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QUEST MEANS BUSINESS

Sanctions are Underway for Russia as Theresa May Blames Moscow for a Nerve Attack on British Soil; Donald Trump Picks the Cable Guy to be his Top Economic Advisor, that's Larry Kudlow; A New Disaster for United Airlines, A Passenger's Dog Died in an Overhead Bin

Aired March 14, 2018 - 17:00   ET

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(COMMERCIAL BREAK)

[17:00:00] (WALL STREET CLOSING BELL)

RICHARD AUSTIN QUEST, CNN INTERNATIONAL BUSINESS CORRESPONDENT & HOST, QUEST MEANS BUSINESS: CLOSING BELL RANG on Wall Street, just about an hour

ago as the Dow Jones Industrials fell very sharply, second day of bulls - hey, oh dear, oh, oh, lots of them but they're very tepid.

Trading is over on Wednesday, it's the 14th of March.

Tonight, sanctions are underway for Russia as Theresa May blames Moscow for a nerve attack on British soil.

Donald Trump picks the cable guy to be his top economic advisor, that's Larry Kudlow.

And new disaster for United Airlines, a passenger's dog died in an overhead bin.

I'm Richard Quest LIVE from London, where of course, I MEAN BUSINESS.

Good evening. Just a few miles from here in Westminster a diplomatic crisis is unfolding, faced with the first chemical attack on British soil

since the Second World War Theresa May's government has delivered a stunning reprisal to the suspected culprit Russia, 23 Russian diplomats

have been expelled from Britain in a move designed to undermine Moscow's intelligence capability in the U.K.

The Prime Minister also announced plans to freeze certain Russian state assets and left the door open for stronger economic sanctions.

At an emergency U.N. Security Council meeting a short while ago, Russia denied Britain's claims, the prime minister insists she's responding to a

pattern of Russian aggression stretching back years.

(BEGIN VIDEO CLIP)

THERESA MAY, PRIME MINISTER OF THE UNITED KINGDOM & LEADER OF THE CONSERVATIVE PARTY: It is taking place against the backdrop of a well-

established pattern of Russian state aggression across Europe and beyond.

It must therefore be met with a full and robust response beyond the actions we have already taken since the murder of Mr. Litvinenko and account of

this Russian pattern of aggression elsewhere.

(END VIDEO CLIP)

QUEST: Nick Paton Walsh is outside Parliament, 23 Russian diplomats expelled, that's - that's a sizable number vis-a-vis the total number in

the U.K., what effect will it have?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well nearly half of the total embassy. I mean you know, yes these are the people who have

been accused of undisclosed espionage activity but frankly the response you'll get is the Russians expelling a similar number.

Now those in the U.K. given about a week to get out of town and then of course it's the issue of exactly how these tweaks to legislation, its

extended power that genuinely make Moscow sweat. They are focusing on Russia's state assets here if they consider them to be able to inflict harm

on U.K. citizens.

Also, too though more sort of diplomatically they are suspending U.K.- Russian bilateral relations for example not sending officials or the royal family to the World Cup later on this year in Russia.

But the question is really on the detail of what's in that legislation, does it really bite because frankly a tit-for-tat expulsion of diplomats

just puts people back -

QUEST: Right.

PATON WALSH: - kind of just like the lessons in international relationship Richard.

QUEST: Yes, now so what - what is the next opportunity that she has? What's - what's the next if you like sanctions that might - because Nick,

look (INAUDIBLE) the prime minister said in the statement, she described the Russian response and - as - in denial, sarcastic so she has to do more

surely?

PATON WALSH: Oh yes, I mean it really depends on the allies to be honest. You know, Britain has limited clouts, it wants to respect the role of its

law here and its court systems so it can't randomly go around confiscating things that it doesn't like and certainly needs its allies on board for any

meaningful sanctions.

So, they have heard a lot of rhetoric of solidarity from European allies here. Donald Tusk, the President of the European Council did mention

Moscow is culpable potentially in this, in his statement. The question is where does the U.S. come in this?

We heard from their Ambassador at the U.N. Nikki Haley just a few moments ago.

(BEGIN VIDEO CLIP)

NIKKI HALEY, US AMBASSADOR TO THE UNITED NATIONS: This is a defining moment. Time and time again member states say they oppose the use of

chemical weapons under any circumstance.

Now one member, stands accused of using chemical weapons on the sovereign soil of another member. The credibility of this Council will not survive

if we fail to hold Russia accountable.

(END VIDEO CLIP)

PATON WALSH: There is no way you can hold them responsible because Russia has a veto of that Council but the question is in the days ahead do you

actually see U.K. allies taking concrete measures, sanctions, they bind together and make Russia sweat because frankly further talk isn't going to

upset the Kremlin.

As you've known yourself Richard, the Ukraine they're not particularly uncomfortable with mistruths about their actions, they do need to see

actual things happen for them to feel [17:05:15] that (ph) possibly if they were involved in the death - sorry in the attempted murder of Sergei and

Yulia Skripal that that was a misstep.

And at -

QUEST: Right.

PATON WALSH: - this stage of what we heard here today in London I can't imagine the Kremlin necessarily having a particularly bad night sleep.

QUEST: Nick Paton Walsh outside Westminster, thank you.

Now the Prime Minister, Theresa May has suggested the backlash is far from over. Britain is a popular destination for wealthy Russians and their

money and the PM warns she'll make it more difficult for the country's ultra-rich to visit Britain.

(BEGIN VIDEO CLIP)

THERESA MAY, PRIME MINISTER OF THE UNITED KINGDOM & LEADER OF THE CONSERVATIVE PARTY: Mr. Speaker, we will also make full use of existing

powers to enhance our efforts to monitor and track the intentions of those traveling to the U.K. who could be engaged in activities that threaten the

security of the U.K. and of our - of our allies so we will increase checks on private flights, customs, and freight.

We will freeze Russian state assets wherever we have the evidence that they may be used to threaten the life or property of U.K. nationals or

residents.

And led by the National Crime Agency we will continue to bring all the capabilities of U.K. law enforcement to bear against serious criminals and

corrupt elites. There is no place for these people or their money in our country.

(END VIDEO CLIP)

QUEST: So, Sir Peter Westmacott is the former British Ambassador to the United States.

SIR PETER JOHN WESTMACOTT GCMG LVO, SENIOR BRITISH DIPLOMAT, FORMER BRITISH AMBASSADOR TURKEY, FRANCE AND THE UNITED STATES: Good to see you. Good

evening.

QUEST: Let's find out where you stand on these things before we get into detailed questions. Do you believe Russia did it?

WESTMACOTT: Looks like it to me.

QUEST: So, in that situation, the response of the PM today, 23 that's the best part of half of the diplomatic force in the - in the - in the U.K. or

maybe just slightly under, there to be expelled, how serious a move do you think that is?

WESTMACOTT: I think it's a very significant move. It's more Russian diplomats, agents, that have been expelled from the United Kingdom for many

years, not since the days of Oleg Gordievksy.

She has stopped short of expelling the ambassador and I was thinking back to a time when I was involved with some of this stuff, you know, years ago,

when the Syrian Embassy was implicated in an attempt to blowup an El Al airliner from Heathrow Airport and we not only expelled the ambassador, we

broke diplomatic relations with Syria, when Mrs. Thatcher was the Prime Minister.

So, she - this is a significant move, and I think a number of the other things that Mrs. May has announced are also substantial so it's an

important message I think to the Russians.

QUEST: Why would you not expel ambassador or recall your ambassador for consultations, going as close as you can to breaking off diplomatic

relations?

WESTMACOTT: Recalling an ambassador, you know, it - this is a diplomatic process of which the significance is largely lost I think on other people.

I think she's done a lot here. We have to wait and see how and if the Russians retaliate, I imagine they will do something.

She may have something else up her sleeve, she may need to have something else up her sleeve to show the Russian that, to coin a phrase, 'she means

business.' And so, I think we'll wait and see how that goes.

But I think several other of the elements there, and doing a British recruitment of a very important (INAUDIBLE) act which is what Putin hates

in terms of America and the sanctions and the restrictions on a lot of his wealthy cronies which flows from (INAUDIBLE) -

QUEST: But isn't that -

WESTMACOTT: - (INAUDIBLE) -

QUEST: - isn't that what has to do - but isn't that what she has to do? I mean she may be working up to it but I wonder, bearing in mind that the

Litvinenko murder which unsolved, to this date you know, no one stood trial, there's been no confirmation of any (INAUDIBLE), does Britain really

wants another version of that?

WESTMACOTT: Litvinenko took a long time to resolve but let's be fair you know, when eventually a full investigation was carried out it was very

clear that a finger of blame was pointed at President Putin himself.

QUEST: And they'd never admitted it.

WESTMACOTT: Of course, they won't and it never will. They've never -

QUEST: And they'll ever admit this time.

WESTMACOTT: They will not. And that's why a lot of what the Russians have been saying is (INAUDIBLE), 'give us the evidence we'll examine it,' of

course they won't examine it.

We might nevertheless for if you'd like reasons of public relations give them a sample if we've got one but never expect this regime to admit it's

mistakes or to stop lying.

So, the point is you have to call them out for their actions, you take firm action yourself which shows that there are real costs to this sort of

behavior.

QUEST: Why are we not seeing a stronger response from allies particularly within the European Union? Oh yes, everybody has made the right noises but

I don't hear anybody else saying, we - you know, 'this could've happened on the streets of Paris,' or, 'Berlin,' or, 'Madrid.' Yes, 10 Russian

diplomats out the door.

WESTMACOTT: We've had a very powerful statement from Nikki Haley tonight in the Security Council, the U.S. Ambassador, stronger action than I

expected -

QUEST: Yes.

WESTMACOTT: - just now but I think the statements that have come from the other European capitals have been very supportive. We haven't -

QUEST: They've been -

WESTMACOTT: - as far as I know -

QUEST: - been weak. They've been -

WESTMACOTT: - Oh.

QUEST: - weak, Peter.

WESTMACOTT: I think you're unkind. I think what we have not yet done as far as I'm aware, I'm not with the government anymore, is ask them for a

specific measure of you know, additional E.U. sanctions against Russia,

We've - this is a first stage of what we are - Theresa May has said that there is more to come. We need to call out [17:05:14] a lot of the

elements of Russian behavior, a lot of embarrassment will flow from that and I think there's - there's plenty more to come yet.

QUEST: Right. So finally, I guess you know, what I'm not hearing from the government, and maybe this is because you have to do it in diplomatic step-

by-step considered way, I'm - I'm not feeling outraged, I'm not hearing fury, I - if this was Donald Trump, who had this happen on the streets of

New York, he'd have had half of them all the plane and economic sanctions well underway.

WESTMACOTT: Watching the House of Commons earlier today and seeing what is very unusual for the House of Commons at the moment, a united front from

all the political parties and a great deal of support for Theresa May, something she hasn't had for a year or so in the British Parliament. I

thought there was a sense of outrage and a very strong sense of 'this is absolutely unacceptable,' not only in this attack on the individuals

concerned but also in terms of producing an illegal nerve agent contrary to all international laws.

I thought there was strong outrage there. I think the measures that have been announced so far are strong and important and let us see what more can

be done to bring under control the very wealthy cronies of President Putin who regard London as something of a playground.

The other thing, remember that's going to be --

QUEST: Yes.

WESTMACOTT: - done, fresh investigations into at least a dozen unresolved murders of Russian citizens in Britain where there are question marks.

Let's see what that produces as well because this is not going to be just left to rot. I think there's going to be serious attempts to get to the

bottom of Russian bad behavior in the U.K. And I think you're a little unkind in saying that there isn't enough outrage.

QUEST: Are we good? (ph). Diplomatic to the end, (INAUDIBLE) Sir Peter.

Turning to the European markets (INAUDIBLE) closed before the route of the U.S. stocks get in the way so if you take a look at the numbers you'll sort

of see that they ended flat.

By the way Draghi has says, rate rises will be patient and prudent, call it the Kudlow rally, news that President Trump had picked a new economic

advisor briefly pushed stocks higher on Wall Street, we'll talk about that and we're the final hour of #MYFREEDOMDAY. Things kicked off on this very

program yesterday and since then what's been done to bring attention to the scourge of human trafficking.

We'll show you here on QUEST MEANS BUSINESS [17:02:22].

(COMMERCIAL BREAK)

[17:04:33] QUEST: U.S. stocks ended the day firmly in the red. Industrials were the worst affected as fears of a trade war with China has

now gripped Wall Street. Look at the Dow, I mean besides that little bit of green in the beginning it's - just before - until after, it started at

10 o'clock, straight the way down and it stays low for the entire session of 249 points just off of the low of the day.

Boeing was a driver for the large portion of the losses, the shares were off some 2.5 percent and the - you can now say that that is more than 10

percent down - well over 10 percent down so they were in a correction environment.

Disney has a restructuring which is why their stock put on a little bit but business certainly is a stock that's been all over the place [17:05:13]

lately but Boeing, DuPont, Goldman, look at all the ones at the bottom.

The Boeing factory in Missouri got a special visitor, President Trump, talked with us (ph) ahead of a roundtable on taxes.

Now the Dow came off of its lows around midday, the reports that Larry Kudlow has agreed to become President Trump's top economic advisor. Those

reports are now confirmed, he's been talking about it on the "CNBC Network." Kudlow was the informal advisor to the president as well as a

contributor on the channel. He was vocal in his opposition to blanket tariffs, that's the same issue that prompted Gary Cohn to quit.

Kudlow says he's a disciple of Stephen Moore's philosophy. Stephen Moore of course the Distinguished Fellow with the Heritage Foundation -

STEPHEN MOORE, WRITER; PRESIDENT, CLUB FOR GROWTH; FORMER MEMBER "THE WALL STREET JOURNAL" EDITORIAL BOARD; FORMER ECONOMIC ADVISOR, TRUMP CAMPAIGN &

DISTINGUISHED VISITING FELLOW, PROJECT FOR ECONOMIC GROWTH, HERITAGE FOUNDATION: Yes.

QUEST: - and - and always glad to have you on by the way (ph). Before we go any further Stephen Moore, what is the Stephen Moore philosophy to be -

of which we should become disciples?

MOORE: Well I don't know what the Stephen Moore philosophy is but I don't know - do now what the Kudlow creed is and it's 'the best path to

prosperity is free-market capitalism,' and I'm a disciple of his and I'm just really excited. I think a lot of people are really excited something

like having the first draft pick and getting Lebron James.

I mean Larry Kudlow is a phenomenal economist, he's a great communicator, he does believe in the free enterprise system and a very pro-business. I

think he and Trump will have a great rapport together and you're right the one issue that they don't fully agree on is trade so we'll see how that

plays out in the weeks ahead.

QUEST: Jeff Zeleny is at the White House in Washington. And Gary - sorry Rex Tillerson did not get on with the president as was made clear, it

wasn't a meeting of minds. From what you're hearing on the White House, does that meeting of minds exist between Kudlow and Trump?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well I think there's no question about it. I mean as you said Larry Kudlow was an advisor to a

candidate Trump, he worked with him closely along with Stephen -

MOORE: Yes.

ZELENY: - on creating you know, the economic policies so he has a long- standing relationship with the president.

That was much different than the secretary of State of course who didn't really - he had - hadn't - hadn't met the president, he didn't know the

president at all so I do think that we've seen a pattern develop over the first you know, a year plus of this presidency.

The president likes to be surrounded by people he's comfortable with so I think he'll certainly will be comfortable with him but the question is on

immigration as well, that is another difference that Larry Kudlow has with the president.

But of course, he serves at the pleasure of the president he's not coming here to the White House to espouse his own ideas, he's coming to work -

QUEST: Right.

ZELENY: - for the president. The question is can he change anything internally you know, to dial back some of these things that he disagrees

with on steel and aluminum. We don't know the answer to that.

MOORE: Yes.

QUEST: OK but before -

MOORE: Jeff, let me -

QUEST: - you go Jeff -

MOORE: - take that -

QUEST: - one quick -

MOORE: - can I just -

QUEST: - Oh, yes.

MOORE: - respond to that.

QUEST: Yes. Of course, (INAUDIBLE).

MOORE: A very good point Jeff makes. Yes, so Jeff you're exactly right you know, that is a question is whether Larry Kudlow can prevail in some of

these debates that will happen on issues like trade and immigration.

And you know, one of the things that I found because I did serve with Larry Kudlow on the campaign and we met often times with Donald Trump and one of

the things that Trump often ask was you know, 'Larry, if we do such and such a policy, if we impose this tariff, what impact will that have on the

stock market?'

And oftentimes Larry says you know, 'you don't - you don't want to go there you know, Mr. President because it's going to have a negative effect' and I

do think that is where I think - because so many people watching the show or America watchers, that's - that's where I think Larry can have a very

salutary effect on Donald Trump, you know, saying 'look you're going to hurt Americans, you're going to hurt the economy if you go in this

direction.'

But on trade I Trump has persuaded Larry that some of these strategic tariffs may be on countries like China makes sense given how much China is

stealing from us and I think - and I do think that tariffs are coming on China, you've mentioned the idea of a trade war, I don't know if a trade

war is coming but I believe that Donald Trump is going to get very tough with China in the weeks ahead.

QUEST: All right but a quick question to Jeff and then we'll let you go Jeff, stay with me Stephen.

Look Larry Kudlow just said on "CNBC," that Wilbur Ross has said to him, "By all means have the debate but Larry once the decision is taken,

everybody stands behind it."

Is - Jeff's any - is that a - is that a modus operandi which Donald Trump can live with, in other words -

ZELENY: Sure.

QUEST: - have your debate in the Oval Office but once I've decided, get behind it.

ZELENY: It certainly seems like that and I was watching that interview that Larry was doing on "CNBC" and he said he agreed to that. Of course,

again he's coming in there not to espouse his own views, he was already doing that to a much wider audience. Of course, he is coming in to try and

shape this policy.

But we've heard the president, we've heard him say again and again, he said it yesterday as well, he likes to have people disagreeing with him and we

do see that internally. The question is though, I think how this affects other advisors [17:05:14] here, how this sort of you know, changes the mix

and the dynamic of discussions here.

But I think that Larry Kudlow coming in with a strong personal relationship with the president is about the best thing you could have coming into this

often chaotic and you know, complex White House.

QUEST: Jeff, I'll let -

MOORE: I talked to Larry (ph) -

QUEST: - you go -

MOORE: - on this by the way, Larry agrees with that. I mean, he did -

QUEST: Right.

MOORE: - on "CNBC" and he said it to me many times, like I understand, if I take this job and I'm a spokesperson for the president then I have to you

know, advocate for his policies. You know, you fight the fight internally and then you advocate them.

I always talk to my buddy (INAUDIBLE) who is a mutual friend of ours and he was saying you know, I worked for Richard Nixon, I had to go out there and

defend wage and price control so you know, sometimes you just have to bite- the-bullet and do that. And I don't think Larry is going to have to defend wage and price controls.

QUEST: Alright so Jeff, we'll leave - we'll - we'll say goodbye to you.

We will listen now - for - to what Larry Kudlow said just a short while ago on the questions of tariff because Stephen on this issue, it's not just

tariffs, everybody can be a free marketeer in the - in theory until it actually has to be put into practice with hard economics.

Have, a listen to what Kudlow said?

(BEGIN VIDEO CLIP)

LAWRENCE ALAN "LARRY" KUDLOW, CNBC HOST, "THE KUDLOW REPORT;" INFORMAL ECONOMIC ADVISOR TO PRESIDENT DONALD TRUMP & NEW CHIEF ECONOMIC ADVISOR TO

PRESIDENT DONALD TRUMP: I just don't like blanket tariffs and I don't think you should punish your friends to try to punish your enemies in

international affairs and that's where he went. So, on radio Saturday I applauded the carve-outs (ph) and in talking to him in recent days, Europe

can get carve-outs (ph) if they negotiate with us to reduce some of their barriers; they have many barriers, you know, for Japan; China, I don't

know, maybe China will negotiate in good faith, we will see.

(END VIDEO CLIP)

QUEST: So, as you hear that, the idea of targeted tariffs, the idea of - I mean let's not get too hung up on this question, even though it was the

issue that cost Gary Cohn his position. How will Larry Kudlow play with the others in the White House?

MOORE: I think he'll - you know, Larry Kudlow is somebody everybody gets along with. I think he can be - have a disagreement with people without

being disagreeable and look on this tariff issue I Trump has actually had a bit of a - impact on Larry's thinking.

You know, we do run large, large, trade deficits with some of these countries and there is no reason they can be buying more American products

you know, Trump ran on an "America First" platform and I don't - I don't anticipate major problems with Europe but I do think you know, as I said

before I think Trump is very obsessed with China -

QUEST: Right.

MOORE: - they - as I said, the report came out last week as you know, $500 billion a year they're stealing from our - through technology, we can't let

that stand.

QUEST: Stephen, good to have you. We've lots more to talk about -

MOORE: We do.

QUEST: - in the future and we're - you are always welcome -

MOORE: Thank you.

QUEST: - thank you.

Former executive at Equifax has been charged with insider trading, Yun Ying, the company's Chief Information Officer stands accused of selling

nearly one million dollars-worth of stock options just before Equifax announced a massive breach.

You can tell exactly the significance of this, look, that's before, that's after, now you just imagine if you have your stock options and you know,

that the company is about to announce this massive breach and you can sell here, rather than here?

Well that's the allegation, it really is a simple as that. When the breach was made public in September, shares of around 15 percent then.

Clare Sebastian is following developments for us in New York. It is an allegation, it's only - it's an allegation at the moment. It is true, this

is just a straightforward case of criminality, insider trading?

CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT & CNN MONEY: Yes. Absolutely Richard and if you read the SEC complaint, it seems that pretty

clear that this is what happened. They lay it out almost by time stamp, on August 25th he found out that there was a breach, didn't know immediately

but it was a breach of Equifax when it - when it turned out to be a really urgent case.

He texted a colleague and he said, look I'm starting to put two and two together, I think it's us that was breached. (INAUDIBLE) following Monday,

comes into work at 10:00 a.m., start conducting Internet searches of Experian a rival credit reporting agency that was breached in 2015, sees

the impact it had on Experian's stock price; an hour later he exercises all of his available stock options, makes almost a million dollars.

It turns out that if he had waited until the public found out about this on September 7th he would've lost a hundred and seventeen thousand dollars

based on - based on what his options were.

QUEST: It's a little bit breathtaking, that somebody in the C-Suite doesn't know or doesn't care that they - they've got privileged

information, market sensitive, privileged information and they're not supposed to trade on it. It - I mean it is C-Suite 101 [17:05:13].

SEBASTIAN: Absolutely Richard. It is - it's pretty extraordinary. When you look at the evidence and actually Jun Ying wasn't the only person who

was associated with potential insider-trading related to Equifax. When this first came out the company, they basically disclosed that three

executives including the CFO had sold shares out worth collectively up to $2 million between the time that the company found out about this on July

29th and when they disclosed it to the public on September 7th.

The company later in a subsequent internal investigation found out that those three and one other were not guilty, that they had not known about

the breach but still certainly this is - this adds to the catalog of errors that Equifax has been accused of.

QUEST: Stench is everywhere.

Clare Sebastian, thank you.

When we return, a flight attendants order to put a dog in an - to an overhead baggage bin on a flight which had fatal consequences for the dog,

it's the latest gut-wrenching incident of one of the U.S.'s biggest carriers, United Airlines, 'flying the friendly skies,' shall we say.

(COMMERCIAL BREAK)

QUEST: And I am Richard Quest, there's a lot more QUEST MEANS BUSINESS in just a moment as Silicon Valley pays tribute to Stephen Hawking. I have

been speaking to his old boss who says, Professor Hawking loved to party.

In a global day of action, students are raising their voice as #MYFREEDOMDAY comes to an end.

As we continue tonight, this is CNN and, on this network, the FACTS ALWAYS COME FIRST.

Moscow says it will retaliate against Britain's decision on Wednesday to expel 23 Russian diplomats. It follows the poisoning of a former - Russian

former double agent in the U.K.

British Prime Minister Theresa May says there's no alternative conclusion other than the Russian state was culpable.

The Pakistan Taliban is claiming responsibility for a blast in Pakistan which killed nine peace officers. It happened on Wednesday in a Lahore

suburb. The group have released a statement saying that the attack is in response to the many deaths of their fighters, they also warned the

government and security forces more attacks will follow.

Thousands of students across United States took part in a national school walk-out demanding stricter gun rules and an end to school violence. The

students remained outside for at least 17 minutes, that's one minute for each of the 17, people killed in the Florida school shooting, which is

exactly a month ago [17:04:49].

(COMMERCIAL BREAK)

[17:05:03] QUEST: United Airlines says it has taken steps to avoid the repeat of an accident on a flight after a dog in a pet carrier was put into

the overhead bin and then the dog later died.

The order was given by a cabin crew on a flight from Houston to New York. United called the bulldog's death a tragic accident. And in a statement

tonight, United says "we have learned that the customer did tell the flight attendant there was a dog in the carrier, however, our flight attendant did

not hear or understand her, and did not knowingly place the dog in the overhead bin."

The family spoke to "Abc News".

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: When the flight attendant came, she said, boy, you have to put him up there because it's going to block the path. And well,

like, it's a dog, it's a dog, and she's like it doesn't matter, you still have to put it up there.

And she just put -- she helped her put it up and she just closed it like it was a baggage. She took him out and opened the thing and then she got the

dog and she was dead.

(END VIDEO CLIP)

QUEST: United will now hand out kind of tags to passengers carrying pets in the cabin, last year, 24 pets died flying on U.S. carriers, 15 of those

were on United. Last April, a three-foot long rabbit died in transit during United flight from Heathrow to Chicago.

And then there was some years ago this song.

(MUSIC)

QUEST: United breaks guitar, there was a protest song about baggage handling which went violent 2009, and if all that wasn't enough, well, we

won't forget this in a hurry.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: But kill me, they kill me, kill me, they kill me --

UNIDENTIFIED MALE: Relax --

(END VIDEO CLIP)

[17:35:00] QUEST: Let him dazed, but David Dowe(ph) came with no more controversy for United, he had been forcibly removed from a United flight

which had been overboard -- Sam Collins; the independent traveler here too, joins me now, what do we make of this?

SAM COLLINS, INDEPENDENT TRAVELER: Well, I know exactly what the stock market made of it. United Continental holding down 2.58 percent. So doing

worse even than Boeing, and that just shows that a 10 month old French bulldog named Cockito(ph) -- may he rest in peace, can have a really

serious effect on the value of an airline.

QUEST: If we're -- for the purposes of this question, let's accept that the flight attendant didn't know there was a dog in the bag, that will be a

he-said, she-said --

COLLINS: Yes --

QUEST: Discussion. And what systematically is it telling us about United that they've had these incidents. Other airlines have had them too,

remember.

COLLINS: Yes, well, look, there are 2 million United passengers a week. That means there's 2 million chances for United staff to mess up those

encounters.

QUEST: Right --

COLLINS: Clearly, something gone horribly wrong in this case, and we will probably never know quite who said what, when and so on. But it is very

much the case that -- you showed there the terrible case of dog to David down nearly a year ago.

But I think this -- perhaps almost more fury about this event and the sad consequence of --

QUEST: Is there something systematically wrong with United?

COLLINS: I don't think so. I mean, look, every airline is under immense cost-pressure. So therefore, their customer service is not as good as it

was maybe in the '70s when people were paying an absolute function to play and they enjoyed the kind of glamour associated with it.

I mean, things just go wrong in aviation. Also today, I learned that a great dean(ph) that was supposed to be in Kansas --

QUEST: Hold on --

COLLINS: Ended up in Japan --

QUEST: This is another United --

COLLINS: German Shepherd ended up in Kansas, I mean, possibly got the nationalities mixed up there. But you know, things are going to go wrong,

unfortunately, as your very good set up there showed, people remember --

QUEST: But people remember, Simon, but they don't let it -- may influence --

COLLINS: Oh --

QUEST: Their decisions. Look at this graph again, let's bring our graph again of the shared prices because if you look at the shared prices

valiant, they're all pretty much going in log -- very big string.

COLLINS: Yes --

QUEST: And I venture to suggest why United is a bit lower than everybody else. But that low, that red line lower is because of a capacity issue --

COLLINS: Yes --

QUEST: Under battle over yield management, not because of David Dowe(ph) or dead dogs --

COLLINS: No, and that is part of the problem. The -- big analysts are having to contend with it, it's all about price, sure, schedules important

that everybody is after a deal when you got airlines like Spirit and Frontier who are muscling in on markets, saying yes, we're going to give

you a very basic economy product and you can bid up a bit from there.

But there's intense competition, it's a great time to be a traveler, it's terrible to be a 10-month old French bulldog.

QUEST: I just got -- since Simon is here, next week or a week after next, I am about to do the first London nonstop.

COLLINS: Yes --

QUEST: The inaugural flight, first time the two. I'm going to fly down to (INAUDIBLE) onto the old kangaroo route to 1947 --

COLLINS: Yes --

QUEST: With Stephanie Songs(ph) --

COLLINS: Yes --

QUEST: Is this the future, the (INAUDIBLE), the Norwegians, the levels, the INGs level. Is this the future?

COLLINS: I don't know that this route was just going to be able to -- 9,000 miles long, almost the longest flight in the world is necessarily

more than just a niche. Sure, contest is looking at can they do ten and a half thousand miles which would be Sydney to London.

We shall see. I know you've actually done the longest ever flight in the world which has ever taken place with a passenger, aviation -- which is

Singapore to New York.

QUEST: Yes --

COLLINS: It all depends so much on the price of fuel. You carry an awful lot of jet fuel --

(CROSSTALK)

The fuel for later on in the journey. But enjoy it and I'll meet you at Heathrow because I'm taking the first flight --

QUEST: I was going to say, I was -- I was looking forward -- you know, you're going the other way --

COLLINS: I'm going the other way --

QUEST: You could have got it already --

COLLINS: I'll find out how it was you, I'll buy you a coffee if you're still awake.

QUEST: I'm still -- economy sticks, so I'm still -- all right, good to see you, thank you --

COLLINS: Thank you.

QUEST: Now, Stephen Hawking helped explain the universe, and after his death, colleagues explaining what Hawking meant to them before.

(COMMERCIAL BREAK)

QUEST: Tributes from across the world, I mean, as we remember Stephen Hawking who died early on Wednesday at the age of 76. Now the visionary

physicist was considered the world's greatest among scientists.

And one particular reason of course besides the great brain and the level of academia with his ability to explain some of the biggest mysterious of

the universe and the longer way he inspired millions including the world's top technology executives who took time to remember him today.

So for example, we've got Tim Cook of Apple saying "the greatest enemy of knowledge is not ignorance, it is the illusion of knowledge." Quoting

Stephen Hawking.

And then Google's chief executive says "the world has lost a beautiful mind and a brilliant scientist." As for Satya Nadella; the Microsoft chief

executive, he says "we lost a great one today, Stephen Hawking will be remembered for his incredible contributions to science, making complex

theories and concepts more accessible to the masses."

Joining me now is Alan Fersht, master of Gonville and Caius College, Cambridge where Stephen Hawking was a fellow.

[17:40:00] Good to have you with us, sir, thank you. And what was the essential essence of the man's humanity and brilliance that he was able to

be a true genius, but at the same time so accessible in terms of popularity. What was it do you think?

ALAN FERSHT, MASTER OF GONVILLE & CAIUS COLLEGE, CAMBRIDGE: He had a great sense of humor, he was fun, he was effusive, and not even think bound in a

wheelchair and then becoming more and more mobile.

Didn't that -- basic fun he had and then the joy of life. He liked being center of things, he liked mixing with people, he's very sociable.

QUEST: And if you had to weigh up his singular largest contribution to physics, what would you say that was?

FERSHT: I think it's undoubtedly cocky radiation. He discovered the black holes, that is massive, tiny objects in which everything have sought to

sink. Actually radiates out energy and they evaporate and eventually dissipate themselves and the whole universe again.

And that was his major breakthrough.

QUEST: And in a very much the Einstein fashion, he had quoted and accepted a level of celebrity which he seem to enjoy.

FERSHT: Yes, there's no doubt about it, he enjoyed being the center of attraction. Had a terrible physical disability, he was able to overcome

it, he was proud doing that, it made him I suppose much more accepted and he realized he succeeded.

QUEST: Was he able to instill a love of this in the students or when he was elected or when he was talking about this. Could you -- could you

visibly feel that he was imparting a love of the subject to those he was teaching?

FERSHT: Unfortunately, I never saw him lecture much. I knew more of him and his sort of social activities within the college and the lecture he

gave there. Perhaps the interactions I've had with students do their -- that he did inspire them.

There's no question he's inspired millions of people to take up physics.

QUEST: And the ability to create such achievements in the face of such overwhelming physical disability. I mean, that always strikes me whenever

I did stories about him, that always struck me as being a defining point in his abilities.

FERSHT: Yes, that's true. Before he was struck down with this illness, he indulged in lots of other activities when he realized he would never be

able to do those, he concentrated on the thing he could do well, and he enjoyed that.

QUEST: Master, good to see you, thank you for joining us from Cambridge tonight, we very much appreciate it, thank you sir, you only retire --

FERSHT: Thank you --

QUEST: Over the last 24 hours, Cnn has hammered home the importance of freedom. Events have been taking place worldwide like this say no to

slavery balloon released in Rome, the latest though as we talk about these issues, first, traders.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is the story of Singaporean Nicolas Travis; the founder of skincare brand Allies of Skin, and how his company is making

allies of its own around the globe.

In his teens like so many others, Nicolas had bouts of alchemy.

NICOLAS TRAVIS, FOUNDER, ALLIES OF SKIN: It was frustrating, it was irritating to a certain extent, and then it kind of at certain points felt

hopeless.

UNIDENTIFIED MALE: But hopeless quickly turned to hopeful. He studied medical science in college, business in grad school and wrote a business

plan for a skincare line. And in 2013, he launched Allies of Skin.

Three years later, his first products went on sale.

TRAVIS: I launched Allies of Skin with three products. It was a little bit unusual for this industry because you have brands usually launching

eight or ten products.

UNIDENTIFIED MALE: But getting noticed wasn't easy. In a crowded industry where according to Euro Monitor International, the top three companies

accounted for just over a quarter of the market size in 2016.

Expanding from three products to seven, business is beginning to boom. Accessing phone calls and e-mails to buyers, a persuaded high-end retailer,

locations in 12 countries to stock Allies of Skin products, in addition to online sales shipped around the globe.

TRAVIS: E-commerce takes up about 50 to 55 percent of all sales.

UNIDENTIFIED MALE: Revenue during the first year was $700,000, and this year --

[17:45:00] TRAVIS: We're definitely going to see 2 million.

UNIDENTIFIED MALE: And he's not alone in that growth. The global beauty and personal care product industry is estimated to grow by more than 4

percent annually, reaching $430 billion by 2022.

Digital convenience is driving that growth. For up to five beauty shoppers use online tools before or while they shop. However, just 6.4 percent of

total sales in 2015 were made using e-commerce platforms.

But that number is growing especially in Asia when only 10 percent of beauty products are sold online, followed by North America and western

Europe. Reality TV star Kendall Jenner's make-up artist was impressed by Allies of Skin and let his army of social media followers know.

TRAVIS: That was something that we couldn't have planned to, because we don't have the budget to do that. It also shows how important social media

is.

UNIDENTIFIED MALE: While hard work has been the foundation of the successful business, everyone can benefit from a lucky break.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

QUEST: This time yesterday, I was at Atlanta's International Airport, I had the launch of Cnn's "MY FREEDOM DAY". And on last night's program, I

spoke to those on the frontline, people trafficking, the flight attendants, the airport workers.

And the past 24 hours, Cnn has used its global resources to bring the world together for this crucial cause and course. Here's a snapshot of what's

been achieved.

(BEGIN VIDEO CLIP)

(SCREAMING)

CROWD: My freedom day!

UNIDENTIFIED FEMALE: Kids like these around the world do a signing off and saying enough is enough.

UNIDENTIFIED MALE: Freedom means seeing a world(ph) --

UNIDENTIFIED FEMALE: Those girls are not singled out for attack.

UNIDENTIFIED MALE: There can't be freedom, that's just like me. I was held captive by Boko Haram.

UNIDENTIFIED FEMALE: Freedom to me is when everyone have a right to do what they want and what to -- what they don't want to do or do.

UNIDENTIFIED FEMALE: People writing their thoughts on this freedom tree as I like to call it. Freedom is movement, freedom is possible, a right for

everyone.

UNIDENTIFIED FEMALE: All over the world, girls are being forced into early marriages.

UNIDENTIFIED FEMALE: I feel like my freedom day is such an important thing, especially now since there's so much slavery going on in the world.

(SINGING)

UNIDENTIFIED FEMALE: Every human, free a thing, free to fly, free to dance, free to run, free to dream, free to choose what human beings want to

be.

CROWD: My freedom day!

(END VIDEO CLIP)

[17:50:00] QUEST: The activism isn't over yet, Asher Zain is at a school in Los Angeles having a special assembly right now on my freedom day.

What's going on?

ASHER ZAIN, CNN: Hi there, Richard, well, it's a little noisy here, they're slowly wrapping up the final special assembly. Two special events

held here at Southgate High School in South L.A., about 1,600 children filling up this auditorium and it's just been an incredible moment of

seeing young people united in the fight against modern day slavery and human trafficking.

I've got two seniors here with me to tell us a little bit more about the day. Leslie is actually president of the Ram's(ph) club, Ram's(ph) club

have organized much of the event to score -- have put on for this issue.

Leslie, thank you for being with us. Leslie, tell us a little bit about the day, what has been some of the highlights?

UNIDENTIFIED FEMALE: Well, from the highlights throughout the day have been the way all of stars and like the guest speakers that have -- came out

today to help us spread awareness about what human trafficking is and helping encourage people to understand what the day actually really -- like

what the day really is about.

And having the band come on and support us as well.

ZAIN: Amazing, they were actually fantastic. Maria, tell me about the students here because I've been here for a couple of hours and they have

been really engaged, really excited. Why is it such a big issue for kids here at Southgate High.

UNIDENTIFIED FEMALE: For monitoring students is such a big case because Miss Shaw(ph) has always inspired, you know, tried to make a difference and

tried to stop it.

Most students as like myself in my last year, we were not aware -- I wasn't aware of what modern day slavery was, and she introduced it. So she

encouraged me to stop and -- you know, make a difference every day.

And that's why every student here is involved.

ZAIN: Leslie, how important is a special assembly like this, how important is something like my freedom day to making a difference in this fight?

UNIDENTIFIED FEMALE: Well, I think it's very important because it helps spring awareness and by summary has said not many students actually are

aware of what modern day slavery is. And when many people think about slavery, they think about how it was back then.

And this day just brings a lot of us together and then helps us on use our voice.

ZAIN: What does freedom mean to you two? Maria, what does freedom mean to you?

UNIDENTIFIED FEMALE: Freedom to me means able to travel wherever I can with no fear and nobody telling me not to.

ZAIN: Thank you so much, thank you for being so welcoming, you guys have an amazing school, thank you for all your works in this fight against human

trafficking and modern day slavery.

And Richard, I'm going to send it back to you, these are amazing kids, they're the next generation on the frontline of this fight. And you know,

I think we can offer a little bit more hopeful that this isn't just -- this will end sooner rather than later with the young people here and around the

world taking up this battle, Richard.

QUEST: Quick last question to you, Asher Zain, you've been involved in this since the start. Are you seeing real tangible progress from that

which we are doing with my freedom day.

ZAIN: I honestly am, Richard, I have been incredibly heartened by young people's commitment. You know, we often say about the young, they are

slightly slythe, if you will, that they can't stay focused on something.

But we have seen kids stay to this issue, remain committed to the issue and technology, Richard, they have really embraced technology to make videos,

to use social media and they are moving the needle, and they are holding people accountable and shining a light.

I'm incredibly heartened for what comes next, and we'll be right here to capture it all.

QUEST: Asher Zain joining me from Los Angeles. Now while my freedom day is over, it's not too late for you to join in. Let the world know what

freedom means to you, share your story and it is the hashtag my freedom day.

We started it all this time yesterday in Atlanta and it would be a treat and an honor and a privilege to hear from you of what my -- of what freedom

means to you. Before we take a short break, I need to bring you some details of some news in the Navy.

The U.S. Navy has confirmed that an F/A-18 Hornet has crashed in a Key West of the Florida coast. The air crew ejected from the aircraft, search and

rescue efforts are now underway.

A photo posted on social media shows a helicopter hovering over the sea. We'll bring you more updates as we get to those for you. And a quick look

at the markets, just to remind you, it was a pretty awful day.

And the Dow started with a potential for a little bit of a gain when it opened. But the first hour of trading, that had evaporated and it was down

and it was the fears of trade, it was the fears of worries and Boeing which was the largest stock or loser dropped the market down most.

[17:55:00] We will take a profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight is a profitable moments. And Larry Kudlow; one of the senior commentators, chief commentators of Cnbc, a rival network to us has

been appointed as the director of the National Economic Council at the White House.

Donald Trump's replacement for Gary Cohn and the former president of Goldman Sachs. It's a fascinating appointment. I have interviewed Larry

Kudlow on many occasions when he was in the 1990s, the chief economist at Bear Stearns.

And if you go further back, the man is certainly qualified for this job. He worked in the Reagan White House. He'd been at the Fed, he's a numbers

man through and through. Chief economist at a major bank, yes, after some personal difficulties and then came back for a stellar career at a rival

network.

Put this all together and it's too easy to say Larry Kudlow was a globalist or a marketier or he's not in favor of tariffs or he likes targeted

tariffs. He's much more nuance and complex than that.

What it does mean though is that Donald Trump has somebody who thinks more along the lines with him at the White House. However -- and this is the

point, why should Larry Kudlow be any more successful in that role than Gary Cohn who came with a stellar pedigree from Goldman Sachs.

This is not about academia or achievement. It's about how well you get on with the president and how well you handle disagreements as and when they

inevitably arise. And that's business for tonight, I am Richard Quest in London.

Wherever you are, up to the hours ahead, I hope it's profitable.

END