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Quest Means Business
Report: Extreme Heat Could Wipe Out One Percent of E.U.'s GDP This Year; U.S. Says Dozens Of Countries Helping China Dodge Tariffs; French Court Stops Social Media Ban For Those Under 15; Mangione Admits Killing Thompson, Pleads Guilty To Stalking; Trump: I Will Declare Strait Of Hormuz United States Territory Soon; Coral Gardening In French Polynesia. Aired 4- 5p ET
Aired August 14, 2026 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:18]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": The end of the week and the markets are just coming to a close in New York. Take a
look at the Dow and see the way in which trading is being muted throughout the session. Lower at the end, but frankly, no hugely, and it is the same
across the other markets, and bring to close, Madam. Oh, one and a two, and one, two, three, four.
Later than normal, but those are the markets, and these are the main events of the day.
A dire economic warning as wildfires burn across Europe.
One bank says the extreme weather could cost the continent an entire years' worth of economic growth.
The Trump administration is now accusing Canada of helping China illegally dodge U.S. tariffs. You're going to hear from the President of the Business
Council of Canada.
And France's highest court has struck down a ban on social media for young people. What does that mean? How will that be put into effect?
We are live in New York, end of the week, middle of August, August the 14th. I am Richard Quest and I mean business.
Good evening.
We begin tonight with an economic warning throughout Europe as record temperatures send several countries into their fifth heat wave of the year.
The Dutch bank, Triodos says the extreme weather could cost the E.U. $208 billion this year, or one percent of its GDP.
Across the continent, firefighters are battling wildfires. There are more than 2,000 residents who have been evacuated in Western Germany after a
fire spread towards the village of Gey and in Croatia, people have been hospitalized after an overnight fire near the coastal town of Omis.
In the United Kingdom, wildfires ripped through several homes across the West Midlands and the local fire service is describing it as one of the
most significant incidents it has ever handled.
Stefano Pozzebon has the latest and brings us up-to-date.
(BEGIN VIDEOTAPE)
STEFANO POZZEBON, CNN CONTRIBUTOR (voice over): A tower of smoke looms over holidaymakers in Northern Greece on Thursday. The fast-moving forest fire
sending tourists and locals fleeing, hundreds on small boats emptying two popular resorts in peak holiday season.
From the sky and the land, fire crews battle to stop the blaze, one of many wreaking havoc across the continent as Europe swelters in record breaking
heat, dry conditions are helping wildfires race across the region.
Spanish crews worked through the night fighting a fire in the country's northeast that burned through 20,000 acres and forced more than 900 people
from their homes.
In Croatia, seven people were in hospital in life-threatening condition early Friday after strong winds whipped up a fire around the popular
tourist town of Omis on the Dalmatian Coast.
Fires in France and Germany have also led hundreds of residents to evacuate. Usually temperate Britain has not been spared as the country
baked on its hottest day of the year on Thursday, fires spread across Central England, burning farmland and Houses to the ground.
UNIDENTIFIED FEMALE: Now, our horses, we saved them.
UNIDENTIFIED MALE: I heard a scream and all the trees along the railway track were exploding. They weren't just setting fire, they were exploding.
So we just grabbed everything and left.
POZZEBON (voice over): With no sign of rain, authorities here and across Europe remain on high alert.
Stefano Pozzebon, CNN, Rome.
(END VIDEOTAPE)
QUEST: Now, across the continent, the economic costs are staggering and getting worse. Critical waterways are drying up and Romania has had to shut
down its last working nuclear reactor because of record low levels in the Danube.
And an important transport route in Germany, the Rhine has also reached new lows, with economists at ING saying the reduced traffic could cut the
country's GDP by 0.3 percent this year.
The heat is also putting pressure on public transportation. In England, two trains derailed in less than 24 hours, and experts say record temperatures
could be a factor.
Sehrish Usman is an economist and postdoctoral researcher at the Chair of Finance at the University of Mannheim, is with me now. Here is the really
difficult part about this: There is nothing we can do about it. I mean, this is economic loss that will happen because of the heat, but there is no
alternative.
So it is just a case of how bad it is going to be and how quickly you can recover you can recover afterwards.
[16:05:19]
I think we may be having difficulty with the good doctor. Can you hear me? Can you hear me, ma'am?
DR. SEHRISH USMAN, APPLIED ECONOMIST AND POSTDOCTORAL RESEARCHER AT THE CHAIR OF FINANCE AND CORPORATE GOVERNANCE, UNIVERSITY OF MANNHEIM: Yes, I
can hear you now. Ah, yes. Thank you for having me.
Can you hear me?
QUEST: Yes, I can hear you. I don't know whether you heard the question, so I will ask it again. The real problem here is that this economic loss,
there is very little that can be done about it, because the weather is the weather and the infrastructure simply isn't built for it.
USMAN: Yes, definitely.
So this summer is really serious. What we are experiencing at the moment is multiple episodes of heat waves, droughts and wildfires. We can observe
lower water levels in Rhine, which is affecting our lives, businesses, and also it has a huge cost for the whole economy.
So in my own research with my coauthors from European Central Bank, we have estimated that extreme weather events like floods, droughts and heat waves,
they can cost European economies 43 billion euros only in the first year and the impact manifests over time and can reach up to 1.26 billion euros
in 2029.
QUEST: What would you recommend that European governments do now? Because obviously this year is gone; next year is probably -- it is too hard to
mitigate now. So what would you be suggesting that governments need to be doing?
USMAN: Yes. So definitely the first and the foremost important thing is the adaptation. So the way we work or the way we are doing our economic
activities, or we are producing, for instance. So we really need to adapt. But adaptation also comes with some limits.
It can remove the damage, but it cannot completely eliminate the cause. So we should together incorporate the policies so that we can adapt and we can
mitigate, for instance by reducing the emissions so that we can really build real resilience.
QUEST: It is not an even story across Europe, is it, in terms of those countries that are better prepared or will feel the effects somewhat less?
But it does beg the question how much worse this could get?
USMAN: Yes. So in our research, we see that there is a lot of heterogeneities across the region, depending on their own baseline climate
conditions and also how well-prepared they are with the extreme weather events like heat waves.
So, the question is that they really need to develop the policies which can help them to adapt and to mitigate the real impact of these events. Yes,
and what was your second question? Sorry again?
QUEST: Well, no, I mean, it is just a question of how much worse is this going to get in future years?
USMAN: Yes.
QUEST: If this is as a result of climate change, of human climate change, then we are going to have to get used to it and build infrastructure
accordingly.
USMAN: Definitely. So there are two impacts. So the first is the contemporaneous effect. For instance, if there is a heat wave we see that
it affects our labor productivity. People work less number of hours and also less effectively. Then there is another impact, which is a long term
effects - long-term impact, which manifests over time and this is because, the economic activity is affected and the losses can go up to 126 billion
euros by 2029, which we show in our research.
So we really need to take into account that the costs are much higher, even if the event ends, the cost still adds up.
QUEST: I am grateful for you. Thank you for joining us tonight on QUEST MEANS BUSINESS and try and keep -- I was going to say keep us cool as
possible, bearing in mind the circumstances.
Now drenching storms are rolling over the U.S. Midwest for a sixth day. It follows a one in a thousand year rainfall event that took place on
Wednesday. Look at these pictures -- and efforts to rescue a vehicle that was washed off the road by the floodwater.
On the Nevada-Arizona border, the problem is quite the opposite, not enough water to go around. Lake Mead, which is the largest reservoir in the United
States, is drying up, and that puts the water supply for millions of people in seven U.S. states at risk.
CNN's Bill Weir reports.
(BEGIN VIDEOTAPE)
BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voice over): For the boaters who still love Lake Mead, reminders of the megadrought are all around.
[16:10:09]
The bathtub ring, which shows the high water mark from the mid-'80s, is now almost 19 stories tall. Old sunken boats and worthless drinking water
intakes get more exposed by the day.
WEIR (on camera): They couldn't imagine when they built this the kind of megadrought that would drop Lake Mead by 70 percent. That used to be the
water intake tower.
WEIR (voice over): A satellite timelapse shows how much of the nation's biggest reservoir has disappeared in the last 25 years. Mead, 27 percent
full while Lake Powell only 23 percent and dropping. Together, they keep 40 million people alive in seven states, which have never agreed on how to
share.
While the dry, lower basin states of California, Nevada and Arizona have volunteered to make cuts, Doug Burgum's Interior Department could force
much steeper ones, especially to junior rights holder Arizona where water is needed to make everything from copper to microchips to most of the
nation's winter vegetables.
GOV. KATIE HOBBS, (D) ARIZONA: I would argue that all of those things are not just important to Arizona's economy; they're important to the national
economy.
WEIR (voice over): And Gov. Katie Hobbs seems willing to fight for their share all the way to the Supreme Court.
HOBBS: We are very hopeful that it will align closely with the proposal that we put forward -- the three lower basin state proposal. And nobody
wants to end up in court, but this is a critical situation for Arizona and I'm going to use every tool available to me. We have set aside millions of
dollars to fight in court if that becomes necessary. I hope it doesn't. But we're not at that point yet.
WEIR (voice over): Utah is among the upper basin states refusing to offer new cuts, even as St. George has some of the cheapest water and highest per
capita use in the West. And that's not even counting this private surf ranch with wave and wakeboarding pools for 56 homes and another similar
development under construction.
WEIR: You can surf in the driest county in Utah. How can you justify that? Whether they're pulling it out of a brackish aquafer or it's private water
--
ZACH RENSTROM, GENERAL MANAGER, WASHINGTON COUNTY WATER CONSERVANCY DISTRICT: No.
WEIR: -- how is that a good look for Washington County?
RENSTROM: So unfortunately, like other communities, certain things were approved years and years and years ago and we're kind of dealing with
those. Since then we have completely changed all the rules but not just at surf lake but at a data center or a golf course. We've implemented this
very strict policy now of large water users.
WEIR (voice over): Zach Renstrom is trying to get his very conservative county to copy Las Vegas where nearly every drop of Sin City's wastewater
is captured, cleaned and put back into Lake Mead thanks to the foresight of leaders like Pat Mulroy.
PATRICIA MULROY, FORMER CEO, SOUTHERN NEVADA WATER AUTHORITY: I mean, the minute you accepted climate change is a reality, you had to accept that
this day was coming. And if you're in the water business you hope for the best and plan for the worst.
WEIR (voice over): She thinks Burgum should be using more carrots and sticks to get the states to agree and proposes desalination plants in
California for irrigation so farmers could give their shares to thirsty cities and wildlife habitats.
MULROY: To put the states through the pain and anguish of having to go through another round of cut discussions, I would put that off. But where I
would put my energy is I would put the states together and empower a body or a group in the Lower Basin and upper basin to look at ways to augment
this river system. I mean, we have stayed away from desalination, and it blows my mind. You can't conserve your way out of this. You can't cut your
way out of it.
(END VIDEOTAPE)
QUEST: Now, a deadline is nearing on U.S. trade talks with Canada. The White House has issued a blistering new trade report accusing Canada of
being one of China's biggest enablers.
In a moment, the president of the Business Council of Canada. There he is. And we will be talking to him about what he thinks of this suggestion and,
more importantly, how Canada is going to fight back, in a sense, against the tariffs. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:16:50]
QUEST: The Trump administration is accusing more than 40 countries of helping China illegally dodge President Trump's tariffs. It is The White
House Trade Report entitled "The Great Transshipment Scam." And on its cover, an image of a Trojan horse.
The alleged scheme works much like the Trojan horse. China is accused of routing exports to the U.S. through third countries that have lower U.S.
tariff rates. It is an old trick. There is nothing new about what is being done.
But in an op-ed in "The New York Times," the Trump adviser, Peter Navarro, said "... preferential access to the American market is not a license to
launder somebody else's exports." And he reiterated "... the United States is cracking down on this."
(BEGIN VIDEO CLIP)
PETER NAVARRO, SENIOR COUNSEL FOR TRADE AND MANUFACTURING: Every country in the world is allowed to cheat us under the World Trade Organization rules,
and that should just blow your mind to begin with.
The rules of the WTO allow other countries of the world to charge us higher tariffs, erect higher non-tariff barriers, and there is nothing we can do
about it except for Donald Trump and his reciprocal tariffs program that he is putting in place.
(END VIDEO CLIP)
QUEST: Now, Navarro traces the so-called great transshipment scam back to the first tariffs in the first administration. The White House has singled
out the U.S. trading partner, Canada, as one of China's, in their words, biggest enablers.
It also names the E.U., India, Israel, Japan, Mexico, South Korea and Taiwan as the so-called tier one group.
With me now, Goldy Hyder, the President and CEO for the Business Council of Canada, representing all the major companies in Canada.
Sir, thank you for joining us. I am very grateful.
Look, first of all, do you reject this idea that Canada is one of the biggest enablers, that the transshipment of Chinese goods through Canada to
the U.S. is a way of avoiding tariffs?
GOLDY HYDER, PRESIDENT AND CEO, BUSINESS COUNCIL OF CANADA: Well, thank you for having me, Richard. And yes, we reject that. The reality is we have an
agreement that we are all trying to be compliant with to prevent that from happening and we would need a significant amount of evidence to show that
that is taking place.
We are all aligned in making sure that the way we manage this trade agreement is to adhere to the things that we've all signed on for, and to
ensure that there are no violations taking place. Anything that's been done has been done openly and transparently by the countries that are involved.
So I think there are broader issues there that will get addressed on the "rules of origin issue," but that will be an issue dealt with during the
process of the review and renewal of the USMCA agreement.
QUEST: Okay. Assuming, of course, that the President decides he will go ahead in that, which is a very big assumption. But let's drill down into
these -- the sort of the third round of tariffs, which are due to come into force on Wednesday.
Sources are telling us that there are high level, frequent talks between President Trump and Prime Minister Carney. What is your understanding of
the latest situation?
[16:20:10]
HYDER: Well, look, the process that's underway with the USTR and Canada's trade negotiation team has been making progress. We are cautiously
optimistic that they are doing the hard work of addressing how to prevent these 338 tariffs, as they are known to come on, on August the 19th, while
at the same time, our governments priority has been to reduce the 232 tariffs, as they're known on steel, auto, lumber and others to bring that
rate down, if nothing else, to bring it down. In a perfect world, of course, it would be zero, but we've now entered a world in which free trade
includes tariffs.
So the process that's working its way through Ambassador Greer has been very clear. He needs to take an options or set of options before the
President. He intends to do that next week. Our own side is briefing our Prime Minister and I think in the nature of these negotiations, there will
be some progress. They may pull back and they may move forward.
QUEST: But the reality is, look, whether you get over this or you get over that, whatever is the issue du jour, the President -- the U.S. President
does believe that the United States has been badly done by, by Canada. Let's forget whether it is going to become a part of the union.
He believes that Canada has taken advantage of the United States and therefore nothing seems to be able to shift that view.
HYDER: On the contrary, look, this agreement was signed by this President. He had called it the greatest agreement of all time. It was so good. I
point out to Republicans that the Democratic administration maintained it and kept it in place.
We are working towards its review and renewal, despite the fact that the United States has indicated it may want to withdraw from it. The proof
point, of course, is this has been successful for, first and foremost, the United States of America.
It has created 14 million jobs. It has given them access to oil, potash, uranium, oil, gas, you know, energy, you name it. They've been able to get
it. Is it perfect? No agreement is perfect. Has it been implemented exactly the way all three sides envisioned it? Clearly not, because all three sides
have issues that they're working through, in some cases, in a bilateral process -- United States, Canada and other cases, United States and Mexico.
But all of these roads are going to need to merge underneath the review and renewal of the USMCA, because our supply chains are integrated capital
forms in that environment.
QUEST: And yet, I mean, I listen to your answer carefully, but the rhetoric from the U.S. President, and I understand that most people in Canada are
sort of in policy positions, try to dance around it and point to facts and point to how things are actually on the ground.
But the President has it in for Canada.
HYDER: Richard, I don't know about that. He says he likes Canada, he likes Canadians. I think he in many ways, he envies what Canada has. We have a
lot of resources. We have, you know, a geography and a proximity. We have a lot of water.
He looks at Canada, I think, and says, boy, I sure wish I had a lot of those things. The reality is the trade agreement enables him and the United
States to benefit from having Canada as a neighbor.
We have an agreement. We should honor that agreement. We are working towards the review and renewal of that agreement. We know the President
prefers tariffs over all else, but the reality is our three business communities in Canada, U.S. and Mexico have all made it very clear to all
administrations, we want a timely trilateral review and renewal of an agreement that provides tariff exemptions on things that are compliant, and
that's what we are working towards.
QUEST: Goldy, I am grateful for you joining us tonight, and certainly have a good weekend. Thank you sir.
A French ban on social media for young people has just been stopped. The nation's top court has now ruled that the ban is too broad and infringes on
people's privacy. It has also ruled the ban did not consider the specific risks of each platform or the individual situation of each minor.
CNN's Anna Cooban reports.
(BEGIN VIDEOTAPE)
ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: France just tried to completely ban social media for everybody under 15, but the country's
highest court just struck that decision down.
Only last month, French lawmakers voted overwhelmingly to block kids under 15 from opening new accounts starting on September 1st, and to wipe out all
existing accounts by January next year.
This was a high profile project for President Emmanuel Macron's second term, one that he hoped would be in place by the beginning of the new
school year. But all bills in France need to be scrutinized by what is called the Constitutional Council. They determine if the bills comply with
the French Constitution.
Now the Council ruled that a blanket ban was just way too broad. It violated freedom of expression and raised privacy concerns because to keep
the kids out, the law would force everybody, even adults, to show their digital I.D. and prove their age just to log on.
[16:25:04]
France was hoping to be the first E.U. country to bring in such a ban, hot on the heels of Australia, who has banned it for under 16 and the U.K. has
announced similar plans. The country's Parliament will vote on the proposals in December, while Spain, Greece and Denmark are also looking
into similar age restrictions.
The Elysee said that Macron is determined to push through the reform before the next presidential election in the spring, and he has tasked his Prime
Minister, Sebastien LeCornu, with working as quickly as possible on a new version of the bill, which takes into account the Council's concerns.
Anna Cooban, CNN, London.
(END VIDEOTAPE)
QUEST: Now, as you and I continue with QUEST MEANS BUSINESS tonight, a surprise guilty plea in a killing that captured the world's attention.
Luigi Mangione has told a judge that he did indeed shoot UnitedHealthcare CEO, Brian Thompson. So what happens next? We will discuss after the break.
(COMMERCIAL BREAK)
QUEST: Hello, I am Richard Quest. We've got a lot more. QUEST MEANS BUSINESS in a moment.
Luigi Mangione has pleaded guilty to federal charges in the killing of the UnitedHealthcare CEO, Brian Thompson. But what does that actually mean? We
will go into the details.
And Ukraine's President says interceptor missiles could turn the tide of the war with Russia. I will be speaking to the chief executive of a British
company that says it is working to address the shortage.
We will only get to those stories after we've had the news, because this is CNN and on this network, the news always comes first.
Records smashed and emergencies in multiple nations as Europe continues to be ravaged by extreme heat. There are wildfires raging in places like
Greece, Germany and Spain.
In one coastal town in Croatia, 14 people have been sent to hospital and more than a thousand people have been forced to evacuate their homes. This
summer is on track to be the hottest on record in the United Kingdom.
A French ban on social media for young people has now been stopped. The nation's top court struck down a bill that has banned social media for
those under 15.
The Constitutional Council ruled the ban is too broad and infringes on people's privacy. French lawmakers had overwhelmingly passed the bill last
month. France would have been the first country in the E.U. to have such a ban.
Italian police say they've recovered three stolen paintings by the renowned French artist, Paul Czanne, Pierre-Auguste Renoir and Henri Matisse. Masked
burglars stole the art from a museum near the northern city of Parma in March. They broke in, grabbed the works all within three minutes. The art
experts say their value exceeds $10 million.
[16:30:55]
A guilty plea today in the murder of the United Healthcare chief executive. Luigi Mangione, now, told the judge that, indeed, he shot Brian Thompson in
December of 2024. Mangione could be sentenced to life in prison.
The judge told Mangione that there's no chance for parole in the federal system. Outrage over U.S. healthcare problems prompted some to support
Mangione, but prosecutors now say murder should not be celebrated.
(BEGIN VIDEO CLIP)
JAMIE MCDONALD, UNITED STATES ATTORNEY, SOUTHERN DISTRICT OF NEW YORK: No grievance, political belief, or ideological cause can ever justify murder.
There can be no celebrity in assassination.
Any person who celebrates, encourages, or excuses actions like these is fundamentally wrong.
JESSICA TISCH, POLICE COMMISSIONER, NEW YORK CITY: To those who idolize Luigi Mangione, I say this: violence is not a cause. Murder is not a
message, and a killer is certainly not a hero.
(END VIDEO CLIP)
QUEST: Shimon is with me. Shimon is with you live in New York. Good evening to you.
Now, this plea in a federal court. There is as much tactics involved here because, of course, the murder is also being done in the state courts.
So, describe to me the significance of today's development.
SHIMON PROKUPECZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, in terms of for the state case, there is a chance now that that case will be
thrown out, will get dismissed, because there are very strict and kind of nuanced double jeopardy laws here. Meaning that you can't try someone in
the state on for the same crime or the same act once they have either been convicted or pleaded guilty on the federal side.
And since what Luigi Mangione was charged in this case has to do with the former United Healthcare CEO Brian Thompson, it's very similar. And so,
now, they are going to go before the state court here and argue that, that case should be dismissed.
You know, what's happening here is, look, this was going to be a really, really hard case to defend for these attorneys, and I think they would
prefer that any conviction here would have allowed Luigi Mangione to spend his time in a federal prison versus a state prison, and they really want to
fall on the mercy of the judge here.
And they think that perhaps, by pleading guilty, and then during a sentencing phase, they can present some kind of mitigating facts as to his
health, as to his belief -- his mental health, and his beliefs over this, his hatreds towards healthcare and the issues that he had, and this as, as
a cause.
You know, they -- he, himself was arguing today, this was the reason he did it. And then, his attorneys, in this brazen statement after the proceedings
came out on the steps of the courthouse, and said that he had been treated poorly by the system. Sort of an excuse here for what he did.
And so, certainly we are going to see a lot of that in the federal case. And I think they are just trying to hope that somehow, instead of Luigi
here, Mangione, spending the rest of his life in prison, maybe he gets 50 years, maybe he gets 40 years.
(CROSSTALK)
QUEST: Right. But --
PROKUPECZ: There is some way he comes out.
QUEST: At the end of the day, I mean, your shrug of shoulders at the end there tells us all really what we need to know.
He is going to prison for a very long period of time.
PROKUPECZ: Yes.
QUEST: And it is a nice point whether he dies in prison or eventually is released. I mean that's the sort of thing here. But he is going to get
locked up.
PROKUPECZ: Well, he is going to get locked up for a long time. I mean, the judge could -- look, given how little -- he showed no remorse for what he
did here. He came in in this cold way, never apologized, never said I'm sorry for what I did here.
Brian Thompson's family was sitting in the front row. He had every moment there to turn to them and say I am sorry for what I did here. He did not.
[16:35:01]
Instead, he defended himself. And all of that is something the judge is going to have to consider. It's likely here that he could be sentenced to
prison for the rest of his life. You know, the other thing, Richard, we learned today the trickery, the way in this kind of twisted way, in which,
Luigi Mangio (PH) learned of where Brian Thompson was.
He sent an e-mail to United Healthcare saying that he was managing a fund. He was a manager of a fund -- of a $50 billion fund, and he wanted to go to
the investment conference where Brian Thompson was attending here in Manhattan, and he needed to know the location.
And within an hour, the insurance company got back to him and told him, this is where you need to go. That's how he learned where Brian Thompson
was a month before -- about a month before he killed him.
QUEST: Shimon, I'm grateful for you. It must be boiling down there in Lower Manhattan. Thank you for joining us.
PROKUPECZ: Yes, it is.
QUEST: Now, some news just in. President Trump is escalating his rhetoric regarding the Strait of Hormuz. A few moments ago, the president was
speaking at a police academy event in New York.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And after we finish defeating Iran, which is being very badly defeated, pretty soon, I will be declaring
the Hormuz Strait a territory of the United States.
(END VIDEO CLIP)
QUEST: Right. A territory of the United States. Just when you thought this couldn't take any other turns.
Julia Benbrook is with me. Julia, a territory of -- what is this all about?
JULIA BENBROOK, CNN CORRESPONDENT: Well, I'm here now at the Nassau County event. This is where President Donald Trump just left the stage. I'm sure
you can tell, they are still playing music as people are leaving. He had law enforcement officers behind him.
And the focus of this event specifically was crime statistics. Touting crime -- touting crime statistics dropping from 2025, and that year
specifically. Taking a closer look since Trump has started this second term.
But during these remarks, he said, "you know, I don't like a teleprompter. I often like to go off script, which we do know that is a part of Trump's
style. And he did start talking briefly about the war with Iran. This now nearly six-month-long conflict. He said that when the United States defeats
Iran, he also added that they are being defeated very badly right now. That Iran is being defeated very badly right now.
But he said that he would want to make the Strait of Hormuz, that critical waterway, that is a key area of focus during negotiations, he would want to
make the Strait of Hormuz a territory of the United States.
Now, of course, there would be a lot of steps there for that to actually become reality. But this just shows that he continues to up the rhetoric
when it comes to what is taking place there.
And Iran has laid out specific details, demands that they want agreed to in order to fully reopen the Strait of Hormuz. Trump, for his part, already
says that the United States is in fully control of that strait.
Now, Iran, though, those demands that they have laid out appear to show that they at least believe that they have an upper hand in some of these
negotiations, because some of what they laid out seems to go even farther than that Memorandum of Understanding, that agreement that was signed by
both the United States and Iran back in June and has since been suspended.
But a lot of questions here still remain when those first joint U.S.-Israel strikes against Iran took place. Trump had said that it could take a couple
of days, a couple of weeks to work through this.
Again, this has now been a nearly six-month-long conflict, and ahead of the Midterms, something that he was focusing on here at the event. This is not
something that has been popular with the American people. In fact, a large number of polls show that people do not approve. Americans do not approve
of how Trump has handled this conflict so far.
QUEST: I am grateful to you. Thank you, Julia Benbrook, with that part of the story.
Coral reefs are endangered around the world. A non-profit in French Polynesia's on a vital mission to restore them. You will see what they are
up to in a moment. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:42:12]
QUEST: Coral reefs play a vital role in supporting the fisheries industries, tourism, coastal protection, and indeed the livelihoods of
hundreds of millions of people. And yet, it's an ecosystem in crisis worldwide.
Today, CNN's Bijan Hosseini is live from French Polynesia. That's the home of a leading coral reef restoration organization that he will cover
extensively over the next year. It's all part of the Rolex Perpetual Planet initiative.
I guess Bijan, the first thing that any one of us says, looking at you in that sort of surroundings is, my God, how did you get that assignment? I
mean, nice work if you can get it.
But those islands are in deep trouble.
BIJAN HOSSEINI, CNN SENIOR PRODUCER: They are, Richard. Right now, we are specifically on the island of Moorea in French Polynesia, and as you
mentioned, I'm on the deck of the headquarters of Coral Gardeners.
And yes, they are in deep trouble. The world right now is coming off the worst mass coral bleaching event in recorded history. That was back in
2024, and it affected around 85 percent of the world's reefs.
But more danger is on the way. NOAA, an organization that looks after the ocean and the atmosphere, have said the chances of experiencing a "very
strong" El Nino this year is now at more than 90 percent That will happen at the end of this year and early into next year, which is why the work
that the Coral Gardeners here are doing is so important. They plant corals in underwater nurseries. They monitor which ones can adapt, which ones are
heat resistant. They take all that knowledge and they outplant them into these damaged coral reefs.
So, yes, as you mentioned, we will be following that journey over the next 12 months, and we don't know how that story will end.
(CROSSTALK)
QUEST: Right.
HOSSEINI: There will be little wins, and there will be many, many challenges, of course, ahead.
QUEST: The reality, of course, is that the coral reef has either been bleached or destroyed in so many areas. Is there a feeling that this
project makes a meaningful difference because the destruction has been so widespread that I guess one can start feeling hopeless.
HOSSEINI: Yes, and it is easy to feel that way. I think the founder of Coral Gardeners, Titouan Bernicot, has said, look, there are challenges
that lie ahead this year, but it's also an opportunity to learn. To learn which corals can adapt, and that's what they are doing.
And look, they are not going to solve the issue. That's much bigger than this. But what they can do is they can buy these reefs enough time for us
to come together and figure out a solution to actually help protect our oceans. So, since they launched in 2017, they have planted more than
220,000 coral just around here in the islands of French Polynesia.
[16:45:03]
So, you know, a little difference does go a really long way in helping buy these corals' time. Richard
QUEST: I'm trying to remember whether it was Mauritius or Maldives where I planted some coral on one assignment, because it is essential, or these
islands will get washed away.
Now we've had a Cabinet -- we have had a Cabinet meeting in one country underwater. We have all this sort of works going on. Is there a coordinated
feeling about all of this?
HOSSEINI: There is, and it's coming from the very top. The president of French Polynesia announced last year that they would protect 4-1/2 million
square kilometers of their oceans. That's, you know, roughly the size of the European Union, Richard. So, it is coming from the top.
And what the team here is working to do with the government is make Coral Gardeners an actual occupation, a job to not only, you know, help inspire
and educate the youth, but to give them meaningful income to help protect the reefs here. So, it is really happening from top to bottom.
QUEST: Please assure me that before you get on the plane to go back, you are at least going to go in the water.
HOSSEINI: I'm going in the water today. Actually, we are going to go look at some of these nurseries right after this, and we are going to be taking
some of those coral. We are going to be out planting them today with the team. So, I'm really looking forward to that.
I haven't had a chance to get in yet, but the water does look very inviting, Richard.
QUEST: It looks extraordinarily inviting, and extremely envious.
Bijan, thank you. We'll talk more as you continue to follow this project.
This is QUEST MEANS BUSINESS. It's a Friday. We have made it.
(COMMERCIAL BREAK)
QUEST: It's no secret that the U.S. war with Iran has created a global shortage of Patriot missiles. The interceptors are crucial for air defense.
The Ukrainian President Volodymyr Zelenskyy told CNN this week that he needs more of the U.S. stockpile, and he needs five percent just to get
through the winter.
He says 10 percent is needed to destroy all of Russia's ballistic missiles.
Now, British company says it's working to address the shortage. It's Cambridge Aerospace, it's raised $300 million to develop missile and drone
interceptors, and has already won contracts with the British Ministry of Defense to provide low-cost interceptors for the British armed forces.
Steven Barrett is the founder and CEO of Cambridge Aerospace. He is with me now.
[16:50:01]
Sir, now, look, at the end of the day, these Patriots are very expensive. They take a long time to manufacture and then deliver. So, essentially, is
your product quicker, faster, cheaper?
STEVEN BARRETT, FOUNDER AND CEO, CAMBRIDGE AEROSPACE: Well, thanks for having me. What we had focused on initially actually are drones like
Shahed. So, these are not your sort of small basketball-sized drones. These are drones the size of your living room that carry 120-pound bombs that can
level a city block.
And what's very challenging about those is they're produced in absolutely enormous volumes, sometimes 900 per night in the case of the Ukraine war.
That means that while historically interceptors like Patriots have been used against these drones, you have Shaheds that can cost, you know,
$20,000. Patriots can cost $4 million, and that exchange ratio is just uneconomic and also impossible to manage and to manufacture the number of
Patriots that are needed to combat that threat.
QUEST: Right.
BARRETT: So, what we are producing to start with are Skyhammers, they are called, which are designed to take out Shaheds and lower-end drones in a
really cost-effective way.
QUEST: What do you estimate if you've got your devices and your machinery? What do you estimate that reduces the necessity of Patriots by?
Well, for example, in the Ukraine conflict, up to 900, and it can rain into the country, as I mentioned. So, that means that you couldn't possibly use
that number of high-end interceptors such as Patriots. So, the saving could be absolutely enormous.
But it also applies in the Gulf conflict that we see, where, for example, some months back, a $1.2 billion United States ballistic missile early
warning radar was taken out by a drone that would have cost something like $20,000 or $30,000.
Now, the U.S. had been using Patriots, sometimes even two, three, or four Patriots at a time, to ensure that threat was taken out, and that's proven
to have depleted the stockpiles of the U.S. and many other countries very significantly.
(CROSSTALK)
QUEST: Right.
BARRETT: So, what's essential is that we sort of match the threat to the interceptor for low-end threats like Shaheds use cheaper interceptors
produced high volume for high-end threats like ballistic missiles. Then, the Patriots really are the appropriate way to counter those risks.
QUEST: I mean, this is what it's really about now, isn't it? It's a suite of various weaponry and defense mechanisms for the right moment.
Do you believe that Ukraine should be given more ability to manufacture these things themselves?
BARRETT: Well, as you said, it absolutely is a layered air defense system, and that's the architecture that most countries need to start developing.
And in the case of Cambridge Aerospace, we are starting at that level of drones and producing interceptors by the thousand per month. And if you
take Patriots, you know, something like 10,000 Patriots have been manufactured in all of history, and in the first part of next year, we will
be producing around 2-1/2 thousand of these lower-end interceptors every month, which will be sort of transformative.
But we are going up the spectrum, producing interceptors for cruise missiles and then ballistic missiles.
(CROSSTALK)
QUEST: So --
BARRETT: And I think it will be essential to provide low-cost effectors to Ukraine and other countries to defend themselves.
QUEST: Can we turn our attention to defense spending overall? Because all European countries, Germany, in particular, have ramped up defense spending
dramatically over the last two to three years, and there is more to come.
The U.K. is having the debate at the moment over what is the correct level, and there are many in the U.K. saying that the country is woefully
inadequately defended at the moment because of the spending cuts.
What's your view?
BARRETT: I think it is the case that there was a peace dividend after the Cold War, and it was right at the time that countries took advantage of
that to invest in other areas, you know, healthcare, education, and so on.
But the geopolitics of the world has changed. We need to adjust to it, and it is the case that most European countries are playing to some extent
catch up. And when you take the U.K. as a specific example, there has been a rapid set of increases in spending, increases and commitments, and we
really have seen politicians and ministries of defense in the U.K. and across Europe really move at significant pace now.
So, I think, there has been, perhaps, a bit of a lag in many countries, but you are seeing a real change now.
And I think a second thing that really helps with responding to that need is that countries now prioritizing not just their existing established
primes, but also startups like Cambridge Aerospace, many others across Europe, and giving them the chance to contribute and help grow the economy
too.
[16:55:00]
QUEST: So, I just want to end though on this question of how the U.K. defense industry fares on a European expenditure basis because the U.K. is
outside the E.U.? Have you managed to work around on this?
BARRETT: It's not been a particular challenge so far, because, really, although, you know, that Brexit did occur in 2016, defense collaboration
largely stood outside of the apparatus of the European Union.
So, while there is some effect, it's not a dramatic effect, and there are extremely strong partnerships across Europe in defense and even across all
of NATO.
So, I think it's something that the politicians have really been working hard to ensure that we are coordinating our activities very effectively.
QUEST: At some point in the future, sir, when we are back in the U.K., we must come and have a look at your drones and your machinery, and take QUEST
MEANS BUSINESS to your doorstep.
BARRETT: I think you are most welcome.
QUEST: Thank you, sir.
Now, a look -- a final look at the markets and how we end the week. Slightly lower after a fall in retail sales. There is the triple stack. The
-- I mean, it's really not worth spending too much time talking about.
The Dow ended off 107. S&P fell off a record. Both the S&P and the NASDAQ did have their third consecutive weekly gain overall.
We will take a "PROFITABLE MOMENT" after the break. QUEST MEANS BUSINESS on a Friday.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT", it is sweltering here in New York. Europe is having its fifth heat wave that will take it into record
territory, along with the U.K., of course.
The issue of climate change is now well and truly on the front. Wherever we go, every summer we are going to get worse numbers. More people die
because, of course, Europe just doesn't have the infrastructure necessary for these exorbitant heats.
But this week, I've seen several versions of it. For instance, earlier in the week, I was in Johannesburg in South Africa, where they are having its
winter -- southern hemisphere, a blisteringly cold season and winter.
In fact, it was raining, and everybody said that it was just extraordinary how cold it was. I then come through London, which is in the middle of its
heat wave and is deeply unpleasant, and I end up in New York, where the saving grace seems to be that there is a lot of air conditioning. So, at
least you are -- your coal inside.
[17:00:05]
But how much longer are we going to ignore? We can mitigate, we can adopt, but we have to take decisions. And those decisions are arguably already too
late that we have missed the vote.
END
