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Quest Means Business
Six House Republicans Defy Trump to Block Tariffs on Canada; Trump Repeals EPA's Ability to Regulate Greenhouse Gases; Fuel Shortage Hitting Government Services, Causing Blackouts; Trump Immigration Policies' Impact on Native versus Foreign Born Unemployment; CEO Issues Dire Warnings About A.I.; Billionaire's Immigration Comments Spark Outrage. Aired 4p-5p ET
Aired February 12, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:19]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": And there you have it, the closing bell ringing on
Wall Street, and if you look at the chart, you'll see what started quite well ended rather badly.
I think, we are at the low point of the day. We will show you the triple stack later in the program and I think that will confirm it.
Oh, we've got four strong quick gavels. Trading is over. Miserable sort of day on the market and the main events of the day that you and I will chew
over in our nightly conversation.
Cracks in President Trump's control over the Republican Party as tariffs cause concern over the cost of living.
The CEO of Otherside A.I. with a dire warning on the coming impact of A.I. to the labor market. The point about his viral essay is he knows what he is
talking about. He has seen it for himself.
And sir Jim Ratcliffe, a British billionaire living in Monaco, he may have apologized for his controversial comments that U.K. is being colonized by
immigrants, but he says he doesn't apologize for the sentiment.
We are live in New York. Thursday, February the 12th, my goodness. I am Richard Quest, and I mean business. Where is the bell?
Good evening.
There are fractures growing in the Republican Party it would seem, as President Trump continues to fight for his trade policies. Six House
Republicans joined Democrats on Wednesday in a revolt to repeal President Trump's tariffs on Canada.
Mr. Trump threatened the defectors with consequences ahead of the midterms, but they defended their positions, claiming the tariffs are hurting their
constituents. And today, we have this interesting report.
It comes from -- it is actually the Liberty Street Economics, which is part of the New York Fed, a study from the Fed of New York found -- and I am
going to quote it: "We find that nearly 90 percent of the tariffs economic burden fell on U.S. firms and U.S. consumers.
As to that vote, the House Speaker, Mike Johnson, downplayed it.
(BEGIN VIDEO CLIP)
REP. MIKE JOHNSON (R-LA): I am disappointed in the vote, but the President has veto power, and there is not a two-thirds majority in both chambers to
override the veto, so it is not going to change the policy in the end anyway.
But I think this is a fruitless exercise and a pointless one, and I am disappointed in it.
(END VIDEO CLIP)
QUEST: Stephen Collinson is in Washington.
When I was in Davos, Anthony Scaramucci collared me on the promenade and he said, "The wheels are coming off the wagon. It is just a matter of time."
Are we seeing that?
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: I don't think the wheels are necessarily coming off the wagon, but maybe the nut on the hub is
getting a little looser. That vote on the Canada tariffs was significant because the House doesn't usually vote to rebuke Donald Trump.
There was another vote in which Mike Johnson failed to stop another revolt by a handful of Republicans, which means he is not going to be able to use
a gimmick he has been using going forward to stop more votes on the tariff.
So, in the coming weeks, the Democrats are going to try and put forward a bunch of votes in the house on Donald Trump's tariffs and Mike Johnson is
not going to be able to shield his members from those votes.
So, you may see even more defections from the tariff situation. I think what this is about is -- and it happens to every President, especially
unpopular presidents, that there comes a time when some members of their party start thinking to themselves, wow, I've got to look after myself and
my constituents rather than necessarily the unpopular wishes of the President and that's when power starts to wane away from somebody in The
White House.
QUEST: Today, the President said he was giving some -- talking about his Voting Act. He said that the United States is the only country that allows
mail-in voting. Yes, I've heard him say it today, but it is not.
I mean, I vote in the U.K. elections by post -- a postal vote. Lots of places have postal votes. How does he get away with it?
COLLINSON: He gets away with it because he is only talking to say 40 percent of the country. He gets shielded by an extraordinary, powerful
conservative media machine. He repeats this stuff over and over and over again.
He said it in the run up to the 2020 election, and that provided the kind of political foundation for him to then argue that the election was stolen
when he lost it. This is what Donald Trump does. He is a gusher of untruth, day after day after day and it is impossible to push back against
everything.
[16:05:10]
So some of it just gets into the body politic, but your point about mail-in voting, that kind of comment horrifies Republicans because they've been
trying to get their voters to use mail-in voting to supersede the advantage that Democrats have always had in that particular method.
So, not only is it not true, it is absolutely self-defeating for Republicans.
QUEST: We are going to talk more about tariffs in a second, but I just want to put it -- this report, you may not have read the detail, I did look at
it and I read it.
This is from the New York Fed. It could not be clearer, Stephen. It could not be clearer, words, pardon the obviousness of one syllable. We find
nearly 90 percent of the tariff economic benefit fell on U.S. consumers. Who bears the cost? The high pass-through tariffs on U.S. imports. The U.S.
firms and consumers bear the bulk.
It could not be clearer.
COLLINSON: Right, but I once spoke to somebody a very senior member of Trump's team in his first term, and I asked him this question, why does the
President keep saying that foreign countries pay for tariffs and the consumers don't? And this person said he had spoken to the President
numerous times, and it is just impossible to get that point into the President's head.
He has believed in tariffs since the 1980s.
QUEST: Right.
COLLINSON: He believes his position that he is bringing in trillions of dollars to the U.S. Treasury and everyone else apart from the U.S. is
paying. He just doesn't see the facts on this issue.
QUEST: Stephen, I am grateful for you for bringing the facts to us. Thank you very much indeed.
President Trump -- staying with this story in Washington, revoking the environmental protection, the EPA, to you and me to their ability to
regulate greenhouse gas emissions.
Kevin Liptak is at The White House.
Kevin, this is considered a long policy on climate. It is a significant part of the climate -- it is a significant part of the EPA's ability to
regulate carbon emissions and they are essentially saying the earth is flat.
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: It is the entire underpinning of their legal authority to contain emissions -- carbon
dioxide, methane -- all of these other greenhouse gases that are warming the climate, but also that this finding had said we are endangering human
health.
You know, Lee Zeldin, who is the administrator of the EPA called the rollback of it today the Holy Grail of deregulation. It is something that
conservatives have been talking about for decades. You know, this finding occurred in 2009, and they have been basically trying to roll it back ever
since.
You know, it is almost certain that it is going to be challenged in court. You've already seen groups like the American Lung Association say today
that they are going to sue, but you're right you know, this sort of flies in the face of all scientific evidence. You know, study after study have
found that these gases are damaging to human health.
But what the administration is saying today is that the economic benefits of this will be so great that the President is rolling it back.
QUEST: All right, Kevin, now, look, we know the President believes this, but it takes more than one to push this through even if you've got a
powerful president. Are they -- do these other members of the administration genuinely believe that climate change isn't human related
and/or getting worse and going to be an existential threat, or are they just doing it because the boss believes it?
LIPTAK: Listen, I think you have to give up a lot of your own personal beliefs when you're working for President Trump. That's something we've
seen over and over again, whether it is on tariffs, which you were just talking about with Collinson, or whether it is on the science of climate
change and, you know already in Washington, you know, there are plenty of Republicans who do believe in climate change and believe in the science
behind it.
And you, I think, have seen them put those beliefs to the side because they have a leader of their party who says that climate change is a hoax and
seems intent on rolling back all of these regulations.
You know, getting rid of this particular finding was part of Project 2025, the blueprint that the Trump campaign was using to sort of lay the
groundwork for how he would govern if he were elected, so this had been, you know in the pipeline for quite a long time.
You know, the President claims that this is going to save, you know, the American public, trillions of dollars based on, you know, cheaper cars,
potentially. But I think the fact is that Americans have shown an appetite for electric vehicles, for cars that don't necessarily burn some of these
fossil fuels.
So, even though he is rolling this back, it is not necessarily clear that the industry or that the American public wants to go back in that
direction.
[16:10:04]
QUEST: I am grateful. Thank you, sir.
We talked about tariffs. Tariffs is one of the issues driving a wedge between the U.S. and its allies, a topic likely to be at the fore of the
Munich Security Conference this weekend.
The organizers have already labeled President Trump as the leading demolition man of world order. Remember last year in Munich? This from the
Vice President.
(BEGIN VIDEO CLIP)
J.D. VANCE (R), VICE PRESIDENT OF THE UNITED STATES OF AMERICA: The threat that I worry the most about vis-a-vis Europe is not Russia, it is not
China, it is not any other external actor and what I worry about is the threat from within, the retreat of Europe from some of its most fundamental
values, values shared with the United States of America.
(END VIDEO CLIP)
QUEST: Now, this was all followed up with the National Security strategy in November. Michael Froman is there in Munich.
Michael, this is a document I know that you've read closely. You've also followed gently and more, but the reality is when you are there at Munich,
there is the U.S. view on the world, and there is everybody else, or most of everybody else, and a very large gap in between.
MICHAEL FROMAN, PRESIDENT, COUNCIL ON FOREIGN RELATIONS: Well, there is and if we just roll back the calendar a few weeks, we saw what happened in
Davos, where the whole agenda was sort of captured and hijacked on the issue of Greenland. So, everyone is here in Munich anticipating what will
be the dominant issue here?
Will it be a follow up to Vice President Vance's criticism of the threat within? Will it be around NATO? Ukraine? European security and the European
project? The importance of reform and consolidation in areas like defense, and what will it mean for the broader transatlantic relationship?
QUEST: What do you gauge as the health of the transatlantic relationship? Give me a brutally honest assessment.
FROMAN: Well look, I think first of all, I think the President has raised some legitimate issues, for example around European commitment of resources
to its own defense and Europe has responded. It has responded quite well, a long way to go to make sure not only that they are spending more money, but
that they are spending it well, they are spending it on the things that matter. And that's going to require some very hard decisions within Europe
about consolidating some of their defense projects so that they are not siloed.
You know, on the other hand, I think particularly the conflict or the dispute over Greenland really shook up the Transatlantic relationship when
Europe thought that there was even the possibility, which ultimately the President took off the table of the U.S. using military action to take
Greenland, to take territory from a fellow NATO ally.
I think that's what is lingering is now that that has been taken off the table, can NATO move forward?
QUEST: Is Ukraine -- are they going to reach agreement on Ukraine? The problem seems to be the longer you talk, Russia just has the meat grinder
ability to keep feeding the machine that eventually they believe will overwhelm Kyiv.
Now, it is almost like whilst Everybody is talking, they are losing in a sense. Is there any urgency there?
FROMAN: There isn't enough urgency, certainly and that's one of the important things about this conference is will Ukraine be put back at the
center of the agenda? I mean you're right, Richard, Russia has some tremendous advantages in terms of being willing to put men and women at
risk and material support behind this war, but they have been fighting for four years, and they've only taken about 20 percent of Ukraine.
And so, they are not winning the war. Now, the question is, can Ukraine win the war or Ukraine change the calculation that Putin faces so that he comes
to the table more seriously? And a lot of that will happen -- will come down to what does the security arrangement look for Ukraine going forward?
QUEST: Okay, now, the Carney speech at Davos, privately leaders will tell you left, right and center, it was just what needed to be said -- a dose of
reality. The Emperor's new clothes, the reality now, but it also gives cause for this global reality, this variable reality that Carney calls
where countries will do deals with different countries depending on the necessity of the alliance.
You're going to see a lot of that variable reality at Munich.
FROMAN: I think that's right. A year ago, I talked about how we were heading towards a polyamorous world where countries would have relations
with other countries on various issues, and sometimes they would be with the U.S., sometimes, they might work with China, sometimes they work among
the middle powers.
And so I think we are going to see a much more complicated international environment than we've seen before and the question will be what role the
U.S. plays in that.
[16:15:10]
You know, I think if you look back over the last week or two, the U.S. convened a ministerial in Washington on critical minerals and had something
like 40 or 50 countries represented there.
So the U.S. is not disengaging. I don't think the Trump administration can be accused of being isolationists, they are just engaging in a
fundamentally different way than we've ever engaged before.
QUEST: Good to see you, sir. Thank you. Have a good Munich, as they say. Thank you for taking the time. Its late at night for you.
FROMAN: Thanks for having me.
QUEST: But thank you for talking to us tonight.
In a moment, to Cuba, the worsening fuel shortage. You're going to hear what it is actually like on the ground in Havana. It is QUEST MEANS
BUSINESS. Good evening to you.
(COMMERCIAL BREAK)
QUEST: Mexican naval vessels have arrived in Havana desperately carrying or carrying desperately needed aid as the U.S. squeezes Cuba's oil supply. The
shortage of fuel is forcing authorities to ration health, transport and other services.
Our correspondent, Patrick Oppmann reports from Havana.
(BEGIN VIDEOTAPE)
PATRICK OPPMANN, CNN HAVANA BUREAU CHIEF: Mexican Navy ships have just entered the port of Havana carrying humanitarian aid, hundreds of tons of
it. But it is what they're not carrying that is perhaps more important, which is oil.
The flow of oil from traditional allies of Cuba is Venezuela, Mexico that over the years have said billions of dollars of oil that has all been cut
off under pressure campaign from the Trump administration.
So, we are seeing the impacts of that every day. Less cars on the road, government run hospitals cutting services, blackouts lasting longer and
longer, both Canada and the United Kingdom have issued travel advisories among other countries, warning their citizens not to come to Cuba unless it
is absolutely necessary because they will face harsher conditions here on this island.
The U.S. is calling on the Cuban government to open up politically and economically, saying there needs to be a change in the communist government
if the flow of oil will start up again. But there is no sign that the Cuban government at this point is buckling under that pressure.
Patrick Oppmann, CNN, Havana.
(END VIDEOTAPE)
QUEST: Emily Morris is with me. Emily helps Caribbean and British researchers collaborate and is involved in the University of UCL,
University College London's Institute of the Americas.
Emily, thank you for taking time. We have a bad delay between us, between New York and Havana, so we will take it slowly.
But what is the situation like at the moment? Do you have regular power, regular light or is it intermittent being cut off because of fuel
shortages?
[16:20:10]
EMILY MORRIS, HONORARY SENIOR RESEARCH FELLOW, UCL'S INSTITUTE OF THE AMERICAS: Well, most people are suffering a lot of power outages at the
moment. I am in a place which is very close to some hospitals, and so I've actually had quite a reliable supply because they are reluctant to turn off
the hospitals because then they have to have backup diesel generators and diesel is in short supply, and electricity.
So you know, in my own case, I am okay for as long as this interview lasts. But people are really suffering. I mean, the power cuts are very, very long
and its made everything very difficult.
QUEST: And then you've got the fact that there are no fuel for cars. I assume heating as well is becoming much more difficult. And we have almost,
you know, no aircraft, no airlines, because unless they're prepared to tanker the fuel from Miami as they come in and out, there is no aviation
fuel, too.
How desperate is it?
MORRIS: It doesn't actually feel that desperate. You know, my flight home is all arranged because the flight is just going to refuel in the Bahamas.
You know, so there are ways around it in some cases. So it doesn't feel like a complete -- you know, everything shut down. There are still traffic
on the street, a high proportion of electric vehicles, it has to be said, but I think the biggest issue is political uncertainty, they just don't
know when the next tanker is going to arrive and so they don't know how bad it is going to get.
And clearly, the government is preparing for the worst and they've got plans, contingency plans for rationing the electricity more and more to
prioritize as you mentioned, health in particular which means that people will be hugely not just inconvenience, it means that so many things just
aren't going ahead.
So, yes projects are on hold. Universities shut down so they -- classes are being canceled. And so everything is really on hold at the moment. But
there isn't a sense that they can't survive. And I think this is one of the things which is, in a way, a miscalculation or a bit of a group think on
the part of the United States is that they don't realize actually, Cuba does produce a third of its own oil and half of the electricity is
generated from domestic sources. That's from oil and so you know, they can manage, they can manage but it is very hard.
QUEST: I am grateful to you, Emily. As the situation continues, we will follow it and talk to you again. Thank you for giving us time this
afternoon, Emily, joining us from Havana.
Now, the U.S. Energy Secretary is in Venezuela, where he got a firsthand look at the country's oil facilities. Secretary Chris Wright is one of the
highest ranking U.S. officials to visit Venezuela in nearly three decades.
While there, he is meeting the country's acting president, he did that on Wednesday. And today, he told CNN's Boris Sanchez that the business climate
in Venezuela is going through a dramatic change.
(BEGIN VIDEO CLIP)
CHRIS WRIGHT, U.S. SECRETARY OF ENERGY: The U.S. government is not going to offer physical security or economic security. American businesses and
international businesses, they do business all around the world in all different political and risk environments.
Venezuela is no different in that, it is just it was one of the absolute riskiest, worst business environments there was two months ago. Today, it
is meaningfully better, you know, is it Norway? Of course not. That's going to take time, but it is moving in that direction.
(END VIDEO CLIP)
QUEST: And very well put.
Stefano Pozzebon was there as the Energy Secretary toured one of Venezuela's old decrepit oil facilities.
(BEGIN VIDEOTAPE)
STEFANO POZZEBON, CNN CONTRIBUTOR: We are at an oil producing facility in Eastern Venezuela called Petro Independencia, and on Thursday, the
Secretary of Energy Chris Wright is visiting this oil facility together with the Acting President of Venezuela, Delcy Rodriguez. It is a stunning
reversal.
Consider that it has been only 40 days since U.S. Delta Forces picked up Rodriguez's predecessor, Nicolas Maduro, in the middle of the night to take
him to New York City, and now the Secretary of Energy is visiting together side by side, hand in hand almost, they are traveling on the same van with
the Acting President.
And the company that is running this facility, Chevron has been telling us that they believe the potential here could be of up to 300,000 barrels a
day. Currently, they are producing only 40,000 barrels of crude oil a day, but both the secretary and the Acting President are telling us that they
hope to overcome the obstacles that are in the way to that goal.
Chevron is telling us that they are producing around 40,000 barrels a day here, but the potential could be up to 300,000 barrels a day.
[16:25:14]
What do you think is the biggest obstacle that we need to overcome in order to reach that goal?
WRIGHT: Oh, it is just to get the political and economic arrangements as smooth as possible between our countries, but there is no question that
Chevron can ramp this facility.
Chevron and PDVSA can ramp this facility that this area to 300,000 barrels a day, no question about it.
DELCY RODRIGUEZ, VENEZUELAN ACTING PRESIDENT (through translator): We are working on a very fast paced agenda to consolidate binational cooperation.
It is what is important for both the United States and Venezuela that our countries, our peoples benefit from these partnerships.
Chevron has been in Venezuela for over a hundred years, and we are doing extraordinary work as the partners that we are, improving production,
improving facilities, infrastructure maintenance -- this is the way forward. This is the path of cooperation and it is the agenda for a long
term productive partnership.
It is what I mean when I say that no obstacle or impediment should hinder this productive path that we are on.
POZZEBON: The reversal compared to just a couple of months ago and the full rhetorical warfare between Venezuela and the government of Nicolas Maduro
and the United States, and the idea that now the two of them are walking side by side is perhaps a symbol of how quick the transformation in this
country has been so far.
For CNN, this is Stefano Pozzebon, Anzoategui, Venezuela.
(END VIDEOTAPE)
QUEST: President Trump thinks his immigration crackdown is protecting American jobs. Research from the Peterson Institute says the opposite. The
senior fellow, Jed Kolko, and I will be discussing this research in just a moment.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Hello, I am Richard Quest and together, we will have a lot more QUEST MEANS BUSINESS. I will be talking to the chief executive of an A.I.
company who says something extraordinarily big is happening and the impact will be much larger than COVID.
[16:30:02]
QUEST: Hello, I'm Richard Quest. Together we'll have a lot more QUEST MEANS BUSINESS. I'll be talking to the chief executive of an A.I. company who
says something extraordinarily big is happening and the impact will be much larger than COVID. And one of Britain's wealthiest men is under fire for
saying the U.K. is being colonized by immigrants. Before that, this is CNN and here, the news, well, you better believe it, will come first.
A U.S. federal judge has blocked the Defense Secretary Pete Hegseth's bid to punish the Democratic senator who called on American troops to refuse
illegal orders. The judge ruled that Hegseth unlawfully retaliated against Senator Mark Kelly by threatening to demote him. Kelly is a retired Navy
captain and an astronaut. The Justice Department is likely to appeal against the ruling.
Arizona neighbors of Nancy Guthrie are being asked to check their security camera footage. Investigators are looking for video from January the 11th
and the 31st. A suspicious vehicle was reportedly seen in Tucson neighborhoods on those days. The search is now in its 12th day.
The Ukrainian athlete has been banned and disqualified from the Winter Games. The IOC has barred Vladyslav Heraskevych from competing in the men's
skeleton event because his helmet has pictures of Ukrainian athletes killed in Russia's war. IOC officials said they sympathize with him but are citing
strict rules against political demonstrations.
President Trump's border czar has said the massive immigration crackdown in Minneapolis is coming to an end. The announcement follows weeks of protests
sparked by harsh tactics used by federal agents, along with outrage intensified after agents shot and killed two U.S. citizens. Around 3,000
federal agents deployed to the city as part of Operation Metro Surge and now the border czar Tom Homan is describing it as a success.
(BEGIN VIDEO CLIP)
TOM HOMAN, U.S. BORDER CZAR: I'm very pleased to report that this surge operation and our work here with state and local officials to improve
coordination and achieve mutual goals as well as our efforts to address issues of concern here on the ground have yielded the successful results we
have came -- came here for.
(END VIDEO CLIP)
QUEST: The president has said his immigration policies will protect American jobs. Research from the Peterson Institute found his efforts
aren't actually helping U.S. born workers or native born workers as they're called. Native born jobs have decreased in recent months as foreign born
jobs held steady. These population trends, according to our next guest, complement each other rather than compete.
Jed Kolko is a senior fellow at the Peterson Institute for International Economics, also former U.S. undersecretary of Commerce.
We need to take this a little slowly because it is complex stuff, I think you will agree. The sort of the rubric had been American jobs for American
workers, and if we stop the immigrants, then Americans will get the jobs. Tell me why it's not working.
JED KOLKO, SENIOR FELLOW, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Thank you for having me here. Here's what's happened in the past year or
so. The unemployment rate for native born workers has actually gone up. It's higher than it was a year ago while at the same time, the unemployment
rate for foreign born workers, for immigrants, has held steady or has even fallen a bit.
And of course, that is the opposite of what many had expected and hoped out of this immigration policy. Now, the reason for this is immigrants and
native born workers aren't simply competing for the same jobs. Economists say that they are not substitutes, but rather they are complements. In
other words, they tend to work together. So if companies struggle to hire, to find foreign born workers, they might have to end up cutting back on
their production or their hours for everybody, including native born workers.
QUEST: Now is that because of a skills mismatch? The sort of theory realized that if you need a nurse or a computer person or a plumber or
whatever, and you can't find one, there'll be another in the opposite job pool. But that's not happening.
KOLKO: When you look across native and foreign born workers, the mix of jobs that they do is somewhat different. I mean, of course there are jobs
that you can find both native born and foreign born workers doing.
[16:35:02]
But overall, native born and foreign born workers tend to do somewhat different jobs. They have somewhat different skills. And they also live in
somewhat different labor markets. So there are places where there are lots of foreign born workers and others where there are fewer.
QUEST: Right. So --
KOLKO: It means that immigrants are much more likely to be competing with each other for the same job, rather than competing with native born
workers.
QUEST: Right. Now, the argument is always, and the traditional argument has been, let's take crop picking, for example, in California or lawn mowing or
whatever it might be. But the argument has always been Americans don't want to do those jobs. Native born workers, I should put it. Native born workers
don't want to do those jobs. Therefore, that would be borne out by the theory that they are not being competition for the same jobs.
KOLKO: And that's one example. But it's not even necessarily not wanting to do the same jobs. It may be different skills or living in different places.
Whatever the reason, for the most part immigrants are competing more with other immigrants for the same jobs rather than with native born workers.
QUEST: So what's the answer here? Because if the national policy is to restrict immigration, and we've seen what effects that's having on labor
market and on inflation and on wages, and we've seen that in the system, the Fed talks about this every time in the FOMC, the difficulties of it. If
they are restricting immigration then what is the long term effect on the labor market?
KOLKO: So as you say, we're already seeing much slower job growth. Last year we now know jobs barely grew, only at about 15,000 new jobs a month,
which is a number that sounds more like a recession than normal times. But the real effect comes longer term. Immigration, immigrants contribute
disproportionately to innovation, to entrepreneurship, and we've seen a lot of productivity growth, a lot of new patents, really a lot of the
contributors for long term economic growth thanks to immigrants.
And if immigration is much rarer that slows down, that does long term harm to U.S. economic growth. It also hurts the federal budget. Numerous
studies, including the Congressional Budget Office, have found that immigrants pay more in taxes than they take in government services.
QUEST: Right.
KOLKO: And with fewer immigrants, the federal budget picture gets worse. Those are the two longer term effects that really do harm to the U.S.
economy.
QUEST: I'm grateful, sir. Thank you for taking time to talk to us. We'll talk more. Thank you.
As you and I continue, major figures in the A.I. industry are sounding the alarm. We'll be joined by Matt Shumer, the co-founder of OthersideAI there
he is. Now let's put it bluntly as this. Matt says now is -- the time is now, not in and eventually we should talk about this, this is happening
right now and I need you to understand why we're close enough to feel the ground shake. What's he talking about? You'll hear it after the break.
(COMMERCIAL BREAK)
[16:41:02]
QUEST: Prominent warnings from the A.I. industry are sparking fears of job losses and safety issues. The head of Anthropic's safety team resigned this
week, saying the world is in peril due to the dangers of A.I. The comments echoed a researcher from OpenAI, who's also leaving the country and
company. And on Wednesday, a post from the CEO of HyperWrite A.I. issued a dire warning.
He wrote that the current period is like February 2020 when this seems overblown phase of something much, much bigger than COVID. The CEO and co-
founder of OthersideAI Matt Shumer is with me. That's the company behind HyperWrite A.I.
OK, sir. So this is what I mean. Let me do one more quote that you say. You know, "I've always been, I've always been an early adopter of A.I. tools
but the last few months have shocked me. These new models aren't incremental improvements. They are a different thing entirely."
So what is going on that's got you so upset?
MATT SHUMER, CEO AND COFOUNDER, OTHERSIDEAI: First of all, thank you for having me. I think this is a really important thing to talk about so I'm
glad we're having this conversation. Frankly A.I. models have improved over the years, but I think a lot of people still think of them like the things
they tried in 2022, in 2023. But A.I. has improved more quickly over time.
It's accelerating in terms of the rate of progress, especially in things like engineering and coding, which is what I do every day. So the idea here
is if A.I. is let's say at level 50 at coding, it's probably at level 20 at most other things. But the next A.I. is going to be at level 50 on
everything else, and level 100 on coding.
And very, very recently, a new string of A.I. models came out. One in particular that I was a little, say, spooked or amazed by, that frankly can
do pretty much everything I can do when it comes to engineering, and in a lot of ways, it's quite a bit better and more thoughtful than I am. And the
idea is that if that's the case and that's where we are today when it comes to engineering it's very likely that those capabilities are going to be
available for almost every other role that can be done on a computer in, say, a year or two years.
QUEST: Right.
SHUMER: Now, I'm not saying that means that this is all going to be disrupted and every job is going to be gone overnight. It's not the case.
And I'm not trying to scare people about this. What I'm saying is that we need to have this conversation because even if the capability is there, it
doesn't necessarily mean it's going to proliferate through the economy immediately but it will happen over time. And it's important to talk about.
QUEST: Right. So but what would -- we can talk about it. Absolutely. But in the same way that you can't put the Genie back in the bottle or, you know,
the sand, et cetera., what would you like us to do about it? What is your - - as we talk about it, what do we need? What are the issues that we need to be debating?
SHUMER: Yes. So I think the most important thing is that, and this is the tricky part, it's different for every single person who sees this, who
understands this, because it means something different to every person and for every role. Right? There are some roles that, frankly, I don't think
will be affected, and I don't think they'll be affected quickly at all. It might happen over time, but not immediately.
If you are a doctor, right, you probably will be using A.I. in your profession, but you're going to still be needed in the coming years. If you
are a lawyer, it's not going to stand in the courtroom for you, but it's going to be doing a lot of the grunt work, a lot of the drudgery that,
frankly, you might have currently need, I don't know, a junior associate for. So -- go ahead.
QUEST: Yes. Yes. I mean, yes. So what do we do? I mean, we can only reach, we can't retrain for jobs that don't exist. We can't invent jobs that
aren't necessary. And we are going to end up with, believe me, not mine. I'm on my way out. So it's your generation that's going to end up sort of
age 30 something or 40 this, with nothing to do. Is that the sort of thing we're worried about?
SHUMER: It is. And again, I think there are different levels of worry for different roles and for different people, but at a high level, that is the
worry.
[16:45:06]
I'm 26, right? I'm at the beginning of my career. I don't know what my life and my career is going to look like in 10 years, and that is a little
scary. It's exciting, too, because I can do more if I'm really good at taking advantage of the technology. But it is scary. And I think that's
going to be the same thing that a lot of people feel. And again I wasn't looking to scare people with this article. The idea was to just tell people
this might happen. There's a good chance you should be prepared.
I do think, though, that people should be spending more time, and especially these corporations that are working on this A.I., right? The
ones that are actually building it, not just using it. They should be spending more time and more money researching, what do we do when this
happens? How does society adapt? What are politicians thinking about? They should be thinking about this really, really deeply. This isn't a big issue
today, but it's going to be in a few years. We need to be prepared.
QUEST: But isn't the real problem -- you put your finger on it, sir. Isn't the real problem, as you say in this article, it's more like the moment you
realize the water has been rising around you and it's now at the top. It's a bit the frog, isn't it? It's the frog in the boiling water. It's all
happening very slowly, but all of a sudden you're going to turn around and realize you're in it up to your neck. And then as we discover with
digitization, fourth industrial revolution, it's going to be too late.
SHUMER: Yes, I mean, that is, that is the fear. I think, again this isn't going to affect everybody today. It might not affect everybody in two
years, but certain people it will. I think it's important that people take a long, hard look at what they're doing and what A.I. can do and track its
progress over time. One of the things that I like to tell people is to make what I call a personal benchmark, right?
You say, hey, here are the things in my role that I don't think A.I. can do. Let me write some prompts and every three months I'll feed it to
whatever the best A.I. is at the time and over time you can see how it improves on those things, and it'll give you a bit of a warning sign. You
want to have your own warning bells.
QUEST: All right.
SHUMER: But everybody shouldn't go and panic today. We're not there yet. It's just you want to be informed and you don't want to, you know, dig your
heels in and bury your head in the sand. And I do think that politicians need to be talking much more about this. I think that the companies that
are working on this, they talk about this but I think the reason my article broke through is because I'm the first person to try to say, hey, look,
people that are outside of tech, here's what's going on in a way that you can understand.
QUEST: Sure.
SHUMER: People in tech talk about it in these very jargon heavy, industry specific ways. And that's not going to reach a mass audience that needs to
hear it.
QUEST: All right. I'm grateful, sir. You and I will talk more about it. I'm grateful for you joining us tonight. Thank you.
A British billionaire sparked outrage over his comments on immigration. What Jim Ratcliffe said, and now he's apologizing, gives me the chance to
talk to my good friend Bianca Nobilo who will join me. There she is. The anger. We'll talk about how much of a mess he's made. The man is in Monaco,
by the way and -- anyway, we'll talk about it with Bianca after the break.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:50:31]
QUEST: The British Chancellor of the Exchequer is calling out one of the country's richest men for comments that she says is unacceptable. Sir Jim
Ratcliffe said that the U.K. is being colonized by immigrants. He has since apologized for his choice of language, but not the sentiment underneath it.
Ratcliffe is better known as a co-owner of Manchester United Football Club. Most of the club players were born outside of the U.K.
Interestingly, Ratcliffe himself is not a U.K. tax resident. He's transferred to Monaco in 2020. He has been a supporter of the Labour
government. Now he of course has said these comments and the issue is whether or not he's going to sort of now go to Reform and Nigel Farage.
Bianca Nobilo is the host and managing editor of the show "History Uncensored." Also a dear former colleague of mine.
Bianca, how much of a -- I heard this this morning on the radio. How much of a storm is this? Bearing in mind, yes, his language was intemperate and
inappropriate, but he says it's the sentiment. You know, let's not, let's not get sidetracked by that.
BIANCA NOBILO, HOST AND MANAGING EDITOR, "HISTORY UNCENSORED": Richard, it's so great to be on your program. Thanks for having me. One of the
reasons it's causing this storm, and I think a storm is fair, is because it is capturing such a volatile and growing debate in this country because we
see what's happening with Nigel Farage and Reform in the polls. And that's exactly what this debate is about.
So the language choice of colonize for our viewers that may not have seen it is what the prime minister, Labour, the Greens, the liberal Democrats
have called very offensive and wrong, obviously, because Britain has a history of colonizing and that carries exploitative and subjective
undertones.
But Nigel Farage and Reform were very keen to say let's not get distracted by the language. There are real points here about levels of migration into
the U.K. and the Conservatives, naturally desperate for votes, trying to have a milder response. Neither calls it too offensive nor undersells the
issue.
QUEST: Right. I feel different -- I feel somewhat embarrassed asking this question, but you'll know where I'm going. Is the real danger here with
this one? You know the PM has called on Ratcliffe to apologize. Manchester fans have said this, but it all ignores the point of what he was saying.
His language was awful but, you know, he's -- Ratcliffe has already praised Farage. Farage has already signed on to the sentiment, not the language.
Farage could be the next U.K. prime minister and the current PM is in a mess.
NOBILO: Yes, and also, did you know that he's seeking government funding to build another stadium?
QUEST: I think.
NOBILO: So really not a good idea all round. So, I mean, very clearly there are deep concerns in the electorate about migration. Britain is the country
most likely to cite immigration as a number one concern. About quarter, a quarter of the electorate in the U.K. think that immigration is the biggest
issue and about half think it's a major issue. So clearly it's something that all politicians need to be thinking about.
But I think there are a couple of problems with what Ratcliffe said in terms of the facts. So he alleged a 12 million increase in population in
the last, I think it was decade or so, whereas in actual fact it's more like 2.9 million. He said that nine million people were on benefits.
Actually, the figures more like 10 million but those people also work. You know, a couple of factual things.
But he's not wrong in the fact that net migration has been responsible for 98 percent of population growth from 2020 to 2023. So, yes, the essence of
what he's saying resonates.
QUEST: Quick question on Starmer. Is it a question not if but when he goes?
NOBILO: Yes, I mean, it's very difficult to imagine him being at the helm for the next election. I think the main issue is who was going to replace
him. And while there'd been a bit of a groundswell around certain figures last year, that momentum seems to have dropped. So I would tend to agree
with you there.
QUEST: Has --
NOBILO: As always.
QUEST: Yes. Has the leader of the opposition, Kemi Badenoch, has she made considerable progress? I mean, is Nigel Farage still the one to beat? The
two-party system, which you know better than anybody, is very difficult to beat because of the logistics or because of the inherent way in which it
works. How are things looking at the moment?
[16:55:06]
NOBILO: It is, but actually there's two really interesting pieces of research that I think you'd find fascinating. The first is that now more
than ever in recorded history in the U.K., people do not have an allegiance. They are more changeable with their parties than ever before.
So that has a lot of volatility to it. If a party is going to destroy that two-party system, it would be now so I think that's a really important
factor to consider.
And the Tories also, I was speaking to a friend of mine who runs focus groups and works as a special adviser in the conservative party.
QUEST: Sure.
NOBILO: One of the issues they're really worried about is that in focus groups, they're finding that voters aren't particularly curious about the
conservative stance. It's almost like they're not part of the conversation in the way that they would have been.
QUEST: Right.
NOBILO: Not even we don't want to vote for them, it's like, well, we don't really care what they have to say, which is a huge issue.
QUEST: I'm grateful to you. Thank you very much indeed, Bianca, for joining me. Lovely to have you on the program.
NOBILO: Thank you.
QUEST: Thank you.
Quick look at the markets. Wall Street finished lower. A.I. disruption fears spread. There's the Dow and the triple stack. And you can see it was
a real clobbering for the Nasdaq. But there has been some good gains. I mean what can you say? It's still over 23,000. You pay, it's your money.
You take your choice and we will take a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's ""Profitable Moment."
So it is official. This comes from the New York Fed. We find that nearly 90 percent of the tariffs economic burden fell on U.S. firms and consumers.
It's what's known as the incidence. The tariff incident. Who bears the cost. There's only so many times that you can tell people that, no, no, the
exporter pays it. Oh, no, the foreign country pays it. Now it's -- we've always known but now it's been confirmed again that you or me, those of us
in the United States, pay the cost of the increased tariffs.
And by the way the average tariff in the United States overall went from 2.6 percent to 13 percent. So this idea that somehow the Trump
administration's tariff policy has been whittled down, it's still vast. It is still bringing in a huge amount of money. Yes, but it is also costing
U.S. consumers also a great deal of their salaries, wages and pay as they have to pay for the extra costs in the shops.
Whether or not anybody will ever admit this officially in the administration, I wouldn't put money on it, but if anybody wants to know
who pays for the tariff, the New York Fed has told us exactly that.
And that is QUEST MEANS BUSINESS for this Thursday night. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, have a second one, I
hope it's profitable. I will be back with you tomorrow.
END
