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The Brief with Jim Sciutto
CNN International: Former Prince Andrew Under Investigation After Arrest; U.S. Lawmakers Urge Accountability for Epstein Associates; Escalating Tensions Between U.S. and Iran; Trump Says Decision on Iran Could Come in 10-15 Days; Trump Says U.S. Will Contribute $10B to Board of Peace; Former Prince Andrew Released; U.S. Trade Deficit in Goods Hit Record at $1.24T in 2025; Yoon Sentenced to Life in Prison. Aired 6-7p ET
Aired February 19, 2026 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[18:00:00]
JIM SCIUTTO, CNN ANCHOR, "THE BRIEF": Hello and welcome to our viewers joining us from all around the world. I'm Jim Sciutto in Washington, and
you're watching "The Brief."
Just ahead this hour, former Prince Andrew has been released from custody, but remains under investigation for suspected misconduct in public office.
President Donald Trump says he will make a decision on military action against Iran in 10 to 15 days. And South Korea's former president is
sentenced to life in prison for leading an insurrection.
We begin with the momentous arrest of Andrew Mountbatten-Windsor in the United Kingdom, the former Prince Andrew, as the fallout from the latest
batch of Epstein files continues. Andrew is seen here leaving the police station, the back of a car. He remains under investigation on suspicion of
misconduct in public office, likely tied to his time as the U.K. trade envoy. The former prince is now the first senior British royal in modern
history to be arrested. He's denied all accusations against him.
His brother, King Charles, said in a statement that he felt, quote, "the deepest concern, adding that the law must take its course." Before Andrew's
arrest, Prime Minister Keir Starmer urged witnesses to come forward.
(BEGIN VIDEO CLIP)
KEIR STARMER, BRITISH PRIME MINISTER: Whether it's Andrew or anybody else, anybody who's got relevant information should come forward to whatever the
relevant body is. In this particular case, we're talking about Epstein, but there are plenty of other cases. It is anybody who's got information
relating to any aspect of violence against women and girls has, in my view, a duty to come forward, whoever they are.
(END VIDEO CLIP)
SCIUTTO: Richard Quest has more on the accusations against Andrew.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE AND CNN ANCHOR, QUEST MEANS BUSINESS (voice-over): An unwise and costly friendship leading to a
spectacular fall from grace for the man once known simply as Prince Andrew. The British police are carrying out searches at two of the former prince's
residences after arresting him early on Thursday on suspicion of misconduct in public office.
The investigation was launched after a new tranche of documents relating to the convicted sex offender Jeffrey Epstein were made public by the U.S.
Department of Justice. Some of the emails released appear to show Andrew sending confidential material to the late Epstein, a potential breach of
his duty of confidentiality while serving as Britain's trade envoy from 2001 to 2011.
As trade envoy, the former prince facilitated deals between British and foreign companies promoting the country's interests abroad.
ANDREW MOUNTBATTEN-WINDSOR, THEN-U.K. TRADE ENVOY: If we can open doors and give the U.K. an advantage over our competitors, then I think that's
absolutely right and proper.
QUEST (voice-over): But concerns about Andrew's ability to serve as Britain's trade envoy are not exactly new, something I asked him about in
2006.
MOUNTBATTEN-WINDSOR: I don't know. I mean, I am bringing a discipline to this that I believe is having the right effect.
QUEST (voice-over): He stepped down from the role, already under fire for his association with Epstein, who had pleaded guilty to state prostitution
charges in 2008. Andrew claimed he terminated his relationship with the convicted sex offender during a now infamous visit to New York in 2010.
In an interview with the BBC in 2019, the then prince said he regretted the visit and the delay in cutting ties, but not much else.
UNIDENTIFIED FEMALE: Do you regret the whole friendship with Epstein?
MOUNTBATTEN-WINDSOR: Now, still not. The reason being is that the people that I met and the opportunities that I was given to learn, either by him
or because of him, were actually very useful.
QUEST (voice-over): None of that seems to matter now. The police suspect him of misconduct in public office. But there's also an ongoing
investigation into allegations Epstein trafficked a woman to the U.K. for a sexual encounter with Andrew.
[18:05:00]
The former prince has not publicly responded to the latest allegations, but has consistently denied all accusations of wrongdoing. Amid the crisis, the
crown is putting on a brave face.
UNIDENTIFIED FEMALE: Good afternoon, Your Majesty. Do you have any reaction to the arrest of your brother, sir?
QUEST (voice-over): King Charles avoiding questions about his brother's arrest. The king had previously stripped Andrew of his titles, and in a
statement released on Thursday morning, Charles vowing the monarchy's full and wholehearted support, adding, the law must take its course.
Richard Quest, CNN.
(END VIDEOTAPE)
SCIUTTO: It was the journalist Emily Maitlis, then working for the BBC, whose 2019 interview with the then-Prince Andrew turned this story into a
national sensation. She spoke earlier with CNN's Christiane Amanpour and said she was stunned by today's developments.
(BEGIN VIDEO CLIP)
EMILY MAITLIS, INTERVIEWED ANDREW MOUNTBATTEN-WINDSOR IN 2019 AND CO-HOST, "THE NEWS AGENTS" PODCAST: This is not something we see in this country.
This is not something that we are used to seeing. And we have to remember that Andrew remains eighth in line to the throne. He still lives in a royal
residence. It isn't in Windsor. It isn't Royal Lodge, the place that he was moved out of. But it is on the royal estate. And I think the questions now
for the royal family and particularly for the monarch, his brother, will be how close that relationship is made to seem between the two of them and to
the wider public.
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL ANCHOR: So, the king, his brother, did appear in public today. Extraordinarily, he was going to
London Fashion Week. We have pictures of him walking in. And he refused to answer any journalist questions. He wasn't heckled by the public as far as
we can see. But he wouldn't answer questions. And he has, as I said, made that statement about supporting the course of law.
Given the seriousness of how you describe what's just happened, why do you think it's happened now? What is the trigger?
MAITLIS: There is no question in my mind that when King Charles removed that title from Andrew six months ago, last October, when he asked him to
leave Royal Lodge, the king was essentially paving the way for the law to take its course. He was essentially saying, I think, to the forces of
justice in this country, I don't want to tie your hands. He's my brother, but he is no longer untouchable.
I'm not saying that King Charles had any advance warning of what happened today. In fact, I think we know that he didn't. There was no tip off. There
was no communication between the police, the forces that arrested him and the monarch. But that statement was absolutely critical. When King Charles
said, let the law run its course, this has to be fair justice for all, essentially. But he also said this curious line, which was, I have the
deepest concern.
I thought that was a very strange combination of words because he didn't really explain who that concern was for. Was it for a brother that he feels
he no longer can call a brother formally? Was it for the victims of Jeffrey Epstein in whatever form or guise they are? It remains unexplained. But I
do think that that was a seminal moment because King Charles was indicating six months ago that no one is above the law.
(END VIDEO CLIP)
SCIUTTO: Emily Maitlis, they're speaking with Christiane Amanpour. A number of U.S. lawmakers have called on U.S. leaders to follow the U.K.'s
example by investigating more associates of Epstein. Several say the U.S. has not done enough. My next guest, Congressman Lou Correa, is on the House
Judiciary Committee.
Last week, during a hearing with U.S. Attorney General Pam Bondi, he asked Epstein victims present in that room to stand and asked if they thought the
federal government had their back. Congressman Correa's colleague, Pramila Jayapal, asked Bondi to apologize.
(BEGIN VIDEO CLIP)
REP. PRAMILA JAYAPAL (D-WA): It is about you taking responsibility for your Department of Justice and the harm that it has done to the survivors
who are standing right behind you and are waiting for you to turn to them and apologize for what your Department of Justice has done.
REP. JIM JORDAN (R-OH): Members get to ask the questions. The witnesses get to answer in the way they want to answer. The Attorney General can
respond.
JAYAPAL: That's not accurate, Mr. Chairman.
PAM BONDI, ATTORNEY GENERAL: Because she doesn't like the answer.
JAYAPAL: It is my time. So, Mr. Chairman --
BONDI: Why didn't she asked Merrick Garland this twice.
JAYAPAL: I'm reclaiming my time and when I reclaim my time, it is mine.
UNIDENTIFIED MALE: Mr. Chairman --
JACKSON: The gentlelady has reclaimed her time.
BONDI: I'm not going to get in the gutter for her theatrics.
(END VIDEO CLIP)
SCIUTTO: Joining me now is Democratic Congressman Lou Correa. Thanks so much for taking the time.
REP. LOU CORREA (D-CA): Thank you for having me.
SCIUTTO: So, Andrew is a senior British royal, former prince. Andrew in line for the throne. He's now been arrested for revelations in the Epstein
documents.
[18:10:00]
The only person in the U.S. in prison for Epstein today is Glenn Maxwell, and of course President Trump has raised at least the possibility of a
pardon for her. Can you explain the difference of the consequences many people are finding in a country such as the U.K., whereas here, many of the
victims are still waiting for justice?
CORREA: Let me say that I hope we learn from the Brits, nobody should be above the law, and especially in this issue of the Epstein files. I had a
chance to go look at the Epstein files last week, and what I saw was a jigsaw puzzle of redacted pages upon pages, names redacted. What I did see
was references to girls, children, nine, 10 years old being trafficked, possibly some being assassinated, murdered, made to disappear. A lot of
powerful people from around the world, from the U.S., Europe, the Middle East, those names are clearly there. I don't know what the problem is with
the U.S.
You know, A.G. Bondi, why don't you release, according to the law we passed, release those Epstein files unredacted? The only names that have
been released are those of the survivors. What about the perpetrators? This is wrong. And as you said earlier, I was there at that hearing, judiciary
hearing, and I asked the survivors, do any of you here feel that Ms. Bondi has your back? Not one person raised her hand. And that's really what this
issue is about.
The United States, our laws, federal laws, are supposed to protect our children, our women, our mothers, our young men, and they're not doing
that. This is wrong. We need to move ahead and make sure those files are fully released for everybody to see and all those individuals that were
involved in these horrendous crimes are brought to justice.
SCIUTTO: When she was asked, Pam Bondi said, if any man's name was redacted that should not have been, we will, of course, unredact it. Do you
believe she will follow through on that? Is there any evidence she's followed through on that?
CORREA: Well, she hasn't followed through. The law says -- we passed a bill. Remember, President Trump promised during his campaign to release
these files. He didn't do it. We passed a law to compel him to release these files. What he has released now are redacted files. The law clearly
says release unredacted files. Follow the law, President Trump. Ms. Bondi, follow the law, release everything, let the world see what's in those
files.
SCIUTTO: I want to turn now to the DHS ICE funding debate. The DHS funding bill, of course, remains at an impasse. The House Minority Leader Jeffrey
says the ball is now back in the White House's court. Can you tell us where these negotiations stand? And do you believe that the White House is going
to yield on any of your demands?
CORREA: Look, the White House has a lot of the cards on this one. We passed that big, beautiful bill last year with $170 billion, more money
than you've ever seen go to that agency, to do nothing but deport. And remember, President Trump promised to deport the most serious of criminals.
Today, what do we have? Mother Good, Nurse Pretti killed. Other citizens in my district as well, afraid for their lives. A lot of them want to come
forward and say, we've been beaten, arrested, jailed by ICE. This is not America.
Remember, Homeland Security was designed to protect Americans from foreign terrorists. Now, it's become a police force that goes after anybody that
gets in their way, including Americans. And what the Democrats, Hakeem, has done is asked essentially for guardrails to make sure that when Homeland,
when ICE, CBP is out there doing their job, they don't disrespect our rights. They don't go after us without a warrant, that they respect places
like churches. These are reasonable requests. It's up to the administration now to say, yes, we're going to protect Americans. We're going to protect
law-abiding citizens, or we're just going to run roughshod over people and kill more individuals.
SCIUTTO: I wonder if you see --
CORREA: We have to stand up.
[18:15:00]
SCIUTTO: If you see any moderation of these tactics? Because, of course, Tom Homan pulled that ICE surge from Minneapolis, but now you have this new
legislation, which expands ICE's ability to detain legal refugees, which is quite remarkable. It says that refugees may be considered to have
voluntarily returned to custody simply by following the application process, the next step of the application process, when they first made
that claim for asylum here. I mean, is there any moderation at all?
CORREA: That's not legislation. That's the administration saying, this is what we're going to do. That's really the issue right now, that big,
beautiful bill, all of that money. They can essentially do what they want to do with that money without any consequences. We do need moderation. We
do need common-sense, folks to stand up, both Democrats and Republicans, to say, this is the United States, we have to protect citizens, and we have to
protect individuals that are here working hard, honest, hardworking taxpayers. We need that.
But, you know, big, beautiful bill, $170 billion. They can continue moving forward on this very small shutdown and continue to do what they're doing.
They have the cards. We have very few cards. And that's why we have the whole firm on this one.
SCIUTTO: Congressman Lou Correa, we appreciate you taking the time with us.
CORREA: Thank you very much. Still coming up on "The Brief," President Trump revealing his timeline to make a decision on Iran, warning, quote,
"bad things will happen if Iran does not make a deal." We're going to have the details next.
(COMMERCIAL BREAK)
SCIUTTO: President Trump extending his timeline for a decision on potential U.S. military action against Iran, now saying that decision could
come in 10 to 15 days. Hours earlier, he said it could come within the next 10 days. So, a little bit of movement there. He also issued this warning.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: They cannot continue to threaten the stability of the entire region. And they must make a deal. Or if that
doesn't happen, I maybe can understand if it doesn't happen, it doesn't happen. But bad things will happen if it doesn't.
(END VIDEO CLIP)
[18:20:00]
SCIUTTO: All that in front of the Board of Peace sign. Sources tell CNN the U.S. military is prepared to strike Iran as early as this weekend. The
vice president, J.D. Vance, says Tehran did not acknowledge some of the U.S. red lines in this week's talks in Geneva. These satellite images
appear to show that Iran is fortifying some of its nuclear facilities using concrete and large amounts of soil. Escalating tensions are pushing Brent
oil prices up above $70 a barrel with concerns over potential supply disruptions in the Middle East.
Also, here in Washington, President Trump convened the first formal meeting of the Board of Peace for Gaza reconstruction. He says the United States
will contribute $10 billion to the board, and other countries including the UAE and Saudi Arabia have given more than $7 billion. Apollo Global
Management CEO Marc Rowan, a member of the executive board, says the initial plan is to build 100,000 homes in the southern city of Rafah.
Kristen Holmes is live at the White House. Kristen, can you give us a sense as to your best understanding, and I understand that this timeline is
somewhat changeable as we've noticed, but your best understanding of where the decision-making stands on attacking Iran?
KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, right now, President Trump hasn't made a decision, and we know that to be true from a
number of sources and U.S. officials. We also know that there hasn't been any kind of target strike list that has been given to the U.S. military,
indicating that there has been no real decision by President Trump.
And you heard him give this timeline first 10 days, and then just a few hours later it turned from 10 to 15 days as a potential for Iran to turn
around and come back with some kind of diplomatic deal. And we even heard from the White House just moments ago, telling me in a statement that
President Trump has told Iran to make a deal or else, and pointing to the various military operations in both Iran earlier, the strikes against those
nuclear facilities, as well as the capture of Maduro, to show that President Trump means business.
But right now, President Trump is weighing a range of options. It could be anything from these short strikes that would force Iran into a negotiating
position or to something that was more drawn out. Now, we've been trying to ask the White House if Americans should be preparing for some kind of
prolonged war with Iran, and we just don't have answers on that yet. And I was actually told by several advisers within the White House that they
didn't even really know how to communicate why the White House or why the United States was getting involved in some kind of military intervention in
Iran, and particularly at this time.
I mean, Jim, there are still questions as to what exactly a military intervention or what exactly strikes would do. Is this meant to take out
top leadership? Is this meant to strike an enrichment facility? Is this meant to end their ballistic missiles capabilities? It is unclear why now
and why it is in Americans' best interest to get involved now, other than the generic, you know, Iran is bad and they shouldn't have nuclear weapons.
So, we're still asking a number of questions here to try to get a read on what exactly are these conversations behind closed doors.
And, Jim, what is the day two plan here? I mean, if part of this is to take out the top leadership, what is next for a regime change in Iran? Who would
be in line? I mean, we heard Secretary of State Marco Rubio essentially say they didn't have a plan for that. That was just two weeks ago or a week and
a half ago. So, has that changed or where are we headed with all of this?
SCIUTTO: Yes, and what would even the value be of a U.S. plan for succession? How much control would it have? Kristen Holmes at the White
House, thanks so much.
Joining me now is Vali Nasr. He's a professor at Johns Hopkins University. He's also the author of Iran's Grand Strategy of Political History,
longtime Iran analyst. Vali, good to have you back.
VALI NASR, PROFESSOR, JOHNS HOPKINS UNIVERSITY AND AUTHOR, "IRAN'S GRAND STAND STRATEGY": Thank you. Good to be with you.
SCIUTTO: So, you now have this discussion of the possibility of short strikes just as a pressure tactic against Iran to perhaps bring them to the
table more seriously. In your latest analysis, you say Iran is preparing for a long war. Tell us your best read of how this is going to play out.
NASR: Well, I think there's a risk that Iran will not just come to the table if there are short-term strikes, that it will calculate that it's
much better for it to retaliate against the United States because so far, symbolically reacting to American bombings of its nuclear facilities has
only encouraged additional military threats.
So, I think they are -- they would like to sort of draw the point for White House that there is a cost to going to war with Iran, that this is not
going to be like Venezuela. It's not going to be without casualties, without cost to the region. And the only way they can show that is actually
by striking at U.S. personnel, U.S. ships, U.S. facilities, as well as across the region.
[18:25:00]
SCIUTTO: Yes. And listen, of course, the danger of escalation if that were to happen. What is your best read of Iran's capabilities now to carry out a
robust retaliation, given all the strikes we've seen, particularly from Israel in the last year, but also the U.S.? Do they have the capability to
do so?
NASR: Well, first of all, during last year's attacks, they did hit Tel Aviv and Haifa, and about 20 percent of their missiles got through Israel's
Iron Dome. But Israel was -- is sitting much farther away from Iran. U.S. ships are sitting off of Iran's shore. So, it's not just long-range
ballistic missiles, but short-range missiles. And Iran can also not target the U.S. necessarily, but target oil facilities, tankers, shipping, drive
the price of oil up.
And secondly, the question of how effective Iran's retaliation would be is in the eyes of the beholder. It really depends on what is President Trump's
threshold for a cost of war. Is it one body bag? Is it 1,000? Is it one oil facility? It's definitely not going to be zero. And the Iranians want to
argue it will not be zero, because that's the only way in which they think they can deter President Trump.
SCIUTTO: Sources have told CNN the president has privately argued both for and against military action, and we've seen him kind of toggle back and
forth on his own timeline here. Is it clear to you, or to anyone really, what is the objective? What is his objective if he chooses to strike?
NASR: No, the objective is not clear, and he hasn't actually communicated it. He said last summer that he had obliterated Iran's nuclear program.
There was nothing to talk about. And for months he wouldn't talk to Iran about their new nuclear program. All of a sudden, he wants a nuclear deal
immediately, unless otherwise he's going to go to war, over a program that he claimed that he had already destroyed.
And if the goal is regime change, he hasn't said that, because that's not what's being discussed in Geneva and in Moscow. So, to say that the
Iranians need to make a deal, otherwise there would be war, if the goal is regime change, that's not what they're talking about. If the goal is a
nuclear deal, then, you know, this doesn't sound that why is it that all of a sudden, he's picked on this issue with this massive armada, after he
claimed that he had put the issue to rest last summer?
SCIUTTO: Yes. Tell me how the region sees this, because there's been some reporting that when President Trump was considering strikes a couple of
weeks ago, that America's Arab allies pulled him back from the brink. Are they applying the same kind of pressure now?
NASR: Yes, because what these aircraft carriers in the region represent is America's ability to hit Iran. But the region is not confident that the
U.S. has the capacity to protect them from Iranian retaliation, that the U.S. has not shown them a pathway that the war with Iran would be short-
term, and that it will not end up lasting months and months, in which case it will completely undermine their economic programs about digital future
investments, the kind of post-oil economies they're investing in.
And I think right now they see whatever problems they have with Iran, they see instability as a greater threat to themselves than the Iran that's
sitting across the Gulf, and the prospect of a U.S. war actually to them means the start of the unknown, of instability, and makes them very
nervous.
SCIUTTO: Yes. Final question, if I can, just on the possibility of a nuclear deal. It struck me that a couple of the U.S. demands sound quite
similar to the JCPOA, the deal negotiated by President Obama, taking enriched uranium out of the country, perhaps sending it to Russia, et
cetera. I mean, is there a realistic pathway to some sort of nuclear deal between the U.S. and Iran?
NASR: There is, two things. If the United States actually was negotiating the deal, it's not. It basically wants a declaration that everything is
solved, and then the details would be worked out later. I mean, you can't send two envoys for a three-hour meeting in the middle of their
conversations with Russia and Ukraine on another major global issue. And it doesn't look like President Trump is looking for a detailed negotiation
here.
Secondly, he's not looking for a deal. He's asking Iran to surrender everything. And it's not clear he's offering anything realistic in return
that the Iranians could actually trust. So, I think the prospect is there, but I don't see a deal happening in the short-term.
SCIUTTO: It sounds a lot like the trade deals, right? Kind of a couple pieces of paper, but not actually a detailed document. Vali Nasr, thanks so
much for joining.
NASR: Thank you.
SCIUTTO: Just after the break, British police released former Prince Andrew hours after arresting him. We're going to have a live report from
London just ahead.
(COMMERCIAL BREAK)
[18:30:00]
SCIUTTO: Returning now to our top story. Andrew Mountbatten-Windsor, formerly Prince Andrew, has left police custody. This picture shows him
leaving the police station hours after his arrest on his 66th birthday, no less, on suspicion of misconduct in public office. Documents released by
the U.S. Justice Department show he was in contact with Jeffrey Epstein while serving as British trade envoy. He has consistently denied any
wrongdoing related to Epstein.
Max Foster is live outside Buckingham Palace. And, Max, you've covered the royal family for a long time. I just wonder how earth-shattering this is
for the former prince, but also the broader royal family.
MAX FOSTER, CNN ROYAL CORRESPONDENT: Well, it's really earth-shattering, obviously, for the prince. You know, a gradual decline in his public role
to this point where he's arrested. As I understand it, absolutely no warning that a convoy of police were driving onto the king's estate in
Norfolk to arrest him this morning. Perhaps that was because inviting him to the police station wouldn't allow them to go straight into his house and
start searching it.
So, they spent the day interviewing him and searching his house. And they have since released him pending more investigations. So, this was a break
in those interviews, if you like, rather than an end to them. He hasn't been charged for anything at this point, but an absolute shock to everyone.
I understand even the king wasn't told that the police were arriving.
(BEGIN VIDEOTAPE)
FOSTER (voice-over): Andrew Mountbatten-Windsor arrested after new revelations in the Epstein files in an extraordinary development without
precedent in modern history. British police took the former prince into custody on Thursday morning on suspicion of misconduct in public office.
[18:35:00]
Having said earlier this month that they were assessing claims that Andrew had shared sensitive information with the late Jeffrey Epstein while
serving as the U.K.'s trade envoy. They've not said exactly what led them to this arrest, which comes after the latest tranche of emails released by
the U.S. Justice Department appeared to show that Andrew was sending confidential material to Epstein. Sparky renewed scrutiny of the already
disgraced royal. He's previously denied any wrongdoing and hasn't commented publicly on these more recent misconduct allegations.
UNIDENTIFIED FEMALE: Your Majesty, how are you feeling after your brother's arrest?
FOSTER (voice-over): King Charles didn't answer reporters' questions about his brother's arrest, but said in a statement that he learned with the
deepest concern of the news and reiterated his wholehearted support and cooperation with the authorities.
Andrew became trade envoy in 2001. That position saw him travel the world carrying a duty of confidentiality. He stepped down a decade later after
coming under fire over his association with Epstein. Questions over his friendship have haunted him ever since. That's in part because of Epstein's
conviction in 2008, when the financier pleaded guilty to state prostitution charges involving an underage minor and served time in jail. And yet, the
senior royal stayed in contact with Epstein, even after claiming in a BBC interview to have cut ties with the convicted pedophile in late 2010 during
a trip to New York.
MOUNTBATTEN-WINDSOR: Now, I went there with the sole purpose of saying to him that because he had been convicted, it was inappropriate for us to be
seen together.
FOSTER (voice-over): Emails released since then call that timeline into question, and Andrew's been dogged by a years-long crescendo of Epstein-
related scandals and allegations. Late last year, the 66-year-old was stripped of all his royal titles and kicked out of his residence and
essentially vanished from the monarchy.
The same police force that arrested Andrew on Thursday on suspicion of misconduct in public office is also looking to allegations that a woman was
trafficked to the U.K. by Jeffrey Epstein to have a sexual encounter with Andrew. That investigation is ongoing.
(END VIDEOTAPE)
FOSTER (on camera): An incredibly sensitive situation, Jim, for the king, who has to protect the monarchy and distance himself as much as possible
from his brother. A very difficult situation, but sensitive also if you imagine that the police that arrived in Sandringham today are the king's
police force. They act on behalf of the crown. If it goes to court, he hasn't been charged, of course, but if it does go to court, that will be
the crown versus a member of the royal family, and ultimately, if he was found guilty, he could face a life sentence on this particular criminality.
And, you know, under judicial parlance, that is serving the king's pleasure. It's an extraordinary situation that we've seen play out today,
but early days, but the shadow haunts the entire monarchy today.
SCIUTTO: No question, and understandably so. Max Foster at Buckingham Palace, thanks so much. Still ahead, bad news for the Trump administration
on trade. The U.S. trade deficit surged in December. Why Trump's tariffs have failed to slow the flood of imports into the U.S. Next.
(COMMERCIAL BREAK)
[18:40:00]
SCIUTTO: Welcome back. In today's "Business Breakout," a down day on Wall Street as investors monitor President Trump's military threats against
Iran. Oil prices rose amid those rising tensions. Also, today, shares of firms that issue private credit fell sharply. Investors rattled by news
that industry heavyweight Blue Owl is selling assets and halting redemptions at one of its funds. The move adds the fears about the overall
health of private lending.
Economist Mohamed El-Erian questioned on X whether this is what he called a canary in the coal mine moment. He said it raises questions about the type
of risks that fueled the 2008 financial crisis. Listen to him. He knows what he's talking about.
New numbers show the U.S. imported more goods than ever last year. That's a blow to President Trump, who had hoped to cut U.S. dependence on foreign
goods through higher tariffs. That's what he said. The whole point was the trade deficit for all of 2025 fell slightly to just over $900 billion, but
imports of goods rose to a record $3.4 trillion. The U.S. trade deficit surged more than 32 percent from November to December.
The U.S. Supreme Court could announce its decision on the legality of some of Trump's tariffs as soon as Friday, although they've delayed before. That
looming decision was on President Trump's mind during a speech today in Georgia.
(BEGIN VIDEO CLIP)
TRUMP: Without tariffs, what would you do? You know what? Everybody would be bankrupt. Everybody. The whole country would be bankrupt. And I have to
wait for this decision. I've been waiting forever. Forever. And the language is clear that I have the right to do it.
(END VIDEO CLIP)
SCIUTTO: Yes. It wasn't quite so clear to those justices during oral arguments. Justin Wolfers joins me now. He's a professor of economics and
public policy at the University of Michigan. Justin, good to have you back.
JUSTIN WOLFERS, PROFESSOR OF ECONOMICS, PUBLIC POLICY, UNIVERSITY OF MICHIGAN: Good day, Jim.
SCIUTTO: So, the whole point of tariffs was to reduce trade deficits. And yet, big jump in the deficit from November to December, but also, you know,
quite a large jump in imports for the whole year. Does this show that tariffs have failed?
WOLFERS: Hey, Jim, I just want to take you back about a year ago when President Trump announced the idea of tariffs to address the trade deficit.
And every economist around the country said, that's a very bad idea. That won't work.
There's been a lot of ups and downs over the year. But if you look at 2025 as a whole, we have basically the same trade deficit, maybe a little bit
bigger than the previous he was. So, I'm going to score this one for the economists, mate.
SCIUTTO: Yes. So, the trade deficit stayed high. There has been no grand return of manufacturing jobs. The next piece is prices, right? Because
there had been some price pressure, but the thinking had been that manufacturers were eating those tariffs until now. Are we about to see big
upward pressure on prices as they begin to let you and me pay for those tariffs?
WOLFERS: Right. So, the studies so far seem to suggest that nearly all of the tariffs are being paid for by Americans. But the way they're being paid
is the corporations haven't passed on to higher prices yet. A lot of them did got lower margins.
Now, I just want to remind you, by the way, if you've got a 401(k), that actually means your 401(k)is paying the tariff rather than you paying it at
the grocery store. But yes, eventually they're going to want to restore their margins and we'll see prices go up.
Now, one thing to remember is I don't think the price rise is going to be enormous. And that's because, yes, Trump announces big tariffs and then he
walks them back and then he allows special loopholes for his mates.
[18:45`:00]
And it turns out he's not actually imposing tariffs anywhere near as big as he said. And as a result, we're not quite seeing as much pain as we might
otherwise see.
SCIUTTO: Let's talk, if we can, about this blue owl news here and how the rest of the market has been reacting regarding private lending. There had
been warnings about this in recent weeks, saying, hey, numbers don't look so good. Do you agree with Mohamed El-Erian that this is a canary in the
coalmine moment?
WOLFERS: I mean, it could be. I think it's important to try and explain to the folks at home what's going on. So, here's a funny story. Let's go back
before the financial crisis 2006-2007. There was something called the shadow banking sector. These were not banks, but they'd lend money as if
they were banks and they weren't regulated. They blew up. That created a global financial crisis. So, we put tighter controls on everyone.
After that, that includes tighter controls on banks and guess what? This new thing arrives called private credit which is basically guys who aren't
banks, lending as if they are banks. Have you seen this movie before?
And so, the same sort of dynamics that could cause a regular bank to have a bank run are playing out in these private credit markets. This canary in
the coal mine, it's not particularly a big deal but it does show that every time you sort of shuffle things around a little bit that these guys pop up,
they try and get a profit, they try and get around regulation but again they're just going to cause problems.
SCIUTTO: Yes, some of the details were just alarming, and you know this far better than me, but the idea that when some of the debtors couldn't
pay, they would just then roll, the lenders would just roll their interest into the -- into just a bigger loan. I mean which is, you know, anybody's
like bought a house or you know borrowed money for a car. Lenders don't normally do that.
If that bubble were to burst, is it insulated from the broader banking market or is there a kind of domino effect that's possible?
WOLFERS: Well, Jim, I can't tell if you're asking me this question in 2007 on the eve of the financial crisis or in 2026. That was the big question
back then, it remains the question now. So, it turns out these not banks, they do get credit from actual banks and so some of their problems could
start to seep into the rest of the financial sector and therefore where you and I keep our savings.
One of the really worrying things is these not banks that act like banks have been lending money a lot to the software industry. With A.I. about to
blow that up, they've got a lot of loans to a lot of firms who may not be able to repay. That's the sort of thing that can start to cause the sort of
-- for those of us again old enough to remember 2008, it could cause those headlines to come back.
But again, this is just a small early problem. It's nothing like that yet. I just kind of know I've seen some of these maneuvers before.
SCIUTTO: Yes, history doesn't repeat itself but it rhymes as they say. Justin Wolfers, thanks so much.
WOLFERS: Pleasure, mate.
SCIUTTO: Checking some of today's other business headlines. Minneapolis Fed President Neel Kashkari is blasting White House official Kevin Hassett
over his criticism of a new Fed study on tariffs. The study says U.S. consumers and businesses are paying, as we were just saying, 90 percent of
President Trump's tariffs. Hassett, the head of the National Economic Council, calls the study, quote, "shoddy." He says its authors should be
disciplined. By whom? I don't know. Kashkari says Hassett's comments represent a new attack on Fed independence.
New numbers show that Amazon is beating out Walmart for the title of the world's largest company by sales. Walmart posted $713 billion in sales last
year, just $4 billion less than Amazon. Still pretty big numbers. It's the first time in more than a decade that Walmart has failed to win that sales
crown. Walmart did report strong fourth quarter results today. Its financial outlook for the current year came in, however, below estimates.
The attorney general of West Virginia is suing tech giant Apple for allegedly not doing enough to fight child pornography. The suit claims that
Apple allows sexual images of children to be stored and distributed on its iCloud services, and that Apple is prioritizing user privacy over child
safety. Apple says in a statement that protecting the safety and privacy of its customers, especially children, is central to its mission. It points
out that the company has features that can be used to block harmful images.
Still to come on "The Brief," life in prison. That is the sentence for a former president of South Korea. We're going to have the details just
ahead.
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[18:50:00]
SCIUTTO: Welcome back to "The Brief." I'm Jim Sciutto. And here are the international headlines we're watching today. British police have now
released Andrew Mountbatten-Windsor following the former prince's arrest on suspicion of misconduct in public office. He remains under investigation.
Officials have not said what exactly led to the arrest. However, documents released by the U.S. Justice Department appear to show that he sent
confidential trade material to Jeffrey Epstein during his time as U.K. trade envoy.
President Trump's Board of Peace, as he's called it, held its inaugural meeting in Washington today. He said it will help strengthen the financial
future of the U.N. and pledged the U.S. will contribute $10 billion towards resolving global conflicts. The board was originally pitched as the
governing body to oversee the reconstruction of a Gaza decimated by war.
And a last-minute triumph, the U.S. women's ice hockey team won in overtime against Canada. Clinch Olympic gold. It's the third time the U.S. has won
that event. It was amazing because they came back in the third period just before time ran out and then won in overtime. The men's tournament
continues Friday with the semifinals.
Finally, tonight, South Korea's former president has been sentenced to life in prison for insurrection. Ivan Watson looks at what Yoon Suk Yeol's
sentencing means for his country.
(BEGIN VIDEOTAPE)
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (VOICE-OVER): The verdict is in. A judge in Korea declares former President Yoon Suk Yeol
guilty of insurrection.
UNIDENTIFIED MALE (through translator): The fact that armed soldiers were deployed to the National Assembly, entered the compound using chopper or
climbing over the fence, all amounted to acts of riot.
WATSON (voice-over): The sentence, life in prison for the former president and 30 years behind bars for his former defense minister.
UNIDENTIFIED MALE (through translator): President Yoon declared martial law in a surprise televised announcement late on the night of December 3,
2024.
WATSON (voice-over): Soon after, soldiers began arriving by helicopter near the grounds of the National Assembly. Choppers that were also filmed
that night by Heo Woojin. He and his wife Song Hwa were among a growing crowd of protesters who spontaneously gathered outside the gates of the
legislature that night.
UNIDENTIFIED MALE (through translator): We looked up on the internet, what could we do? And then my wife said, we need to go and stop it at the
parliament.
WATSON (voice-over): They say they left their cat extra food that night, not knowing when or if they would ever come home.
UNIDENTIFIED FEMALE (through translator): We arrived around midnight. There were already two or 300 people gathered. We had been feeling quite
scared, but we're relieved to see a lot of other people.
WATSON (voice-over): Amid confrontations with soldiers and police, lawmakers also rushed to the assembly, including opposition leader and
current elected president Lee Jae-myung, who live streamed himself jumping a wall to get into the compound. Within hours, assembly members voted to
overturn martial law.
Huge pro-democracy crowds swelled on Seoul's streets, and in the following weeks, lawmakers voted to impeach Yoon. The constitutional court stripped
him from office and authorities arrested him. Former Justice Minister Chu Kuk was among the politicians quick to denounce Yoon's short-lived power
grab.
[18:55:00]
CHU KUK, LEADER, REBUILDING KOREA PARTY (through translator): At the very least, Yoon Suk Yeol should get a life sentence, because he tried to
destroy South Korea's democracy. There are many places where democracy is faltering. South Korea's experience shows the power to protect and recover
democracy lies within the people.
WATSON (voice-over): People like Heo Woojin and Song Hwa. She resells used clothes. He has a trading business. But on the night their president
declared martial law, they sprang into action to defend South Korea's democracy.
UNIDENTIFIED MALE (through translator): The strength of the citizens who acted, even when they were afraid, was truly incredible.
WATSON (voice-over): In previous court appearances, Yoon showed no remorse, calling the investigation a political conspiracy and claiming he
had no choice but to declare martial law to break political gridlock.
WATON: Those arguments clearly failed to impress the judges. It's something the former president may want to consider if he chooses to
exercise his right to appeal his guilty verdict.
Ivan Watson, CNN, Hong Kong.
(END VIDEOTAPE)
SCIUTTO: Thanks so much for joining. I'm Jim Sciutto in Washington. You've been watching "The Brief." Please do stay with CNN.
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