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QUEST MEANS BUSINESS
Trump Fails to Seal Deal on U.S. Health Care; Do Mayors have a Global Role; Venezuela Hits Back at U.S. Threats; Jane Austen Stars on British Banknote. Aired 4-5p ET
Aired July 18, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] ZAIN ASHER, CNN HOST: That deafening round of applause -- really sort of energetic round of applause. Let's take a look and see how
the market did. Come over here for second. Really not a sliver of green. We were solidly in the red pretty much all day, ending the day down 52
points. Healthcare stocks a major drag after Republicans failed in their second attempt to essentially repealing and replace Obamacare. Goldman
Sachs stock down as well after the essentially disappointed on the bond trading aspect of their earnings.
It is Tuesday, the 18th of July. Tonight, the art of the deal eludes U.S. Republicans as healthcare falls by the wayside. Venezuela tells the United
States to back off after Washington threatens new sanctions. And Jane Austen's newest publication will only cost you a tenner. Meet the new face
of Britain's 10-pound note[MT1].
I'm Zain Asher and this my friend is QUEST MEANS BUSINESS.
All right, welcome to all of you at home. I'm Zain Asher. Tonight, President Trump is battered by a failure to deliver on a key campaign
promise. A new development in the investigation into his campaign's ties to Russia. On Capitol Hill, the Republican senators have put plans to
repeal and replace Obamacare on hold. This is essentially after 7 1/2 years of promising they were going to do just that. They essentially fail
today. Meantime, the Senate Judiciary Committee, meanwhile, has gotten clearance to publicly interview Donald Trump Jr. and Paul Manafort about
their meeting with the Russian lawyer. That's according to the ranking member of that committee, Dianne Feinstein.
And CNN has identified the eighth person who was in that much talked about meeting, Ike Kaveladze is a senior vice president at the company founded by
the Russian oligarch who initiated the meeting. The White House had complained that the Russian investigation detracts from the President's
economic agenda. Well the agenda is certainly very much in trouble.
This was plan A. Plan A was to repeal and replace Obamacare in one go, and one fell swoop. That was derailed on Monday night as to Republican
senators joined their Democrat colleagues pledging to vote against the bill. It certainly caught the White House by surprise. I guess is now to
plan B. Repeal now and replace later. That also ended up stalling on Tuesday when three Republicans publicly oppose that idea as well. And now
the President has said he's moved on to plan C. Let Obamacare collapse on its own and put the blame squarely on Democrats. Take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Let Obamacare fail. It'll be a lot easier. And I think we're probably in that position where we just
let Obamacare fail. We're not going to own it. I'm not going to own it. I could tell you the Republicans are not going to own it. We'll let
Obamacare fail and then the Democrats are going to come to us and they're going to say how do we fix it? How do we fix it? Or how do we come up
with a new plan? So, we'll see what happens --
(END VIDEO CLIP)
ASHER: So, let Obamacare fail and you know, we'll see what happens. Hopefully Democrats will come on board. That is what the President is
Investors look like they are losing faith in the President's ability to do all the various things he has promised. The failure of the healthcare bill
help push the Dow down. At one point at more than 150 points. That was around 10:00, 11:00 a.m. local time this morning. It's since bounced back
from that low ending the day down about 54 points or so. The dollar index fell to its lowest level in about 10 months. The index values the dollar
against a number of major currencies. Now the failure of this bill is a huge blow to President Trump whose books, TV shows and campaign appearance
all touted his unmatched, unrivaled ability to make a deal. This is what he said back in February of last year, take a listen.
(BEGIN VIDEO CLIP)
TRUMP: A good dealmaker will make great deals. But will do it the way our founders thought it should be done. People get together, they make deals.
Ronald Reagan did it with Tip O'Neill very successfully. You didn't hear so much about executive orders if you heard about it at all. You have to
be able to get a consensus. With Congress, you have to get everybody in a room and you have to get them to agree. But you have to get them to agree
what you want. And that's part of being a dealmaker. You can't leave the White House, go to Hawaii and play golf for three weeks and be a real
dealmaker. It doesn't work that way. You have to get people in. Grab them, hug them, kiss them, and get the deal done. But it's got to be the
deal that you want.
(END VIDEO CLIP)
ASHER: Love them, hug them, and kiss them and get the deal you want. Obviously, President Trump has touted himself as an enormous dealmaker.
Now six months into the Trump presidency he has only one major success that is technically the results of deal making. And that is the nomination of
Neil Gorsuch as a Supreme Court Justice. He of course replaced, of course, Antonin Scalia.
[16:05:00] Other achievements largely the results of executive actions. For example, withdrawing from the TPP. We all know that Donald Trump hates
these sort of massive multilateral trade agreements. Also, restarting oil pipelines, that's something else he has achieved because of executive
actions. In terms of other promises that have more or less stalled or that are sort of in the works, promises on climate, at taxes and infrastructure
and ISIS are right now in progress. Obviously, the Iraqi army has retaken Mosul, but defeating ISIS is still in progress, as is tax cuts and
Donald Trump has somewhat stalled in other various areas that he has laid out, so, for example, building the border wall with Mexico that he vowed
that Mexico was going to pay for that wall. That has not happened. Halting Muslim entry in December 2015, he promised a total and complete
shutdown of Muslims entering the United States. He has a travel ban in the works, but that promise is pretty much null and void.
And lastly labeling China a currency manipulator. That was one of his key campaign promises when it came to trade. China is not a currency
manipulator. So, that promise has fallen short as well.
Joining me now is Tim Naftali, CNN's presidential historian. So, it's interesting, Tim, because Donald Trump has boasted the fact that he is a
dealmaker. He can certainly get things done. Where was that Donald Trump about the whole healthcare debacle? What are your thoughts?
TIM NAFTALI, CNN PRESIDENTIAL HISTORIAN: Well, just because you're a dealmaker in the private sector or a dealmaker in a narrow segment of the
private sector, the real estate market, doesn't mean you know how to be a dealmaker in Washington D.C. or any capital. One of the things that
Donald Trump assumed, at least based on his rhetoric, was that A, all the skills that he had transferred directly. And B, that the people in
Washington were all stupid.
ASHER: But Tim, it wasn't just Donald Trump that assume that. A lot of people who voted for him assumed that as well. They thought well he's ran
a successful business in the private sector. Surely those skills must be able to be transferred to Washington as well.
NAFTALI: I believe that this is a problem not just in the United States but around the world. That we have discounted and undervalued public
administration period. We all assume that any idiot can be effective in government. And that the people we have in government are all stupid and
are all working simply for themselves. We aren't encouraging, A, people to go into government the way we use to. We're not training people to go into
government. We don't have the respect.
I'm not saying government is always right. It isn't. But we've gone to the other extreme. So, a lot of Americans like folks in other countries
thought that it didn't matter what training you had. That if you promised results and you weren't tied down by political corruption let's say, that
you could make it all work. And now are seen that it's not only difficult, but Donald Trump's governing philosophy doesn't unify his own party. He
can't get his own party --
ASHER: With or without Donald Trump the Republican Party is incredibly fractured. It's impossible. I really think it's almost impossible with a
healthcare bill like this to actually find a healthcare bill that pleases both the conservatives and the moderates as well.
NAFTALI: Absolutely. And the way to do it is the way to do it always in Washington with power, with sway. If Donald Trump's numbers, if his
popularity numbers weren't in the tank, then he could actually scare a lot of Republicans to come on board and to identify with a Trump care program.
But he doesn't have the sway he had. He's not only in trouble because of the Russia probe, but he's not delivering on his other promises as you've
just mentioned. So, Republicans who might have not sat on the fence don't see the advantage of embracing his approach.
There's no question that in the campaign Donald Trump forced Republicans to embrace the replace. The Republicans always wanted to repeal Obamacare for
example. It was the replace Obamacare which was not something all of them signed onto. Donald Trump made part of his mandate if he got anyone to
deliver the same benefits that Obamacare delivered, but at a cheaper cost. And Republicans figured out they can't do it.
ASHER: You know, one question that I have, is have we -- as a presidential historian you'd be perfect for this question. But have we ever had a
situation whereby one party controls the White House, they control the Senate, and they control the House as well, and yet within the first six
months one of their major main campaign promises has completely stalled. When was the last time we sell that?
NAFTALI: In the Carter era, President Carter did not have a successful presidency. And yet his party -- the Democratic Party -- controlled both
Houses of Congress. So, you can have what historians would term and what many Americans would term a failed presidency while you control both
executive and legislative branches. What's really unusual about this is that a successful nominee, a President, a presidential nominee was unable
to pull together a governing coalition in his first six months.
[16:10:08] Now Ronald Reagan -- came first eight months. Because Ronald Reagan came into office and he forced Democrats to support tax cuts in a
way that they never would have before. And why did he do that? A, because he reached out to some Democrats. He wanted to build a bipartisan
coalition. Donald Trump from day one has never tried to give an olive branch to the Democrats. He has been so sectarian focusing largely on his
base that he's never given Democrats an opportunity -- what we would call sort of Blue Dog Democrats, centrist Democrats -- a reason to work with
him. Ronald Reagan did it and he passed his tax cut proposal, which was a signature piece of legislation in his first year. I don't see how Donald
Trump does it without having Democrats on his side.
ASHER: He probably should have started with something a little bit more bipartisan, for example, infrastructure. That probably would have been a
little bit easier. But I do have to leave it there.
ASHER: Good enough, that was a really riveting discussion. Thank you so much.
NAFTALI: Thanks, Zain.
ASHER: The President says Democrats will come -- to your point by the way -- the President says Democrats will come crawling back when Obamacare
fails. CNN's Ryan Nobles is tracking all the developments on Capitol Hill. So, what I'm interested in, Ryan, just explained this to our international
audience, essentially what happened is that you had to Republican senators who said, listen, we cannot vote for this bill. They did it together.
They pulled out together. Completely caught the White House by surprise because they didn't want to be the ones who are blamed for that third no
vote. Walk us through that.
RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Yes, that's what happened last night where you had already two senators that were opposed to the repeal
and replace bill in its current form. And then you had to additional senators jump on board. And that was enough to push the bill to the brink
and essentially make it dead on arrival. So, with those for senators out of the mix, then you had Mitch McConnell come back and say to his caucus,
let's instead passes bill as a repeal only and worry about the replacement later. Well, no sooner than he had uttered those words on the Senate floor
this morning and three Republican senators stood up and said that they could not vote for that form of the bill either.
So, everywhere he turns Mitch McConnell is running into roadblocks. Regardless today he said he hopes to plow ahead and find a way to get his
Republicans all on the same page when it comes to solving this healthcare problem that they find. The problem, Zain, is that you know, he has
moderates on one side and conservatives on the other side, and when you put something in the bill that makes conservatives happy that turns the
moderates off and vice versa. So, it's really an untenable position and it's hard to see the path forward.
ASHER: So, if it's hard to see the path forward, as you say, I mean, when, if at all, when would be a good time for Republicans to at least try to
revisit this bill. What are your thoughts on that?
NOBLES: Probably what we're going to see happen, maybe even as soon as tomorrow, and this will be a remarkable development if it happens.
McConnell will put the bill on the floor for an up or down vote to move to the debate process. And if that fails, you know, it's rare that a majority
leader would put a bill on the floor that he knows is going to fail. If that fails that essentially puts them back to square one. And so, what
they're going to have to do is come up with some sort of a new plan. Essentially start from scratch. And at that point could you then maybe see
some sort of bipartisan effort to fix Obamacare in its current form. Which you really could still overhaul Obamacare.
There are some Democrats who feel that that needs to be done. But still essentially make it be the Affordable Care Act, and keep in some key
components that make the bill as it is. We know next week when Lamar Alexander who is the chairman of the health and education committee, he's
actually going to start to hold a hearing on the individual insurance market. Now this is something that the critics of the Republicans have
said should've happened a long time ago. Bring stakeholders into a room, have them say what should and should not be put into the bill and start the
process him scratch.
The problem with that though, Zain, is that the president is right when he says that there are fundamental flaws with Obamacare and those need to be
fixed right away. Some stabilization needs to be brought into the insurance market. And there doesn't appear to be any appetite by
Republicans to address that problem right now.
ASHER: So, Ryan, I do want to ask you a more sort of political question in terms of the future of certain senators politics or staying in power
rather. For the House members who voted for this bill, essentially voted for this bill for nothing, what happens to them come 2018? What are your
thoughts on that?
NOBLES: Yes, I mean, that's the biggest problem that many of these House members are waking up with this morning. They took a tough vote for
speaker Paul Ryan hoping that at the end the two sides were going to be able to come up with some sort of a palatable bill that they can then sell
to their voters in 2018. And instead, they just took a bad vote for a piece of legislation that only 16 percent of the American public thinks is
a good idea.
[16:15:00] You can bet the Democrats are already writing their attack ads for the 2018 midterms and are prepared to beat these Republicans over the
head with it. They believe that they've got a real shot at taking back the House. The Senate is going to be a much bigger problem. But Zain, the
political reality is, you know, even though it's been so difficult for Donald Trump to get anything done with Republicans, if Democrats to control
the House he's not going to get anything accomplished.
ASHER: You can say that again. All right, Ryan Nobles life for us there. Thank you so much, appreciate that.
From Washington to Wall Street might have chaos, was not the only reason for today's drop on the Dow. We'll tell you why. We'll tell you why else
the Dow was down after the break.
ASHER: Welcome back everybody. Trading has come to a close on Wall Street. The NASDAQ ended the day at a new high boosted by a 13 percent
rise in Netflix stock. For earnings give and take, the Dow actually closed down about 55 points. It was down actually nearly 160 points at its low
around 11:00 out time. Goldman Sachs was actually the biggest drag. The shares sank after pretty disappointing earnings report. I'm going to bring
in Peter Tuchman who is a floor broker at Quattro M. Securities. So, Peter, it's interesting because bank stocks -- can you hear me, Peter?
PETER TUCHMAN, FLOOR BROKER, QUATTRO M. SECURITIES: I can hear you. Hi, how are you?
Great. So, it's interesting because bank stocks have really led the charge since Donald Trump got elected. But now especially as we start earning
season, we're seeing a bit of a shaky start for a lot of banks during earning season. Just walk us through that. What's change?
TUCHMAN: You know what, it's really hard to know what change. I mean, Goldman earnings came out of their lack of revenue in the bond market.
That seemed different than some of the other descriptions of what the problems were with earnings last week. Even though J.P. Morgan blew them
out of the water. You know, Goldman Sachs can be a huge factor in the market on any given day when news comes out or on earnings day. Goldman
just carry such a heavyweight just in the perception that is Goldman. That they have such a presence in the market. That they have such a weight in
So, today, I think, obviously, the low end of the day down 160 was definitely caused by Goldman. Some of the other banks sort of fell just
because they're banks. But incredibly enough what I think is really important to say was the S&P closed at an all-time record high. Every few
times -- and there've only been a few since the election -- that we've seen a big selloff in this market. If you look at the S&P chart on the day it
goes from a very low bottom left to a very high upper right. So, there are people sitting around, no matter what, today it wasn't in the banks, but it
was in some of the other sectors. We surely saw it in Netflix. They have a shopping list and they're ready to buy on any discount.
ASHER: What's interesting that you and I have talked about the fact that this market is just going up and up and up, and they're not necessarily
paying attention to what comes out of Washington.
[16:20:01] But today must have been slightly different. Obviously, the repeal and replace effort for Obamacare essentially failed and that must
raise some red flags about Donald Trump's pro-growth agenda. What are your thoughts?
TUCHMAN: Absolutely. I think that the market is sort of sloughing off headlines in a big way. It's not reacting to the daily tweets and whatnot
like it may have in the beginning. But net-net when the agenda of our president is put into question it's definitely weighing on the market.
We've seen that over time a couple of times. You know, last week in fact, when they pushed off the August recess and then we've had questions about
the bank regulations and tax stuff. When the agenda is put in question the market reacts to it.
Now, at the end of the day do they slough it off by the end and by the market back, absolutely. Did the Dow go from 160 on down and only closing
down 50? Yes. Did the S&P closed at an all-time high? Yes. So, the reactions tend to be short-term, but at the end of the day when the agenda
is put in question and when we saw with Donald Trump Jr., when we look at the accusation going to almost the attack of criminal intent, the market
ASHER: Yes, you bring up a good point, but even though there was a lot of headwinds politically today and with bank stocks, the market still actually
closed down only 50 points. That was a good point you mentioned.
TUCHMAN: And the S&P closed at an all-time record high.
ASHER: Right. Peter Tuchman live for us there. Have to leave it there, thank you so much. Appreciate that.
TUCHMAN: Great to speak to you.
ASHER: European stocks close firmly lower. That fresh blow to President Trump's agenda we've been talking about, certainly undermining investor
confidence in Europe as well. Some disappointing earnings reports and a strong euro also weighed on markets as well. The German Dax was down 1.25
percent at the close. The markets in London and Paris also ending the day in the right as well.
Brexit uncertainty is weighing on London's economy. Already job creation has weekend and the housing market has cooled down. There could be worse
to come. Some of the city's biggest financial firms are considering taking their headquarters out of the U.K. Here's our Nina dos Santos with more.
NINA DOS SANTOS, CNNMONEY EUROPE EDITOR (voice-over): Londoners have always known there is no such thing as a free lunch. While inflation may
have softened this month, prices are still rising faster than wages. In the uncertainty surrounding Brexit is becoming increasingly hard to
UNIDENTIFIED FEMALE: People are angry. We want to get paid enough. Things are getting cut. The wrong things are being cut. The right things
are not bringing opportunity. It's all backwards in my opinion. Everything is rolling backwards and not forwards like it should be.
UNIDENTIFIED MALE: Well, what happened to supply things.
DOS SANTOS: Such angst cost Prime Minister Theresa May her majority. Allowing Jeremy Corbyn to pitch his Labour Party as a government in
waiting. One which he's promised Brussels, would be more conciliatory in exit negotiations. Even the man who spearheaded the leave campaign now
thinks Brexit is a bad idea. With a government so ill-prepared its representatives appear to come empty-handed to this month EU talks.
For May, making friends further appealed, isn't going to plan either. Britain may have been quick to offer Donald Trump a state visit, but amid
dithering over dates, pro EU leaders like Merkel and Macron wasted no time in welcoming the U.S. president themselves.
(on camera): So, where does this leave the U.K.? Well, increasingly isolated. And in London, home to 1/4 of the nation's GDP, businesses are
becoming increasingly skeptical that Brexit will be done and dusted by 2019.
SADIQ KHAN, LONDON MAYOR: Once the Article 50 notices served, we are supposed to negotiate and exit within two years. And what the government
is now talking about, I welcome this, is a transitional period of two years to give people certainty before we enter the new arrangement with the
DOS SANTOS (voice-over): Meanwhile, banks are accelerating their contingency plans and looking for alternative European headquarters with
Paris and Frankfurt making audacious bids for their business. Moves which could leave the whole of Britain paying a hefty price before Brexit has
even begun. Nina dos Santos, CNN, London.
ASHER: You heard the London Mayor there talking about his faith in London's future in Nina's piece. This week he's welcoming the mayor of
Chicago to the British capital, to look at how their cities can actually help each other. Chicago's Rahm Emanuel said if public trust in government
is slipping cities that are quick on their feet can take up the slack. Samuel Burke spoke to Emanuel who says big city mayors can be leaders on
the world stage.
RAHM EMANUEL, CHICAGO MAYOR: The nation-state is now what you and I grew up under. And cities and mayors are not what they used to do 20 years ago.
Today I Mayor must have their own economic international trade position if you're a global city. And cultural exchange in a way that they never had
to do 20 years ago. And it's not just a sister city program with a new flight.
[16:25:00] You're going to have to do things today. Now Sadiq is leader, I'm hoping to be perceived as also leader, in this emerging definitional
change that's coming with municipalities. And then here's one other factor. Political systems today are very fragile. Because the public that
we represent do not think governments represent them or are actually attuned to what they want. That's not true in local governments. People
see local governments as something they can influence and that also influences their lives. And that's stability in a period of instability is
why cities are emerging as such powerful players on the international stage.
SAMUEL BURKE, CNN TECH, TECHNOLOGY AND BUSINESS CORRESPONDENT: I've heard from so many people in the tech community in the United States, even people
who aren't of Donald Trump and some of these leaders, that they're still very hopeful that some of the economic promises he made will come through.
Tax cuts and that type of thing. What are you hearing from Chicago-based businesses? Tech or not, are they still hopeful that some of this can be
delivered in the United States from the president?
EMANUEL: You now, I mean, do I think there hopeful? I don't want to put words in their mouth. I know what I'm doing. Which is I'm not waiting.
So, we're doing what we have to. To double down on our strengths and move forward.
BURKE: So, your operating, just I've got to do it myself.
EMANUEL: Do I look like a patient person?
BURKE: Not particularly.
EMANUEL: OK, well I'm not very patient. Then I know enough about politics and the difficulty having served on ways of means of tax reform that I'm
not going to wait for Washington to figure out what the number is on the page. We live in an uncertain world. My job is Mayor is to create
certainty around talent. Certainty around training. Certainty around transportation. Certainty around transparency and technology. That if
you're looking at a city to expand, you want to expand in a place that is providing greater certainty in a very uncertain world. And that's my job
BURKE: So, you're talking about all these partnerships that mayors can create, including with tech companies. And local media say that you've
been having some preliminary talks with one of Elon Musk's many companies. This time "Boring Company." Do you think there's an actual opportunity
there for this company to do tunneling in Chicago?
EMANUEL: Yes, O'Hare and Midway are one of the reasons Chicago is a global city. Creating the distance between Chicago's downtown central business
district and O'Hare, two major financial -- rather economic engines for the city, job creators, and shortening that distance will only make sure that
Chicago's place in the world economy is all that much stronger. Do I know if the technology works? No.
BURKE: It needs investigating.
EMANUEL: More than that. I'm very intrigued by it and I think it's a great opportunity for us.
ASHER: the government of Venezuela fires back at Donald Trump after the U.S. president threatens to punish the Maduro government by economic
sanctions. We'll have details just ahead.
[16:30:16] ASHER: Hello everyone, I'm Zain Asher. Coming up on the next half hour of Quest Means Business, Venezuela's foreign minister hits back
at Donald Trump for threatening new sanctions. And Jane Austen rub shoulders with the Queen on Britain's new 10-pound note. First, these are
the top headlines we're following for you at this hour.
U.S. President Donald Trump says his new healthcare plan is to let Obamacare fail. His comments came after a bill to repeal and replace it
fell flat in the Republican-controlled Senate. And it does not look like there is enough backing for a repeal only option either.
Donald Trump Junior has not said whether he will voluntarily testify to the U.S. Senate Judiciary committee about his controversial meeting with
Russians, but a ranking senator says Special Counsel Robert Mueller who is leading his own Russia investigation has given his approval for Trump
Junior and former Trump campaign chairman Paul Manafort to testify in a public session.
The family of an Australian woman shot and killed by police in Minnesota now want answers, but the investigation is expected to take up to four
months. Justine Ruszczyk was fairly shot Saturday night after police responded to her 911 call of a possible sexual soul near her house. The
officers are now on administrative leave.
The Spanish Civil Guard has detained the president of the Spanish football Federation, Angel Maria Villar Llona, who is also is a vice president on
the FIFA council. He was taken into custody be with his s and a beautiful on and several other football officials. They face corruption,
misappropriation and other charges related to an investigation into whether he pursued services that would benefit his son a lawyer specializing in sports law.
Saudi police have arrested a woman who wore what is being described as suggestive closing in a video that went viral. She was walking through a
historic village in a short skirt and crop top. Saudi women are required to be fully covered, her case is now in the hands of prosecutors.
Venezuela's foreign minister is accusing the U.S. government of siding with terrorists after President Trump threatened the Maduro regime with
sanctions. A month protest in Venezuela has been raging against food and medicine shortages and now against President Nicholas Maduro's promise to
rewrite the Constitution. President Trump has called Mr. Maduro a bad leader and is threatening swift economic sanctions. The Venezuelan Foreign
Minister is firing back.
(BEGIN VIDEO CLIP)
SAMUEL MONCADA, FOREIGN MINISTER, VENEZUELA (through translator): Obviously, the government of the United States is accustomed to humiliating
other countries with its international relations, and believes it will get any response, the submission that it is used to getting. The hole that the
United States government is digging as far as its relations with Venezuela, complicates a rational complication for its actions with regard to the
entire international community.
(END VIDEO CLIP)
ASHER: Leyla Santiago joins us live now from Mexico City. So, Leyla, current U.S. sanctions target specific individuals for things like asset
freezes but a mass sort of wide U.S. sanctions could really have a devastating impact especially, given how much the Venezuelan economy is
LEYLA SANTIAGO, CNN CORRESPONDENT: Right now, the Venezuelan is already in trouble in the U.S., the White House is actually just given a better
indication as to where they may take those sanctions. They say that they have several options on the table, the oil market could certainly be
something, the U.S. buys oil will price from Venezuela, that could be something if they pull out of that, could really have a big economic impact
However, if the past is any sort of indication, and the past as you mentioned, Zain, those sanctions have targeted individuals, frozen assets,
taking away visas, in the U.S. government really hasn't given any indication of specific names as to who they would target if they move
forward with taking some sort of action against President Maduro's administration. And that something that Trump said he will do if President
Maduro moves forward with his plan to rewrite the Constitution.
As you mentioned, this has been something that has been an effort of his for several months and has also been a source of protests. We have seen
protests out on the streets of Venezuela for months, very violent protests that have even turned deadly.
[16:35:00] We are up to nearly 100 deaths since this unrest began. And I can tell you that earlier this month when I was on the border Venezuela
there was certainly quite the image of desperation in need of relief from what is a very troubled economy. People who couldn't find very basic
supplies, I talked to one man who was looking for medicine for his 85-year- old grandmother. I talked to one woman who couldn't take an extra step after she crossed that border because of the pain and lack of medical
attention that she was finding in Venezuela.
And also in the hospitals, I talked to people who said they were having to cross into Columbia because they just can't find very basic goods in
Venezuela right now given the state of the economy.
ASHER: The situation you just described Leyla is pretty much hopelessness and it is very much untenable. So, what can the international community
do? Because these threats from President Trump, the threats of economic sanctions that is really only going to make Maduro even that much more
defiant given his opinion of the United States.
SANTIAGO: And you are right, this is something that Maduro said look, I am not going to bow down to any international pressure, the foreign minister
when he pointed the finger at the United States today even going as far to call it a racist and xenophobic empire. That was certainly a reaction to
Trump's words. That said, Trump is not alone here, there is quite the growing voice from the international community. Mexico being one of those.
But Venezuela still has its allies as well, especially, Zain, in the Caribbean. A lot of those Caribbean islands backing Venezuela, the hope
for President Trump is that he can continue to join the growing call from the international community. And now he is taking it one step further for
the first time, threatening action if Maduro moves forward on rewriting this Constitution that his critics say is a move that he wants to make to
remain in power.
ASHER: All right, Leyla Santiago, life for us there and Mexico City, thank you so much. Appreciate that.
Turning now to Brazil, President Michel Temer has put tax reform on the agenda, it is a big task but he wants to get it done in the second half of
the year. It sounds quite like a lot of Trump's big promises here in this country. Alberto Ramos is the head of Latin America economies at Goldman
Sachs. It is interesting, what sort of effect, given what the Brazilian economy has been through, what sort of effect will tax reform have on
ALBERTO RAMOS, LATIN AMERICA ECONOMIST, GOLDMAN SACHS: It is critically important. I wouldn't do a tax reform to raise revenue because the tax
burden in Brazil is already extraordinarily high. It is much higher than the average of the OECD, it is among the highest among a set of emerging
economies. But you need to do a tax reform in order to modernize the tax code. The tax code is exceedingly complex, generates very significant
costs of compliance. And the tax handles generate a very significant misallocation of resources because of the distortions embedded in them.
So, revamping, modernizing, simplifying, streamlining the tax code would increase investment, would increase revenue by generating more growth.
ASHER: I'm sorry I was going to interrupt you because I had actually read that the average Brazilian company, it takes them 2000 hours to do their
corporate tax. Why is it so complicated?
RAMOS: Because the tax code is very complex because individual states have their own tax codes.
ASHER: I see.
RAMOS: If you have a business and you operate in different states across Brazil, you have a battalion of tax lawyers to interpret the law and the
specific states in which they operate. But the overall tax architecture, the taxes are highly distortionary of a number of cascading taxes that not
only imply higher compliance costs, but again between misallocation of resources that that hurt investment.
ASHER: But actually, even though the tax code is very complicated, Brazil is actually very good at collecting taxes which is not what you would
necessarily expect from a developing country.
RAMOS: That's right, it is quite interesting that the tax burden is very high but not everybody pays taxes, there is a fair amount of tax evasion.
So, you can do the math. Those and actually comply with the code and pay taxes, that effective statutory tax is actually quite high.
ASHER: I do want to talk about NAFTA because that is another expertise area of yours. We did actually get recent objectives from the Trump
administration about how we are going to go about renegotiating NAFTA. I just want to get your thoughts on it, and also given how does it measure
with Donald Trump's campaign promise for bringing back manufacturing jobs to the United States?
RAMOS: The NAFTA treaty is a 23-year-old treaty. There is plenty of scope to modernize it and revamp it, to make it more in line with modern trade.
I think all three parties from Mexico to the U.S. to Canada would agree on that. I think we should avoid this excessive focus on the trade deficit,
that is a much bigger issue. We should not look at trade is microeconomics and sector level imbalances.
[16:40:00] ASHER: That is the main goal and objectives though, to reduce the deficit with Mexico.
RAMOS: Their trade has been empowering for both countries, there's a lot of bilateral trade. The trade deficit with Mexico in particular is not
that high, $60 billion is not that high given the size of the U.S. economy. It has been pretty stable over the last 10 years. Actually, used to be
bigger than it is today. We should look at ways to modernize the treaty again, there is plenty of scope to do it.
Keep in mind that when the treaty was signed 23 years ago, the biggest technological innovation was the fax machine. I think the technological
frontier has evolved a lot versus what was the trade reality at that point. There is plenty of scope to make this a better treaty. We need more trade
ASHER: In terms of the Mexican reaction, what has that been?
RAMOS: I think they are ready to engage in a negotiation, they also see the possibility of modernizing and turning this into a better trade, that
is a win-win situation for both involved.
ASHER: All right, appreciate you joining us, thank you so much.
RAMOS: My pleasure.
ASHER: Brazil's problem with corruption is certainly is not new but it has come to dominate the political agenda, in the last few years we have had so
many headlines on that issue. What impact does that have on business in Brazil? Richard spoke with John Slattery head of commercial aircraft at
the Brazilian aerospace giant Embraer, who says that they can look beyond the political turmoil.
JOHN SLATTERY, CEO, COMMERCIAL AVIATION, EMBRAER: We are a global operation. As I mentioned in commercial aviation, 70 customers in over 50
countries around the world. I would say over 90 percent of our sales are outside of Brazil. All of our businesses done in U.S. dollars, and 85
percent or 70 or 85 percent of our vendor base, our supplier base is outside of Brazil. For sure, Richard, there are some turbulence and
headwinds domestically in Brazil at the moment, but our best wish to the government and the administration in Brazil is that they will find some
And we expect that, GDP this year is actually on a positive trajectory and next year as well.
RICHARD QUEST, CNN HOST: What you are saying is it doesn't affect you as such, the fact that the government is in shambles.
SLATTERY: Correct. Embraer is somewhat uniquely positioned because we are a global company, the majority as I said, over 90% percent of our business
QUEST: It is quite an interesting dichotomy or contradiction, isn't it? Your principal competitor is Bombardier, there you have Canada with an
excellent government and manufacturer that has a shamble on its balance sheet. And you are the exact opposite, you have a shamble for a
government, and an excellent company.
SLATTERY: I won't accept your thesis, Richard, it's not for me or anyone in Embraer to comment on the capability of our government. Here's the
point, we compete in the one thing I do want to mention, if you mention my competitor in their government, the one thing in Embraer that we are
obsessively focused on is let's have a level playing field. Let's not have state-sponsored institutions coming in backfilling the right-hand side of
the shareholders equity on the balance sheet.
We want the aircraft to speak for itself. Airlines should take aircraft based on the capability of the aircraft, and cost be representative, or
purchase prices should be representative.
QUEST: You think it was wrong to bailout Bombardier?
SLATTERY: I didn't bailout Bombardier, I am not going to speak for those who consider focusing on Bombardier for supporting Bombardier. But here's
what I would say, I will bring you back to the point, we believe strongly in a level playing field. It is hard to play rugby going up the pitch,
Richard. You will appreciate that.
ASHER: Still to come here on quest means business, Rupert Murdoch has a few messages for the U.S. president and his family. And they are not the
sort of messages that will make for happy reading for the president. That is next.
[16:45:00] (COMMERCIAL BREAK)
ASHER: Welcome back everybody, media mogul Rupert Murdoch appears to be sending a very clear message to President Donald Trump, Murdoch's "The Wall
Street Journal" actually published an editorial Thursday morning that criticized the Trump family for its involvement with Russia. And let me
tell you this opinion piece was scathing indeed, it was pretty harsh. It said the political realities of Washington will destroy Mr. Trump and his
family and their business reputation, unless they change their strategy toward the Russia probe. They don't have much more time to do.
Much to dig into here, I want to bring in CNN's senior media correspondent Brian Stelter. For our audience members who don't necessarily know, just
explain, obviously "The Wall Street Journal" is conservative as is Fox News owned by Rupert Murdoch. But just explain to us the sort of personal
relationship between Murdoch and Trump. How far back do they go?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: They go back decades, not always very close, but certainly a friendly relationship as two men who
were frequently in New York in the 80s and the 90s and the 2000s in similar circles. And these are men who now have mutual interests. Rupert Murdoch,
conservative media mogul who wants certain policies, wants certain actions in Washington. Also has corporate considerations for Fox and his
companies. And Trump benefits from positive or somewhat fawning even coverage from some of Murdoch's outlets.
So, there is a mutually beneficial relationship here. It is notable, recently we have seen several of Murdoch's papers publishing critical
stories, very critical editorials and columns.
ASHER: "New York Post."
STELTER: That's right, "New York Post" a couple of weeks ago said, please stop tweeting Mr. President. Then last week called Trump's son, Donald
Trump Junior, an idiot and criminally stupid. And now this "The Wall Street Journal" editorial pointed out, it is probably the biggest sign yet
of some sort or shift in Murdoch's thinking.
ASHER: It is interesting because, on the one hand, we are seeing these opinion pieces, scaling opinion pieces in "The Wall Street Journal" you
mention the "New York Post" as well, but still Fox News is reliably very much, a lot of the anchors there are very large pro Trump.
STELTER: Yes. The opinion hosts on Fox from morning, from 6 a.m. to 11 p.m. are reliably pro Trump. It is a sort of positive reinforcement
network for the president, he can tune in and hear good news about his administration. Rupert Murdoch runs Fox News but he also has connections
to all of these papers. He also owns the Journal and the Post and these other outlets. Perhaps, he is using the papers, he has more of a history
of doing in the U.K. as well as in the U.S. using his papers to get his point across.
While knowing at Fox News, viewers of Fox News want to hear good news about the president, they might not want to hear such a scathing comment. It is
notable to watch this kind of shifting in conservative media because Trump knows what he is going to hear from liberal critics. He knows what is
going to hear from "The New York Times" editorial board members. But to hear conservative media figures criticizing this administration is more
news literacy I think because it can ultimately have more of an impact on the administration.
ASHER: What messages Murdoch trying to send? One of the quotes that we actually just pulled up is, they will destroy their business reputation
unless they change their strategy towards the Russia probe. What is Murdoch getting at there, what does he want to see happen?
STELTER: I think what he is saying through his papers is, get it together, man, it has been six months, this administration on many days of the week
seems dysfunctional whether through small things like spelling mistakes, or big things like policy failures. I think the editorials, columns. Even
some of the critical voices that we have heard on Fox News, his big television channel, are trying to say to this president, get it together,
try to get staff in place I can manage what's going on.
To be transparent, that is when the main points of his editorial, to be more transparent and get this Russia cloud at least partway off of him. It
is a huge challenge for Trump, and we have Rupert Murdoch of all people saying it. Really seemingly saying it through the editorial pages. It is
ASHER: Yes. I think Donald Trump Junior meeting with that Russian lawyer seem to change things quite a bit for certain conservatives.
[16:50:00] Brian Stelter, always good to have you, thank you so much.
Still to come here on QUEST MEANS BUSINESS, it is the 200th anniversary of Jane Austen's death. But the novelist will soon be back in circulation as
Britain unveils its new 10-pound note. We will tell you why they picked Austen after the break.
ASHER: Jane Austen is the new faced on Britain's 10-pound note, thanks to a campaign that demanded more female representation on the currency. The
campaign which starting 2013 succeeded despite a nasty sexist backlash on social media. Can you believe it? And today, on the 200th anniversary of
Austen's death, the Bank of England actually unveiled the new design. Governor Mark Carney said a 10-pound note was particularly fitting for
(BEGIN VIDEO CLIP)
MARK CARNEY, GOVERNOR, BANK OF ENGLAND: Ten pounds would have meant a lot to Jane Austen. About the same as a thousand pounds would mean to us
today. Ten pounds was half the annual allowance that she received from her father while he was alive. And a 10-pound note might have had symbolic
meaning as well, as it was the amount she was paid for, paid by her publishers, Crosby and Co., for her first novel, "Susan." And experts will
know eventually through summary working became "Northanger Abbey."
(END VIDEO CLIP)
ASHER: that is interesting, I didn't actually know that there is some actual significance to actually picking the 10-pound note specifically.
Devoney Looser is the author of "The Making of Jane Austen" a professor of English at Arizona State University. She joins us live now from Canberra,
Australia. Thank you so much for being with us, I am British I grew up reading Jane Austen's book, "Pride and Prejudice" in school. Of all the
iconic British women, why Jane Austen for this bill? Walk us through that.
DEVONEY LOOSER, AUTHOR: I think Jane Austen is regarded by many, myself included as the greatest novelist writing in English. So, I think she was
a choice that appealed to many who appreciate great literature and appreciate the idea of a woman who could succeed in a round that is often
considered as male.
ASHER: It is interesting, what do you think -- I am trying to get you to go to hundred years back in time into Jane Austen's head. What do you
think Jane Austen would have made of all this hype? Because she lived during a time when women did not even have the right to vote. And now here
she is 200 years after her death on the 10-pound note. What would she have made of all this hype?
LOOSER: I think she would be stunned. She was a perfectly well-regarded novelist in her own day. He was moderately successful. But by no means a
bestseller or a household name. I think this would come as quite a shock to her. I think it would also be amusing to her because her brother was a
failed banker, the idea that she would end up on a banknote is especially interesting from a family perspective.
[16:55:00] ASHER: I do have to mention quickly this quote that is actually on the note, it says I declare after all there is no enjoyment like
reading. What is interesting is that quote was actually given to a character of Jane Austen's that had actually no interest in reading
whatsoever, does this it explained that choice?
LOOSER: I think it sounds good, I guess is why the Bank of England shows it, but in fact that character yawns before she says it, and yawns
afterwards. Clearly, she does not take enjoyment in reading, we are meant to understand that.
ASHER: Thank you so much for being with us, thank you, I appreciate that. I know it is early in Australia where you are, so thank you.
And if you want to take QUEST MEANS BUSINESS on the road with you, or you have missed part of today's program, you can always download our show as a
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And it has been fun, that is QUEST MEANS BUSINESS and I am Zain Asher in New York, I will see you again at the end of the week.