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Quest Means Business
Iran War Drives Inflation To Highest Level In Three Years; Senate Confirms Warsh As Federal Reserve Governor; Poll Shows Americans Feeling Economic Uncertainty; Over 100 Labour MP's Sign Letter Backing Keir Starmer; Trump Heads To Beijing for Summit With Xi Jinping; "Free Ben And Jerry's" Campaign Calls For Brand's Independence. Aired 4-5p ET
Aired May 12, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:17]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing markets and closing bell. Closing bell ringing on Wall Street. We've got a
bit of a mixed market today. The Dow is up, but the other two are off. So there are no gains, and even the Dow only went positive late in the
session.
Sir, bring us to a close and oh! And one, two, three, four firm gavels. No records. Trading is over.
The stories and the events today. U.S. prices are now rising at the fastest pace in years. It is of course, the oil crisis rippling through the
economy.
The OpenAI trial and a climactic moment as the chief exec of OpenAI, Sam Altman takes the stand.
And a rocky road for Ben & Jerry's parent company. I will speak to one of the co-founders of the ice cream company about his mission to free Ben &
Jerry's.
We are live in New York on Tuesday. It is May the 12th. I am Richard Quest and I mean business.
Good evening.
It would appear the horse is out of the stable. Inflation in the United States is soaring. Annual rate 3.8 percent. That was a 0.6 percent on a
monthly basis. It is the highest inflation reading since 2023. There you are. You can see the uptick there.
Prices are also outpacing wage growth for the first time in three years, 3.8 on inflation, 3.3 on wages and the reason is the war.
The closure of the Strait of Hormuz has sent energy costs much higher. You can see that chart and you and I know because we've talked about it many
times, the cost of energy impacts the price of everything else.
When asked about these higher prices earlier, Mr. Trump said stopping Iran from having a nuclear weapon was more important.
(BEGIN VIDEO CLIP)
REPORTER: When you're negotiating with Iran, Mr. President, to what extent are Americans' financial situation motivating you to make a deal?
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: Not even a little bit. The only thing that matters when I am talking about Iran, they
can't have a nuclear weapon. I don't think about American's financial situation. I don't think about anybody.
I think about one thing. We cannot let Iran have a nuclear weapon. That's all. That's the only thing that motivates me.
(END VIDEO CLIP)
QUEST: David Goldman is with me.
David, before we get some analysis from Mohamed El-Erian, just give me the numbers. How much of a surprise was this and how far up is it?
DAVID GOLDMAN, CNN BUSINESS SENIOR REPORTER: It wasn't a surprise. It was pretty much in line. In fact, you know, I think that we had expected that
it might have even gone higher, considering how high gas prices were going.
But I think the big takeaway is that if the President wanted to pick a dumber day, to say that he doesn't care about Americans' finances, it would
be hard to find it.
It was the first time, as you said, that wages have well, inflation has outpaced wages in three years. And it was the same day that CNN came out
with a poll that said that 77 percent of people believe that President Trump has made their finances worse.
And so they clearly are blaming him for this. He is taking ownership of the war, which is, everyone knows, causing gas prices to go higher. It is going
to be a hard circle to square if this continues. And he says, I don't care about people's finances.
QUEST: I guess, though, to be fair to the President, he says, I don't -- when its put on a balance of scale, it is vis-a-vis the Iranians getting a
nuclear weapon. And I suppose when you are in his shoes, those are the decisions that you have to make.
Maybe you might have expressed this a little more diplomatically.
GOLDMAN: Maybe. And, you know, the thing is, to be fair to trump, that he has a big economic buffer, right? I mean, we just had on Friday, a pretty
good job gains and GDP is looking pretty good. That means the economy is growing broadly. Consumers are still spending.
All of these things are true, and yet -- and yet inflation is going to be a problem and it is going to be problems for the Fed, his hand-picked
successor to Jerome Powell is going to come in unable to lower rates, as he wants to do.
[16:05:05]
And so now, the Fed has a higher chance, according to the market of raising rates than lowering rates. This is a pickle. It is not something that is
going to be easy to get out of.
QUEST: I am grateful. Thank you, David. And David is referring there to the Fed and Kevin Warsh the Fed nominee for chair, is one step closer to taking
the role. The U.S. Senate voted today to make him a Federal Reserve Governor. That now clears the way for the vote to confirm him as Chairman
and that might happen as soon as tomorrow.
Mohamed El-Erian is the Professor at University of Pennsylvania's Wharton School, also chair of Gramercy Funds Management and the chief economic
adviser at Allianz.
Mohamed is with me. Good to see you, sir.
Now, 3.8 percent. Are we at a number where the Fed is going to have to act? They can no longer -- bearing in mind, by the way, that the prediction is
that we are $100.00 oil for the rest of the year. No one really knows, but that is the prediction.
Can they look through this number? 2.8?
MOHAMED EL-ERIAN, ECONOMIST AND ADVISOR, ALLIANZ: So for now, meaning the next few months, they will act by not acting. So they will sit there, they
will wait and see how much of the high energy prices continues to percolate into the economy.
And here, today's number, Richard were worse than expected. The consensus forecast was lower than what happened, and the Fed is going to look at
this, and it is going to stop it from cutting rates for most of the year. And if we get a rate action, it is more likely to be a hike than a cut.
But I think the scenario is they will do nothing for at least 18 months.
QUEST: So you think they can sit on their hands for that long?
EL-ERIAN: I think they are going to sit on their hands because the next stage that we are going to see is what I call demand destruction. So, if
you remember, there were four phases to the shock, the economic shock from the Middle East War.
Number one is energy prices and interest rates go up. Number two that we are seeing today is it starts to be an inflation problem, much broader.
Number three is the affordability issue becomes severe enough that people stop spending, that's demand destruction. And number four, hopefully we
won't get there, you get financial instability.
So the Fed is going to have to keep an eye on the employment mandate. And I think that unlike other Central Banks, unlike the Bank of England, unlike
the ECB, unlike the Reserve Bank of Australia that has started hiking, Norway has started hiking, they won't hike, but they also won't cut.
QUEST: Right. But that demand destruction that you talk about, that becomes a self-fulfilling downward spiral as it feeds into the economic loop,
demand destruction, therefore, less this, less that growth slows. And before long, I mean, you know, playing it out over the next year, you have
got classic stagflation.
EL-ERIAN: You do, and in other parts of the world, you could well get recession. So the U.S. is insulated to some extent because you will not see
physical supply shortages here. The U.S. is an exporter. But go to Africa, go to Asia, see what the Prime Minister has asked his citizens in India to
consume less energy.
What you're starting to see is real concern about physical shortages. And if that happens, Richard, and it is a matter of six weeks for some parts of
the world, then you get major destruction.
QUEST: While I've got you, sir, we will be talking a little bit later about this. But you are an expert on bonds and markets and that.
The U.K. just going to talk with the U.K. for a second. The bond vigilantes seem to be out. Highest borrowing costs in years for U.K. government debt,
10-year gilts. The message now is very clear. Unless they sort out the political mess which could lead to the economic mess, there is a premium
for lending now to the U.K.
EL-ERIAN: Yes, I cannot emphasize enough how worried I am.
Just to put some context. Like you said, the 10-year is now at over five percent, that is crippling for mortgages and for businesses. It makes
government debt more explosive.
The 30-year is at the highest in 28 years. So, this is a major headwind for the economy. What the markets are wondering about is not whether the Prime
Minister stays and goes, whether which the Chancellor stays or goes, is will their commitment to fiscal discipline remain? And that is what is
being questioned right now.
[16:10:17]
And we don't want to get back, you and I will remember 2022. We had what is called a Liz Truss moment when suddenly the pension system was under
enormous pressure. So I am really worried and I am hoping that we will see these rates come down, but they will only come down if there are some
reassurance that fiscal stability will be maintained.
QUEST: I am grateful, sir, as always, thank you very much.
Going around the world with you. I am grateful. Thank you.
New polling -- let's go back on to this side of the Atlantic into the U.S. Americans are increasingly concerned about those higher prices, 73 percent
say they believe the current conditions are poor and the cost of living is one of their biggest concerns.
They are telling us they just feel stuck.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I thought that maybe one day I would buy a house, and now that feels probably not so likely.
UNIDENTIFIED FEMALE: Insurance prices have gotten out of control. Vehicle prices have gotten out of control.
UNIDENTIFIED FEMALE: Everything has gone up from the beef to the eggs. Gas.
UNIDENTIFIED MALE: I haven't had a full tank of gas in, like, months.
(END VIDEO CLIP)
QUEST: David is with me. David Chalian.
David, now listen, David. Look, this is serious stuff because you've got the President saying he doesn't - - I mean, it is not he doesn't care about
Americans' affordability. But when put against Iran getting a nuclear weapon, he will he -- that's the more serious issue for him at the moment
and I suppose there is a very strong argument for that.
Except, of course, he did tell us that that was unlikely because they were obliterated. But that's another story for another day.
How serious is this for Trump?
DAVID CHALIAN, CNN WASHINGTON BUREAU CHIEF AND POLITICAL DIRECTOR: Yes, I mean, listen, this is a serious, clear and present danger to his party's
political standing in our midterms, it and probably to his political standing to keep enacting his political project for the next two-and-a-half
years with the American people.
You're right to note the context of what he was saying, which is that when it comes to dealing with Iran, he is only thinking about getting rid of
Iran's nuclear capabilities and desires, and that he doesn't want to allow sort of the pain at the pump or the economic anxiety that may be caused for
Americans due to going to war in Iran as a calculation of anything related to getting out of Iran.
But the reality is, the President and his team are keenly aware of this real economic anxiety and concern that is pervasive, Richard. This is not
just Democrats or anti-Trump voters who are telling us in this poll. I mean, this is including some of his voters.
Look at that, 77 percent say that Donald Trump's policies have increased the cost of living where they live. And let me just tell you something.
Among Republicans, it is a majority of Republicans, 55 percent who say that very same thing. So, this is cutting across partisan lines, income lines,
generational lines in this country.
QUEST: Right, except at what point does the pain become so bad that even if the President is somewhat insulated from it because of his wealth, those
around him say, all right, it is time for you to change tack, sir. Sorry, we are not going to support this or Republicans in Congress do it.
But so far there has been no willingness or will to do that.
CHALIAN: Yes and our reporting suggests that some of those voices have been in his ear, and he is not paying attention to them. When it comes to this
project in Iran and this pursuit of a de-nuclear Iran, he seems sort of singularly focused on that. So, yes, he seems to be willing to accept some
political pain here in this period of time to accomplish that goal.
QUEST: Right, now, one of the beauties of having you with us tonight is that you can put it into an international context for viewers watching,
because, you know, if we take, for example, the U.K. at the moment where we've got Cabinet Ministers whispering in the Prime Minister's ear, listen,
you can't go set a timetable. You've got people saying, no, you've got to go.
Now, that's clearly not going to happen here in any shape or form. But there must be those who can go to the President -- I mean, you know, and
say, listen, if you do not, we are doomed.
CHALIAN: Yes, I think he is hearing that message. And by the way, I think we are starting to see -- you and I have talked about this for quite some
time, when are people in his own party going to start expressing some misgivings here? And the answer has been not really. And we just saw it
again last week. There were primaries in Indiana.
His grip on the Republican Party is firm. However, in our poll, Richard, he is at his lowest approval rating among Republicans in the history of our
polling for the entire time he has been in office, he stands at 79 percent approval among Republicans. And when it comes to the economy, that number
is 70 percent approval on the economy.
[16:15:08]
So, yes, he is starting to see that this economic anxiety is also hitting his own voters and how they are assessing him and that is something
Republicans on Capitol Hill have been talking about to him, whether or not he changes course here, that is an entirely different matter.
QUEST: And we are grateful, sir. David, good to have you. Thank you for tonight.
CHALIAN: Thank you.
QUEST: QUEST MEANS BUSINESS from New York.
Sam Altman is testifying on the West Coast, California. Elon Musk is suing him and OpenAI for allegedly abandoning its original charitable mission. We
will be outside the courthouse in a moment.
(COMMERCIAL BREAK)
QUEST: Just into us in the last few moments, OpenAI's chief executive, Sam Altman, has finished testifying in California.
Elon Musk is suing Altman for allegedly betraying the company's original nonprofit mission. Mr. Musk says he helped found OpenAI to create safe
artificial intelligence.
During Altman's testimony on Tuesday, he said Musk's resignation in 2018 boosted company morale and that Musk left because he lost confidence in
OpenAI.
Hadas Gold is outside the courthouse in Oakland.
That might all be true, but it doesn't go to the point of whether or not there was any chicanery, in a sense, or they changed the mission, all of
that sort of thing, does it?
HADAS GOLD, CNN A.I. CORRESPONDENT: Yes, Richard, much of Sam Altman's time on the stand today had to deal with his character, Elon Musk's attorneys
kept trying to push the idea that Sam Altman is untrustworthy.
The first question out of Elon Musk's attorneys mouth was, are you completely trustworthy? Musk's attorney kept bringing up instances from
former OpenAI board members and executives, especially during that time in 2023, when he was briefly ousted as CEO where many of those people accused
Sam Altman of dishonesty and of lying and trying to shore up this idea that Altman is dishonest and that translates into what Elon Musk is claiming,
and that he was deceived when OpenAI transitioned from being a full nonprofit to having a for profit entity as well.
Altman's response was that he always believes that he was honest, and chalking up those instances with OpenAI board members and executives as
misunderstandings.
QUEST: But hopefully you can hear me. We've had -- you know --
GOLD: Now, I can.
QUEST: Good. Thank you.
[16:20:00]
It is difficult, though, to separate the personal here from the underlying legal issue of whether or not there was some form of dishonesty or distrust
about what the mission was, whether somebody was misled, which is a different issue than whether or not Altman and Musk liked each other.
GOLD: Yes, that is the big question is whether Elon Musk was completely misled. And that's a lot of OpenAI's defense. They say and they have been
bringing up evidence that Elon Musk himself, at different points, pushed for a for-profit endeavor, that he left OpenAI in 2018 because he couldn't
get control.
One of the more interesting moments from Sam Altman's testimony today was that he mentioned a moment where Musk, When he was trying to get full
control, was asked what would happen if you die to the control of OpenAI? And Musk said -- suggested that his children would inherit that control.
And Sam Altman said that was a hair-raising moment, and one of the moments that led him to believe, as well as others, that Elon Musk should not have
control of OpenAI.
OpenAI is saying that Elon Musk is only bringing this lawsuit now because OpenAI is successful, and because Elon Musk has his own competitor, xAI.
QUEST: I am grateful to you. Hadas is in California. Thank you very much indeed.
The issues that have been going on in this trial show the huge significance of A.I. For instance, some say it is the greatest innovation since
electricity A.I., which is how General Atlantic's co-president, Martin Escobari, views A.I.
Now, bearing in mind, General Atlantic is a private equity company. They invest other people's money into various companies at different stages of
development. I sat down with Escobari. He joined me in the C-Suite in the Sky. Why he has high hopes? We will soon find out if the rest of Wall
Street agrees.
Several A.I. firms could go public this year, and that includes xAI as part of SpaceX, OpenAI and Anthropic. They are three absolute giants. The amount
of money that they are going to raise when they float will dwarf the market, the total IPO market, as Escobari explained.
(BEGIN VIDEOTAPE)
MARTIN ESCOBARI, CO-PRESIDENT, GENERAL ATLANTIC: We are growth equity.
For us growth equity is different from venture or from buyouts. Growth equity is your large $100 million revenue business. Your high growth, 30 to
50 percent, and you are already profitable.
QUEST: So venture is at that stage.
ESCOBARI: Earlier.
QUEST: Earlier and buyout is mature, ready to go.
ESCOBARI: Ready to go, mature. We can optimize, we can lever, we don't lever. We focus on growth. Eighty percent of the returns come from growth.
QUEST: Why has private equity been having some challenges?
ESCOBARI: One very important reason, for the decade ending in 2021, we got -- we, as an industry got investors used to getting their money back in
four to five years and returning two to two -and-a-half times their money so they could re-up and even increase their allocations.
And then starting in 2021 through 2024, that number went to ten-year hold. So all that capital they needed, they were expecting to, they didn't have
and it created not only an overallocation to private equity, but uncertainty of if I give you a dollar, when are you going to give it back
to me?
Why did we have that winter of exits? The IPO markets were shut down because of the 2021 correction and the M&A markets were slow because of
antitrust uncertainty.
In 2025, the spring of liquidity began. IPO volumes up 50 percent, M&A volumes up 50 percent, secondary volumes up almost 50 percent.
2025 second highest liquidity year for private equity. So I think we are coming out of that troubled period that was to my -- in my interpretation,
primarily because we didn't return capital at the pace people were used to.
QUEST: The A.I. revolution.
ESCOBARI: Yes.
QUEST: We know it is here or coming or there or whatever, and we know it is going to be bigger and probably more aggressive and deeper than we can even
possibly imagine. How big do you think it is going to be?
ESCOBARI: It's the greatest innovation since electricity. The technology today is ready to automate, we believe 60 to 70 percent of all White collar
worker. The barrier for adoption, and you see it more broadly is diffusion. Not enough companies are focusing on the right projects, not enough forward
engineers to deploy the technology.
Still, some concerns about A.I. safety and how to keep moments in the loop. That's the challenge of today. The challenge of tomorrow is the cost. How
do we get these A.I. costs to a more manageable level? Because if you look at the B2B revenues of Anthropic and OpenAI are already at $100 billion,
and they were in the single digits 18 months from now.
QUEST: But then you've got the whole question of the data centers and the whole infrastructure. The whole thing is going to --
[16:25:05]
ESCOBARI: Yes.
QUEST: Are we in danger of screwing ourselves?
00:05:05Listen, we've had infrastructure build outs before. The dot-com fiber, and we've had the railroads, it is -- the data center related
investments are one to two percent of GDP. The railroads were six percent, so below the railroads.
The big difference and why this will go on for a little longer is who is funding this investment? Is it the high yield debt? Is it unprofitable over
levered telco companies? No. It is highly profitable, magnificent cash rich companies.
So what they are seeing is unlimited demand for intelligence. And they are putting their cash flows and their balance sheets behind this. And they've
got room to go.
QUEST: In the A.I. revolution, where are we? If that is here, well, if that's the beginning and that's somewhere in the future for where we could
end, where do you think we are?
ESCOBARI: Twenty percent of the way there.
QUEST: Twenty percent?
ESCOBARI: Yes, because diffusion hasn't happened. And then right now, it is all about using A.I. for efficiency. Soon it will be A.I. for new revenue
generation. And then I think Dario Moret (ph), who I love, he is one of the most impressive people I've ever met. A.I. for creating new therapies, that
is the hundred percent.
When the A.I. ties points that are unconnected and creates something that's life-saving, that's the full potential in my mind.
(END VIDEOTAPE)
QUEST: In just a moment, Sir Keir Starmer is facing growing pressure from his Cabinet, and it is sending British borrowing costs higher, we care
going to be talking about in a moment.
(COMMERCIAL BREAK)
QUEST: Hello. I am Richard Quest, together, we will have a lot more QUEST MEANS BUSINESS.
Isa Soares is in Downing Street, where Sir Keir Starmer is fighting for his political future. We will talk to her and I will be talking to the Ben of
Ben & Jerry's about his mission to free the company that he founded from the corporate owners.
[16:30:10]
We'll get to the ice cream and the politics after the news, because this is CNN and on this network, the news always comes first.
President Trump says he doesn't need China's help in the standoff with Iran. Mr. Trump is now on his way to Beijing for a crucial meeting with Xi
Jinping. Before he left, he downplayed the idea that China could play a key role, saying the U.S. will win it peacefully or otherwise.
Meanwhile, the administration he leads is struggling to keep its top health officials on the job. Marty Makary, the head of the Food and Drug
Administration, the FDA, has been pushed out. It means the U.S. only has interim people, whether it be the FDA, the CDC, and the country still has
no one serving as surgeon general.
The number of hantavirus cases is rising. Those leading the World Health Organization says 11 cases have now been reported among the passengers and
crew of the MV Hondius ship. It's now headed to the Netherlands, the ship that is, where it will be disinfected after all remaining passengers left
the ship in the Canary Islands. The WHO says the risk to global health is low.
Earlier in this program, Mohamed El-Erian told us he's very worried about the way British borrowing costs for the government are rising so sharply.
Bond yields rose and the pound fell as Sir Keir Starmer faces growing pressure to resign. The Gilt, the 10-year Gilt hit 5.1, is the highest
level since 2008. And there are also four junior ministers have resigned from the government.
The deputy prime minister, David Lammy, says Mr. Starmer, Sir Keir, still has his full support and more than 100 Labour MPs signed a letter urging
members to back the prime minister. 100 one way, 71 or two the other way.
Isa Soares on the one hand, on the other hand, I mean, from everything I've -- you're there. Is it all over bar the shouting or is there a lifeline?
ISA SOARES, CNN CORRESPONDENT: We have been here before, haven't we, Richard? Deja vu. But not under Labour.
QUEST: Yes. True. True.
SOARES: You and I have reported on this under the Tories, the conservative party. But here we are again. Look, we have seen chaos. We have seen
turmoil here at Downing Street. And the prime minister is still yet really living to fight another day.
Of course, we have this division that you've clearly just outlined for us, Richard. In one hand, we have 100 MPs putting in letters, statements of
support, saying we will back you. We have our support. On the other hand, we have 80 plus MPs who are calling for the prime minister to resign or set
out a timeline.
What is not clear from those 80 plus MPs, Richard, is whether any of them are actually backing any specific candidate. As you all know, under the
Labour rules, in order to be some sort of contest of leadership, you need to have 81 people backing one candidate.
QUEST: Right.
SOARES: So far, no one is telling us who that would be.
QUEST: Right. And the problem, of course, is nobody wants to put their head above the parapet until somebody else has done it first.
SOARES: Exactly.
QUEST: Which is why you always end up with this famous British tradition of the stalking horse, where one person sort of just has a go so that
everybody else can say, right, the horses are off. But here's another problem. The letter of one of the ministers that resigned basically said to
Keir Starmer, look, you're a very nice man and you mean well, but you haven't got what it takes. And I don't think you're going to be able to
have what it takes.
SOARES: And you're -- yes. And you're talking about MP Jess Phillips whose absolutely stinging really letter from this MP basically saying that deeds
not words, Richard, are what matter. And what we've been told is that that letter resonated with many MPs up and down the country. Another MP saying
today, you know, we've been knocking on doors where people have been telling us is that change is not coming fast enough at the speed you
promised us.
QUEST: Right.
SOARES: And in fact, many people saying the problem is not policy here, but it is the prime minister which then brings us back to the question that you
asked to start off with. How long is he going to hold on to this job? Right? We don't know at this moment.
What is clear, Richard, is that what we understand from British media is this Wes Streeting, the health secretary, is expected to have a meeting
tomorrow with Prime Minister Starmer. What will he say? Will he actually say, I'm throwing my support and my name in the ring for this leadership
challenge? All we say, Richard, is there a plan, Prime Minister?
[16:35:01]
QUEST: Two years ago, this government got elected with the most extraordinary landslide victory. But what's becoming clear, Isa, is that it
was an anti-Tory vote, obviously, because they've been in power, but nothing to do necessarily with Keir Starmer. Hero to zero, it would seem.
SOARES: And this is something that I've been asking some of our guests today, Richard, because people are saying one MP was saying to me, this MP
was asking for him to actually for Prime Minister Starmer, he's one of the 100 -- Prime Minister Starmer to resign is, you know, he said he lacks the
communication. He lacks leadership. We've known all along what kind of leader he is in terms of a communicator.
He is not a Trump. He's very matter of fact. We know where he leads. So this -- it feels like many of them are surprised that we are in this
situation. Prime Minister Starmer, though, is saying put up or shut up. And he's really, really throwing down the gauntlet and saying if you want a
leadership challenge, let's go ahead. And it's not clear right now whether anyone is prepared to start a coup and come out fighting.
QUEST: OK. On the business front, with these Gilt yields so high, which of course Gilt yields affect long term borrowing, which is mortgages, there's
already an affordability crisis. Those people who have looking to borrow now 5 percent, 6 percent, 7 percent for mortgages, this is -- it could be
the bond market that finally does him in.
SOARES: And we've been here again. We've been here before, right, Richard, with the conservative party. This was always the economy. We kept a look at
those bond Gilts. That was always the pressure. And this is something that we heard from Deputy Prime Minister David Lammy today. We've heard as well
from the defense secretary basically saying we need that continuity.
We've got wars going on right now, not just in Ukraine but also in Iran, the Strait of Hormuz. Those pressures, and we need to stay the course.
Here's hoping the financial markets will listen. Of course, Mohamed El- Erian wasn't convinced, though.
QUEST: I'm flying to London tonight. I hear it's very chilly there. Is that right?
SOARES: It is. It is chilly tonight, Richard. But, you know, we'll hear from the king tomorrow of course. So we have a royal occasion.
QUEST: That's cheered me up. Thank you very much. Royal occasions and chilly days. Thank you very much, Isa Soares, in Downing Street.
President Trump is on -- is in the air at the moment. He's going in the opposite direction. He's going to China to meet Xi Jinping. We'll talk to
you about why. We'll be getting reports from the "FT" about why he thinks Mr. Trump will walk into this summit at a disadvantage.
(COMMERCIAL BREAK)
[16:40:15]
QUEST: President Trump is on his way to Beijing. Once there, he will hold talks, of course, with the Chinese leader Xi Jinping. Before he left
Washington, Mr. Trump said he expects to have a long talk with the Chinese president about the Iran war, despite yesterday when he said the ceasefire
is on massive life support. The president, the U.S. president, is now downplaying the need for help in reaching a deal with Tehran.
(BEGIN VIDEO CLIP)
UNIDENTIFIED REPORTER: Do you think President Xi can help and contribute to a deal with Iran?
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He could. I mean, it might be. I don't think we need any help with Iran, to be honest with you.
They're defeated militarily, and they'll either do the right thing or we'll finish the job.
(END VIDEO CLIP)
QUEST: Gideon Rachman is the chief foreign affairs commentator at the "Financial Times." He wrote an op-ed this week entitled "A Weakened Trump
Arrives in Xi's Court."
He may be weakened, Gideon, but how does -- what are the dynamics when the two sit down?
GIDEON RACHMAN, CHIEF FOREIGN AFFAIRS COMMENTATOR, FINANCIAL TIMES: Well, look, I think that the Chinese do not necessarily want confrontation with
him. If anything, they would like a more stable U.S.-Chinese relationship. So I don't expect Xi to, you know, crow about the difficulties that America
is having in Iran. He'll try to sound like he's, you know, going to be broadly helpful if he can be. And similarly, I think that the Chinese,
although they'd obviously prefer lower tariffs, feel they're in a better place than they were at this time last year when, you know, tariffs on
China from the U.S. were up at 145 percent.
They've gone down substantially since then, largely because China has demonstrated it can retaliate through restricting exports of rare earths
and critical minerals. So I think for Xi, the accent will be just, you know, management of the relationship and try to avoid unpleasant surprises.
QUEST: But do you think that this is one of those events where all of us, all of a sudden, you could find Donald Trump claiming Xi to be his best new
BFF?
RACHMAN: Well, yes. I mean, people have been waiting that -- for that for some time. I think one of the paradoxes of the Trump administration is that
Trump has surrounded himself with China hawks. You know, people who on trade really wanted to hammer China, who militarily were very suspicious of
China. But he himself is sometimes said to be the most China friendly person in the Trump administration.
And a lot of that is based around his professed admiration for Xi Jinping. He would like to get on well with him, and I think part of him would love
to be able to come back and say, I've got this fantastic new deal with China, you know, loads of trade, perhaps lots of investment. Whether that
actually comes off, I mean, I'm sure he'll get a headline figure that he can announce, but I don't think there'll be like a, you know, a complete
rapprochement.
QUEST: Do you see any movement on Taiwan? I mean, it's difficult to know because Trump has used the situation where the U.S. has never said one way
or the other what it will be prepared to do with Taiwan in terms of nuclear, et cetera.. They've used it to their advantage. And I'm wondering
at what point China is going to push that further.
RACHMAN: Well, the Chinese have made it clear that they would like America to shift its position on Taiwan. What they're really hoping for is that
Trump can be persuaded to say explicitly that he opposes Taiwanese independence as opposed to being neutral on the question. And that would
be, it sounds like a small ship, but it would be a big shift in American policy and would really undermine Taiwan's position.
That said, I think, although Trump himself might be inclined to do that, I don't think he's very hung up on the, you know, traditional phrases around
Taiwan. I think that his advisers would be very low to let him do that because, precisely because it would weaken Taiwan's position, probably
cause a row back in the U.S.. So I'd be surprised if he did it, but it's not inconceivable.
QUEST: I can't let you go. I need to hear your views on the fiasco that is Downing Street at the moment. What do you think?
RACHMAN: Yes. Well, I mean, we've seen it many times before. I think Starmer is seriously weakened. But I think your previous -- like your
colleague put it very well. It's not -- somebody has got to wield the knife and it's not clear whether they have the support to do it. So I would
suspect he'll cling on for a little while, but be gone by the end of the year.
QUEST: That's a good -- it's a good timescale for us to follow and to hold you to. Good to see you, Gideon. Thank you very much indeed for joining us
tonight. I appreciate it.
RACHMAN: All right.
QUEST: Ben and Jerry's, we've all got our favorite different flavors.
[16:45:03]
Unfortunately, this particular flavor we're going to be talking about is a little more sour. Now it's fighting to be independent, and the founders
don't want anyone getting in the way of their social mission. The co- founder Ben Cohen, there he is.
Good to see you, Ben. You'll be with me after the break. It is the "Free Ben and Jerry's" campaign. In a moment.
(COMMERCIAL BREAK)
QUEST: Gosh, this is good. It really is. Ben and Jerry's fish food ice cream, chocolate with gooey marshmallow swirls, caramel. Well, you can't go
wrong, can you?
The founders of Ben and Jerry's believe there's more to the brand than the names and what's in its container. Activism has been baked into the mission
since its founding 48 years ago. So they've protested against, excuse me, possible oil drilling in the wildlife refuge in 2005 with a giant mound of
ice cream on Capitol Hill. In 2015, they celebrated same-sex marriage becoming legal in the U.S. and renamed its chocolate chip cookie dough
flavored "I Dough, I Dough."
And during the war in Gaza, Ben and Jerry's stopped selling ice cream in the West Bank occupied by Israel. That was met with fierce resistance from
the parent company at the time, Unilever. Since then, Unilever spun off the brand in essentially the same management to Magnum. The founders are now
claiming the problems got worse. Jerry Greenfield said he'd had enough.
(BEGIN VIDEO CLIP)
JERRY GREENFIELD, CO-FOUNDER, BEN AND JERRY'S: This isn't because I've lost my love for the people at Ben and Jerry's. They're the soul of Ben and
Jerry's. What has made their work so important to me, and what allowed the company to be more than just an ice cream company, was the independence to
pursue our values, which was guaranteed when Unilever bought the company. It's profoundly disappointing to come to the conclusion that that
independence, the very basis of our sale to Unilever, is gone.
(END VIDEO CLIP)
QUEST: Jerry left the company. Ben fights on with a "Bree Ben and Jerry's" campaign, calling for the ice cream maker to become independent. B and J
supporters even crashed Magnum's shareholder meeting last week.
Ben Cohen is the co-founder of Ben and Jerry's. He's with me now.
Sir, it's always an honor to have you on the program. Magnum has said they're not going to sell that, you know, that the original agreement with
Unilever needed to be updated.
[16:50:01]
But essentially they are still committed to the same three branches of the social policy. You say that's not the case.
BEN COHEN, CO-FOUNDER, BEN AND JERRY'S: Yes. That's correct. You know, they put out a press release saying that they are strengthening the social
mission. At the same time that they are -- that they're attempting to get rid of the entire independent board of directors that is responsible for
the social mission of the company. So, you know, the contract that was signed by Unilever and has now been transferred to Magnum is very, very
specific.
It states that the independent directors can only be added to the board by a majority vote, the independent directors, and they can only be removed by
a majority vote of the independent directors.
QUEST: Right.
COHEN: Magnum has just, you know, just kind of acted in rather a Trumpist fashion and disregarded the law and just trying to make this power play --
(CROSSTALK)
QUEST: Well, what do you think --
COHEN: We make Ben and Jerry's in the image of Magnum.
QUEST: Right. But what have they stopped you doing? In reality what is -- what has been the practical problem for you?
COHEN: Well, during the war in Gaza, what many people call a genocide, what I would call a genocide, Ben and Jerry's wanted to come out with a
statement calling for a ceasefire. And Magnum refused to allow that to happen. We -- the company wanted to support the student protestors. Again,
Magnum refused to allow that to happen. Even more recently, the company wanted to support Black History Month and Magnum refused to allow that to
happen.
So clearly, they've been Trumpified. And if the --
QUEST: OK.
COHEN: And as a matter of fact, the company has been explicitly forbidden from using the name Trump.
QUEST: OK.
COHEN: And the reality is that Ben and Jerry's has a history of calling out presidents when they act in opposition to the values of Ben and Jerry's.
QUEST: Can I ask you?
COHEN: Yes.
QUEST: If you -- have you got investors, assuming they would sell, which they've said they won't, but just humor me. Have you got investors that
would put up the money if Magnum suddenly said, you know, you're a bunch of troublesome whatevers, we'll sell to you?
COHEN: Yes, we do. There is a group of socially conscious investors. When Unilever first announced that they were looking to sell off their entire
ice cream division, Jerry and I went to them and said, hey, look, we're having all these problems with Ben and Jerry's. Why don't you just separate
out Ben and Jerry's and sell it to a group of investors that agree with the social mission.
And Unilever refused, but we were very vocal and public about calling for socially conscious investors to appear and indeed they have.
QUEST: So now you're in this uncomfortable position where Magnum won't sell. You don't like what's happening. They own the company, but you're not
going to leave -- you're determined to stay and sort of battle it out.
COHEN: Yes. That's correct. You know, I mean, when the board of directors gave the company a social mission, I don't think any of us realized it at
the time, but we also ended up giving the company a soul, a spirit, a heart, and that is what is so valuable about Ben and Jerry's. And that is
what has developed this incredibly supportive consumer base.
QUEST: OK.
COHEN: A sense of shared values, which is the strongest relationship that you can form. And it's those consumers that will end up forcing Magnum to
allow Ben and Jerry's to continue to go on and be what it's designed to be.
QUEST: All right.
COHEN: And we're saying let Magnum be what they're designed to be.
QUEST: I'm grateful to you, sir. It is an honor to have you on the program. I'll finish off the ice cream once we finish.
[16:55:02]
Thank you very much for talking to us. Thank you.
Magnum responded to the controversy. They say, in part, "Recent steps to update the Ben and Jerry's corporate governance are wholly aligned with the
merger agreement and standard corporate governance across the organization. Nothing more than that. Suggesting our actions are anything more is just
not true. They are not and never have been."
Finally, tonight, I met some pretty remarkable people on my travels, but few have been as memorable as Brody the dog. A few years ago, I was in
South Africa for "WORLD OF WONDER" around the Western Cape, and along the way I met a sweet four-legged friend who joined me for part of the journey.
(BEGIN VIDEO CLIP)
QUEST: Join me and a trusty sidekick named Brody. The awesome beauty of Cape Town. The bonhomie of Brody.
Brody, you are a beauty.
And together, no doubt, part of our "WORLD OF WONDER."
(END VIDEO CLIP)
QUEST: Sadly, we've learned from Brody's owner, Mike Caine and companion, has passed away. Our condolences to the Brody family, and to Brody, thank
you for one of the most enjoyable memories that I've had on my "WORLD OF WONDER" travels. You truly made it special, Brody.
We'll take a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, they call them the bond vigilantes because they ride en masse the bond market to force change when they see
economic stupidity or negligence, or just simply bad management of an economy. And arguably, well, not arguably, we did see that with Liz Truss
back earlier in the century. And now the bond market in Britain is sending a very firm signal that they don't like what they are seeing.
Mohamed El-Erian summed it up. He's very worried. And when Mohamed is worried, the rest of us should be worried, too, because the risk of fiscal
incontinence as a result of shift in Labour policy away from rectitude to a reckless spending is exactly what could happen if Starmer falls, and if it
is a rush to popularity.
We're a long way from that. Don't get me wrong. And Starmer still there in Number 10 Downing Street. But everybody seems to think it is a question of
when, not if. And once you get to that position, well, you may as well just get the egg timer out and start counting the moments.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Heading to London tonight. Gosh, I'm so sorry. I just have to finish
this off, probably the whole lot before I fly tonight. I'll remind you that whatever you're up to in the hours ahead, I hope it's profitable. I'll see
you in the U.K.
END
