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What We Know with Max Foster

Kevin Warsh Confirmed As Fed Chair; Trump Arrives In China As War With Iran Looms Over Trip; Iranians On Edge As Threat Of Resumption Of War Looms; Princess Of Wales Receives Warm Welcome In Italy. Aired 3-4p ET

Aired May 13, 2026 - 15:00   ET

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

[15:00:32]

ISA SOARES, CNN HOST: President Donald Trump is in Beijing to meet with his Chinese counterpart.

I'm Isa Soares, coming to you live from London.

MAX FOSTER, CNN HOST: I'm Max Foster in Italy, where the princess of Wales has taken back to the global stage. She's on her first overseas tour since

her cancer treatment. I'll explain why she's here and what the reaction was, Isa.

SOARES: And we'll have more of those stories. Thank you, Max, in just a moment.

But first, just news coming in to us from Washington. The Senate has confirmed Kevin Warsh as the new Fed chairman. The vote coming in. It is

54-45. He will replace Jerome Powell, Jay Powell who -- whose eight-year term, of course, expires this month.

Very much expected. We knew this was coming. But it's interesting, of course, coming in that he's now been confirmed 54-45 vote mostly split as

you would imagine among party lines. And Warsh is widely viewed among some of the financial markets. Wall Streets as more aligned with President

Donald Trump, who has time and time again been criticizing Jay Powell, Jerome Powell wanting, of course, those interest rates to move much quicker

than they have been. So will be interesting to see whether, when Warsh takes office, whether he would heed those calls. Important, of course, for

the Fed to be independent.

So, Kevin Warsh has been confirmed as the Fed chair in the last few moments.

I promised you at the top of the show that I'll bring you the latest on China. Of course, President Trump is visiting Xi Jinping in Beijing and the

scene has been set as delegations from the world's two superpowers prepare to face off at the U.S.-China summit. Tariffs, Taiwan, technology were

already certain to be front and center in those talks, but now looming large over them is the Iran war.

President Donald Trump insists the U.S. doesn't need help from Beijing to bring an end to the conflict. We heard that yesterday before he departed

Washington, but China's close economic ties with Tehran could provide Xi Jinping with some significant leverage in negotiations, which are scheduled

to start on Thursday.

Following all the developments for us is our Alayna Treene at the White House and Mike Valerio joins us from Beijing.

And, Alayna, let me go to you first. What are we likely to see here? What kind of pressure or diplomacy are we likely to see the U.S. call on Xi

Jinping? Because, you know, this time yesterday, President Trump said he didn't need any help. Today, he says he wants a long talk with Xi about

Iran. So, what is he looking for here?

ALAYNA TREENE, CNN WHITE HOUSE CORRESPONDENT: Yeah, that was exactly the question I asked President Trump, Isa, as he was departing for this trip

yesterday. He said, as you mentioned, that they are planning to have a long talk regarding the war in Iran, but then pressed further if he was going to

ask him to help in any way, he said, we don't need their help. We are going to solve this war one way or another.

But look, I will say, from the conversations I've been having with people in the Trump administration, they recognize kind of that China's close

relationship with Iran and really the Iranians are kind of relying on the Chinese in many ways as well, could be helpful here, particularly as we

know that the president has grown increasingly frustrated with the division in Iran's leadership. And this idea that many people in the White House do

not believe that they are being serious about these negotiations to end the war diplomatically.

I do want to share with you, Isa, as well, because we just got this comment from the vice president moments ago on this exact issue, and he said that

he was speaking just this morning, the V.P., J.D. Vance with Jared Kushner and Steve Witkoff, of course, the two people in the U.S. side who have been

crucial to these talks with Iran, but also with their Arab partners about this, and said they do believe that they are making progress. But the

fundamental question is whether or not that progress does enough to meet President Trump's red line. So just interesting that were hearing that

conversation happening, of course, while the president is in Beijing set to meet with Xi Jinping.

Look, I do think as well, in addition to Iran, there are a number of things that really this White House wants this visit to be about.

[15:05:00]

Even more importantly, they really want to try and make it about the economy and trade. I would note, we saw the president when he touched down

and stepped off Air Force One for us, U.S. time. It was in the morning, of course, in the evening local time in Beijing. But it was also notable who

stepped off with him. You know, the president was greeted with this pomp and pageantry.

But then you also saw some of these two tech titans get off the plane with the president that included Elon Musk, as well as Jensen Huang. Again, big

leaders in the tech industry. We also know there are roughly a dozen CEOs of other major tech companies like Meta and Boeing, among others, who are

also going to be there.

So, there is going to be a big economic -- you know, you know, an economic push around this visit. We're going to probably see different economic

deals announced. We know tariffs are also expected to be part of these conversations, as well as talks around Taiwan and a potential arms deal.

And to get back to the Iran stuff, I mean, this is something that, again, the Trump administration didn't really want to be hanging over this visit.

I remind you and our viewers that this actually was supposed to take place this visit six weeks ago. The president pushed it back, hoping that that

postponement would mean there would be an end to the war and that the China visit would really be focused on these trade talks.

However, of course, that didn't happen. This war has gone on far longer than this White House had said it would than they had anticipated. And now

it really is going to loom large over this meeting between these two men. So, it's really going to be fascinating. I'd also note, of course, that the

Chinese have a vested interest in what happens with Iran, because they are the biggest consumer of Iranian oil.

So, what's going on in the strait right now, huge concern for the Chinese as well. So, this is really going to be, I think, a huge topic of

discussion when the two meet tomorrow.

SOARES: Alayna, do stay with us.

Let me go to Mike.

And, Mike, I was speaking to a guest just in the last hour who is saying that President Trump needs this visit more than Xi Jinping. And at the same

time, we're hearing from sources that that tell us that China views this conflict with Iran and really the -- as you and I were talking about in the

last hour, the quagmire faces at having a strengthened position in this negotiation with Iran.

What is your sense of what were likely to see, how far Xi Jinping is prepared to go here?

MIKE VALERIO, CNN CORRESPONDENT: I think that he wants to push D.C. as far as he can get with Taiwan, with tech and tariffs. But what we didn't talk

about in the last hour, Isa, that I think is important for everybody at home watching is that when President Trump and administration officials ask

for help with Iran, it's a very delicate tightrope that they have to walk because, let's say China helps out with Iran and they're going to get

something in return, that presumably would help up the diplomatic prestige that China exerts on the world stage because if you think if China here

comes out of this summit with leaders in Beijing being able to say, yeah, we helped President Trump reopen the Strait of Hormuz.

You know, of course, Trump and the administration will spend that in saying like, only I can come to China and be able to make this deal. But also,

China would be a major part of that, too. So, of course, they were instrumental in that deal between Saudi Arabia and Iran a year and a couple

of months ago, with that rapprochement between the two countries. So that's something that administration officials and politicos here in Beijing are

acutely aware of.

To get to, you know, the human dimension, though everybody in this town knows this summit is happening, their lives have been somewhat disrupted

because of it. There is the really palpable sense, the longing for a better ties with the United States. But to a person, Isa, nobody thinks that

better ties are going to happen under this guy. Their words, not mine.

So, let's play a couple sound bites from them and we'll talk about them on the other side. Let's listen

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (translated): He can say one thing and then overturn it himself and say something completely different later. That gives people

the impression that he's unreliable.

UNIDENTIFIED MALE (translated): I just hope both sides can benefit together. Hopefully they stop introducing measures that intensify

competition.

UNIDENTIFIED MALE (translated): This guy is absolutely awful. He directly blocked our chip supplies. As a leader, he's way too petty.

(END VIDEO CLIP)

VALERIO: Okay, so that last guy who was speaking his business specifically was harmed by chips being cut off by the United States advanced chips. And

if I were a betting man, I mean, when we're talking to analysts and sources here in terms of the trade-offs that the United States can offer, we have

Jensen Huang, who was on the plane, the CEO of Nvidia, and he has said, Isa and Alayna, that he wants his most advanced chips to be sold here in the

Chinese market, because otherwise China is going to develop its own home grown industry and not become needy for these advanced American chips and

harm the American advanced A.I. chip economy as a result.

[15:10:10]

So, I would think I'm going to be acutely watching here in the Beijing bureau if that is one of the concessions that the president makes. If tech

and chips become one of the bargaining positions that America is willing to say, all right, yeah, we're going to give in on this one. By the time the

summit is said and done.

SOARES: Let's see what comes out of this. I know you'll keep a very close watch. Thank you very much, Mike, and to Alayna Treene, also there at the

White House.

Now, we seen the world, the leaders, of course, of the world's two biggest economies meeting as the war, as you heard there from Alayna and from Mike,

as the war with Iran unleashes one of the largest energy shocks in history.

Our Matthew Chance has just entered Iran. And we would like to note CNN operates there only with the permission of the Iranian government, as

required under local regulations, but maintains full editorial control over what it reports

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Well, we're on a long drive towards the Iranian capital, but we've had to stop because we've

come to a bridge that was struck by a U.S. or an Israeli airstrike during the recent bombing campaign. You can see a whole section of it has fallen

into the into the river. And if you look around over here, all the cars and trucks have had to go around on this detour. When you -- when you consider

all the other roads and bridges that have been hit, it's added hours to the journey time.

Well, before we arrived in Iran, some Iranians told us, don't go in. It's too dangerous. The war could resume at any time, especially amid growing

tensions over the closure of the Strait of Hormuz and the failure of the U.S. and Iran to reach a compromise over nuclear activities. But with

President Trump on that state visit to China, both the U.S. and Iran seem to be looking to Beijing as a possible way out of their deadlock.

Iran is China or China is Iran's major trading partner. China buys most of Iranian oil, has a shared interest with Washington in getting the energy

supplies unblocked.

Meanwhile, here in Iran, we're glimpsing how the country is being shaped by the conflict and the pressure it's under, from crowds of Iranians at the

border we've just been to hauling cooking oil across from Turkey, where it's much cheaper and acute cost of living crisis, remember, sparked

nationwide protests late last year that ended in horrific violence.

To the words of one Iranian father who told me that what he called Trump's war had silenced people and made the Iranian government stronger -- in his

words, at least for now.

Matthew Chance, CNN, on the long road to Tehran.

(END VIDEOTAPE)

SOARES: Our thanks to Matthew Chance and team there in Iran.

Well, at least $1 trillion. That is the staggering figure the Iran war could ultimately cost American taxpayers, according to war budget budgeting

experts say in the United States, a senior Pentagon official on Tuesday told Congress the price tag of the conflict currently stands at $29

billion.

Our Haley Britzky joins us now.

And, Haley, this is your reporting, of course, $29 billion. And it could be much higher because there's so many additionals that haven't been included

here. Just break it down for us.

HALEY BRITZKY, CNN SENIOR U.S. NATIONAL SECURITY REOPRTER: Yeah, Isa. So, the official that was given by J. Hurst, yesterday, the Pentagon

comptroller, before Congress was $29 billion, as you said, up $4 billion from the estimate that he provided two weeks ago, saying that that was

adjusted because of updated repair and replacement costs for equipment, as well as just the cost of keeping U.S. troops in the region, saying that,

you know, that has shifted the ultimate estimate here.

But as you mentioned, I mean, there's some that is not even included in that estimate. That includes intensive repairs that could come to U.S.

installations and bases in the Middle East that have obviously been hit repeatedly by Iranian drones and missiles. Mr. Hurst sort of left the door

open, left the door open for what could change as far as U.S. force posture because of the repairs needed to those installations. So, certainly,

something that will continue to grow.

There was a lot of frustration yesterday among lawmakers that they did not feel they were getting a transparent answer about the ultimate cost of this

conflict. But as we heard from President Trump yesterday, sort of shrugging off the financial concerns of Americans when he was asked if, you know,

financial burdens on Americans factored into his decisions, he said, absolutely not. I think about one thing that we cannot let Iran have a

nuclear weapon.

So, something that he does not seem concerned about, but certainly something that we have heard could come up again and again. As we know,

midterm elections are looming in the fall this year, Isa. So this problem is certainly not going anywhere as well as were trying to figure out what

exactly will happen with this cease fire.

[15:15:03]

Obviously, with the president in China now knowing that he will be having those conversations with Xi Jinping. So, certainly, the cost will continue

to fluctuate and congress will continue to demand answers about that, Isa.

SOARES: Yeah, that's not going away. And that and that comment, that clip from him surely is not going away. It will be used, I'm pretty sure by the

opposition.

Thank you very much, Haley Britzky. Thank you.

Well, here in the U.K., a long-time member of Keir Starmer's cabinet is now set to challenge him for the job of British prime minister. There are

reports here in the U.K. that Health Secretary Wes Streeting will resign from Mr. Starmer's government on Thursday, and then launch a bid to replace

him as labor leader. Streeting must get the support of at least 81 labor members of parliament to try and trigger a leadership vote within the

party. We'll stay across this story, of course, for you in the next 24 hours.

Now, Catherine, prince of Wales, has been warmly welcomed in Italy on her first official overseas trip since being treated for cancer. The princess

is on a two-day solo working trip focused on early childhood education, and it means a lot to her. It's an important cause to her.

Max Foster is in Reggio Emilia in northern Italy.

So, Max, just painted a picture of the kind of the turnout in Reggio Emilia. Quiet there now. But the scenes I was hearing a lot of "Ciao,

Kate".

FOSTER: Yes, exactly. So, I think you can describe this as a tentative comeback tour for the princess, because she's obviously been through this

treatment. She's still in recovery from that, but she's also got this newfound vigor, I'm told, from her aides, because she went through a life-

changing experience.

And the one thing she wants to focus on, particularly in terms of personal work, is those early years and how they shape brains, if you like. But let

me take you back to the scene here a little earlier on, when she arrived.

(BEIN VIDEOTAPE)

FOSTER (voice-over): Chants echoing of "Ciao, Kate" as the princess starts her comeback tour in northern Italy, her first official overseas trip since

undergoing cancer treatment. Thousands cramming into the piazza at Reggio Emilia to welcome her.

FOSTER: Princess greeting, all the well-wishers that have turned out here in Italy. Princess coming to town doesn't happen every day. So much

excitement about that. She has been in recovery, of course, from her cancer treatment. So, this is a huge moment for her. The palace saying she's

trying to balance her public work with her recovery.

UNIDENTIFIED FEMALE: It's been an honor to meet her.

FOSTER: What was your reaction when she came over?

UNIDENTIFIED FEMALE: Oh, she's amazing. I can't believe my eyes.

FOSTER (voice-over): The princess is here to learn about the internationally recognized Reggio approach, a philosophy of early childhood

education built around creativity, relationships, and hands-on discovery.

UNIDENTIFIED FEMALE: I gave her a present. It was a little rose, which will last five years because it has been stabilized. It was in a small box

and she was very happy. And then she said that my hat was very glamorous.

FOSTER (voice-over): Palace aides described this trip as an important step in the princess's recovery journey, adding that she takes great joy from

this work. The visit also marks Catherine's first official trip to Italy, a country she previously spent time in before university, though she admitted

she needed to do work on her Italian.

UNIDENTIFIED FEMALE: And the way that she approached the city and the experience shows a real interest, not just something facade, but something

deep, which is incredible.

FOSTER (voice-over): The princess believes early learning should be creative and prioritized in the same way as climate change. This is a

global mission for someone coming back to the world stage with renewed vigor after a life-changing health event.

(END VIDEOTAPE)

FOSTER: So, she met lots of people today because the whole project is really around the community. Everyone has to get involved in the community.

You just don't -- you don't expect your local nursery just to do all the work for you. So, coming up, we'll speak to a member of the local community

who's very much involved in this entire approach. We'll also speak to the princess's main adviser on early learning, to see what she said to him

about it.

(COMMERCIAL BREAK)

[15:22:27]

SOARES: Quiet now in the piazza here in Reggio Emilia. But it was very different a bit earlier on when the princess of Wales arrived, one of the

biggest stars in the world. She's not an Italian princess, of course, but she was here to view one of their crown jewels. So there's the cheese

that's very famous here. But then there's this approach to education. And that's what she came here to see.

So, well-wishers gathering outside the town hall, just in front of me, they were chanting her name. They were saying, "Ciao, Kate". Repeatedly,

everyone trying to grab her attention. She is here on a two-day trip, raising awareness of the importance really of early childhood education.

Something that the princess believes is as important as climate change.

Paolo Ricco is the education coordinator at the Reggio Approach.

Thank you so much for joining us, because you had quite an extraordinary day, didn't you, with the princess.

So, take us through it.

PAOLO RICCO, EDUCATION COORDINATOR, REGGIO APPROACH: Yes, it was really fantastic opportunity for us to welcome the princess of Wales in Reggio

Emilia.

FOSTER: Yes.

RICCO: And the fact that she asked to come and visit the municipal in front centers and preschools of the city of Reggio Emilia was a great honor

for all of us here in Reggio Emilia. So --

FOSTER: So just explain the approach because it's more of a philosophy, isn't it, rather than a method.

RICCO: It is a philosophy. It is an approach to early childhood education. It is not a method. It is contextual.

Here in the city of Reggio Emilia, and one of the most important aspects, it is that it is a. An approach that is run in the municipal infant toddler

centers and preschool. So, these schools are municipal schools, public schools.

FOSTER: But describe specifically how it is because you've seen the princess working with objects with young children.

RICCO: Yes.

FOSTER: So it's not about being taught.

RICCO: No, the child is the protagonist of the learning processes. Child is seen. Children are seen as competent subjects, protagonists of their

learning processes and along with their peers, along with educators, they are in a constant research process along in the daily life, along with

their peers, along with the educators.

And it is --

FOSTER: You might take them outside, for example, you won't just tell her this. Tell them this is a tree. This is what you need to know about a tree.

Explain what you would do with a tree, for example.

RICCO: For example.

Yeah, I mean, all the schools have also an area outside with beautiful gardens. And she will visit another school tomorrow as she did today. And

what we would do is to be out with the children in small groups or in large groups and ask them what they see, what is their idea about the trees? We

will provide different kinds of materials so that they can maybe draw a tree, or they can paint a tree. They can create a tree on clay.

So, it is the 100 languages of children is a metaphor of this idea of learning in different ways. So, each child can express his or her own

ideas.

FOSTER: It's about all the senses, isn't it? So, they would touch the tree. They would smell the tree.

RICCO: Exactly, exactly. Yes, it is all the senses and all the different ways in which a child can interact with a subject, or can explore and

understand the different possibilities that --

FOSTER: Which is very similar to a lot of the work the princess has been doing in the U.K., exactly. As I understand it she discovered your project

and found all of these parallels.

RICCO: Yes.

FOSTER: So when you spoke to her about why she was here, what did she say?

RICCO: She said that she was very excited to be in Emilia. That was the first thing that she told us today, and that she wanted really to

understand the approach, the philosophy, because she feels that there are many connections and similarities with the framework that they are

developing in the royal foundation early childhood center. So, we found really a lot of shared and common ideas and interests, and she was really

very, very excited to be there.

So, she talked with the children. When we were at the school, she sit down with the children. She started at the level. She was very relaxed. She's

very nice, very friendly and really, really interested in understanding. So, she would pose the most pertinent questions.

FOSTER: Yes, testing you.

RICCO: Yes, yes. And also really, so not the formal question that you may expect, but really the questions that she wanted to understand.

FOSTER: Paolo, really appreciate you joining us. And you must be exhausted. We've got another day of it.

RICCO: A little bit. Thank you.

FOSTER: Isa, it's really fascinating actually learning about the approach. It's just not about telling a child what to do. It's letting them explore

it. So, it has been an interesting day.

SOARES: Indeed, about curiosity, right? And exploration, so important. Thanks very much, Max.

And Max will join us a bit later on in the show. Still to come though, U.S. President Donald Trump arrives in China for a high stakes visit. How he

might be pressed to make concessions in exchange for help in the war on Iran. That is next.

(COMMERCIAL BREAK)

[15:31:10]

SOARES: I'm back to our top story this hour. The world is closely watching as longtime rivals Donald Trump and Xi Jinping prepare to face off in

Beijing, the us president received a warm welcome at the start of his visit, carrying global consequences. Look at that welcome there.

The two-day summit marks Mr. Trump's first overseas trip since waging war with Iran. And the stakes, of course, couldn't be higher. China holds a

unique position, being the biggest buyer of Iranian oil as well as the strategic partner of Tehran.

We're joined now by Laurel Rapp, director of the U.S. and North America program at Chatham House.

Laurel, great to have you on the show.

I was speaking to our White House correspondent just at the top of the hour, you know, and what we've been hearing is that President Trump pretty

much downplaying China's role when it comes to Iran yesterday, saying we don't need help today. We're going to have a long talk, but still

downplaying that. How do you see -- how do you envisage that kind of conversation

LAUREL RAPP, CHATHAM HOUSE: That's right. President Trump says we've got it under control in the United States and don't really need others to help

resolve it. By all measures, though, Hormuz still mostly remains closed. The underlying issues that the U.S. waged war against Iran in the first

place, the nuclear program, ballistic missiles, Iran's regional proxy support, none of those issues have been resolved. And then added to that is

this international chokepoint that is really strangling global shipping, global energy prices.

China wants this strait open, too, but it might not be for free if the Chinese start to engage -- to engage the Iranians to reopen that strait.

SOARES: Right. Might not be for free. So, what would Xi Jinping would want in return? Because sources have been telling CNN that, you know, that China

understands it has some sort of upper hand here, given the quagmire that the U.S. faces, it faces with the Strait of Hormuz.

RAPP: That's right. The White House has painted itself into a bit of a corner here and is trying to look for different off ramps out of this

conflict. One of the things China is really seeking in this visit is concessions on Taiwan. Not necessarily in any facts on the ground, but in

language and soften U.S. support for Taiwan. That's something that has worried many who support that strong U.S.-Taiwan relationship. That's the

top goal China has, as we understand it.

China also would welcome a relaxation of some of the sanctions and the tariffs. That has been, of course, a big feature of the first year of the

bilateral U.S.-China relationship is very pitched trade war, which is, which has cooled off to some degree after the last set of meetings between

the leaders, but that's going to be on the agenda as well as we understand it. Maybe a board of trade to manage those tensions in a bilateral and more

organized fashion moving forward.

SOARES: Yeah. And, Laurel, I mean, on that point, I think it's interesting. Maybe trade them maybe easier to see some sort of concessions

there or the tariffs, I should say.

But on Taiwan, do you see this White House moving, shifting the language at all? We've been hearing just in the last several hours from senators on

both sides of the aisle concerned, of course, about the language and whether the U.S. will change its position vis a vis Taiwan.

RAPP: We've heard from both members of Congress and also members within the administration, that the U.S. position on Taiwan will not change during

this visit. That that the position that the U.S. has had remains, but I think the big question many watching today and tomorrow have is will

President Trump's view on that be different? And the nuances of the language here on Taiwan, China watches this language incredibly closely and

even small deviations from how these countries have talked about the status, the disposition of Taiwan will be really taken note of in China.

And so that is something that Chinese officials are looking for some give on, that will absolutely be a top -- a top goal here, as leaders meet.

SOARES: Yeah. And that language, of course, could be so destabilizing if it does shift.

Laurel Rapp, really appreciate you being on the show. Thanks for your analysis, Laurel. Appreciate it.

Well, Iran is holding a send-off ceremony for its World Cup football team. I want to show you these scenes and these live images. I'm just going to

ask my team if these are live images coming to us from Tehran.

We have been seeing massive crowds waving flags as you can see, to wish their players the very best. Despite the war with the U.S. that Laurel and

I were just talking about, the Iranian national team is set to head to Los Angeles. They're set to play their first match against New Zealand in Group

G on June 15th. Well wishes there. Wishing them the very best in the World Cup. Those are the scenes coming to you live from Tehran.

Well, we are in the final moments of trade on Wall Street and markets, if we bring you the markets, are somewhat have been somewhat mixed. The Dow

Jones down a 10th of 1 percent. The Dow slipping on hot inflation numbers while the Nasdaq is pushing higher as investors flock to chip stocks.

And this of course is our Business Breakout.

The U.S. Senate has confirmed Kevin Warsh as chairman of the Federal Reserve. The former Morgan Stanley banker replaces Jerome Powell, who

served for eight years. Today's confirmation of President Trump's pick was the most partisan vote for a Fed chair nominee in U.S. history.

Higher gas prices sent U.S. wholesale inflation soaring last month. The producer price index PPI, increased 6 percent on an annual basis from March

and more than 15 percent increase in gas prices accounted for 40 percent of the increase in costs businesses paid.

And gas prices around the world could see yet more spikes. The International Energy Agency today reports global oil reserves are rapidly

shrinking and it blames supply disruption, of course, caused, as we've been talking about the war against Iran.

Well, just a few hours drive from where Chinese Leader Xi Jinping will welcome U.S. President Donald Trump. This week sits a refinery that's

allegedly part of a network helping fuel Iran's economy by importing oil.

Our Simon McCarthy has the story for you.

(BEGIN VIDEOTAPE)

SIMONE MCCARTHY, CNN SENIOR CHINA CORRESPONDENT (voice-over): As we drove to this oil facility three hours south of Beijing, it was soon clear, we

weren't welcome.

UNIDENTIFIED MALE: These guys are just trying to block the camera basically.

MCCARTHY (voice-over): A black van pulled up, blocking our view of one of the many refineries dotting China's coast.

MCCARTHY: Security here is really tight. This is a facility which is sanctioned by the U.S. government for allegedly importing Iranian oil.

MCCARTHY (voice-over): Iran sends most of its oil to China. That trade is in the spotlight ahead of President Trump's arrival in Beijing this week

with the U.S.-Iran ceasefire under strain.

The day before Trump departed for China, Washington blacklisted a dozen people and entities, it says are linked to the trade of oil from Iran to

China.

Five Chinese oil refineries and multiple port terminals have been sanctioned by the U.S. since last year for allegedly importing Iranian oil.

The company we visited, Hebei Xinhai, was sanctioned last May. It declined CNN's request to be interviewed. It was hard to tell what kind of oil the

plant was processing, but sanctions clearly hadn't shut it down.

The U.S. has been increasingly imposing sanctions on Chinese entities it believes are involved in the trade of oil from Iran.

SCOTT BESSENT, TREASURY SECRETARY: They are the largest state sponsor of terrorism, and China has been financing them with their energy purchases.

MCCARTHY (voice-over): For its part, China doesn't acknowledge importing Iranian oil. It also rejects U.S. sanctions and has been pushing back.

Earlier this month, Beijing ordered companies not to comply with sanctions on refineries.

MCCARTHY: Multiple ports south of me here, as well as across the ocean this direction, are believed to have continued to import Iranian oil

throughout the course of the war.

MCCARTHY (voice-over): This oil is carried by a network of vessels, including those known as the shadow fleet.

[15:40:00]

The oil is loaded in Iran and shipped out often to a floating gas station off the coast of Malaysia, where dozens of boats loiter with their tracking

devices turned off.

Trading sanctioned oil and ferrying it to buyers like those in China.

CNN pinpointed one such transfer where the Iranian flagged vessel Herby transferred oil to a China-bound tanker just last month.

Weeks later, the Herby was intercepted by the U.S. Navy on its way back to Iran.

Once those ship-to-ship transfers are complete, ships heading for China blend in with thousands of other vessels regularly transiting through these

waters.

For the U.S., that's a major problem. But for China, this oil flow is powering its economy and keeping a close partner afloat.

Simone McCarthy, CNN, Hubei Province, China.

(END VIDEOTAPE)

SOARES: Great reporting there from the team in China.

And still to come, sources tell us the CIA is carrying out lethal operations in Mexico. CNN's exclusive reporting coming up after this.

(COMMERCIAL BREAK)

[15:44:16]

FOSTER: It's quiet now, but there were extraordinary scenes here earlier on when the princess of Wales arrived here in Reggio Emilia, in Italy, in

northern Italy. It's her first overseas visit since she had her cancer diagnosis, and it was extraordinary to see the reaction here.

Lots of people, of course, taking the view, you don't always have a princess visiting town, but there was also this other element where there

was an element of pride, pride in the crowds here today, because she had come to effectively see one of their crown jewels. And that is this

educational approach that they have here, a holistic approach, which is much more about exploration, rather than sitting there and expecting

children to learn.

But I'll explain a bit better through a local councilor who I met who's head of education in this area.

(BEGIN VIDEO CLIP)

MARWA MAHMOUD, COUNCIL FOR EDUCATION POLICIES, MUNICIPALITY OF REGGIO: This is very famous for the Reggio Emilia approach because it was built

here. And this approach is built on three main topics. The first one is the big idea on child. That is protagonist capable, curious.

The second one is that our teachers, our pedagogues, our educators are always in a continuous training. The third one that I think is

characteristic of our town is the participation. And we don't think that our schools are just services to be provided to families. We think that are

places where we build day by day democracy.

FOSTER: What did you just talk about with the princess?

MAHMOUD: I talk about Reggio Emilia Approach. I talk about our integration -- in integrated, inclusive public system. I told her that Emilia has a big

role to lead our services because we have a cooperation among public services, private services, and also preschool state services.

FOSTER: And what about the idea of a princess coming to your small city?

MAHMOUD: It's amazing. It's really amazing. It's emotional for us. It's very, very important for us. And it means a lot, a lot of things.

FOSTER: So, with me is Christian guy. He's from the royal foundation center for early learning, which is was set up by the princess, wasn't it?

And she did her research in the U.K. effectively and then discovered this. So, take us through the process.

CHRISTIAN GUY, ROYAL FOUNDATION CENTER FOR EARLY CHILDHOOD: You're absolutely right. So, she spent a lot of time early on during her royal

duties meeting people in crisis, people in the prison system, or who had addiction challenges, mental health problems. And she heard them talk about

how early years had been so traumatic, those unresolved challenges. And she then spent time with some of the world's finest neuroscientists, who showed

her how the first five years of life are so fundamental to our human wiring, how we learn to deal with ourselves and to each other.

And so, she made the early years, and particularly social and emotional development, her life's work set up the center for early childhood, and

she's on a mission to share that with the rest of the world.

FOSTER: Just take us through the research that captured her there.

GUY: Well, the brain is developing an unbelievable speed between pregnancy and five, about a million connections being made every single second during

that time. And by five, it grows to 90 percent of its adult size. This is a period of profound and rapid development, and it's how we learn to

understand ourselves, trust others, make friends, manage our anger, think clearly.

And if those years start poorly and are full of trauma and adversity, it can be very hard to ever recover. You can with the right support, but then

you fast forward to people in our prison system and under real challenges, and she wants to get ahead and lead a genuine prevention revolution across

the U.K. and the rest of the world.

FOSTER: And as I understand it, obviously she went through this life changing moment and she's got to balance her work and her recovery. But she

has come into this with a newfound vigor, in a way, and an urgency. And for her, it's a global mission, and she's compared it to climate change. What

does she mean by that?

GUY: Well, that's right, she is very much back to work and very focused on making a global difference. So, we have work in the U.K. where we look at

bringing the science to life through the system. But as we look at the state of the world and some of the challenges we face, growing human

disconnection, poor mental health, loneliness, fragmented communities, division, and you look at what that science says about how important these

foundations are in the earliest years.

She wants to point people to the importance of those first five years, and to work with others to make this a truly global, urgent issue. But she

wants to do that with optimism. Ambition in partnership with others. So, it's on a par with climate because unless we tackle this properly, we'll

always be playing catch up.

FOSTER: I get the sense that she's almost creating a movement because she's connecting with this project here. I understand there'll be other

visits as well later on. So ultimately, what will this look like, do you think? And just point, just explain to me what she discovered today. It was

this was a moment today that she took away, which she didn't expect, for example.

GUY: Well, the special thing about Reggio is that it has that story of decades after the war of prioritizing early childhood. So, I think seeing

the commitment at a city level from the mayor and businesses and others to make this a priority was special. But then looking at the philosophy, the

way it uses creativity, nature, the way it lets children explore and create and develop for themselves is really special.

And I think Reggio is a key partner for us as we learn about this. But I think we now will go across the continent to find other brilliant practice,

other ways to show how you do early development well, how you build those cultures of care, that support that human development. So, this is just the

beginning, but it's a special place to start.

FOSTER: Well, we've already put a request in for the Maldives, so were trying to find you a --

GUY: Pretty some interesting requests already.

[15:50:00]

FOSTER: I will come along to that as well. Christian, thank you so much.

GUY: Thank you.

FOSTER: I'll let you go to bed if you've got another exhausting day tomorrow. Thank you for that.

Isa will be back after the break with the rest of the day's news.

(COMMERCIAL BREAK)

SOARES: One exclusive reporting, CNN is learning about secret as well as deadly operations carried out by the CIA inside Mexico. Sources tell us the

targets are alleged drug cartel members. For its part, Mexico's government is denying our reporting.

Natasha Bertrand joins us now.

And this, Natasha, this is your reporting. So, add some context here. What have you learned? And really respond to this criticism that we've had in

the last few hours from Claudia Sheinbaum, the president of Mexico?

NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: Yes. So, what we learned when we were going back and looking at the CIAs presence in Mexico

is that the CIA has had ground operators inside the country for several months now, at least, and their role has been to help track down Mexican

suspected Mexican cartel operatives and conduct lethal operations against them if necessary.

Now, the CIA prefers to engage in these kinds of operations with Mexican partners, but it's not clear that they are doing so in every instance. So

there may be some unilateral operations going on as well inside Mexico, according to our sources, this cooperation and this this mission by the CIA

has been ranging from, you know, passive intelligence sharing to more active participation in operations to go after these cartel operatives, but

broadly, the CIA has put personnel on the ground in order to fulfill that mission, something that President Trump has repeatedly said the United

States considers a priority.

Now, when we went back to see, well, what kind of operations the U.S. actually carrying out, we discovered that one of them actually occurred in

late March, when CIA operations officers inside Mexico, we are told, facilitated, an attack, a targeted assassination on one of these Sinaloa

cartel operatives who was driving a car down a highway. And the vehicle that that he was in exploded. We were told that that was the work of CIA

operatives who had helped facilitate that operation.

And so now, we are hearing from Claudia Sheinbaum, who is the president of Mexico, as you said, and she is saying that it is not true that the CIA is

operating inside the country. We should note that we did reach out to her office for comment well before publication. They did not respond. We

reached out to the CIA before publication. They said that they were going to decline to comment.

And then after we published, they released a statement saying that the story was false. But we should note this is a very sensitive subject

between the U.S. and Mexico when it comes to Mexican sovereignty, something the Mexicans are very sensitive about. They say that every operation the

CIA conducts on its territory needs to be in full coordination with the Mexican government.

That's not something that President Trump has promised to do. He has said repeatedly, including just last week, that the U.S. is prepared to go it

alone. If the Mexican government does not do more to confront the cartels, he said.

SOARES: Natasha, thank you very much indeed. I know you'll stay across the story. Great reporting there from Natasha Bertrand.

That does it for us for this hour. I'm Isa Soares. That is WHAT WE KNOW. Do stay right here. We'll have much more news after this very short break.

I'll see you tomorrow.

END

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