need Trump's administration

to push to it and make sure that all the hostages return. I think he has the power to do it. I think he has the power to talk to Netanyahu and tell

him about how urgent it is.

LIEBERMANN: Oren Liebermann, CNN, in Tel Aviv.

(END VIDEOTAPE)

QUEST: President Donald Trump has backed off his assertion that there would be a conclusive end to the war in Gaza in the next few weeks, clarifying

remarks he'd made just a day earlier.

A charity in northern England has found an innovative way to help power the Ukrainian military. Whoever put it there, it is gutting vapes for parts and

using them in power banks, in a moment.

(COMMERCIAL BREAK)

[16:51:42]

QUEST: Now earlier this summer, the U.K. government banned businesses from selling these, disposable vapes. I'm not even going to -- or I should have,

I was shown how to do this, but I'm not going to try. Anyway, instead of letting them go to landfill, a local charity is repurposing them for use on

Ukraine's front lines. Volunteers with the Leeds Ukrainian Community Association, they crack open the vapes, pull out the batteries and send

them to Ukraine, where the parts are used to power devices like phones and portable lighters.

Viatcheslav Semeniuk is trustee of the Leeds Ukrainian Community.

Good to see you. Thank you. And so I'm curious how many -- how many of these are you getting?

VIATCHESLAV SEMENIUK, TRUSTEE, LEEDS UKRAINIAN COMMUNITY ASSOCIATION: So the first batch was around two pallets. So roughly estimated maybe 5,000,

6,000 pieces of those small things. Yes. And they are now all gone to Ukraine. So we are expecting another batch soon. So keep watching.

QUEST: So where are you getting them from?

SEMENIUK: So there are warehouses that they have them unused because obviously, because of the obvious reasons. So they just donate them for

free to us. And we collect them and just, yes, work on them and send them in batches. Yes.

QUEST: And what are the -- because the actual batteries in these things are relatively small. What can they be used for when you get them to Ukraine?

SEMENIUK: So they put them all together. So I suppose that people, they know what they do, so they put them all together in some boxes at some

electronics ports. And yes, they make power banks. And sometimes this is the only thing that they can use in trenches to light -- to light them to

like have a phone charger.

QUEST: Whose idea was this?

SEMENIUK: Yes. It was like a kind of accident because we had this first batch donated, and then we tried to deliver them to Ukraine, and we

couldn't deliver them as they are. So we took them back to Leeds and started to take in the batteries out of those vapes. And then this is the

way we can deliver them as they are not vapes anymore.

QUEST: So they're going to -- well, one hopes the war ends soon so that you don't need to send many more of these. But the U.K. has now banned these.

But there's still lots of them. So I imagine you're going to be getting them for quite some time to come.

SEMENIUK: Yes, yes. And after the latest article on BBC, lots of people all over the world are contacting us and wanting to help to do whatever they

can. Local Leeds people from United States, from Canada, from different places. So I'm quite pleased with that.

QUEST: Wonderful city, Leeds. I grew up there, so I know it very well indeed. And do you vape?

SEMENIUK: No.

QUEST: Oh, you know, I've never tried it and I'm not about to try it now. Thank you for joining us, sir. I'm very grateful.

[16:35:06]

SEMENIUK: No problem at all.

QUEST: Thank you.

Now, I wanted to show you the markets at the end because U.S. markets, they seem to be unfazed for now by the president's attempts to fire the Fed

governor Lisa Cook. The Dow actually gained 130 odd points. The Nasdaq saw the best of the session as you can see up there, Nvidia extended its gains

ahead of Wednesdays earnings. Apple rallied after announcing its next product launch date.

As you put it all together, even though it looks like there's more red than greens, the greens are, the greens have it on more powerful.

We will take a "Profitable Moment" after the break. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment." What an extraordinary set of events. Firstly, the U.S. president tries to fire a Fed governor for the flimsiest

of excuses when he can only fire for cause, which is gross misconduct. Then you end up with the Treasury secretary, the U.S. Treasury secretary,

describing the Fed's independence as being a political arrangement between the people and the government.

And then finally, you have the president himself admitting, in his words, we will soon have a majority, and then we'll be able to get off to the

races with housing. This is just naked open gerrymandering the Fed's board so that he can get lower interest rates and control the Fed because it is

an institution, an independent institution of which will not so far bow to his demands.

The Fed themselves put out a statement when they said longer terms insured independence. That's why the Fed term is 14 years. If I'm not mistaken,

it's the only seat, it's the only position in government that has that length of term. All in all, it doesn't -- the seriousness of this is that

however it's finally resolved, it's like a -- it's like a sweater that's now got caught on a nail. It's being pulled apart thread by thread. And the

independence, like virginity, once it's gone, ain't coming back.

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's profitable. We must

sort out this bell.

END