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QUEST MEANS BUSINESS
White House Announcement on Tariffs Coming this Week; UK to EU Don't Hurt Our Financial Services; Saudi Crown Prince Woos Investors; Global Stocks Sink After Gary Cohn Resigns; Why this Year's Women's Day is Different. Aired 4-5p ET
Aired March 7, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] BIANNA GOLODRYGA QUEST, CNN HOST: And trading has come to a close on Wall Street with stocks off the lows of the day. It is Wednesday,
Gary Cohn's exit stokes fears of a trade war. We'll have a reaction in Washington and on Wall Street. And will explain how China dominates the
market for steel. The U.K. finance minister warns Europe's approach to Brexit negotiations will backfire. And Mohamed bin Salman corruption
crackdown rocks Saudi Arabia. The crown prince is now on tour to sooth nerves and strike deals.
I'm Bianna Golodryga and this is QUEST MEANS BUSINESS.
And tonight, markets are in the red. Gary Cohn is out, and tariffs appear to be more likely than ever. Donald Trump's top economic advisor will
resign apparently over fierce opposition to the president on steel and aluminum tariffs. Cohn is a free trader and was seen as a steadying
influence on economic policy. He's already being missed by Wall Street. The Dow fell as much as 349 points before slowly recovering through the
session. The S&P 500 and Nasdaq ended virtually flat.
Discretionary consumer goods, energy stocks, consumer staples and financials bore the brunt of the sell-off. CNNMoney's Clare Sebastian is
here with more. Clare, even though we ended the day in the red a lot of people expected it to be much worse. Why the rebound at the end?
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: I think it's the kind of double forces that we have today, the Cohn departure and the issue of tariffs.
And when you saw the rebound really pick up it's when Sarah Sanders in that White House briefing was talking about potential carveouts in in these
tariffs, possibly to Mexico and Canada. People in the markets have really been looking for details on these tariffs. ever since the tweet came out
last week. There's been really very little known about what's going to happen. Will there be carveouts for companies even? Maybe for countries.
Will there be retaliation? We heard today that the European Union is potentially going to put tariffs on some American products. So, there's a
lot of uncertainty and I think they're latching on to any information that we get about this and the carveouts are seen as potentially positive.
GOLODRYGA: So, their reaction is incremental day by day. Right? We don't know what the president will do and what will be done in retaliation. We
know that Jared Kushner is going to be heading to Mexico to ally some nerves and given the fractured relationship between the two countries.
When Sarah Sanders mentioned the carveouts was that as big of a surprise as the initial tariffs themselves were last week?
SEBASTIAN: I think surprise is all relative in today's world. I think people try to get more out of her than she gave. I think they're just
looking for any kind of information that perhaps, we know that NAFTA, for example, is pretty much on the rocks at the moment. And they just finished
the latest round and seem to have gone almost nowhere. So, Canada and Mexico are very much on people's minds.
But, look, uncertainty is really the bottom line today. It's not just what Gary Cohn's departure means toward tariffs. It's what it means for the
White House generally, for the political climate. Over the past year the markets have very much shrugged off the chaos in the White House. Maybe
we're reaching critical mass. Now may be the departure of Gary Cohn is really going to start to lead the markets to focus more on what's happening
in the halls of power in Washington. Certainly, it's a very sensitive time and everyone looking ahead to the jobs report on Friday, to the signing of
these tariffs and to the Fed next week, as well.
GOLODRYGA: Totally uncharted territory here. And the president yesterday tweeted that he's going to be looking for a top replacements Gary Cohn.
How big of a loss is it, specifically for the financial markets to have Gary Cohn leave the White House?
SEBASTIAN: It's a pretty big loss. He was very much a steady force, certainly within the White House and also for the markets. He brought a
sophistication I think and those of his expertise on the markets, the former president of Goldman Sachs. So, he has years of experience and he
was well liked by Wall Street. And it's not just the fact that he provided a diversity of opinion on things like free trade. He was very much a
globalist. He even had a more nuanced view on things like coal than the president himself. But also, his record, he did everything that Trump has
done that Wall Street really liked, be it tax cuts, be it infrastructure. Gary Cohn stood behind that for. So, I think that's what people are
thinking at and thinking well, what does this mean going forward? Are we going to see more potentially destabilizing policies like these tariffs?
GOLODRYGA: Right. He seemed to be really a mainstay when it came to traditional Republican economic issues and concerns and priorities and now
the question is who will fill that void?
SEBASTIAN: That's a good question.
GOLODRYGA: Clare Sebastian, good to have you. Thank you for coming on.
The White House now says Canada and Mexico, as you heard, may be exempt from the tariffs. Those two countries export more steel to the United
States than China which led to criticism of the Trump administrations plans. The Commerce Department says the tariffs will still hurt, though.
China produces almost half of the world's steel. No one else comes close. But commerce says many Chinese metal products go through the third
countries before they end up in the United States where they are not classed as Chinese imports. These are some of the countries cited in the
commerce report from earlier this year. And bear in mind that the United States is not the only country pushing for steel tariffs. Only yesterday
the European Union decided to renew a set of duties of up to 70 percent on some Chinese steel products.
[16:05:00] Meanwhile, the EU has put together a new list of products that will face tariffs in Europe if Donald Trump goes ahead with this plan.
This includes things like orange juice, peanut butter, cranberries and denim. More industrial and agricultural products could be hit too when the
full list is made public. Thea Lee is the president of Economic Policy Institute in Washington, and she is joining us now. Thea, thank you so
much for coming on the show. You say the negative reactions to the tariffs are overblown. Why?
THEA LEE, PRESIDENT, ECONOMIC POLICY INSTITUTE: Well, I think people are a little bit hysterical about the tariffs. These are a targeted set of
tariffs on two sectors. It's not the end of the world and in terms of the overall economic impact that's around $10 billion in a $19 trillion
economy. So, this tariff in and of itself is not going to be end of the world. It is also not going to solve all of our problems.
GOLODRYGA: But what about the larger issues that people believe will unfold? Geopolitical, retroactive retaliatory, and what are those concerns
that people are bringing to the table and are they valid?
LEE: Certainly, there will be some response if these tariffs go through as described. But the question is whether it's a measured response or whether
it spirals out of control. And I think in the end of the day it's not really in other countries' interests to have spiraling out of control set
of back and forth. So, it could be that this action is taken. There is a response and then it's over. And that again, is not the end of the world.
So, I think people like to use the words trade war. They're talking about something which seems very scary and seems very global. But in fact, I
think we should take a look at what these particular responses are. They're responses to a situation in the global economy where you have
excess capacity in the steel and aluminum sector. You have a lot of unfair trade practices and U.S. producers have been disadvantaged by that. So,
this is, in that sense, just a response to some bad actions by other countries.
GOLODRYGA: So, what is your response, then to those who note that, listen, you're talking about maybe 140,000 people who work for these specific steel
and aluminum sectors who will benefit this versus those six, if not more million, who will be impacted negatively as a result of it?
LEE: Well, I think those numbers are not quite right either. Because even if you put the tariffs on as described, it's not clear that the prices will
move by that full amount. They'll probably respond by a little bit less. And so, I think some of those estimates are exaggerated. You know, some of
this just gets absorbed as it does. I mean, these things happen, currencies move, and tariffs change, and it is not really the end of
civilization as we know it.
There will be some relative price changes. But I think in the end they're relatively modest and there will be some stabilization in the steel and
aluminum sectors, but I think most of the other sectors that are users of steel and aluminum will respond, but without catastrophic outcomes.
GOLODRYGA: You know, the president, his talking point has been that for years the U.S. has treated unfairly. He talks about a huge deficit. Many
economists don't view that deficit as a threat. But they do say that imposing the actions that he' d like to would actually increase the
deficit. Are they right and thus, is the president off on his point?
LEE: The president doesn't always use the exact right numbers in describing what the problem is, but I would say that the overall trade
deficit has been a problem for the United States. That we are importing more than we export in a way that's undermining our ability to create good
jobs at home. You know, what the overall impact is, is complicated and in the end, there's a lot of adjustments happen. It's a big economy and this
is a very small piece of a big economy. So, I think it's hard to say for sure what the total outcome would be.
GOLODRYGA: Yes, it's complicated and I think made more complicated and worrisome to many in that there are still not many details that we know
about this. Including from the president's top advisers who were obviously thrown off by the president's decision, as well and obviously led to Gary
Cohn leaving or at least one of the reasons why he left. But of course, this conversation will continue. Thea, we appreciate you joining us.
LEE: Thanks for having me, Bianna.
GOLODRYGA: The mere threat of a trade war is already creating winners and losers. U.S. Steel says the tariffs mean they can rehire 500 workers at a
blast furnace that was previously closed. And Century Aluminum says it will now be able to hire up to 300 workers. However, economists say tens
of thousands of jobs are at risk in other sectors. Deutsche Bank today warned that General Electric will be hit particularly hard if costs go up.
One oil CEO has written to Donald Trump urging him to reconsider. Canary's Stan Eberhart is a proud Trump supporter but says these tariffs would give
foreign oil producers an advantage. He told Zain Asher the impact is already obvious.
DAN EBERHART, CEO, CANARY LLC: We are already seeing the effects of it. So, our steel costs from some of our providers are already up about 20
percent since last Thursday. Also, we are also looking at prices that used to be quoted for a three-week time period, now the folks we're buying steel
from are only holding the price for a day. [16:10:00] So, we're already seeing a rise in our input costs for what we do at Canary and which is produce manufactured pressure control items for
the U.S. oilfield.
ZAIN ASHER, CNN CORRESPONDENT: So, I know that you were a supporter of the president. Apparently, you wrote Trump a letter on Monday. I hope you
don't mind me prying, but what exactly did the letter say?
EBERHART: Ture. The letter says that we spend in excess of ten million a year directly and indirectly on imported steel and we think that a rise in
our input cost would make us less competitive with both our competitors and will make the U.S. oilfield less competitive with OPEC and international
oil-producing countries. So, we think it's a negative for our industry and a negative for the U.S. economy and we think that Trump should pause and
reconsider before implementing the tariff.
ASHER: Obviously, this is something that a lot of Republicans like yourself, Republican politicians, both in the Senate and the House
vehemently disagree with in terms of they think it will start a trade war. They think that there can be devastating potential ramifications in terms
of what can happen to the U.S. economy if Donald Trump starts imposing tariffs. Then we had House Speaker Paul Ryan actually come out and say,
you know what? He would be open possibly to targeted and specific tariffs. He said he'd be open to that. What's your reaction to that?
EBERHART: I think any tariff are a bad idea. I think that we need lower cost goods. It would make everybody compete more effectively. I think it
goes back to kind of economics 101 and guns and butter. We should do what we're good at and what we're efficient at and that's what will produce
economic growth in the long term. And we'll make lives better for consumers and better for producers and better for the overall economy here
in the U.S.
ASHER: Obviously, you're a supporter of the president if Donald Trump. Doesn't going through with this and you think this is something that he
indeed might end up going through with, is that enough for you to re-think your support for the president?
EBERHART: I think it gives me pause, but I still think that he's done an amazing job overall, and I think that he's done well with the Supreme Court
nominee, well with the economy in general. I think he stood up for America in a way that no post World War II president has, and I still think he's
overall a great leader for the country. But I think that, you know, my hope is just that he'll reconsider this one position, take a pause and hear
from the folks who would be affected from it and maybe decide the other way of what he proposed last week.
GOLODRYGA: And that is one executive's opinion. Well, when we return, the British Finance Minister makes an appeal to keep Britain's financial center
in one place. We'll update you on the roll call of firms preparing to move. That's coming up next.
[16:15:00] (COMMERCIAL BREAK)
GOLODRYGA: The U.K. Finance Minister, Philip Hammond, says Britain's financial services sector must be at the heart of the Brexit deal. It
comes hours after EU leaders rejected Britain's trade plan saying pick and mix deal is out of the question. The chancellor warned that a fragmented
market will mean higher costs for consumers and the winners won't be in Europe.
(BEGIN VIDEO CLIP)
PHILIP HAMMOND, U.K. FINANCE MINISTER: Those who think that the major winners from any fragmentation of London's markets would be Paris or
Frankfurt or Dublin or Luxembourg should take note. The real beneficiaries are more likely to be New York, Singapore and Hong Kong. Cutting Europe's
market share and leaving Europe as a whole less competitive and more resilient on distant financial centers operating under very different
(END VIDEO CLIP)
GOLODRYGA: Goldman Sachs is the latest big business to relocate staff after Brexit. The U.S. investment bank has reportedly decided it can no
longer wait for clarity on what sort of Brexit there will be. It's said to have put two dozen staff on notice of a move to Frankfurt. The
clearinghouse Euroclear is to move tax residence to Belgian capital, Brussels, this year, along with the domicile of its headquarters. There
has been concern about the so-called passporting rights allowing firms to operate across the EU after Brexit.
Here is the growing list of major firms who have already announced staffing moves and they include UBS, HSBC and the insurer Lloyd's of London.
Lloyd's of London has been a British business since the 17th century, it's in their name. And now that it has opened a subsidiary within the
Eurozone. Inga Beale is the company's CEO and she's joining me from London. Inga, thank you so much for coming on. Tell me your response and
your thoughts on the future for your company and the industry given the uncertainty with Brexit and the EU coming up with a deal?
INGA BEALE, CEO, LLOYD'S OF LONDON: Well, Lloyd's was one of the early ones to announce that we were going to set up a subsidiary within the EU.
And so, end of march last year, actually, we announced that we would be moving and setting up to Brussels, in Brussels. But it is only for a
portion of our business. It is only for about 5 percent of our business and that means about 2 billion euros of business. And that's because
fundamentally when the U.K. had left the EU we won't have the licensing to be able to continue to offer insurance coverage for the clients that are
based within the EU and EA markets. So, we took a decision -- we had to take our sort of future into our own hands. And I think this is what
you're seeing a lot of the businesses are doing now because of the ongoing uncertainty about what the U.K. government can negotiate with the EU.
Philip Hammond talked today about not wanting to fragment the actually sort of European market, per se, but for insurance it's a little bit different
because we're not part of that banking sector. And so, when he talks about a potential, you know, winners such as being New York or whatever,
insurance is a little bit different. We need to be licensed in every market that we do insurance in. And you won't see that impact happening
for insurance. You will see that each firm has to be licensed either in the U.K. to the U.K. business within an EU country to do be able to carry
on doing business within the EU.
GOLODRYGA: So, it looks like you've cushioned yourself rather well and early. Still, given the instability, who do you put more blame with? The
British government or the EU with regards to this debate?
BEALE: Well, I'm not about apportioning blame. I just know that this is a very public and difficult negotiation, and both sides are having to do a
certain amount of posturing. I wouldn't want to do that negotiation. Now I know that the U.K. government understands the needs of the financial
services sector. It certainly understands the specific needs of the insurance sector. And I know that they will do their best to negotiate a
good position. But what we are really after is can we have this mutual market access because we've got lots of EU-owned insurers doing business in
London, as well. And so, they suffer and it's actually trying to get to that mutual recognition that we can, you know, EU companies and U.K.
companies can still continue to trade cross-border for the benefit of all of us and particularly for the benefit of our customers. Who at the end of
the day nobody wants to impact negatively and yet they stand to be impacted to their detriment.
GOLODRYGA: From a broader scale, are you concerned about being impacted at all from the new proposed tariffs and the U.S. president, obviously, not
impacting your industry directly. He's talking about steel and aluminum, but it does impact the U.K. and its trading partners from a broader
perspective of uncertainty. Are you concerned about yet another hurdle?
[16:20:00] BEALE: There's so much uncertainty out there at the moment. There really is and it is our job as business leaders to try and navigate a
route through this. The U.S.is actually a really important market for Lloyd's. Lloyd's has been doing insurance business in the U.S. for many,
many decades -- centuries even. And so, it's a very important part. What actually what Lloyd's benefits more from is a healthy, buoyant, U.S. market
because that's where nearly 45 percent of our revenues come from.
GOLODRYGA: Inga, great to hear from you and your perspective, as well. Thank you so much for joining us.
BEALE: Thank you.
GOLODRYGA: Air France's merger with Virgin Atlantic could prove problematic once the U.K. leaves the EU. It is unclear if Virgin will
still consider to be a British carrier once airlines own more than half of it. Richard spoke to the Air France CEO at the Airlines for Europe summit
JEAN-MARC JANAILLAC, AIR FRANCE CEO: We have a clause in our agreement where if the fact of not being any longer British Airlines prevents Virgin
from flying to the USA, we can sell back the necessary amount of Virgin Group in order for Virgin to stay a British Airline. But two things,
first, for the links between Great Britain and USA, it's possible according to I think the rules in the USA to have an agreement with the company that
is not owned by the country, if the country of the ownership of the company has open skies with the USA. So, it means that since Europe has open skies
agreement with the USA from the USA point of view it would not be a problem to have Virgin own majority by EU plus British interests.
RICHARD QUEST, CNNMONEY EDITOR-AT-LARGE: Are you worried at the level of protectionist talk that is now coming out, say, for example, the United
States? I mean, let's just face it. In the last week we've gone from steel tariffs to tariffs on Harley Davidson's, Levi's and bourbon to cars.
I mean, who knows where it will end?
JANAILLAC: We are against protectionism and we are for open skies. And what we have seen, for example, is the relations between Europe and USA,
the huge development of the flights, the huge development of the number of people traveling from one continent to the other. It's an increase of the
offer. It's a huge plus for the people because they can travel for cheaper -- for cheaper tariff and for the economy. Because it allows exchanges
between the countries. So, we are for open skies. We are for open competition. But we must be for this open competition between countries or
between continents that are following the same rules.
QUEST: Fascinating time for you in France as the new president -- relatively new president -- gets to grips on the reforms start to take
place. But those reforms are taking place at the same time as you've made major reforms within Air France at the same time. So, I'm wondering at
what point do they clash?
JANAILLAC: Well, no, they don't clash. They go in the same direction. Because the reforms have been initiated by President Macron -- and by the
way, the reason is very impressive because government is working on a very different reform is a business-friendly kind of reform. Trying to create a
positive environment for doing business within France. We are quite impressed first by the reason of positive reforms and by also the wheel of
the government to help us having a better environment, comparable to the one of our main European neighbors.
GOLODRYGA: Prince Mohammad bin Salman's corruption crackdown shook the entire Middle East. Now the Prince is on the road to convince his trading
partners that it's still safe to invest in Saudi Arabia. Those investments are crucial to the Prince's economic diversification plan. His first stop,
Egypt, regional security and investment dominated the agenda there. Egypt is a key ally for Saudi Arabia in its fights with Iran and Qatar.
Next, the U.K., the Prince discussed social reform as a key part of his modernization plan. There will be plenty of deal making, as well, and
lobbying for Saudi, Aramco's massive IPO. That listing is expected to be a key topic on the Prince's swing through America. New York and London are
reportedly losing ground to countries that won't require as much transparency from Aramco.
[16:25:00] Alia Moubayed is director of geo-economics and strategy at the International Institute for Strategic Studies. She is joining me now from
London. Thank you so much for coming on. So, a lot to unpack here. But this is a huge tour that Mohammad bin Salman is on now. In London right
now, a charm offensive on the receiving end. A lot of pressure for that listing to take place in London. A lot of pressure, however, on Saudi in
ALIA MOUBAYED, INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES: Absolutely. I mean, there is an imperative for reform, both for creating jobs and
diversify and these are essential for safeguarding stability and security in Saudi Arabia. I think it is very clear that this Crown Prince -- and he
has said it very broadly and bluntly, that the current economic model of Saudi Arabia is unsustainable in an environment where structural changes
are happening in the oil and gas market. And he realizes that Saudi Arabia does not have a lot of time to do these reforms to contain and rein in
public finances, diversify its sources of revenue.
But also invite a more diversified base of both private sector investors from the region, but also from the rest of the world. And let's not
forget, the pressure is also a geopolitical one. He is amidst a multiplicity of conflict in the Middle East. Most important of which is
next door in Yemen. But also, he has his eye on a very important arrival, Iran. And he has to think how he has to play to do his regional power play
in the conflicts in Syria and have Saudi have a role in the post-ISIS Iraq. So, a lot to chew for the young Crown Prince.
GOLODRYGA: Yes, and a lot on the western receiving end, as well to chew through. Because on the one hand the Crown Prince has introduced a let of
social reforms. Women and allowing them more freedoms and liberties. Driving, for one in the coming months will be legal. On the other hand, as
you mentioned, their being in Yemen and a lot of their military force as well has raised a lot of eyebrows. Him imprisoning a lot of his cousins,
as well, over so-called corruption claims and charges. So which side wins, ultimately?
MOUBAYED: I think there are, as I mentioned, there are a multiplicity of important strategic dossier. But I think the most important one is really
remains his focus -- at least what is consuming the focus of the Prince -- is the economic dossier. And this is the main driver of his visits.
Whether to Egypt, in order to consolidate economic partnerships and really security cooperation.
In the U.K., basically to invite investors to come and reap the benefit of what he calls opportunities offered by Saudi revision 2030. And also, to
discuss, probably behind closed doors an exit strategy from the war in Yemen. But also, more importantly, I think it's not that he himself in the
case of the U.K. is driven by an economic imperative. The U.K. also is very eager to ensure that the markets of Saudi Arabia are more diversified
for its exports which have been for a long time skewed towards arms and defense-related sales. And the U.K., like many other countries, western
countries like the U.S. and others, would like to take part in the liberalization of infrastructure, health and education services and now, as
you rightly mentioned, the culture revolution that the Prince is doing. And that is opening a huge amount of the creative sector, art and tourism,
et cetera. So, it's like a, you know, it's a version of the economy that is waiting for opportunities to grab.
What matters, really is the rule of law, is really instilling a sense of predictability in the business environment which has been taken recently by
the corruption probe. And we are still waiting, of course, I mean, the business community is hoping that a proper system of due diligence, due
process, commercial courts, a level playing field, improved competition, all of the gambits of business environment reforms -- what we call
structural second-generation reforms that Saudi would embark on. And we have started seeing these steps. The bankruptcy law has been adopted
recently. We are seeing a move towards reform in commercial. So, there's a lot happening.
GOLODRYGA: Yes, it's clearly won the support of President Trump. It will be interesting to see if he can win the full support of Prime Minister May.
Alia, thank you so much for coming on.
Well, another departure through the revolving doors at the White House. We'll look at how recent exits may signal Trump's changing worldview.
[16:30:00] (COMMERCIAL BREAK)
GOLODRYGA: Hello. I'm Bianna Golodryga. And there's more QUEST MEANS BUSINESS in a moment. When Gary Cohn's exit from the White House upsets a
And the annual International Women's Day is underway. This year it's different. Before that though, the headlines this hour.
The Dow recovered most of its losses and closed down 83 points on Wednesday. The White House says tariffs on steel and aluminum could come
by the end of the week.
U.K. police say they believe a Russian former double agent and his daughter were specifically targeted with a nerve agent. Sergei and Yulia Skripal
are fighting for their lives in the hospital. One of the first police officers of the scene where they were found unconscious Sunday in Salisbury
is also hospitalized.
A German court has found eight members of a far-right group guilty of terror related crimes. The seven men and one woman were tried for multiple
bomb attacks targeting refugees. They were sentenced to prison terms ranging from 4 to 10 years each.
A Florida grand jury has indicted Nikolas Cruz on Wednesday in the school shooting three weeks ago. He was charged with 17 counts of premeditated
murder and 17 counts of attempted murder. Police say Cruz confessed to killing 17 students and teachers at a high school in Parkland, Florida on
Today's drop in the stock markets is an indication of how seriously Gary Cohn's resignation is viewed. His exit seen as a sign that the White House
is shifting away from the globalist like Cohn and Jared Kushner and towards nationalists like Stephen Miller. Cohn's departure follows his ally Dina
Powell who recently left the post of deputy national security advisor and returned to Goldman Sachs. For more analysis on this, CNN White House
reporter, Stephen Collinson is joining me. So, quite a day, quite a few weeks. We seem to be saying this on repeat. But how significant of a move
was Gary Cohn's departure?
[16:35:00] STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: Well, it was expected for some time. But I think what happened is that Gary Cohn lost
the argument on this issue of putting tariffs on steel and aluminum, which has caused so much worry in the stock markets and around the world,
particularly among the U.S. allies. So, in that sense I think there's certainly to the argument that the globalist in the administration are
losing to the populist/nationalist strain of thought that Donald Trump harnessed so effectively during his campaign, which is really at the center
of his worldview. Not just as president and as a candidate but for over 30 years. So, I think there's a lot of, you know, evidence that going forward
that populist/nationalist strain of thinking is going to be far more influential in Trump's economic policy simply because there will be fewer
contradicting voices around the president who have a great deal of influence. So, from that sort of standpoint it is a significant departure.
GOLODRYGA: And fewer voices, because many that remain still agree with him. And as we mentioned, many have left in an unprecedented manner and
fashioned within just a little over a year the President's term. Can you talk about what, if any names are being discussed as possible replacements
for Gary Cohn?
COLLINSON: I don't think it's clear that there is a strong sense of a short list. Some people have talked about Larry Kudlow, a CNBC business
commentator who is often floated when these nominations come up and who is often in contact with the president although he has come out against the
tariff plan. Some people are talking about Peter Navarro, another economic adviser who is very hawkish on China, who is in favor of this tariff and
whose star is seen rising in the White House, but I think it will take a couple of days before serious names emerge.
The question you have to ask is given the chaos in the White House and given the fact that the White House is under a special counsel's
investigation, why would somebody want to go into this environment where, many, many, many people are leaving. You have to for example think about
would you need to get a lawyer in case you become part of this special counsel imbroglio. Although the president said yesterday, there are ten
people lining up for every single White House job, the task of replacing Gary Cohn I think is going to be quite difficult.
GOLODRYGA: The prestige that usually comes along with working at a White House now comes with a hefty price of having to bring your own lawyer, it
appears. Stephen Collinson, thank you so much for joining us.
South Korea's Moon Jae-in insists sanctions against the north should stay in place as long as the Kim regime has nuclear weapons. President Moon is
urging the international community to keep up the pressure even though Seoul says Pyongyang might be willing to talk to the U.S. about scrapping
its nuclear program. Will Ripley's and Seoul with more. A lot of optimism, but a lot of skepticism still remains about a potential
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: And justifiable skepticism, Bianna, given the fact what North Korea would essentially expect in return
for giving up the nuclear weapons would be for U.S. troops to pull out of South Korea.
Which obviously unless there is a huge shift in U.S. policy that would never happen. They want the joint military exercises to stop and in fact,
those exercises that were postponed until after the Olympics they are kicking off on March 31st we've learned,
according to U.S. defense officials.
And they also would probably tell the U.S. that they would have to give up their nuclear weapons in exchange for North Korea to give up their own, so
we need to really temper our expectations here in terms of what North Korea actually means in terms of their willingness to de-nuclearize. Plus, for
them, this freeze that we have seen. They haven't launched a missile or tested a nuclear device since late last year. Maybe they consider that
denuclearization and they've been showing unusual restraint given the frenzied pace of missile testing we've seen in the last few years of the
Kim Jong-un era.
But nonetheless, the fact that these talks are going to be happening, that South Korea's President Moon Jae-in will be meeting in April with Kim Jong-
un, that is significant. We know the South Korean delegates who were in North Korea earlier this week and they'll be leaving from Seoul here in
just a few hours and they'll be flying to Washington and meeting with their American counterparts and sharing what they learned. And also, we are
told, Bianna, they'll be delivering some kind of a message, probably a verbal message from the North Koreans to the Americans.
GOLODRYGA: And yet we know all of this can change within just a matter of one tweet, right? The president half-jokingly said yesterday said that he
took credit for this breakthrough. How much of this should be credited to the president?
RIPLEY: Well, the president's insults hurled towards Kim Jong-un, if you know anything about North Korean culture, that was certainly not helpful
and at that time I had conversations in Pyongyang with North Korean government officials who
said they didn't think it would even be possible to engage directly with the Trump administration and there was nothing more disrespectful in that
culture than insulting the leader of the country.
[16:40:00] That said, the sanctions of the Trump administration have been pushing very strongly for this maximum pressure, and they are working,
according to my sources and I was chatting in Beijing a couple days ago who said, when there used to be a hundred trucks passing from China into North
Korea, now there are ten trucks. And that's starting to hurt hurting the North Korean economy significantly according to people who have visited and
information that we're hearing on the ground from North Korea. And also, the potential threat of U.S. military action that also has to be very
troubling for the North Koreans and they know that that would be potentially catastrophic. And while with previous U.S. presidents, the
North Koreans always kind of felt certain that the United States would never attack, with President Trump there is that element of uncertainty and
whether that was intentional or not from the tweet, it certainly does have the North Koreans at least at this moment engaging and appearing willing to
engage in diplomacy. Kim Jong-un wants to stay in power for many decades to come and he wants to be there long after President Trump is out of
office and after President Moon is out of office. So, this is his strategy right now to try to engage.
GOLODRYGA: People are still trying to figure out what his long-term strategy is. A lot of people took him as somebody who may not have a long-
term strategy, but clearly, he has proven a lot of people wrong. Will Ripley, thank you so much for that report.
A populist revolt is up ending the established political order in Italy. I will speak to the chairman of Illy Coffee about what his country and where
it is headed next.
GOLODRYGA: Silvio Berlusconi says he will support the leader of the League Matteo Salvini as Italy tries to cobble together a new government. The
country yet again plunged into political uncertainty Monday after parliamentary elections delivered victories for populist and Euroskeptic
parties but left no clear winner. Andrea Illy as the chairman of Illy Coffee and joins me in the C Suite.
Great to have you here. I know we were talking about the elections before the break. You said the country's used to uncertainty, but it can't be
great for business in an industry that depends on certainty, right, to continue to see uncertainty on the front?
ANDREA ILLY, CEO, ILLY COFFEE: Well, Italy is quite used to political instability, and this did not prevent the country to become the seventh
largest economic power in the world. So also, probably because the origin of political instability it's the same origin of Italian creativity.
ILLY: Which is important for the industry because more and more Italy is gaining competitiveness in the luxury, high end segments of the market with
fashion, furniture, food, Ferraris and all of the F's that you want and this drives export it also attracts a lot of tourism. So, I don't think
this, say, political instability would have a change on the economy frankly. I'm optimistic.
[16:45:00] GOLODRYGA: A lot of F's you keep talking about, one of them includes fascism and a rise, the resurgence in fascism and populism. Does
that concern you at all?
ILLY: Fascism is a word which is -- I wouldn't use. Populism, I would say, anti, it's let's say a protest movement. There has been some
disappointment for several reasons for the old political establishment, so voters decided to vote for a new party which is a protest movement. It is
not so difficult to understand at the end of the day.
GOLODRYGA: The company itself, though, continues to grow. The firm is responsible for brewing 7 million cups of coffee every day across 140
countries and average annual growth of 10 percent. What are you doing to continue that growth as you continue to Seymour competition entry market?
ILLY: Well, our strategy is to lead quality and we do any kind of efforts in order to continue to first produce higher and higher quality starting
from working hand in hand with coffee growers wherever they produce, we work with them, so they produce the coffee specially for us and we reward
them with a 30 percent premium price for the quality they give.
We reward them to such an extent that we have an international award here in New York every year awarding the three best growers in each of the
countries, nine countries of our blend. And the second most important, let's say, activity to grow is promoting quality even beyond our own brand,
promoting coffee quality altogether that, let's say, by disseminating the positive of coffee, let's say the pleasure and the health and the
sustainability. And of course, the Illy brand on top of it as the best Italian espresso and now we have a new campaign, for instance, which is
about improving what you are. And it's a never-ending story and this is about ambassadors and Andrea Bocelli, the well-known Italian singer is the
master testimonial of this campaign we think will make us even accelerate growth.
GOLODRYGA: Coffee definitely makes me happy every morning and you are here to promote the World happiness report out next week. Tell us about that.
ILLY: The World Happiness Report is yearly report published by Jeffrey Saxon and his team and he's ranking countries by happiness and this year
we're going to present the report at the Vatican on March 14. And it's interesting because this year there is a geographical, let's say focus, on
Latin America which is the region where we buy most of our coffee, and interestingly enough, we discover in this happiness report that the Latin
American countries are happier than they should be given their living conditions because of their heart, their family, sense of community and
their passion and this is exactly the answer that I get the reason why they do such a high quality coffee .
GOLODRYGA: A lot to learn from them.
ILLY: A lot to learn.
GOLODRYGA: It's great to have you on the show, Andrea Illy. Thank you very much. Continue drinking your coffee as do so many others.
Most of the time buying stocks is a pretty dull experience. Two childhood friends in Atlanta wanted to change that. On this week's "TRADERS," how
they built a successful e-commerce company around providing a little flair for your feet.
UNIDENTIFIED MALE: Humble, yet essential piece of apparel, often unseen, rarely celebrated, but in Atlanta, one company is on a mission to pair
socks with appreciative owners.
FUTHUM TEWOLDE, CO-FOUNDER, SOCK FANCY: We grew up together and we've known each other since we were 6. I tried to introduce him to the sock
world essentially and realized quickly that it was far too difficult to find a great pair of socks and nice quality as well as great designs and
that's when we had our aha moment and said why can't we design a great pair of socks and know that if we did it through the subscription model there
would be low overhead.
UNIDENTIFIED MALE: They ran with the idea in 2013 and launched Sock Fancy with a mere $600.
TEWOLDE: In the making of the website, one day we kind of left the site open and on and we went out for a few drinks and came back. We realized
that we had all these orders and our phones started blowing up instantly.
STEFAN LEWINGER, CO-FOUNDER, SOCK FANCY: People started placing orders before we had inventory in hand.
UNIDENTIFIED MALE: The business took off from there. Allowing customers to choose a monthly subscription starting at $11 for funky and whimsical
socks. Before long. it had attracted 20,000 subscribers across more than more than 85 countries. The company says it made more than $2 million in
gross revenue in 2017.
[16:50:00] LEWINGER: They lend themselves so well to a giftable item. We see about a 65 percent of our purchasers are female, but about 81 percent
of the people who are actually receiving socks are men.
UNIDENTIFIED MALE: The earliest socks may date back to the stone age and probably consisted of animal skins tied around the ankles. Their
popularity boomed in the 16th century thanks to the invention of the knitting loom. Today, the global industry is worth over $42 billion, and
is expected to nearly double by 2025. Asia Pacific is the biggest market for socks driven by a rapid population growth and a retail boom in the
TEWOLDE: We really are concentrating on the 90's revival. This is a great example of that. The jazz solo cup and these socks right here were
inspired by one of our favorite shows, "Saved by the Bell."
UNIDENTIFIED MALE: The socks in the showroom sometimes begin with inspiration
from the most unlikely of sources.
TEWOLDE: You know, it could be as simple as someone walking in one day and saying I was eating watermelon and I realized it would be a great sock
design. Once we have designs in stock we have an algorithm that randomly assigns the socks to a customer's order.
LEWINGER: We rely entirely on e-commerce. It allows us to reach the broader economy faster and it allows us to show off our personality a
We focus really hard on the design of each sock and it's not just the pattern or the color, but it's the construction of the sock, too. We
encourage anybody to try any other company or product they can and compare them side-by-side. We are confident that we would kind of come out on top
GOLODRYGA: Well, this year's Women's Day has a special resonance after the revelations of the me-too movement. I am joined by two CNN journalists who
have reported extensively on sexual harassment and assault in Hollywood and Silicon Valley. Chloe Melas from CNN entertainment and senior technology
correspondent Laurie Segall.
Ladies, thank you so much and the work that you've been doing is just so important and crucial and Lori, I know that in the tech world this is
something that's not new and has been going on for years and decades, but now a lot of people are speaking out for the first time and you spoke to
some of these women.
LAURIE SEGALL, CNN SENIOR TECHNOLOGY CORRESPONDENT: There was a huge moment. I've been covering tech for nine years and I've been covering
these types of stories for so long, but something happened around July and I spoke to many women who spoke out for the first time and they told me
essentially about their experience with sexual harassment. Take a listen.
(BEGIN VIDEO CLIP)
[16:55:00] BEA ARTHUR, FOUNDER, THE DIFFERENCE: You don't want to tell people that you were in a business meeting and somebody shamed you and made
you feel less than. Who wants to say that?
LEITI HSU, CO-FOUNDER, JOURNY: It was a moment that I felt my leg being grabbed under the table and I thought, holy moly, this is real.
LISA WANG, CEO, SHEWORX: We are sitting at a Starbucks and he grabs my face and tries to make out with me.
CECILIA PAGKALINAWAN, FOUNDER, APPLOUD, STYLETREK: I hate to say this. It's the norm, and I hope that we can change that.
ARTHUR: We were literally working on spreadsheets the least sexiest thing in the world and he stood up and pulled out his erect penis, genitalia.
HSU: When he did that he made me disrespected.
PAGKALINAWAN: Demoralized and disrespected.
GESCHE HAAS, FOUNDER, DREAMERS/DOERS: Like I didn't have any worth as a woman in business.
(END VIDEO CLIP)
GOLODRYGA: You don't even know how to respond to this, in 2018 we're hearing these types of stories. When it comes to fixing this problem and
changing it and seeing more executives, female executives in leadership roles, where are we?
SEGALL: We're getting there. We're not there and it's a mistake to say we're there and the public dialogue has happened and there it is actually a
movement lodging for International Women's Day where 48 venture capitalists have signed up to put out their harassment policies. Two actually put a
point of contact as who you can contact if something is happening and that was a huge, and I spoke to women who said are things better? A woman said,
I am going to dinners where VCs are interested in this, but I'm about to go fund raise again so we will see.
GOLODRYGA: And Chloe, this goes beyond Silicon Valley and Hollywood, the me-too movement is seeing backlash. Is that a bad thing?
CHLOE MELAS, CNN ENTERTAINMENT REPORTER: Some people are saying I don't want women had business meetings or I don't want to put women in high-level
positions, and that is not what this is about. It is just about treating people with respect. And there's also been some criticism in terms of
well, Hollywood, they're just wearing black dresses to awards shows, are they really affecting change.
And I can tell you I sat down with Tina Chen, who was Michel Obama's former chief of staff. She started the legal defense fund and they have raised
over $21 million and already paired a thousand people with attorneys. They are really trying to change laws and also make sure that companies have a
zero-tolerance policy and take people to court to make sure that this doesn't happen again.
GOLODRYGA: Corporate responsibility and including men in this conversation is crucial. Thank you so much for your incredible work. We will be
following it going forward. Thank you. Join us tomorrow for more coverage of International Women Day. I am Bianna Golodryga in New York, the news
continues here on CNN.