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QUEST MEANS BUSINESS
Trump Hits China with $50 Billion Tariff; Trump's Lead Lawyer on Russia Probe Resigns; Car Bomb Rocks Somali Capital; U.S. Drops Charges Against 11 Turkish Bodyguards; Trump Trade War Fears Rock U.S. Markets; AT&T and Time Warner Trial Begins; WTTC: Tourism Accounts for One in Every Five New Jobs; Dow Tumbles 724 Points After Trump Unveils Tariffs. Aired 5- 6p ET
Aired March 22, 2018 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[17:00:00] ZAIN ASHER, CNN HOST: All right, that sound marks the end of yet another trading day on Wall Street. Take a look at this, you'd better
buckle up, because boy, there was not a drop -- not a drop of green on the market today. We raced towards the finish line, ending the day down 724
points after President Trump announced tariffs on goods imported from China. And you add that to the interest rate hikes we got yesterday, add
them together and you get a market that is clearly in pain.
My friends, it is Thursday, March the 22nd. Tonight, the Dow suffers one of the biggest point drop in history as the president adds a new front to
his trade war (ph), and then on top hits (ph) China with tariffs and promises that this is just the beginning.
And Mark Zuckerberg reflects on his mistakes at CNN as Facebook shares resume their fall. Hello everyone, I'm Zain Asher, and this, my friends,
is Quest Means Business.
Hi, welcome everyone, I'm Zain Asher. Let me just repeat what I just showed you over there. It has certainly been a disastrous day for Dow,
which tanked, and investors fear that this is the beginning, what we saw today at noon, local time here in the United States, this was just the
beginning of a global trade war, certainly sparked by President Trump imposing about $50 billion worth of tariffs on Chinese imports.
And look at how the Dow reacted, my friends. We ended the day down 724 points, that's off almost 3 percent, certainly had investors worrying
because this is the 5th worst single-day point decline in the Dow's history, and the sell-off came soon after Mr. Trump took aim at China.
There he was today -- that was this afternoon in Washington, D.C. -- and in particular, he was upset at China because of the theft and the seizure of
U.S. intellectual property that has gone on for quite some time. And he promised the day of the unfair trade practices are now over.
(BEGIN VIDEO CLIP)
TRUMP: -- we've lost. We're doing things for this country that should have been done for many, many years. We've had this abuse by many other
countries and groups of countries that were put together in order to take advantage of the United States, and we don't want that to happen. We're
not going to let that happen.
(END VIDEO CLIP)
ASHER: All right, so, the Dow, S&P, and the Nasdaq all suffered their biggest single-day losses since February 8th, so what is that, about a
month and a half ago. Both in point and in percentage terms as well, yesterday by hundred close Dow (ph) of about 2.5 percent and, as you can
see there, it was a similar story for the Nasdaq, down about 2.5 percent as well.
Industrial companies took the biggest hit. I want to bring in Clare Sebastian, you know, just live now (ph) from the Stock Exchange. So -- so
Clare, you know, here's the thing. The companies that were hit the hardest on the Dow were companies like 3M, Caterpillar, and Boeing. And these are
companies that really do have a significant amount of exposure to China.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes absolutely, Zain, those were the ones that saw the heaviest losses. Boeing, which is the single biggest
exporter in the U.S. was down more than 5 percent. But really we saw a setting (ph) pretty much across the board today. This was broad based.
And this is because it's not just about the fact that this could, you know, hit prices on imports coming in from China to the U.S., and that will hurt
consumers and potentially businesses, this is where this could go next. This is the fact that China could retaliate. They've obviously signaled
(ph) that they're willing to do that, and that could hurt industries here in the U.S. that export to China. Agriculture, for example.
So I think it's -- it's not just the fact that we're seeing that -- the $50 billion (ph) in tariffs, which is no small number. That's about 10 percent
of the whole -- the entire amount that the U.S. imports from China. But it's where this could go from here. The potential, as you say, for a trade
war. That's what's really sent a jolt through the markets today.
ASHER: What's interesting, though, Clare, if you look at -- I mean, we have it on the screen -- or we just had it on the screen -- we had the
markets on the screen, if we could just put it up, guys in the control room. Around the time that president trump announced the tariffs, at about
12:30 this afternoon, we actually saw the Dow recover slightly and then, as we headed towards the finish line, it really accelerated. Just explain the
momentum for us, that we saw throughout the day.
SEBASTIAN: Well, I mean shades of early February again, they -- the trend that we saw in the recent market volatility was that the last hour of
trading is always the most volatile. Some down here would tell me that that's when the machines kick in, the algorithms really start to accelerate
Certainly that is something that is in play when you see these big moves on the stock market. But one thing that was interesting day is that just
before we got that announcement on tariffs, we heard that, you know, Trump's attorney in the Mueller investigation was exiting, and that sparked
So I think we're seeing a market that's very sensitive to all kinds of news, that's much more sensitive to political risks coming out of
Washington than it was, perhaps, for the whole of last year.
I think that is the mood that we're in at the moment. So, yes, there are fears of a trade war and retaliation but all kinds of things can jolt the
market, in the mood that it's in at the moment.
ASHER: But the president's supporters will say, "Listen, this is just Donald Trump doing exactly -- exactly what he said he was going to do at
least two years ago." So are there any real surprises here? Clare Sebastian, live for us, thank you so much.
All right, so in the last few minutes, China said that if there was a trade war it would fight to the very end with all necessary measures, certainly
sounds ominous. I want to bring in Matt Rivers who joins us live now from Beijing. So -- so, Matt, China has a few real options when it comes to
retaliating, what are its sort of main choices?
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, I mean, they have a -- a wide range of choices that they could choose from with a varying scales
of the impact. But, I mean, there are certain industries that are certainly more obvious than others. If you want to hurt the American
economy, look no further to begin with than agricultural products.
And specifically, you could look at soybeans. It is a massive export from the United States here to China; $12.4 billion worth of American soybeans
were shipped here to China in 2017 alone. And China knows that. Specifically, China knows where that product is coming from, 8 of the top
10 soybean producing states in 2017 voted for Donald Trump in 2016. That is Trump country.
And so, if China is looking at it and go, "OK, we -- we want to hurt the American economy but we also want to put political pressure on the white
house by targeting constituents in Trumps base, in places that voted for Trump in 2016." Soybeans would be a very good place to start.
I actually spoke earlier today with and Iowa trade delegation representing soybean farmers that just happens to be in Beijing at this point, lobbying
the Chinese Government to not retaliate too hard against soybeans if that happens. And -- and this -- the person I spoke with said, "Look, we're
nervous about this. This is something that we are very concerned about. This is the heartland of America. This is tens of thousands of jobs that
ordinary Americans rely on those Chinese exports to -- to -- to make their bottom lines look pretty good." And so, that's one of the ways China could
And you mentioned right off the top there, this statement from the Chinese embassy in the United States, some pretty strong language not -- that we're
not used to seeing from the Chinese Government frankly saying things like if a trade war were initiated by the U.S., China would fight to the end to
defend its own legitimate interests with all necessary measures. Zain, that's the kind of language that we usually hear when China's talking about
territorial issues like Taiwan. It's not the kind of language that we're used to hearing when it comes to trade disputes.
ASHER: OK. So China's certainly talking a good game. But you and I both know that China doesn't want to retaliate. Of course, it can, when it
comes to U.S. soybeans. It does not want to though.
President Trump, during his announcement today did leave the room open for some sort of negotiation. Is there any -- is there any room for dialogue
at this point, do you think?
RIVERS: Well, I mean, I think both -- and China certainly doesn't want a trade war. And we've talked to analysts here who -- which many of whom
argue that China actually has more to lose than the United States does. The United States, perhaps, would have to pay more for sneakers, and
furniture and bedding if -- if it came to it. But China needs to sell things to the United States, it relies on that. This economy needs to
export its manufactured goods to the United States in order to remain healthy.
So, perhaps, what's happening here is you're seeing the United States bring China to the table. And, perhaps, you could see China give some
concessions to the United States; perhaps actually open up market access for American companies, something that companies for the better part of a
decade have argued that China hasn't done in a substantive way.
And so, China definitely does not want a trade war. They will retaliate here in some way, but perhaps they're not going to see the kind of
escalation that you might assume would happen based on that kind of language in the statement posted by the Chinese embassy in the U.S., Zain.
ASHER: All right. Matt Rivers, live for us there. Thank you so much. And what sparked these tariff announcements is really the issue of
intellectual property rights. Clare Sebastian walks us through why those intellectual property rights mean so much to the United States.
(BEGIN VIDEO CLIP)
DANIEL MCGAHN, CEO, AMERICAN SUPERCONDUCTOR: The facts are overwhelming. It really reads like a -- a spy novel or -- or a major motion picture.
SEBASTIAN (voice-over): Daniel McGahn has spent the last seven years fighting for his company's survival.
MCGAHN: Their strategy was to kill us, basically to eliminate us.
SEBASTIAN (voice-over): "They" is a Chinese wind turbine manufacturer called Sinovel. In 2007, American Superconductor, a Massachusetts-based
energy technology company, partnered with them to provide the technology that powered their wind turbines and get access to China's burgeoning clean
SEBASTIAN: When did you first realize that something was wrong?
MCGAHN: We started to really understand in the early months of 2011.
SEBASTIAN: In March of 2011, Sinovel abruptly refused to pay for a delivery.
MCGAHN: What we learned is they had bribed an employee at the time in Europe, to the tune of about $2 million dollars, to come and work for them
and help them. So basically it was a bribe to get access to our technology that we weren't selling to them.
SEBASTIAN: And once they had that.
MCGAHN: They didn't need U.S. anymore.
SEBASTIAN: The news wiped nearly a billion dollars of Americans Super conductor's market value. The employee is serving a national confessed in
2011 and was sentenced to a year in jail. In January of this year the U.S. convicted the company Sinovel of stealing trade secrets, sentencing is set
for early June. In response to the verdict Sinovel said its ".fully prepared and is actively taking measures to protect the company's
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Work with China to strengthen protection of intellectual property rights.
BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: I stress the importance of protecting intellectual property.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Rapid theft of intellectual property.
SEBASTIAN: Successive U.S. presidents have pushed China to strengthen legal protection for intellectual property and crack down on theft. Some
experts say there are signs of improvement.
ERIN ENNIS, U.S. CHINA BUSINESS COUNCIL: What companies tell U.S. is that in general IP protection in China is getting better but this is a slow
moving boat. There are still serious. issues with things like technology transfer, with the ability to enforce your rights in the market.
SEBASTIAN: Do you see any of that evidence?
MCGAHN: As soon as we get paid I'll call you up and tell you that I see that there's an improvement.
SEBASTIAN: American super conductor is now downsizing to a much smaller space.
MCGAHN: We've taken the whole foot print of the company and we've taken the head count and reduced it to one third of what it was.
SEBASTIAN: It also expanded into new technologies.
MCGAHN: This helps bring more renewable energy onto the grid.
ASHER: And it's getting back on track. Still hoping this case will be a catalyst for change. Clare Sebastian CNN, Massachusetts. All right my
next guest is Greg Autry, co-author of the book "Death By China" with Peter Navarro who is now president Trump's Director of Trade Policy. Greg joins
U.S. live now from Los Angles. So Greg listen it's no secret that people are certainly nervous and some what jittery. You saw what happened to
stocks today, they ended the day down about 700 points or so. Even people within president Trumps own cabinet - we know that he surrounded himself by
free traders who are against tariffs. Why are they wrong?
GREG AUTRY, AUTHOR, "DEATH BY CHINA": Well first of all I admire the president for going through the trouble to bring a lot of different
perspectives into his cabinet and listening to all the different arguments. Spending a year trying to work with the Chinese and working with the
secretary of commerce and the U.S. TR to investigate this thoroughly before taking action. The reason they're wrong is you don't react to threats of
retaliation from the people that have been stealing from you. It's like if you called the police and report that I'm burglarizing, I'm going to shoot
You can't react that way that, you've got to have the courage to stand up and realize that when you tell them that you're going to hold the line and
hold them accountable the same way that you hold your other trading partners accountable. To behave and follow the rules they signed onto in
the WTO that you're going to do that and what ever takes and there will be consequences and there may be some bad days but you've got to have the
courage to stick with it.
I believe the administration intends to stick with it.
ASHER: I think there are better (ph) people that would disagree with you that it's important to hold China accountable especially on the issue of
inceptual (ph) property theft. Both sides of the aisle agree that this is a problem that suddenly (ph) needs to be dealt with. The question is, how
do you go about it because when you think about tariffs a lot of people argue that the U.S. is really shooting its self in the foot especially
when it comes to raising prices on American consumers A and B if China retaliates what happens to American farmers?
AUTRY: Yes well I think you've got to decide whether you want to be a super power or a resource colony that buys manufactured products from
somebody else. And if that's the case I'd rather the British took U.S. back frankly. But I think America would much rather make the iPhone then
sell soybeans. It's not that I'm not concerned about soybeans in a fair retaliation that's unfair on American agriculture products.
We need to take it seriously but America is a country that has driven global innovation at the U.S. tax payers expense for the last half century
and if we allow those intellectual properties developed by American tax payers and American companies to simply be stolen because we're afraid of
the Dow dropping two percent or three percent in a day, we are going to be the worlds panties. And the Chinese government understands that, these are
Chinese state owned organizations that target these American companies.
When they steal these products and put them out of business. It isn't integrated policy in Beijing and it should have been dealt with years ago.
We saw President Obama, President Bush in your clips earlier trying to deal with it in a more polite and less confrontational manner. That didn't work
so finally somebody had to step up and do something.
ASHER: So -- so, Greg, just in terms of tariffs, we don't actually have the details yet. President Trump didn't tell us what exactly is going to be
taxed in terms of imports from China. We don't have the details yet.
But if electronic goods, say, now incur a lot of tariffs, who are these tariffs actually trying to protect? Because when you think about, as you
mentioned, consumer electronic goods, they are made in Shenzhen, China, not so much in the United States. So who would these tariffs actually protect
at this point?
AUTRY: They would protect the workers that have been displaced in the United States, thrown out of their manufacturing jobs in California and are
now trying to work at a Starbucks during the evening, and a Home Depot during the day, and -- and -- and sell Tupperware at night to put together
half the money that they used to make when we had manufacturing jobs.
So we're trying to get those back. And that's both for economic reasons, for reasons of an equity that we have imported from China, from the fact
that the products in China are made with no concern for labor standards or human rights, or environmental standards. So there's a whole lot of
reasons to -- to go after them.
And we've got to realize that being producers, in the long run, is much more valuable than being consumers. If we're entirely focused on what our
stock return is today and exactly how cheap a shirt is in Walmart, we are going to, again, be the victims. If we are focused like smart countries
like South Korea and Germany have been on producing, exporting, and creating value and wealth for our country, our children will have a better
ASHER: OK. I want to get your take on something quickly, Greg. You know, we've seen sort of two major tariff announcements from President Trump. We
saw obviously one today in which he talked about the possibility of leaving room for negotiation with China. He left that door open, loud and clear.
It wasn't sort of a done deal.
A few weeks ago, when he talked about steel and aluminum tariffs as well, he left the room open in terms of exemptions for several companies. And
not only did he end up exempting Canada and Mexico, we also got word just recently that he's now going to exempt various other countries as well,
including the E.U. So when you think about President Trump announcing tariffs and then making exemptions, and then offering various rooms for
negotiation, is his bark far worse than his bite? And is this just a very elaborate negotiation tactic?
AUTRY: I think they're very serious. But on the other hand, he's a shrewd negotiator and his negotiating style has always been to make a bold and
forceful opening move, and then see whether we can't reach some accommodations. But he's got to make it clear that he's serious in a way
that no other administration has been willing to make the Chinese understand that we're serious.
Obviously, we'd love to sell out to products to China, and we'd love to see if we'd get benefits from buying products that they can actually produce in
a responsible manner that are - that are inexpensive. That works great.
What we don't need is people hacking our companies, putting the company that you just showed before this, the wind turbine companies, out of
business by frank espionage run by the Chinese Government to benefit Chinese data (ph) on companies.
ASHER: Greg -- Greg -- Greg, just -- just quickly -- just quickly, the fact that the E.U., Canada, Mexico, Brazil, South Korea, and Argentina were
exempted from the steel and aluminum tariffs, doesn't that defeat the whole purpose?
AUTRY: I don't see how you mean that. I mean, the problem was Chinese overcapacity. And the point that had to be made was that Chinese
overcapacity gets either transshipped as raw steel that goes to some of these countries and then is manufactured to products, or simply because the
market is flooded (ph) that the market price gets pushed down.
After having talks with those countries, which I don't have the details on internally, I assume that arrangements were made to try to ensure that
pressure would be put on China who is the problem here. They are the ones that created the overcapacity.
ASHER: A lot of people are saying that those countries actually account for half of the steel that's imported, that's why it defeats the purpose.
But, Greg, we have to leave it there. Appreciate you coming on the show, sir. Thank you so much, have a great evening.
AUTRY: No problem.
ASHER: All right. Coming up, like it or not, Mark Zuckerberg is one of the most powerful men in the world. After the break, find out why the
Facebook chief says he's fundamentally uncomfortable with the power that he wields (ph).
ASHER: All right, welcome back everybody. Mark Zuckerberg's public apology on CNN has not -- has not soothed investors' concerns about the
company's future. Facebook stocks spent another day in the red. A two and a half percent fall coming after a punishing few days for Facebook shares.
Facebook has actually lost roughly $50 billion, no small change, in value since the report of the data breach broke over the weekend.
Speaking to our Laurie Segall, Zuckerberg says he wants to repair the damage. After announcing new measures to restrict Facebook's use of data,
the Facebook chief also says it's open to new, tighter regulations on political advertising.
(BEGIN VIDEO CLIP)
MARK ZUCKERBERG, CEO, FACEBOOK: I actually am not sure we shouldn't be regulated. I -- I actually think the question is more, what is the right
regulation, rather than "yes" or "no" should it be regulated?
LAURIE SEGALL, CNN CORRESPONDENT: What's the right regulation?
ZUCKERBERG: Well, there's some -- some basic things, then I think that there's some big intellectual debates. On -- on the basic side, you know,
there are things like ad's transparency regulation that -- that I would love to see. But if you look at, you know, how much regulation there is
around advertising on t.v. and print, you know, it's just not clear why there should be less on the Internet.
(END VIDEO CLIP)
ASHER: And Zuckerberg did speak off camera to other publications as well. He told Recode that he sometimes feels uneasy with the responsibility of
being such a powerful chief executive, quote saying, "I feel fundamentally uncomfortable sitting here in California in an office, making content
policy decisions for people around the world. . I mean, who chose me to be the person that did that?"
During his conversation with CNN, Zuckerberg reflected over his past mistakes.
(BEGIN VIDEO CLIP)
SEGALL: You've been a leader of Facebook for 14 years; is it 14 years now?
ZUCKERBERG: Yes, we started in 2004.
SEGALL: Looking back on all your time, because we don't get to hear Mark - - personal Mark that often, do you have any moments you look at that are regrets? Or anything you, you know, if you could look at one moment as
something you regretted that you really wish, now, you could have changed or you could have done, what'd it be?
ZUCKERBERG: Oh, I don't know. You know? I mean, there was so many mistakes that -- that I've made. I mean, I started this company when I was
19, all right? I was a kid. And .
SEGALL: What do you say to your old self in the board room (ph)?
ZUCKERBERG: . Well -- well, I think, you know, if -- I think a pretty common question is what mistake do you wish you'd -- you'd not made. But
the reality is, you're going to make a ton of mistakes in your life, no matter what you do, right? And I've made every kind of mistake that you
I mean, I started this when I was so young and -- and inexperienced, right? I made technical errors. I made business errors. I hired the wrong
people. I trusted the wrong people. I -- I probably launched more products that have failed than -- than most people will in their lifetime.
But, you know, I think the thing that -- that makes Facebook work for people is not that there weren't mistakes. It's that we learned from them,
right? And that's the commitment that I try to have inside our company and for our community is that -- yes, you're not going to get everything right.
The world changes, right? There are going to be new challenges that come up.
(END VIDEO CLIP)
ASHER: And earlier, I spoke to P.R. guru and CEO of The Geek Factory!, Peter Shankman. And I asked him what he thought of Zuckerberg's handling
of process (ph) and what the secret was to a good apology.
(BEGIN VIDEO CLIP)
PETER SHANKMAN, CEO, THE GEEK FACTORY!: You don't turn the situation into making you the victim. When I heard his apology, somehow I was -- I was
thinking like he wants us to feel sorry for him, "I was young when I started this. I was -- I was -- I was a child when I reached my first
billion dollars in revenue."
You know, I'm -- I'm sitting there going, "This is a tough life. I -- I feel for this multi-mega-millionaire, it's very difficult." You know, the
issue really is the fact that this is not new. OK? In one way or another, I looked it up, Zuck has given no less than seven apologies in the past 10
years for things that Facebook has done wrong.
ASHER: How is this one different?
SHANKMAN: It's not. If you look at it, you know, it's -- it's -- the only reason it's different is because it's a bigger story, and ties into
everything else that's currently going on in the era of privacy and the era of data hacking of -- of -- of Experian, and -- and -- and all of those
things that happened. Where, we're sort of accepting we have no privacy.
But here's the thing, if you really want your privacy, maybe you shouldn't give it all to Mark Zuckerberg so you can look at pictures of the car of a
friend you went to high school with 30 years ago.
SHANKMAN: -- and it ties into everything else that's currently going in the era of privacy, in the era of data hacking of Experian, and all of
those things that happened where we're sort of accepting we have no privacy, but here's the thing. If you really want your privacy, maybe you
shouldn't give it all to Mark Zuckerberg so you can look at pictures of the car of a friend you went to high school with 30 years ago.
That's really where it comes down --
ASHER: So -- we're to blame just as much as Zuckerberg?
SHANKMAN: No one's really to blame, except that we're -- we're -- we're not really thinking this through. We're complaining that our privacy's
been abused, that we freely gave so that we could play Farmville.
ASHER: However -- you know, you bring up an important point, and that is the fact that Mark Zuckerberg may have wanted to engage our sympathy,
which, you know, you can't blame him for --
SHANKMAN: Well, right, that's what P.R. people do (ph).
ASHER: Fair enough. However, he did list ways in which he made serious errors --
ASHER: And also he listed ways in which he could have done better, and changes he's going to make going forward --
SHANKMAN: Well that's the --
ASHER: Is that enough?
SHANKMAN: Let's see if that happens. It's very easy to say, "You know what? This was a mistake. I'm never going to do that again." You know,
when I got in trouble when I was -- when I was a kid for drawing on the cat, and, "I'm never going to draw on the cat again, Mom, I promise I've
learned from this!" You know, 2 days later, I'm back drawing on the cat.
But it becomes a question of is he going to implement this? Is Facebook going to implement this? At the end of the day, the information we give to
a conglomerate like Facebook is very valuable, and people pay a lot of money -- corporations pay a lot of money. Is that going to affect his
stock price? Right?
If he says, "We're going to make these changes," and all of a sudden that information isn't as valuable to third-party advertisers, which is
Facebook's bread and butter, is that beneficial to Facebook as a whole?
ASHER: OK. Aside from the financial side of it, I want to -- I want to get into how users interpret what happened. Because a lot of people are
saying -- people are going to be upset with Mark Zuckerberg, they're not necessarily going to trust him as much, but at the end of the day, they're
still going to log onto Facebook --
SHANKMAN: People have been --
ASHER: -- because it is a monopoly.
SHANKMAN: People have been complaining about Facebook and saying, "Well, I'm getting off Facebook" -- I remember several people, back when Google
Plus came out, OK? So, "I'm moving to Google Plus! The privacy is much better there --" So you'd have never heard from them again (ph), or four
months they're back ob Facebook, "Well, hey, I tried it, it was interesting, you know"
We're going to go where the people are. And there are 1.7 billion people currently on Facebook. Every single one of your friends is currently on
SHANKMAN: Instagram is owned by -- wait for it -- Facebook. Where are you going to go?
ASHER: OK, so, you have a Facebook account?
SHANKMAN: Of course I do.
ASHER: You're not going to get off it? (inaudible)
SHANKMAN: I'm not going to get off of it. I'm going to -- I was -- I was Facebooking, then I was going on your show. That's what we do.
ASHER: Thanks, (inaudible) was coming on this show (ph), OK. So later on, (inaudible) we're going to be talking about how Facebook fits into the
picture with the antitrust trial of the century as President Trump tries to stop AT&T from buying CNN's parent company, Time Warner.
All right, still to come here on Quest Means Business, President Trump fires the first shot in a trade war, slapping tariffs on Chinese exports to
the United States. Now, we wait for China's response. We hear from a former U.S. ambassador to that country, next.
[17:30:00] ASHER: All right, hello everyone, I'm Zain Asher, coming up on the next top hour of QUEST MEANS BUSINESS, President Trump slaps new
tariffs on China and signaled there are certainly more to follow.
And A&T and the U.S. government put their cards on the table today during opening statements of the anti-trust battle. But first though, these are
the top headlines we are following for you at this hour.
Right, U.S. President Donald Trump has announced new tariffs at about $15 billion in Chinese imports. That move sends the U.S. market tumbling amid
fears of a global trade war. Mr. Trump said, the action is a response to China's unfair seizure of U.S. intellectual property.
And U.S. President Donald Trump's lead personal lawyer has resigned. John Dowd was heading up the response to the special counsel's Russia probe.
And he was urging President Trump to cooperate.
But sources say Mr. Trump lost confidence in his strategy and wants more control. And Somali police report that a car bomb blast in Mogadishu has
killed at least 10 people. The explosion happened outside a hotel where lawmakers and government officials often meet.
Blast blocks the city and sends fumes of black smoke into the sky. There's been no claim of responsibility after this attack. And the U.S. has
dropped charges against 11 of the Turkish president bodyguards. We've got as well bloody brawl as protesters in Washington last May, four other
Turkish bodyguards still face assault charges.
Motion to dismiss the charges came in February right before the former U.S. Secretary of State traveled to Ankara to meet with Turkey's president.
Right, I want to turn now to our top story. The Dow selloff, that's it, sort of Dow tumbling in the wake of that announcement we got at 12 noon
today, President Trump's new tariffs on China.
As the president signed off the plan, he teased ahead to potential each action, he said there's more to come potentially. His goal is to combat
what he calls unfair trade practices which has harmed United States. Take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This is the first of many, which is number one, but this is the first of many.
(END VIDEO CLIP)
ASHER: All right, so you heard him there, number one, but this is the first of many. President reiterated that he was basically doing something
that should have been done many years ago.
To discuss this, we've got our team of resident Cnn trade experts, Patrick Gillespie and Paula Newton. So here's the thing guys. I think a lot of
people agree with the fact that China's intellectual property theft is not only a problem, right?
Both sides of the aisle, Republicans and Democrats both agree on that point. But if that is the case, isn't that a better way to go about this?
PATRICK GILLESPIE, REPORTER, CNNMONEY: That's exactly what Democrats and Republicans are saying. Is there a more targeted way we can go about this
that will not cause so much harm to U.S. consumers. There's a lot up here that Trump is going to target dozens of -- dozens of Chinese products with
tariffs that could raise prices for consumers.
Cool spending which is really the engine of the U.S. economy and ultimately potentially caused jobs same. So there's a lot of concern about this scope
and breadth to these tariffs. And there's concern that, you know, the diagnosis is right, is the remedy right as well, that seems to be up in the
air right now.
ASHER: All right, so one of the ways that China could retaliate is of course, U.S. soya bean products, that's one way, it could hurt farmers in
the United States. Obviously Paula, China can retaliate. The question is deep down, do they really want to?
PAULA NEWTON, CNN: Oh, they want to, and me being honest, they have to. I mean --
ASHER: Even though it could backfire --
NEWTON: Absolutely, look, the noted side of the -- they know, I mean, they've been looking at Donald Trump's behavior over the last few months.
They have been looking at what has happened to so-called allies like European Union, Canada, Mexico.
And in their statement right now, you know, they're basically saying we will fight this to the end, their words, not mine. The United States needs
to cease and desist. Their words, not mine.
Here's the thing -- and I have been reminded by this. When you look at Mexico and China and the way they've been trying to handle was not the
negotiations, any fight back will be political. So when you look at it, they're going to do what Mexico and Canada threatened to do on their
They're going to hit red states, they're going to hit swing states. We've got mid-terms coming up in the United States, and then we go into 2020 --
ASHER: And one of Trump voter --
NEWTON: They will hurt the Trump voters.
GILLESPIE: And the most obvious -- the most obvious place to retaliate is on agriculture, is on even -- you know, a lot of areas where voters went
for Trump in 2016. So I think you're going to see voters not like -- maybe they like the rhetoric on -- from -- on Trump's campaign trail.
They may not like the consequences of this --
NEWTON: Yes, he has more to lose than trade war between the U.S. and China.
GILLESPIE: China does because it sells -- it's exporting much more than we are exporting over there. But I think the argument from the Trump
administration is that we're losing out so much on the intellectual property --
[17:35:00] ASHER: Given the prices could rise depending on -- we haven't got details yet. The prices will rise for U.S. consumers and if China
retaliates, it would hurt U.S. farmers as well.
GILLESPIE: You could argue the neutral is sure distraction.
But it would -- it would certainly hurt both sides, it really depends the size of the U.S. tariffs on these consumer goods like toys, shoes, clothing
NEWTON: But that's when we really get down to Hawaii and how this matter - -look at what Boeing has been going through in the last few days. Does Trump even open his mouth about this?
It really has rattled the establishment --
ASHER: A lot of the stock --
NEWTON: The manufacturing --
ASHER: A lion --
NEWTON: Establishment as well --
ASHER: Really --
NEWTON: There we go --
ASHER: Let me show you --
NEWTON: There you go -- you see it at the bottom of the screen, 3M, Caterpillar, a lot of the -- a lot of the companies that heavily are
exposed to China really suffered. And that's why as Patrick says, this is what corporate America is trying to tell Donald Trump.
They had said it in the Oval Office. They have told him a million times, but what I would like to say to people is look, we're looking at this from
35,000 feet. You've got to come down at my level at 5 feet -- a little bit more than that, but whatever.
And the point is Tom says it looks good at my height, he's like, you guys can talk to me all day long and you can circle on these trade policies, but
I know when I'm at a rally in Pennsylvania, I know what they want to hear.
And he says --
ASHER: But he still lives --
NEWTON: At the end of the day, he still left the door open for negotiation.
ASHER: Which means --
NEWTON: Exactly --
ASHER: He's not completely 100 percent --
NEWTON: Just follow the rules --
ASHER: Committed --
GILLESPIE: Just talking about this -- you know, it's important for people to think about this, that even though the Dow is down 300 points, there's a
lot of fear right now.
Trump today gave exemptions on other tariffs, on steel, aluminium to several countries. In fact, the top four countries that send steel here to
the United States --
ASHER: Right --
GILLESPIE: Are now exempted from those tariffs. So we've seen his biggest threats on NAFTA walk back, we've seen his steel, aluminium tariffs now
somewhat too --
ASHER: It makes you wonder if he's as committed to it as he says he is or if it's just negotiation tactics --
NEWTON: Well, but --
GILLESPIE: That's right --
NEWTON: And then he can say that he looks brilliant. But remember, he got the photo up out of it, right? Those coal miners, those aluminium
producers, those steel workers, they get to the White House, they get to sign -- and when he goes back to as I said, remember, 35,000 feet, let's
get down to the campaign level.
He's going to say I signed that, it doesn't matter if I give them --
ASHER: Yes --
ASHER: Will people after all vote on feeling? It's just the feeling of everybody -- OK, Paula Newton, Patrick Gillespie, thank you guys so much,
always 16 together.
OK, Max Baucus is a former U.S. ambassador to China, he joins us live now from Washington. So Max, just walk us through the barriers ways in which
China could actually end up retaliating. What would be a smart move for them at this point?
MAX BAUCUS, FORMER UNITED STATES AMBASSADOR TO CHINA: Well, we have two very proud leaders here. President Trump obviously, a kind of macho guy,
he thinks that, you know, his buddy, Kim Jong-un knows -- respect to North Korea, I don't really agree with that.
Now, he thinks he can deliver a body blow of another body nose to China and shake him up. It is true that China should be much more fair if you will,
expect in trade and investment.
We also have a very proud president in China. President Xi, his elevation empowers him and he's not going to lose face. And the real danger here is
that if Trump goes through with all of this, it's going to be very significant, it's going to cost China to want to retaliate.
They will retaliate where they must, and they're also going to give in a little bit to try to soften up the United States. Clearly, they're going
to retaliate with agriculture products. They've talked about it, they've mentioned it, they said they can do it.
And that's going to hurt them, farm country a lot. I must add here too, there's a lot of uncertainty, and that's not good for business, that's not
good for policymakers, that's not good for countries.
What's going to get targeted or what not. And add to that, what's the exit strategy? Let's say that tariffs are imposed, how are we going to back off?
How is China going to back off from this retaliation?
I think that's a big question that this administration has not thought through.
ASHER: So ambassador, listening to your language very carefully, and it's what's -- you've been very careful with your words. You're saying things
like, if Trump goes through with this, let's say that -- let's say that tariffs are imposed.
So in your mind, we really haven't reached the point of no return. There's still room --
BAUCUS: Yes --
ASHER: How to walk this back.
BAUCUS: Yes, I think so. I mean, said they're going to affect by 15 days, but the trouble is, it's all very disorganized. Each industry, each
company is trying to figure out what their tariffs are going to be, wants to be exempt.
Who knows -- will -- and Trump will have to make a decision at the end of the 15 days. The more he goes toward the full muddy, all of it, China is
going to have to respond. There's no question, China has to respond, then we got a real problem here.
President Xi's part, and I -- all the years I was over there, he kept hearing over and over again, he cares about party legitimacy, standing
power, and that means a stable economy. So he's going to retaliate as much as he can to save face if they show he's big and strong.
But not too much a way that might damage the Chinese economy which is going to -- causes the middle class to be a little bit uncertain about his
[17:40:00] I don't want to go too far on that.
ASHER: I'm --
BAUCUS: He's in charge, he's in charge, he's --
ASHER: Ambassador, when you -- when you listen to President Trump's language then, on the one hand, he's saying, listen, I like China, I
respect them, we really need China. On the other hand, he's saying, well, you know, the only thing is that China just can't believe that they've gone
away with this for so long.
They're laughing, they're laughing because they can't believe they've gotten away with this for so long. When the Chinese hear that, they think
BAUCUS: Well, they're proud just like we Americans are proud. They say, wait a minute, let him say that about us, you know, it causes them to dig
their heels in a little bit, just like the reverse is also true.
I frankly give the Chinese a lot of credit, they're very smart, they're very cool, they're very calm, they're very calculated. They work this
weight through this as well as any country could.
And don't remember -- don't forget, China is so large, and they've got all kinds of different alternatives. We impose these tariffs, they all do
deals with other countries with different companies and they'll figure out a way to resolve all this and retaliate in ways that does not hurt them
ASHER: Ambassador Baucus, thank you so much, appreciate --
BAUCUS: Good bye --
ASHER: Your respectfulness --
BAUCUS: Yes --
ASHER: OK, all right, still to come here on QUEST MEANS BUSINESS, U.S. government on one side, AT&T and "Time Warner" on the other. Opening
argument not finished, and strategy set in the anti-trust trial to watch, back next.
ASHER: Opposing sides have laid out their battle plans in opening statements at the AT&T-"Time Warner" merger trial. The U.S. government is
fighting to stop the deal, arguing it would raise prices for consumers. AT&T says -- analysts shows actually just the opposite.
"Time Warner" is of course Cnn's parent company and our Jessica Schneider has just left the court room to join us live now from Washington. So
Jessica, just sum up the opening argument on both sides particularly from the government attorney.
Just explain why they are so adamant if this deal does not go through.
JESSICA SCHNEIDER, CNN JUSTICE CORRESPPONDENT: They are very adamant about this, Zain, and of course, like you said, day one of this trial has just
wrapped up. Of course, this is a day where both sides gave their opening arguments. So the government did in fact go first.
This is the first time in about 40 years that the Department of Justice is taking a company to court to block a vertical merger. Now, this is a
vertical merger because AT&T and "Time Warner", they don't directly compete.
AT&T distributes video content and "Time Warner" creates that video content. They own several different entities like "Hbo", Warner Brothers
Studios as well as those Turner networks, that includes Cnn.
So the government laid out its case in a 45-minute opening argument to the judge. This is not a jury trial. One judge alone, a district court judge,
a federal judge here in Washington D.C., she will decide this case.
So the government litigators spoke for 45 minutes this morning, and they basically said that if AT&T acquires this Time Warner content, they will
have the power to restrict the content for other cable distributors and they could potentially raise the rates of the Time Warner programming when
selling it to other cable distributors.
[17:45:00] They have an economist that they're going to put up as a witness, and the economist has done some research and they say that AT&T
could potentially raise prices for individual consumers at 45 cents a month.
Of course, AT&T sort of saying, first of all, those numbers are wrong and AT&T secondly, dismissing those numbers as not a major price increase. So
we saw all these arguments laid out, really a preview to the case here.
And they did call their first witness. The government calling a competitor Cox Communications which is the competitor cable distributor kind of saying
that this would be bad for business if we let AT&T and "Time Warner" merge.
But again, Zain, this is the first time in 40 years that the government has challenged this type of murder -- merger, I should say, brought it to
court. So it will be interesting to see how this really plays out, and of course, the judge is the one arbiter here, the one who will determine
whether or not this merger goes through. Zain.
ASHER: Merger, not murder, but --
SCHNEIDER: You got it --
ASHER: As you mentioned a murder --
SCHNEIDER: It's been a long day in court.
ASHER: Can you imagine?
SCHNEIDER: Yes --
ASHER: Jessica Schneider live for us, thank you so much. All right, executives at "Time Warner" say that regulators are targeting a traditional
media company while going easy on bigger digital rivals, for example Facebook and Google.
Facebook has suddenly been in the news a lot recently, I could give you some perspective on that. AT&T is a $227 billion company, and so about
three times the size of "Time Warner".
The value of the combined AT&T and "Time Warner" would still be dwarfs by Facebook. The social network is actually valued at $538 billion. And just
as a thought for example, let's experiment, let's throw in "21st Century Fox" as well with AT&T and "Time Warner", that company would still -- it
would still be smaller than Facebook.
Joining me live now is Brian Stelter; our resident media expert. So Brian, here's what a lot of people don't understand.
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes --
ASHER: Why go after these sort of old school, traditional media companies like "Time Warner" and AT&T when Facebook is the modern day media empire.
STELTER: Right, Facebook, Google, Amazon, Apple, Microsoft, these companies -- someone called it FGAAM, these five companies, they are giants
in the market place. As you showed right there, much bigger than these media companies.
However, the anti-trust department of the DOJ says it's pursuing this case because AT&T and "Time Warner" are the ones trying to do a deal. You know,
Facebook, they go out and buy small companies, but they don't go out and buy giant --
ASHER: Facebook has been in a lot of trouble recently in terms of accumulating too much power.
STELTER: Right, and frankly, I think the argument we're going to hear in court for the next 68 weeks from the AT&T lawyer is why are you picking on
us when you're not looking at these tech guys.
In fact, we heard that today from Dempatrick Sally(ph), he said, the government's argument is stuck in the past. You are looking at an outdate
model of how the media world works.
Yes, cable, channel owners do have some power, yes, AT&T has a lot of power as well, but AT&T and "Time Warner", the argument for this deal is that in
order to thrive in the future, they've got to get bigger to compete with the Facebooks and with the Googles.
And by the way, they're not the only companies that feel that way. Verizon feels the same way, Comcast feels the same way. All of these distributors
of content, whether it's through your broadband connection or through your wireless phone, they all feel the same anxiety about the Facebooks and the
ASHER: And it's interesting though, because with Facebook, especially given what happened over the past, I guess, week or so, we could actually
end up seeing regulation against Facebook.
Mark Zuckerberg himself said he would be actually opened to it.
STELTER: Yes, he actually opened the door for the very first time to that possibility, in his interview with Lori Siegel, whether there's a
government appetite to take on Facebook though, I think it remains to be seen.
We've heard from a handful of lawmakers who do want to have that conversation, we've not heard necessarily from the most powerful U.S.
senators and representatives who have the power to make that happen.
Nor have we heard from the executive branch, from President Trump on this matter. So I'm -- personally, count me as skeptical on the front of actual
very substantive Facebook action -- oh, when it comes to this deal though with AT&T and "Time Warner", we're going to see that argument play out in
You know, this counter argument that a merger will cause people's cable's bills -- cable bills to go up.
ASHER: I feel that sentiment --
STELTER: By -- you know, we've heard versions of that argument for a long time. We heard it when Comcast and "Nbc" were getting together almost a
decade ago, we've heard it in the past as well.
The difference now is actually being fought in court. And let's be honest, the other factor here, President Trump.
The fact, can he come up in court, but the backdrop of this trial is President Trump's disdain for Cnn. That's why there's been speculation
that maybe somehow there are political motivations here, now the DOJ denies that, but that's certainly on the minds of the people in the courtroom.
ASHER: And as Jessica Schneider was mentioning, we haven't really -- rarely, do you see a government lawsuit to block a vertical merger like
STELTER: That's why nobody quite knows what's going to happen, that's why --
ASHER: Yes --
STELTER: This is so interesting, we haven't seen this in a generation.
[17:50:00] ASHER: Brian Stelter there live for us, good to see you, thank you --
STELTER: Thank you --
ASHER: So much. All right, still to come here on QUEST MEANS BUSINESS, want to do your bid for the world's economy without having to do any hard
work whatsoever, go on a holiday. But after the break, the World Travel and Tourism Council tells us why packing your bags actually creates new
jobs. That story next.
ASHER: All right, if you want to get economic growth moving, the answer is to go on holiday. That is the message from the World Travel and Tourism
Council whose new study says that when five new jobs created last year, it was actually because of travel and tourism.
Gloria Guevara is the group's president and CEO, she joins us live now from Washington. So Gloria, here's what I'm trying to understand. How
resilient has the travel and tourism sector been especially with a lot of the headwinds that we've seen.
Be it Brexit in the United Kingdom, be it wars that we've seen in the Middle East, and also earthquakes, hurricanes, natural disasters, that sort
GLORIA GUEVARA, PRESIDENT, WORLD TRAVEL AND TOURISM COUNCIL: Thank you for having me. Very resilient actually. If I can tell you that we measure the
economic impact of travel and tourism around the world, 185 nations.
We just released our report, as you know, 10.4 of the global GDP, that's the contribution of travel and tourism, 313 million jobs around the world,
as you mentioned, one of every five jobs last year created where the country wishing for travel and tourism.
And despite of all the different crisis around the world, outbreaks, security team, weather related, terrorism. Despite of all of that, travel
and tourism grew 4.6 percent compared to the 3 percent of the global economy.
That tells you that we grew 50 percent more than the economies in the world, and regardless of the crisis, tourism always comes back, which is
ASHER: OK, so very resilient as you mentioned, over 4.5 cents growth. So what are the sort of headwinds that you anticipate for 2018? Be it, you
know, airfare increases, oil prices, strengthening euro, people who might go on holiday in Europe, what are the sort of big headwinds you anticipate
GUEVARA: Well, we're anticipating -- it's very interesting because we're anticipating growth in multiple regions as we see what happened last year.
For instance, as I say 4.6 was the growth average, Europe for instance grew 4.8, North America 2.5.
But in Asia, we saw a very significant growth. To give you an idea for instance, southeast of Asia was 6.7 and 7.4 in the northeast of Asia. So
what we are anticipating is more competition.
Ayatta(ph) for instance is anticipating that last year, for the first time ever, we had 4 billion travelers, these are 4 billion passengers flying, 1
billion of those were in Europe.
And they anticipated not in the next year, that number is going to be almost doubled. At the same time UNWTO which is the body that represents
the government is anticipating that the number of international arrivals is going to grow 50 percent.
Now, the challenge is the share, who is capturing that growth? And that's when the competition comes. Let me mention something that I think is
interesting. China, what's going on with China?
China is the second largest economy in tourism. U.S. is the largest of steel, however, China grew last year at 9.8 percent. We do look at the
numbers and the difference between the U.S. and China.
U.S. is only 10 percent bigger in travel and tourism in terms of GDP from China. But the U.S. only grew 2 percent. So one of the challenges that we
see this year and the next couple of years is between this competition among the nations.
Unfortunately, we see that the U.S. is now capturing their fair share, and if that continues, very soon, China will be the number one in the world.
ASHER: Well, that's interesting, so China could actually be on track to overtake the United States.
ASHER: All right, Gloria Guevara, we'll have to leave it there, we're running out of time, but thank you so much, appreciate you being on the
show with us today. All right, we just have a little bit more time left in the show, and just enough time to remind you what the stock market did
As if (INAUDIBLE), the Dow actually suffered its fifth biggest point drop in history, and even they're down 724 points. President Trump announced
new tariffs on Chinese products, the Dow closed significantly lower, almost a 4 of almost 3 percent.
The Nasdaq and the S&P 500 also fell sharply as well. OK, my friends, that is QUEST MEANS BUSINESS, I am Zain Asher, the news continues right here on