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QUEST MEANS BUSINESS

Trump Picks Trade Fight with Canada; Trump Drops Border Wall Funding Demand; Wikipedia Founder Tackles Fake News; U.K. Labour Party to Ditch May's Brexit Plan If Elected; Ivanka Trump Defends Father During Women' Summit

Aired April 25, 2017 - 16:00:00   ET

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


[16:00:00] PAULA NEWTON, CNN ANCHOR: Another rock and roll day on the markets. Believe it or not, consolidating those gains. How long will it

last? And does it have anything to do with Donald Trump? It's Tuesday, April 25th.

The Trump administration takes Canada to the wood shed over trade. Now the Canadian foreign minister tells me the dispute will hurt the American

middle class.

Build a wall or avert a shutdown? Quite a choice. President Trump puts off his signature campaign pledge for now.

Wikipedia is the encyclopedia anyone can edit. Right? Its founder, Jimmy Wales, tells me why he's the man to take on fake news. I'm Paula Newton.

This is QUEST MEANS BUSINESS.

It's crunch time for Donald Trump and his administration as that 100-day milestone creeps closer and closer. Right now, the U.S. president is

preparing to unveil a tax reform outline Wednesday. In that, we're expecting a major cut in corporate taxes. The number is important here. A

government shutdown looms just two days later. Trump now signaling he's willing to compromise. And the border wall could be put on the back burner

for now.

Now, on top of all of this, the administration is getting tough on trade. Not with China or Mexico. No, it's those evil Canadians, announcing

tariffs on lumber imports and warning dairy could be next. Now, despite a relatively close relationship -- that's not even exaggeration -- the U.S.

and Canada have had a bitter dispute over lumber, and I should include dairy, for decades and decades. I have been witness to all of this,

believe me, it's been going on a long time, and here we go again. Moments ago, Donald Trump said he doesn't see a trade war with Canada. But he does

say Canada's behavior must change.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: People don't realize Canada has been very rough on the United States. Everyone thinks of Canada has being wonderful,

and so do I, I love Canada, but they've outsmarted our politicians for many years. And you people understand that. So, we did institute a very big

tariff, we announced it yesterday. We're going to take care of our dairy farmers in Wisconsin and upstate New York and a lot of other places.

(END VIDEO CLIP)

NEWTON: That wasn't a message for Canada. That was a message for his base. And he is speaking to his base when he talks about trade. Now,

earlier I got the other view, the reaction from Canada's foreign affairs minister, Chrystia Freeland.

(BEGIN VIDEOTAPE)

CHRYSTIA FREELAND, CANADIAN FOREIGN AFFAIRS MINISTER: Canada and the United States have probably the most successful, most mutually beneficial

economic relationship in the world. We do $2 billion of trade every day. Americans spend a lot of time talking about China, but the fact is that

Canada is the largest client, the largest export market for the United States, twice the size of the exports that you sell to China. This is a

great, a big relationship. It is balanced.

In any big economic relationship, you know, whether it's in business or between countries, if you do a lot of business with each other, there are

going to be irritants. And that's what is happening between Canada and the United States. To give us a little bit of a sense of proportion, it's

worth bearing in mind that softwood lumber exports, that's only one of the issues, our only 2 percent of Canada's total exports to the United States.

And dairy, another issue, is less than .5 percentage point of the United States' total exports to Canada. So, these are irritants. They are

serious issues, absolutely, but we have to really not lose sight of the bigger picture, which is a strong, robust, mutually beneficial

relationship.

NEWTON: In terms of these tariffs, though, they wouldn't call them irritants, the people who were involved in this, Canada and Canadian

businesses that are involved in this. In terms of those irritants, are you prepared to fight back? Will Canada retaliate in any way, shape, or form?

FREELAND: So, softwood lumber is a longstanding issue between Canada and the United States. This is actually known as lumber 5, it's our fifth-

round of this dispute. We absolutely will defend our industry. Our view is that these tariffs, that the U.S. allegations that somehow, we're

subsidizing our industry, our view is that's simply wrong. And in the past on every occasion when we have taken the Commerce Department to court, we

have won at every level. At the WTO, at NAFTA, the rulings have always been in Canada's favor. And I'm confident that that will be the case in

this dispute as well.

[16:05:00] In the meantime, negotiations are ongoing. And I hope that we'll be able to reach a settlement. Because the thing, Paula, is that the

big losers in the softwood lumber dispute are American consumers. This is going to cost middle class Americans who want to buy a house a lot of

money. And I don't think that's a good thing.

NEWTON: And that's echoed in the stock prices of some lumber and housing companies today in the United States. Having said that, the Trump

administration is pretty clear, they don't like the dispute resolution mechanism in NAFTA. They say there are too many Canadians on the board.

They also say, they repeated it again today, NAFTA is obsolete and a mess, in their words. How does this really set you up to have a good NAFTA

negotiation if you're Canada right now?

FREELAND: Well, look. Our view is, we're a pro trade country. Canada is a trading nation. We believe our economic relationship is mutually

beneficial, great for Canadians, great for the 9 million Americans whose jobs depend directly on exports to Canada. And we know actually that

Americans really get that. When it comes to NAFTA, we are ready to come to the table any time. The United States in fact has yet to actually initiate

a negotiating process.

NEWTON: And when it does happen, it's still going to be several months away, because there's a 90-day period, understood. But Canadians might be

looking to you to say, what do we go to the table with as Canadians, when the Trump administration has been very clear, Donald Trump tweeted about it

this morning, he is using Canada as an example. Your country is in the crosshairs.

FREELAND: We really think that it's important to focus on the facts of our trading relationship. We are absolutely prepared to and we will and we are

strongly defending our producers, strongly defending Canadian jobs. We're nice guys, politeness is something that we believe is a national virtue.

But it's not an accident that hockey is our national sport. And when it comes to defending Canada's economic interests, we're going to play hard.

Having said that, I think it's really important to come back to the core point, which is this is a mutually beneficial, balanced economic

relationship. It helps American workers, it helps American consumers.

NEWTON: Before I let you go, you've just spent a few hours speaking to Ivanka Trump. I know you were at the W-20 summit. But you were sitting

right next to her. Did you discuss this at all, did this come up at all? And if you didn't discuss this, what did you discuss with her?

FREELAND: I did have a meeting with Ivanka separate from the panel. And I did raise the trade issues with her. Trade is a key issue for Canada in

the Canada/U.S. relationship. She's an influential figure, and it was important to draw her attention to it. Having said that, you know, this is

not her issue. She's not the person leading this. I had a conversation yesterday with Wilbur Ross, the commerce secretary, who is leading on this

issue. And, you know, the message I have for you, Paula, for American viewers, is, Canada is a strong, confident country. We believe that trade

is win/win. We are absolutely going to fiercely defend our national economic interests. But we know that the best result, and I actually

really have confidence in the American people, the best result is maintaining this mutually beneficial economic relationship which has lasted

for so long and helped so many people, workers, consumers, on both sides of the border.

(END VIDEOTAPE)

NEWTON: Now, that may be true, but you noted there, she said Canada is polite but hockey is the national sport, which means there will be a lot of

checking into the boards on both sides as this dispute continues.

Now, Donald Trump promised last week that there would be an announced on a tax reform plan tomorrow. Sources tell CNN he may propose slashing the top

U.S. corporate tax rate to 15 percent from 35 percent. Here is a look at how his plan compares to the rest of the world. In this is why it's

important.

Among G-7 countries, the U.S. has the highest rate, followed closely by France and Italy. The Trump administration says tax cuts will pay for

themselves by spurring growth. Experts say that is sheer and utter fantasy. I want to bring in John Kartch. He is for communications at

Americans for Task Reform in Washington. So, glad to speak to you today. So, you tell me, getting this actually paid for, which means actually

getting it through Congress, is that fantasy?

JOHN KARTCH, AMERICANS FOR TAX REFORM: No, I think it's doable. And as you teed up in the segment, the United States has a very uncompetitive

corporate tax code and that hurts wages, it hurts jobs, and it hurts economic growth. We've been stuck at 35 percent for several decades. And

the rest of the world got busy and cut their rates, we've remained stagnant.

[16:10:00] The effect is that you have a lot of nervous capital on the sidelines, and there's a great pent-up demand for tax reform to happen. So

-- and it's been so long, it's been 30 years, and tax reform is hard, which is why it's so rare. Trump is at 15. He's been at 15 for a while, since

the campaign. The House Republicans, Paul Ryan, they're at 20. So, the question is how do you bridge that difference? But the key is to drive

that rate down and unleash growth. That will throw off a lot more revenue for the government for people concerned about that. And the European

average at 19 percent now, the OECD average is at 25. We're at 35. So, we've got to drive that rate do you know to at least 20 to be competitive.

NEWTON: You know, I don't want to get into the weeds of the IRS, believe me, nobody wants to get into the weeds of the IRS, but everybody talks

about the effective rate. Will this actually be a change, will you start to see a lot more companies, a lot more cash come onshore? I mean, in

terms of your reach out, and I know you reach out to both Congress and corporations. Will that be effective at 20 as well as at 15?

KARTCH: I think 20 solves a great part of the problem. If you can get down to 15, even more. Because competition is going to continue, tax

competition will continue, you know, going forward. The other part of this that we should mention is that the United States has a worldwide system of

taxation, which means our companies are taxed anywhere they earn money. What we want to move toward a territorial system, there's an agreement

between the Trump administration and the Congress on that, so that corporate income is only taxed within our borders. There would be that one

time deemed repatriation that could throw off a lot of revenue. By the way, the one other explosive pro-growth piece of this is full business

expensing. Both the Trump White House and the Congress agree to move to full business expensing whether you're a big company or a small business.

If you buy a machine or piece of equipment, instead of depreciating it over a long period of time, you could immediately expense it. That would be

tremendously pro-growth and is a very important part of this.

NEWTON: OK, understood, and I know a lot of people are counting on the fact that it will be pro-growth and get the United States closer to the 3

or 4 percent growth that the Trump administration says it can do. OK, having said that, John, we're now in April. Are you going to put your

money on this being done? I won't even quibble with you on the percentage, 15 or 20, being done? And how soon do you think it can get done?

KARTCH: You know, it will be done and I think it will get done this year. A key part of this is health care, because you know, they got stalled on

that. The reason that's significant is if they can get that done eventually before tax reform happens, there is a trillion dollars of taxes

in Obamacare every decade. If they're able to remove that, the starting point for tax reform is $1 trillion better. If they also repealed it, it

would be a $1 trillion tax cut.

You're looking at a much better fiscal situation for tax reform if they're able to get that done in the coming weeks before they really get into the

weeds of tax reform. But I think, at the end of the day, there's such a demand for fundamental tax reform, on both the corporate side and the

personal side, that this will happen this year. Just like 1986, it was declared dead about a hundred times before it eventually came back to life

and was signed into law by Reagan. And I think at the end of this year -- by the end of this year you're going to see the same thing here.

QUEST: I'm tempted to say lost me on health care. Because you know, when you start to bring that up how far that goes. But I want to get back to

how you pay for all this. And do you think there will be short-term? What pockets of resistance do you see in this? You know, we heard Wilbur Ross

say today, deficits happen, bad deficits happen to good countries. He's saying, look, this may not be a problem. Do you agree with that? Do you

think you sell that as a tax reform advocate?

KARTCH: Well, I think, you know, spending restraint is very important. That's why the Trump administration is doing government-wide review of

everything. So that's important. On the deficit side, how much? So, depending on how much growth you can get, and remember, the government bean

counters that come up with these numbers always underestimate how much growth tax reform produces. In 2003, they underestimated by a full

trillion dollars. I think the main goal here is growth. We just need to get this done this year.

NEWTON: And you're on the record now as saying that it can get done. Thanks so much for your insights on this. I know you are really plugged in

there on The Hill and otherwise. We will wait to see the show that the Trump administration puts on in the next few weeks.

KARTCH: It going to be a fun year. Thank you so much.

NEWTON: Yes, absolutely. Buckle up. Thanks, John, appreciate it.

Markets soared on Tuesday on the release of positive corporate earnings reports, growing despite no tax reform, and growing anticipation for of

course that tax reform policy we were just talking about. Today's gains build on Monday's rally after Emmanuel Macron won the first round of the

French election. The Dow registered triple-digit gains, ending the day over 200 points higher. The NASDAQ hit a record high, crossing the 6,000

mark for the very first time. Paul La Monica joins us now. I don't want to sound breathless about this, in the sense that I still heard so much

caution. You and I were on the floor of the New York Stock Exchange, a lot of caution from traders and a lot of people pointing out the volume isn't

there yet.

[16:15:00] PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, I think that is a legislate concern, that you would like to see higher trading volume to

justify this move higher. But let's be honest, a rally is a rally and there are some good, fundamental reasons for it. It's not just election

results in France and the hope and hype of the Trump administration. Companies are actually reporting strong earnings. We're seeing it from

Caterpillar, we're seeing it from McDonald's. People are buying things. And whether or not that's because of President Trump or not, I don't think

it really matters, as long as you see sales and profit growth, that's what usually justifies higher prices, not politics.

NEWTON: And what's been so interesting is you start to see also that growth happening worldwide. So, Europe's starting to show some of that

spark. We talk about this all the time in terms of what the Trump administration can get done and what they can't. You just heard what John

was saying there. If that piece comes together, is it going to unleash a lot of that money, that mysterious money that everybody says is on the

sidelines right now?

LA MONICA: Yes, that is I think really a multi-trillion-dollar question. You look at companies like Apple, Google owner Alphabet, Microsoft, Oracle,

Cisco. They all have about 500 or so almost a billion of cash sitting overseas that's just waiting to potentially come back if you get tax

reform. Will they raise their dividend, buy back stock, which is something that investors like but may not help the average consumer? Perhaps. But

they might also buy more equipment, hire more people, buy companies. And that would be good for average consumers too. So, some people have been

talking about tax reform and repatriation of foreign cash as like a QE-4 from the Fed. That might be overstating it a little bit, but there's

legitimate reason to expect that could fuel the market even higher.

NEWTON: And before I let you go, trade war. Wilbur Ross says it's not a trade war, Donald Trump says it's not a trade war. The Canadian say it's

not a trade war. If it walks like a duck, it looks like a duck to me.

LA MONICA: Yes, I think investors are obviously, brushing off any worries about U.S./Canada relations souring. It's just a bigger issue --

NEWTON: It's just Canada.

LA MONICA: -- we have had issues with Canadian exports in the past. This isn't the first time. To be fair to President Trump, it's not as if he's

the first person to go after Canada.

NEWTON: He is the first person to make a big issue of it. I'm asking you, Paul, how much would that rattle the market, when you see a Trump

administration saying, Yes, we're taking on all comers here. We want America first and it's not rhetoric, we're going to put some might behind

that. Working to put some muscle behind that.

LA MONICA: I think America first becomes a problem if it winds up being so isolationist that every other pocket of the world, Canada, Mexico, should

be our allies, Europe, China, if everyone says, all right, enough of this, you want America first, then we'll see how I like it when we sell your

debt, for example, when we counter with tariffs of our own, because then it might be America in the middle of the road as opposed to leading the pack.

NEWTON: And America has a lot of ammunition, they're a mighty economy, but there is collaring to starting these tiffs with these countries.

LA MONICA: Yes, everyone would suffer. No one wants that. That's the big issue. There aren't any winners, that's what people say about trade wars,

nobody wins, not even China.

NEWTON: Paul, thanks very much. Can you believe it's just Tuesday on these markets?

LA MONICA: Your former guest said, it's about a good year. It's been a good year already.

NEWTON: And an interesting one. Thanks, Paul, thanks so much, appreciate it.

Jimmy Wales is digging deep for the truth, apparently. The founder of Wikipedia says he's out to do something new, something different. Yes,

he's fighting fake news, he says.

[16:20:00] (COMMERCIAL BREAK)

NEWTON: The founder of Wikipedia is launching a new website with the sole purpose, apparently, he says, of tackling fake news. Jimmy Wales claims

the news is broken and he can fix it. The website is called "WikiTribune". Apparently, it aims to offer factual, accurate information with real

evidence. Apparently, this screen doesn't want to work for me today. Let's try to keep tapping again.

OK. I'll just tell you "WikiTribune" wants to hire a team of, oh what he says are writers that will be continually fact checking. He wants to hire

professional journalists. As for paying for it, you don't have to worry about it because the adverts will keep popping up, those click-click baits

apparently, will not happen. "WikiTribune" will be ad-free he's saying with unrestricted access for all. Its goal is that it will be funded by

donations. I'm not the only one who thought, this isn't sounding so right to me. I spoke to Jimmy Wales about it and asked him how he was going to

fix the problem of fake news.

(BEGIN VIDEOTAPE)

JIMMY WALES, FOUNDER, WIKIPEDIA: My belief is that we can bring together professional journalists, responsible, thoughtful community members, to

really do something new, do something different with respect to really digging into the facts, really having a different business model so we're

not rushed by deadlines, we're not driven by ad revenues to try to get the most clicks possible. But two really just dig deep and try to find the

truth in so many different areas.

NEWTON: I guess if we're looking, though, for a competitive advantage, to call it something, what is going to be different about why you decided to

put your name and Wiki's name on this? What is so different than what news organizations do each and every hour?

WALES: This is a completely independent project that I'm launching myself because it's something I'm very passionate about. What's really different

we've never seen a website where you have traditional professional journalists working side by side as equals with the community to try to

improve the state of the news. I think that is innovative and new. Also, that we're running based on contributions from subscribers, monthly

contributors, rather than seeking ad revenue. I think that's really different as well.

NEWTON: It's almost as if you have everyone who is in a competitive medium suspicious somehow, as if they're putting out fake news.

WALES: No, I don't think so. I think there's many fantastic news organizations. It's been really exciting to see in the last year or so the

number of people who have been willing to pay for subscriptions to quality newspapers and magazines has really skyrocketed. I think that is a

positive sign, that the public is really ready to say, hey, actually we want quality journalism, we want really solid information.

NEWTON: Yes, and I guess my point is that some people go back to that old adage, you get what you pay for. Your model is completely different. If I

talk about impact, when you decided you were going to do this, what do you think the impact is going to be to use a frame of reference for the next

election campaign in the United States in four years?

WALES: Well, I mean, what I would like to see, not just from "Wiki Tribune," but from the broader media, is to regain the trust of the public.

The latest trust barometer survey showed that trust in the media has fallen down to the level of trust in politicians, which as we know is very, very

low. I think the media deserves trust. And we have to really work hard to get back to trust. And a lot of that has to do with going back to old

fashioned values, that you get what you pay for. It has to go with showing your work, prove what you're saying. You don't publish all of your source

materials online, transcripts of interviews, everything you can do to show the public that hey, we're not making this stuff up, this is actually

facts. That's I think, really the best approach we can take.

(END VIDEOTAPE)

NEWTON: Interesting media venture. We'll continue to watch it. Because Wikipedia has its own problems. As many of you know, with its own accuracy

online. That's what happens when you have a democratic process going online to give you your information.

For many of us, the term Silicon Valley has come to embody everything related to technology and entrepreneurship. In today's segment of "Made in

Malaysia," we'll hear from the people driving innovation in emerging markets.

[16:25:00] CNN's Richard Quest introduces us to Malaysian internet entrepreneur, Patrick Grove, to hear about how he's transforming mobile

entertainment.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN ANCHOR (voice-over): This is Patrick Grove. Officially he's the founder of Catcha Group, a Malaysian-born internet conglomerate.

It has over a billion dollars of assets. In reality, it's an internet pioneer. One of Asia's prolific entrepreneurs.

PATRICK GROVE, CEO AND COFOUNDER, CATCHA GROUP: The Internet is the greatest platform or medium to build a high-growth business. In the

history of the civilization of man, more important to us is that we believe that Silicon Valley doesn't have the global monopoly on the idea iteration

or the creation or execution of great digital businesses.

QUEST: Patrick Grove is making a statement. He wants the world to know that Southeast Asia and Malaysia in particular can breed innovation. And

the most public example is in the Catcha portfolio. It's an on-demand video subscription service.

GROVE: This is the iflix playground.

QUEST: It's called iflix. Sounds very familiar.

(on camera) You're weary of being described as an Asian Netflix. Your eyes will roll. The mouth will froth and once again you will say that's not

true.

GROVE: Correct. That's not true. Most people in emerging markets they don't have big screen TVs in their living room. But they all have a

smartphone. And if they don't have a smartphone, they're going to get one in the next 12 months. The smartphone has become they're primary

entertainment device. So, when I look at what we're doing, it's that we're redefining, we're not redefining TV. We're redefining mobile

entertainment.

QUEST: Why does that make a difference?

GROVE: The connectivity speeds that you have in emerging markets are very different to what you would take for granted in the first world. So, one

of the things that we've done, is that we now have the ability to deliver high def on a mobile at compression rates and speeds that are amazingly

low.

QUEST (voice-over): In two years, iflix has gained over 5 million subscribers in the region, usually charging about $2 or $3 a month. And

true to their mobile first model, you pay through your cellphone bill. Innovation and Malaysia. Groves has been involved in launching what's

aptly called KL Internet City. It's an attempt to create a dedicated area prioritizing internet entrepreneurs. Silicon Valley is the model.

GROVE: OK, let's do this. If you win, I'll wear your tie for the rest of the day.

QUEST (on camera): Oh, god. Most unfair.

(voice-over) This is all very high tech. For me there's always room to go back to basics.

GROVE: That's an antique. That's like three years old.

(END VIDEOTAPE)

NEWTON: I was really tempted to call Richard an antique. But hopefully, he didn't hear me just say that.

Next, Brexit is hanging in the balance as the U.K. prepares for a snap election. The British opposition party says it will guarantee the rights

of millions of you citizens living now in the U.K. if it wins the June vote.

[16:30:00] (COMMERCIAL BREAK)

NEWTON: Hello, I'm Paula Newton and there's more QUEST MEANS BUSINESS in a moment.

When the U.K. Labour Party lays out its vision for Brexit.

And booed in Berlin, Ivanka Trump responds to audience jeers. Before that though these are headlines this hour.

CNN has obtained a letter showing the White House declined to provide documents related to the former national security adviser that had been

requested by a house committee investigating Michael Flynn. A White House aide is disputing that, saying the White House could not provide documents

they didn't have access to.

Eight people were arrested in Brazil Tuesday in what police call the robbery of the century. It happened Monday in Paraguay. About 50 people

armed with weapons, explosives, and road spikes stormed a private security firm and stole a million dollars from several vaults. Three suspects and a

police officer were killed during that shootout.

In France, the two remaining presidential candidates are ramping up their campaigns ahead of the May 7th runoff. Marine Le Pen visited a food market

in Paris. Emmanuel Macron has been criticized for acting as if he he's won the thing, but he says he's taking nothing for granted.

The Chicago Aviation officers who left the United Airlines passenger bloodied and bruised after forcibly removing him from a flight earlier this

month are presenting their version of what happened. The officers filed incident reports describing passenger David Dao as combative, violent and

aggressive. An attorney calls the report that he was violent and combative "utter nonsense."

In the U.K., the Labour Party is promising a new Brexit strategy if it wins June's snap election. No, it still will go on with Brexit. The party

says, though, it will ditch prime minister Theresa May's plan for a hard Brexit. Instead it would guarantee those from the EU living in Britain the

right to remain and would be open to retaining the benefits of that single market. Mrs. May has said she wants a clean break from the EU. Our guest

is a Labour MP, one of the few from her party to actually support Brexit. We have to say, while you might be one of the few from your party, many,

many, many labor supporters, a vast majority of labor supporters voted for Brexit, right? So -- go ahead.

KATE HOEY, BRITISH MEMBER OF PARLIAMENT, LABOUR PARTY: Yes, I was going to say that there weren't many members of parliament who supported Brexit.

But in the country, there were a lot of Labour supporters.

NEWTON: My point to you is I would venture to guess that when you are going through this election campaign, you're on the doorstep, those Labour

supporters, you say, no, we did not vote for soft Brexit or anything that looks like capitulating to the EU, we voted for a clean break. How do

those Labour proposals represent a clean break?

HOEY: I think our spokesman today has done a very good job in really doing something that can unite our party. There's no doubt about it, the labor

party was split on the issue of leaving the EU. We had many people in the north of the country who were very supportive of leaving. And yet in

London, many people wanting to stay, even in my own constituency there were a majority who wanted to remain. I think what he's come up today with is a

very clear view, particularly on EU citizens. That is something that everyone felt very strongly about. But it wasn't felt appropriate to put

that into the legislation to trigger the article that was going to allow the negotiations to start. So, I think there will be an acceptance. I

think the most important thing is that Labour has not followed the liberal Democrats in saying that we want another referendum.

[16:35:00] We accept the verdict of the British people that we're going to lead, and now it's about what country we want the United Kingdom to be when

we do leave. And our vision of labor values and emphasis on trade union rights and social responsibilities. Those kinds of things that distinguish

the Labour Party from the conservative party who are in government at the moment.

NEWTON: Again, how do you know? Because the polls show otherwise, that your supporters actually don't want that, that what you're talking about is

basically the same as staying in the EU. And more to the point, if you're already saying that you are willing to give those EU citizens the right of

residence and residency in the U.K., are you giving up that as a bargaining chip?

HOEY: There's a very clear view that obviously, we want to protect our British citizens who are living in the other 27 EU countries. But I think

by what our spokesman was saying today and what we're saying will be in our manifesto is of course a kind of moral -- something that's morally right.

And are we really going to see those other Democratic EU countries actually turning around and saying, well, we're not going to let your citizens stay

here? This has been one of those kinds of things that people have talked about but we all know it's going to be settled. I would say that there are

-- the thing about these hard and soft Brexit's, the words, they were really brought up by the media, I have to say. People who voted to leave

the European Union knew that that meant they couldn't be members of the single market. But what we want to be able to do is to have as much access

to that single market as possible, because that's also in the interests of the other EU countries.

NEWTON: But I think Labour supporters would agree they want the access, they don't want the strings attached to that access. Obviously if --

HOEY: No --

NEWTON: -- if we could have our cake and eat it too, we would. That's not the way the negotiation will go down.

HOEY: We don't know because it hasn't actually started. You're right in the sense that if you were a full member of the single market, you would

have to accept freedom of movement. That was something that was clear in the referendum, that we wanted to have control, not necessarily because we

wanted to stop people coming to the U.K. or to even reduce the numbers that are coming, but to have the control of who was coming. So, having access

to the single market, you know, Germany and many of the other EU countries sell so much to us as well, they want a relationship. There's no reason,

honestly, there really isn't a reason why with goodwill we shouldn't be able to get a good deal that's good for us and good for the European Union.

Because we'll continue to be friend with the rest of the EU and we hope they will want to be friends with us.

NEWTON: It's all true, of course, but also the EU saying the deal can't be that good or we might have more people leaving. I have to leave it there.

HOEY: That's true, I think they're worried, the EU is worried it's going to have to change fundamentally.

NEWTON: We all await the verdict of the election in June. Thank you.

Boos in Berlin. Ivanka Trump gets a chilly reception while defending her father, next.

16:10:00] (COMMERCIAL BREAK)

NEWTON: With the world's most powerful woman leader. Angela Merkel welcomed the U.S.'s first daughter in Berlin for an empowerment summit.

But the feeling from the crowd let's just say wasn't warm and fuzzy. She was forced to defend her father on women's issues.

(BEGIN VIDEO CLIP)

IVANKA TRUMP, DAUGHTER OF PRESIDENT TRUMP: He enables women in the new reality. I certainly heard the criticism from the media.

(END VIDEO CLIP)

NEWTON: Kate Bennett is in Berlin for us. I have to say, it is a difficult thing to keep composed there, you're defending your father and it

happens to be the president of the United States and you also work for him. She definitely maintained her composure. What's at work there, and is she

ready for all this? It's going to be at least four years of this.

KATE BENNETT, CNN CONTRIBUTOR: I mean, today was an interesting test. This was her first real appearance on a global stage. She was at a panel

at a women's empowerment summit with the G-20 countries. She was onstage with Angela Merkel, with Christine Lagarde of the IMF. This is a

formidable panel, that is sort of a beginner trial by fire to get her toe wet in this global atmosphere. She was prepared. She discussed the cause

apparently closest to her heart which is women's empowerment, women working, how to support female entrepreneurs, et cetera. You're exactly

right, in this one moment when she mentioned how her father is a champion of American families, that's when the crowd sort of turned, they started to

hiss a little bit and do some booing. The moderator said, hey, let's address this. This could be an example or hint about what it might be like

as she becomes a real vital component to her father's administration and a surrogate for him abroad.

NEWTON: So how effective can she be when you know what we heard in berlin is echoed throughout the United States, you know, and some people have been

saying so quite loudly.

BENNETT: I think she's very focused, right, Ivanka Trump is one of the most thoughtful members of the Trump family writ large. Her way, her

mannerisms of dealing with things, especially controversy, vary vastly from her father's. She's very measured, she's very controlled, she's very

thoughtful about what she says. Listen, the task is on her to try to push forward her father's agenda throughout the world, it looks like, and not

just sort of stay back in the White House and be his whisperer, as she was called on the front page of a berlin newspaper. But now she has a real job

inside the west wing, officially a government employee although not taking a salary. She is one of her father's top advisers. Time will tell. She

said today, look, I'm new at this role too. She was asked to define exactly what it is she does, she said, I'm new at this, this is unfamiliar

turf for me as well. I think she's asking for leeway as this unprecedented role unfolds.

NEWTON: Some would say there are other more qualified women who could do it without leeway. Thank you, Kate.

The White House says the president is willing to wait until later this year or, wait for it, 2018. Mr. Trump spoke a short time ago.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: The wall is going to get built, folks. In case anybody has any question, the wall is going to get built. The wall is

going to stop drugs and it's going to stop a lot of people from coming in that shouldn't be here and it's going to have a huge effect on human

trafficking which is a tremendous problem in this world.

(END VIDEO CLIP)

NEWTON: All right. CNN political director David Chalian is live for us in Washington. Look, 100 days on Saturday, right?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Mm-hmm.

NEWTON: That's what all of this is about. Let's get first to the whole issue of the wall, you know how that plays to his base, you tell me that

all the time.

CHALIAN: I do.

NEWTON: How much of a compromise was this?

CHALIAN: Let's see where it ends up. We don't have a clear sense where it's going. What happened here was, he mentioned, as you just said, to

conservative media last night in the White House initially, saying, you know, maybe I can't get it in this year's funding bill or the remaining

part of this bill, we'll get it in next year's funding bill, so it will be a fight in the fall. His aides go out and start talking to reporters and

saying, we're not going to shut down the government over this, we'll get border security money, maybe not wall money per se, we'll move on and have

this fight another day.

[16:45:00] All the news coverage Donald Trump wakes up to is "Trump caves on wall promise." He could not stomach that. He came back out today and

said, no, no, I want wall money in this bill. Now he's going to complicate negotiations again. Nobody is suggesting the government will shut down in

the United States over this. But they'll now have to find in the next 48, 72 hours some sort of fig leaf this president Trump thinks will save face.

This will be the fight, over funding the wall, which as you know he says Mexico is still going to pay for but Americans will have to foot the bill

first.

NEWTON: Maybe somehow, he can get Canada to pay for it, he seems to be taking a lot of shots at them. Wilbur ross says we're not in a trade war

with Canada. This fight over softwood lumber duties is not as old as me, but almost. Canada can take it, Canada is going to be like, OK, we knew

this was coming.

CHALIAN: You remember him on the campaign trail, trade was the crux of the case he was making to white working class voters across the Midwest in this

country and why he had these victories in places that were unexpected, like Pennsylvania and Wisconsin and Michigan, because he was saying, the trade

that the U.S. has been doing, specifically let's say NAFTA with Canada and Mexico, has been hurting your paycheck, your jobs are being affected, your

communities are being affected, we're going to get better deals. That's what he's promising. That's why I have no doubt that Canada expected tough

talk on this from the Trump administration.

NEWTON: And the point, though, is moving beyond the tough talk, what you're saying is that, look, Wisconsin, Michigan, Pennsylvania, what do

they all have in common? He didn't take them by too much.

CHALIAN: Those were the states that put him over the top, no doubt about that. He clearly wants to show that even if he can't say I've delivered,

let me go to the rose garden and check my checklist for the first hundred days, when he can show his core supporters that polls show is still with

him, that he's fighting for them, he's making the effort.

NEWTON: Feel free to detour this conversation if you think -- look, I was at the New York stock exchange today, everybody is talking fax reform,

everybody is talking corporate tax rate. This is a real thing, where we're going to get that compound growth and Steven Mnuchin can come out and say,

I told you so, its fuzzy math.

CHALIAN: Did the folks you talked to think we could get a corporate tax rate?

NEWTON: Yes, but I think they believe in the tooth fairy.

CHALIAN: Here is the deal. This is what I find so complicating. He's going to have to fight both his own party and the Democrats on this.

That's never a good place to start. But the idea of getting the corporate tax rate down to 15 percent is going to blow a huge hole in the deficit.

The Trump administration doesn't seem to care about that. Speaker Ryan does care about that. That's the battle with the Republicans. Now, sorry

to use this noticed term here, but through the process by which that they are going to try to do tax reform is called reconciliation, you may recall

that from talking about health care, it's specific budget rules. You know what you can't do through reconciliation? Have something that's not

revenue neutral. If they're going to blow a hole in the deficit, they need 60 votes, not 51. Where are eight Democrats coming to vote with President

Trump?

NEWTON: Nowhere to be found, maybe in Canada. You of laid I you laid it out well, he's not going to be able to do it. You're coming back, David.

President Trump says North Korea needs to behave. North Korea sees things differently. The military staged a large-scale artillery drill to mark the

founding of the country's army. No word what kind of weapons were used. The show of force coincides with joint exercises held by the U.S. and the

South Korean militaries. CNN's Will Ripley is there and joins us me live. Will, going back to what's been on display here, more saber-rattling from

North Korea. But how much more significant is it, the fact that they had this artillery drill. In order to cause harm, we don't need to use any

kind of nuclear weapon.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: A lot of analysts believe in the short term North Korea's conventional weapons such as the long-range

artillery they were testing not too far from the DMZ, that dividing line between north and South Korea, these weapons have the potential to do more

harm, do more damage. North Korea's nuclear weapons are a greater threat of course in the long term.

[16:50:00] Those weapons are still under development. We could learn more about the specific kinds of artillery when North Korean state media we

which will release images of the artillery drill. South Korean intelligence says there were hundreds of North Korean soldiers involved.

They believe North Korean leader Kim Jong Un was overseeing this as well, which coincided with the major army day, the 85th anniversary of the Korean

people's army.

NEWTON: Will, you were there a little while ago. Now you're back. In terms of what North Korean officials are telling you behind the scenes, how

did they view this whole situation with the United States right now?

RIPLEY: The tone that I always hear in Pyongyang is one of confidence in their leader's direction. I've asked repeatedly if people feel that North

Korea is headed down a dangerous path and they say that's a ridiculous. Granted, this is an authoritarian country that opposes critical voices.

People were out dancing, celebrating army day, soldiers in uniform were smiling and relaxed and seeming to have a good time. If you talk about the

heightened tensions, everybody says, because keep in mind not only are there a million in the standing army in North Korea but there are 6 of

million in reserves in paramilitary, they say they will go to battle today if they need to, if they're called to duty by their leader.

NEWTON: And it's what makes this entire situation so complicated. Our Will Ripley in Pyongyang for us, we appreciate it.

NEWTON: Up next, row upon row of clothes as far as the eye can see. We'll take you to a massive secondhand market in Nigeria. Where the garments

come from might surprise you. Stay with us as we focus on Nigeria.

(COMMERCIAL BREAK)

NEWTON: Nigeria is an oil-rich country. It is trying to pull itself out of recession. Thousands of citizens flock to a massive second-hand

clothing market where the country's entrepreneurial spirit, you can see it now, is alive and well. Eleni Giokos takes a firsthand look.

(BEGIN VIDEOTAPE)

ELENI GIOKOS, CNN AFRICA CORRESPONDENT: This is where thousands of Nigerians go each day in hopes of finding a bargain. Bales upon bales of

secondhand clothing are delivered to this market from all over the world. Many of these garments were donated to charities and shipped overseas in

massive containers. If you look closely enough, you can have your pick of high end brands. Where are these clothes from, do you know?

[16:55:00] UNIDENTIFIED FEMALE: From London.

GIOKOS: The size and scope of this market is staggering. Block after block, stall after stall, as far as the eye can see. And despite the

fierce competition from fellow merchants trying to catch the attention of shoppers, they insist they make a good living. How's business, how are you

doing?

UNIDENTIFIED MALE: Beautiful, beautiful.

GIOKOS: Are you making money, are you good?

UNIDENTIFIED MALE: Yes, making money.

GIOKOS: Traders here told us their profit margins are as high as 50 percent, depending on the quality, grade, and point of origin. Importers

sell a 55-kilogram bale for $260, traders then add another 30 percent before it reaches the consumer. Even with a markup, Nigerians say it's a

great deal. Why do you prefer this clothing?

UNIDENTIFIED MALE: Cheaper.

GIOKOS: Why do they come here, because of quality or fashion? This is just one of many such markets across Nigeria. The fear is they decrease

demand for locally manufactured clothing. But for the Nigerians who come here -- why do you come here?

UNIDENTIFIED FEMALE: I want to look fine.

GIOKOS: These hand-me-down clothes are truly the pinnacle of style. Eleni Giokos, CNNMoney, Nigeria.

(END VIDEOTAPE)

NEWTON: This week we'll be live from Nigeria. Richard Quest will speak to business leaders to hear what's next for Nigeria in the race to be Africa's

most dynamic economy.

If you missed any of tonight's QUEST MEANS BUSINESS, you can download the show as a podcast, available from all the main providers, or listen to it

at CNN.com/podcast. I'm Paula Newton in New York. The news continues right here on CNN.

END