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QUEST MEANS BUSINESS
Shares Of European Carmakers Hit Hard By New Threats Of Trade Tariffs From President Trump, Airbus Has Put The United Kingdom On Notice, After Weeks Of Worry About High Prices And Oil Shortages, OPEC Has Finally Agreed A Deal That Will Pump More Oil, Another Thrilling Day Of World Cup Action Is In The Books; U.S. Audience Shrinks as Team Misses the World Cup Tournament; Trump Threatens Big Tariffs on Imported Cars; Trump Meets Families of People Killed By Illegal Immigrants; Migrant Crisis in Italy, Rescuers Told to Stop Operating; Greece Reaches Debt Deal with Europe; Effort Being Made for More Women Performers at Festivals; IBM Debuts AI that Live Debated with a Human. Aired: 4-5p ET
Aired June 22, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: There's the bell ringing on Wall Street, a good day is coming now for Dow Jones Industrials by half a percentage point on
the main markets, and it's been up pretty much the whole session. The day is over. Oh, my word, man. Everybody wants to get in on the action -- oh,
hang on. Exhausted before we've even started.
But it is Friday, it's June 22nd. Tonight, shares of European carmakers hit hard by new threats of trade tariffs from President Trump. Too
dangerous to proceed. Others are warning Brexit uncertainty puts a question mark over its future in the United Kingdom.
IBM has built a computer to debate -- artificial intelligence is taking another leap forward. How do you debate with something using AI?
I am Richard Quest live from the world's financial capital, New York City where of course, I mean business.
Good evening, we start again with the deteriorating issue of trade and the ever growing battle between the United States and its major trading allies.
Today, with a single tweet, Donald Trump sent shivers through Europe's mighty auto industry.
German giants -- Daimler, Volkswagen and BMW -- all reeled and fell sharply with some real falls of the day, but look at BMW, it's off over 1% after
President Trump tweeted the following, "Based on the tariffs and trade barriers long placed on the US and its great companies and workers by the
European Union, if these tariffs and barriers are not soon broken down and removed, we will be placing a 20% tariff on all of their cars coming into
the US. Build them here."
Now, the issue is one of grave seriousness and it follows the tariffs put on both sides by -- on the steel and aluminum, if you remember, then we'll
talk more about it in a moment. The EU tariffs have come into force today.
If you join me in the war room, if we talk about 20% tariff on US vehicles or sorry, European vehicles, then we're into a completely different league.
At the moment, the European makers, the big ones, the German makers -- Volkswagen has a plant in Tennessee, Daimler and BMW both have plants down
in South Carolina. And the vehicles used from these plants not only sell into the US domestic market, but they are also used to export as well.
I want to show you why this is deteriorating and how serious it could get. So, the United States is now saying that if any -- or is planning on
tariffing any German cars sent to the United States. However, if you take a company like Daimler, Chrysler for example, they are already being hit
with tariffs on cars that they send here and they would certainly be tariffed at the moment on any cars that they are sending to China. You get
Whichever way it goes, any form of vehicles going up to Canada, down to Mexico, any that is sent across to China, any that come back from Europe
into the United States, you can see how this just keeps going on because the rhetoric has been raised to the extent where even when a car is
manufactured in the US will be tariffed to China. Cars manufactured in Germany will be tariffed to the United States and cars manufactured in the
United States are already being tariffed at 10% into Europe.
The net effect is it doesn't matter what currency you're using, it doesn't matter how you're spending it, the ultimate for me is more expense for
consumers and for producers.
Clare Sebastian is here. How much of a shock was it this morning when Donald Trump did that tweet on the same day that Europe introduced these
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, I was watching the European car share prices, the carmakers and they simultaneously fell, not too far, but
a little bit off a cliff. I think to some extent, they had heard this before, Richard. At the end of May, the Trump administration did say they
were launching a Section 232 investigation into foreign auto imports, that's the same pretext they used for the steel and aluminum at the
national security investigation and that would have been a tariff that is ongoing. It will take months.
But that would be a tariff of 25%.
QUEST: So, are these tariffs that he tweeted about, are they an escalation of the steel and aluminum or another -- which sounds like they are because
they came on the same day, and certainly, if the investigation is still underway, they can't be related to that.
SEBASTIAN: Right, so part of the -- that's why it is fairly incomprehensible, A because you know, I think this isn't an escalation of
the steel and aluminum because what we have here is an ideological gap.
SEBASTIAN: Where both sides feel that they are on the defensive. Trump believes that the original steel and aluminum tariffs were correcting an
existing imbalance. The EU sees it as an offensive, so they are retaliating and now, we are in this cycle. But if you look at the number,
20%, that's double the number that the EU currently imposes on American cars.
QUEST: Why does -- I mean, Donald Trump has a point. You know, the EU has -- sorry, the US has a 2% tariff -- 2.5% on cars coming over, the EU has a
10%. Why is there this discrepancy? Why couldn't the EU just not simply say, "Well, we're going to 2.5% or we'll both get rid of our tariffs
SEBASTIAN: Well, that has come up in the discussions that they have been having, so before the steel and aluminum tariffs came in, they have been at
the negotiating table. It's a bit like the USTR has been in Europe and they have been talking about these tariffs and we got some signals for the
EU. We are thinking, you know, perhaps, if they get the exemption made permanent on steel and aluminum, they would lower the tariffs.
This is something that according to the "Wall Street Journal", German carmakers have been talking about scrapping all of the tariffs, but
obviously now that we have this escalation, that is off the table. No compromise seems possible.
QUEST: Clare Sebastian, thank you. Clare, thank you very much. Now, it's as we had just been talking with Clare, it's no coincidence that all of
these comes on the same day that the EU is introducing its tariffs.
It's getting very confusing, but you are aware and you be with me as you'll understand of course, the tariffs we're talking about are the EU's
retaliatory tariffs for the steel and aluminum. Brussels is targeting iconic American products. So, you have orange juice which is key of course
for central states like Florida or Western states like California. You've got bourbon from states obviously from Kentucky and other southern states.
You've got peanut butter from Georgia and from the south. Again, the heartlands of America, strong Republican Donald Trump country and those
were the tariffs.
You've got cigarettes again from the south. You've got jeans -- it doesn't get more iconic then the Levi jeans and others. And you've got Harley
Davidson motorcycles and the interesting thing about these motorcycles as I showed you on the map, they get hit twice. Think about it. Because Harley
Davidson announced only this week that its profits would be hit because it's paying more for steel. The steel price has gone up because of the
tariffs and now, the final product is going to be hit when it is sent as final product to the European Union with a set of tariffs.
Put this together, I am joined by Matt Gold, he is a Professor of International Law at NYU. I have tried to simplify it as best I can and
it's complicated stuff. But we are now seeing real examples of where for example, Daimler, damned if it does, damned if it doesn't. If its cars
come from the US to China, they are tariffed. If they are from Germany to the US, they are tariffed.
MATT GOLD, PROFESSOR OF INTERNATIONAL LAW, NYU: That's correct. We have a difficult situation here with Donald Trump. His entire trade policy is
based on the assertion that the global trading system is slanted against the United States and that has always been a fiction. You can't just look
at the tariffs on cars between the US and the European Union. You'd have to look at all the tariffs the United States puts on all European products
coming to the United States and all of the tariffs Europe puts on American products going there.
Look at the weighted average on each side and compare those and they're almost identical. The United States is at 2.4%, Europe at 3.0%. They are
a fraction of a point apart. Japan, 2.1%, also within a fraction and their tariffs are lower than the United States. The fact of the matter is that
the global trading system is not slanted against the United States unless you cherry pick one of 8,000 product categories -- cars, and you cherry
pick one of the United States' trading partners, Europe and then show a comparison.
QUEST: Right, but okay, when you say cherry pick cars, cars is a fairly sizeable manufacturing base, so the fact that you do end up with a
discrepancy between 2.5% going east bound versus 10% going west bound, how can that be -- or the other way around, actually -- how can that be? Why
is there this discrepancy?
GOLD: Well, first remember, I didn't say the average of the customs do this, I said, the weighted average. In other words, when we run those
averages, we weigh cars much more heavily than paper clips in terms of how much we weight the customs duties in cars than the custom duties in
It factors in the large volume product categories where trade is, but the fact of the matter is, as one country imports apples, one imports oranges,
so when the countries negotiate to lower the reciprocal customs duties, one lowers the duty in apples, one lowers it on oranges. That's why when you
compare specific products, you might get inconsistent duty rates, but when you compare the group, it's -- they are not inconsistent among developed
QUEST: Right, so how would you -- if you were consulting and advising say Daimler or Harley Davidson for example, you're getting nutcrackered on both
QUEST: Harley Davidson is a very good example. It is paying more because of steel tariffs that are being introduced. The price of steel is up some
30% to 40% and now, its final product is going to be tariffed as it goes to the European Union. What would you advise them?
GOLD: Well, first, I would tell them that Donald Trump's authority to impose these national security statutes under US law. He has exceeded. He
has to have -- he has to be imposing the tariffs for national security reasons and he didn't do that with the steel and aluminum and he is not
doing that now with the autos, and I think those tariffs will be overturned by the United States Court of International Trade in six to twelve months
for that reason, and all the tariffs paid refunded. That's one thing I would tell them.
Another thing I would tell them is that the United States is violating the global trading rules.
QUEST: Finally, one point -- is there ever in your view, because I suspect you adopt the traditional economic orthodoxy which is that tariffs usually
are bad and tariffs usually -- is there ever a case for developed and advanced economies tariffing each other?
GOLD: Yes. First of all, when two countries have normal trade relations, they have -- they negotiate their tariffs down, but not down to zero. When
they have free trade relations, they go down to zero. But you want to go in reciprocal fashion, so if the other guy isn't going down, you don't go
But the other is that there are certain specific situations -- microeconomic situations where it makes sense to impose tariffs, unfair
trade practices of goods coming into your economy or being dumped, you've got to impose any of these to offset the impact of the dumping or
countervailing duties to offset the impact of subsidies or safeguard duties to offset the surge. That kind of situation, but those are temporary
duties on specific products and specific microeconomic circumstances.
QUEST: Matt, good to see you. We will need you more in the future to help us understand this because I think you probably agree, this is going to get
worse before it gets better.
GOLD: Yes, unfortunately, I think it will.
QUEST: Good. Well, not good. I mean, good to see you tonight, so thank you. We don't want to worry about it. You understand what I mean. Airbus
has put the United Kingdom on notice. The airplane manufacturer is warning that if Britain crashes out of the EU without a trade deal, a no deal
Brexit, then Airbus will reconsider its future in Britain.
(START VIDEO CLIP)
KATHERINE BENNETT, SENIOR VICE PRESIDENT, AIRBUS: We see, if there is no deal Brexit, this would be catastrophic for this country and catastrophic
for Airbus and our supply chain.
(END VIDEO CLIP)
QUEST: Now, Airbus employees, 14,000 people in the UK and says its supply chain supports 110,000 more jobs. British factories make the wings for all
Airbus passenger jets. They are then transported by the (inaudible) across to Hamburg and Toulouse for final assembly.
A spokesman for the Prime Minister Theresa May said, "The government is confident of getting a good deal for the UK aerospace sector." But the
warning from Airbus comes exactly two years after a slim, small majority of British voters chose to leave the European Union.
Anna Stewart now reports. Many people in the UK say, they've had enough of seemingly endless Brexit battles.
(START VIDEO TAPE)
ANNA STEWART, CNN CORRESPONDENT: Accepting Brexit was never going to be easy, for some campaigners, the fight is still on.
UNIDENTIFIED FEMALE: This is not a party. This is temporary.
UNIDENTIFIED MALE: Yes, absolutely.
UNIDENTIFIED FEMALE: It's much bigger.
STEWART: They are pushing for another vote on the final deal.
UNIDENTIFIED MALE: There is a whole plethora of things that people thought they'd really get, that they now can see they are not.
STEWART: But some people would say that makes a mockery of democracy. We have the vote. We knew the consequences, what do you say to them?
UNIDENTIFIED MALE: Well, let's live in a warm party state. Let's never ever have a general election. Let's just elect one government and have
them forever because that's what democracy said at particular points in time. That would obviously be ludicrous.
UNIDENTIFIED FEMALE: So, you do think Brexit will be good for jobs?
STEWART: Campaigners are taking the temperature of locals here in Redding, a city west of London with this make shift Brexitometer. So, you could see
that some people do think Brexit will be good for jobs, some people say, it could be good for the NHS -- the health service here in the UK -- however,
what really unifies everybody is nobody seems to think that Brexit is going well.
UNIDENTIFIED MALE: Hello there, you in a rush?
UNIDENTIFIED FEMALE: Yes. I am going to miss my bus.
UNIDENTIFIED MALE: Why do you have a (inaudible) then?
STEWART: Mostly, it's an uphill battle.
UNIDENTIFIED MALE: Hello there --
STEWART: Against the fed up.
UNIDENTIFIED MALE: We are campaigning for a people's vote on the Brexit deal --
STEWART: And the fatigued --
UNIDENTIFIED FEMALE: I think it's unrealistic for a charter vote now because we've already voted.
UNIDENTIFIED FEMALE: Yes.
UNIDENTIFIED FEMALE: No, but this is a vote on the final bill.
STEWART: Up and down the country, the British people are worn out. London's famously chatty cabbies are sick of talking about it. How do you
think Brexit is going?
UNIDENTIFIED MALE: So slowly. The government needs to push on and do what the people voted for.
STEWART: It's a struggle to keep up with the twist and turns of the Brexit process.
UNIDENTIFIED MALE: There are a lot of people out there that are a bit confused about what the government are going to be doing.
THERESA MAY, PRIME MINISTER OF GREAT BRITAIN: We are working to ensure that we can have our future customs arrangements --
STEWART: In this cool posturing, Parliamentary rebellion and endless needs for vote.
UNIDENTIFIED MALE: We are not really sure whether it's a back stopper or a backslider she's talking about here.
UNIDENTIFIED MALE: Leading Britain's conversation with Nick Ferrari At breakfast.
NICK FERRARI, RADIO SHOW HOST: Good morning, it's four minutes after seven in this hour. Another vote, another defeat.
STEWART: Dizzying even for a radio pundit like Nick Ferrari.
FERRARI: Probably the best way to put it in English terms would be it's a bugger's muddle. It's just endless jumping on trains from London to
STEWART: Ferrari, a leader says the country doesn't have the stomach for another vote.
FERRARI: It's not the best of three. Where does that end?
STEWART: Two years on with these negotiations, have any of these risks been healed?
FERRARI: Tell me any divorce in a couple you've ever known who said, "I am so glad that divorce took so long." So, this inactivity has made it far
worse, because people get angrier with each other.
UNIDENTIFIED FEMALE: I still want to get out. I want to hurry up and I don't want to be bullied by the EU coalition.
STEWART: Tempers flaring with no settlement in sight. Anna Stewart, CNN, London.
(END VIDEO TAPE)
QUEST: Busy day though as the OPEC decided to increase production, it should have brought the price of oil down. It didn't. And the US miss out
on 2018. It is co-hosting the 2026. What's next for soccer in America -- in the United States in the World Cup?
"Quest Means Business" on a Friday. After weeks of worry about high prices and oil shortages, OPEC has finally agreed a deal that will pump more oil.
The plan is simple, production goes up, the price should come down. This is basic economics even for me. If you produce more, the price goes down.
The deal did not come through easily and the arguments as you've seen all play out throughout this program. Iran and Saudi Arabia, the oil ministers
were pretty much split. Iran says, "If you want to bring down prices, it's not production levels that need to change, it's Donald Trump."
(START VIDEO CLIP)
BIJAN ZANGANEH, ENERGY MINISTER, IRAN: This situation and high price comes by the action of President Trump and the US administration.
(END VIDEO CLIP)
QUEST: The Saudis disagree they are worried about an oil shortage and the Saudi Oil Minister told Johnny D. without raising production, prices could
go up even more.
(START VIDEO CLIP)
KHALID AL-FALIH, SAUDI ENERGY MINISTER: If it's for our action, you would be looking at an industry that would not be able to meet the demand that
we're seeing today and that will be coming in the next few years, and prices as a result of markets would escalate a lot more than they are
(END VIDEO CLIP)
QUEST: Increasing production isn't the huge production for Saudi, for other countries, it is more true -- John Defterios. Johnny D. is in the
middle of it all, and explains. Now, good evening, sir, and let's first of all -- and then let's take this in a fair old clip, and production is going
up, but the price did not go down. That just goes against traditional economics. Why is that the case tonight?
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, there is a lot of talk, Richard about boosting output even more, 1.5 million to 1.8 million barrels
a day. At the end of the day, they suggest, they are going to put a million barrels back on to the market, but senior sources here at OPEC
headquarters say it will be closer to 700,000 barrels a day in the third quarter. So, this was conservative.
Richard, let's be candid here. It was messy getting in their internal strife between Saudi Arabia and Iran and even a bit opaque, but the deal is
done, and they did it by going back to the original agreement of December 2016, and right now, Richard, they are trying to compensate for the loss of
Venezuela and Libya, so the current OPEC President and UAE Minister, Suhail Al Mazrouei explains the math for both the OPEC producers and the non-OPEC
producers, which include Russia. Let's take a listen.
SUHAIL AL MAZROUEI, OPEC PRESIDENT AND UAE MINISTER: The number is going to change. Moving forward it could decrease, increase. What is important
is we always keep in mind the 1.2. Keep in mind that we achieve --
DEFTERIOS: The 1.2 from OPEC itself?
AL MAZROUEI: From OPEC itself, and from non-OPEC, we will meet with them tomorrow and their target is to stay within that trend of 600,000 barrels.
Both groups are on average are reaching 150% almost over conformity and how do we together go back to the original agreement? I think that's what the
DEFTERIOS: So, Richard, I don't want to get into the OPEC weeds here, we are just talking about 150% compliance. They are overly compliant right
now, so the deal is they will go back to the original agreement to comply by 100% and this is why we saw prices go up so much because they thought
they were going to put more oil on the market. Let's take a look here.
WTI up now at 5% and then you see North Sea brand trading around $75.00 a barrel. Here at OPEC headquarters, they are not going to be shouting into
the streets, but sources tell me they are very happy. It's kind of a Goldilocks price, $75.00, not too hot, not too cold, but Richard, they make
decent money at that price without the political noise coming from other parts of the world.
QUEST: Yes, there's only one problem, they can't -- they couple together a deal that will fall apart when somebody cheats or when there is some form
of political instability, and bearing mind, Johnny D., the US and the US's ability to produce more, well, the price could -- if they over pump, the
price will collapse.
DEFTERIOS: Okay, let's get to the political realities here first, Richard. There's not a lot of excess capacity within OPEC to cheat. The Gulf
producers have it, but they want to keep the unity of 24 producers together. That is the real deal here, and there's a lot of heat on OPEC
Senior sources told me they were getting calls from India and China when the price rose to $80.00 a barrel in May, tweets coming from the White
House and in fact, as soon as they signed the deal, Donald Trump was at it again, putting out this tweet, "I hope OPEC will increase output
substantially," is the word from the Donald Trump, "Need to keep prices down." So, this is not a deal that Donald Trump was looking for, but US
ally, Saudi Arabia has to find some common ground with its archrival, Iran. And Iran could go back to the original deal. That's the bottom line here,
And don't forget, they work for 18 months to get 24 producers under one umbrella, so a lot of noise from India, China, from the United States --
they have to keep their deal together. And that's what they got.
QUEST: Have a good weekend, John. Get home safely. Thank you, sir. John Defterios. How did the stocks in Europe benefited from the OPEC decision?
Look at the numbers in the markets in Europe, all closed firmly higher.
Total and Royal Dutch Shell, they were amongst the biggest gainers, and in fact, on the US markets, ExxonMobil was also -- Exxon was a huge gainer as
well in the US along with Chevron.
Another thrilling day of World Cup action is in the books. Serbia and Switzerland just finished. The Swiss performed and scored in the final
seconds. There you are, that equalizer did turn it into a one-one draw, so the Swiss win. World Sport, Don Riddell is with us. It's always -- it's
lovely just to sort of allow ourselves to hear the moment, the tension.
It's turning into a really cracking good World Cup.
DON RIDDELL, HOST, WORLD SPORT: Yes, it really is, Richard. We've had so much entertainment, so much drama, so much emotion. I believe you know,
that was the first game in which we actually had a team coming from behind to win, but you may not have noticed the significance of those two goals
that you've just shown. Of course, it was a win for Switzerland against Serbia, but the two goal scorers, Granit Xhaka and Xherdan Shaqiri, both
hail from Kosovo, a country as you know, Richard which is not officially recognized as an independent state by Serbia, and wouldn't you know, those
are the two men who scored in an absolutely incredible win for Switzerland.
I can tell you that there are some who feel that they have scored for two countries tonight against Serbia. Really quite remarkable drama and an
amazing back story, too, in that one.
QUEST: Don Riddell, thank you. Don Riddell joining us there. Now, the United States is known to be absent in this World Cup, only four million
Americans watched compared to the 11 million in 2014. Still football, or they insist on it, soccer, has come a long way in this country.
The US hosted it -- the World Cup -- in 1994. Then, I think most people sort of agree, the country wasn't ready for such a major event. Clearly,
an untapped market for FIFA and it sparked a flame. Two decades later, major league soccer is hugely popular especially with millennials.
The President of Atlanta United has said soccer as a brand in America is strong despite the missing the World Cup.
(START VIDEO CLIP)
DARREN EALES, PRESIDENT OF ATLANTA UNITED: I think that soccer is going from strength to strength. We have seen that with major league soccer and
in our attendance for Atlanta United this year and the league averages about 21,600 which puts it seven in global world soccer.
So, that's going well, but this chance every four years to be able to bring that fence sitting fan into the fold is a missed opportunity.
(END VIDEO CLIP)
QUEST: Now, Americans have something to look forward to, 2026 when the united bid between the US, Canada and Mexico. Robert Bennett hosts "The
Men in Blazers." It's a podcast which tracks the rise of football in the US. He joined me just before the program, and I asked him, what he says
about Americans looking at and viewing them that we are seeing this year, they are not interested in this World Cup.
(START VIDEO TAPE)
ROBERT BENNETT, HOST, THE MEN IN BLAZERS PODCAST: America loves winning things. We love the Dream Team. We love elbowing, (inaudible) in the head
as we dunk on them in basketball and blow them out by 50 points. We love underdog winning. We love the miracle on ice.
Viewing is down because it's apples and oranges. The last World Cup, Brazil was on the primetime. This one starts as early as 3:00 in the
morning on the West Coast, so you know, early morning television against primetime television, there is a reason to compare, but the good news is,
we are going to host the World Cup in 2026. It doesn't matter that the US are not in right now. The good news is, FIFA -- they have not derided.
They seem to be absolutely corruptible. I take all of it back there.
QUEST: You are such a fair-weathered friend and hypocrite.
BENNETT: It's true. I am and I will take it, but putting the World Cup.
QUEST: The criticism is that you've leveled against FIFA and now, look at you.
BENNETT: Yes, and you know, (inaudible) --
BENNETT: It's all the talk. It's all the talk. Something to give -- the NAFTA World Cup, the NAFTA World Cup that is coming.
QUEST: NAFTA may not exist by then.
BENNETT: You know what? They've given it to Canada and Mexico. The US's two sworn enemies, but for God's sake, we'll keep it together because
football transcends all.
QUEST: All right, will it ever take off in this country?
BENNETT: It has already. It has already.
QUEST: You're deluding yourself.
BENNETT: No, I am not deluding myself. You're just -- you're not an old man, but you're slightly old so the demographic who crave football right
now and the latest soccer poll, 30% -- under 30 demographics, the third most popular sport in this country. The World Cup was here in 1994. It
was meant to put football into the (inaudible) overnight.
QUEST: How much of it is on television versus basketball? Versus American football? Versus --
BENNETT: Richard, 72,000 fans will go and watch Atlanta play on a regular basis, Atlanta. The Mexican national team has done a tour of the US. They
have played in a thousand stadiums. The Champions League pulls ratings, the --
QUEST: So, much is --
BENNETT: It's the sport of the future as our book is subtitled.
QUEST: Get the book in. Get the book in. Just do it while I ask the next offensive question.
BENNETT: Please, I love it.
QUEST: How much of all of this is as a result of the immigration, the Latino factor that are left to their own devices, the sort of Americans
would not have that much interest?
BENNETT: The Latino audience is enormous. The ratings the Liga MX gets in America are outstanding, but what you've seen over the past couple of
years, the past 10 years, it is first of all, the internet has kind of fueled an ability for Americans to emotionally connect. You can connect to
Liverpool if you live in Los Angeles, it is closer intimately as someone in the same zip code as the stadium.
You can connect to Manchester United from Montana, and that's what we like. When I moved to America in the early '90s, if I wanted to watch my team
play, I had to phone my father, have him hold the phone by the television and follow along that way, but the internet and television has changed
QUEST: And the cost of phone calls in those days --
BENNETT: You're telling me, I had to work three jobs to pull around (inaudible) --
BENNETT: That's completely changed. The Premier League is on. You can watch it every single day now. Americans have more Premier League teams
than English people right now. America is a proper football country, Richard, if you were under the age of 30.
QUEST: So, just repeat that sentence. I didn't understand the offensive comment.
[16:30:00] bENNETT: America is just -- if you were under the age of 30.
QUEST: So just to be that sentencing -- so I give them the standing offensive comments.
BENNETT: America is just like 31 years old and primitive, but I just need to make the point. If you're under the age of 30, soccer is very much fun
QUEST: Got it! Got it! I knew we would get in eventually.
BENNETT: This is so --
QUEST: The schizophrenia of a man --
BENNETT: Plus, they're unimportant, why does this happen?
QUEST: Schizophrenia of a man who can't decide if it's soccer or football.
BENNETT: It's those who care, who really care, association football, stuff like that --
QUEST: And if you're broadcasting anywhere else in the rest of the world - -
BENNETT: Yes --
QUEST: You would not use the word soccer --
BENNETT: Nonsense --
QUEST: You wouldn't --
BENNETT: You wouldn't think it's an English word. This is a crazy conversation, I love you, yes, you got me, who cares? Whatever you want to
call it, soccer, football, America loves it all and it is very much the sport of the future, not future is now.
(END VIDEO CLIP)
QUEST: When we come back, we'll hear from the former Finance Minister of Greece about the country's debt deal, says everybody seems to agree that
Greece's bailout is now over. The crisis is finished as Yanis Varoufakis agrees.
QUEST: And I am Richard Quest as more QUEST MEANS BUSINESS in just a moment. But relief in Greece as the country puts its debt crisis behind
it. The former Finance Minister who is at the height of the crisis Yanis Varoufakis will join me immediately after this summary of news.
The QUEST MEANS "SHOW" BUSINESS, why don't we see more female stars in festival line-ups, look at the bench(ph) with just the balance as we
continue, this is Cnn, and on this network, the facts always come first.
President Trump has stepped up his threats to hit European auto import with big tariffs. The president said on Friday that cars coming into America
would be stopped with a 20 percent surcharge unless EU tariffs are removed.
He announces intentions on Twitter saying, "build them here". The president is shifting the focus off the illegal immigration and the forced
separation of families to dent the crime(ph). He met Bret(ph) on Friday with families whose loved ones were killed by undocumented migrants.
Mr. Trump is now urging Republicans to delay efforts to pass immigration reform until after the November elections. But he hopes to have an
increased majority. More controversy on Friday in Italy over the migrant crisis leaving more lives in the concern and uncertainty.
The owners of two rescue boats say the government has forced them to stop operating. One of the boats had 220 people on board, rescued off the coast
of Libya. Italy says they're in violation of international law.
[16:35:00] Relief, that's the word from Greece in both fiscal and emotional terms as politicians in Greece and Brussels declared the country's debt
crisis finally over. They breached the long-term deal that gives Athens more time to pay its creditors.
The Prime Minister, the Greek Prime Minister Alexis Tsipras said the tide had turned.
(BEGIN VIDEO CLIP)
ALEXIS TSIPRAS, PRIME MINISTER, GREECE (through translator): It is a new page for the country, that does not mean that we will abandon the prudent
path of fiscal balance and the structural reforms that the country needs.
It does however mean that we abandon the thorny road of bailouts, the enforcement of extreme austerity, the lifting of a significant part and
economic sovereignty of governments which we lived through all these years.
From now on, we have of course goals and we are committed to those fiscal goals. And anyway, we have shown that we can achieve them.
(END VIDEO CLIP)
QUEST: Former Greek Finance Minister Yanis Varoufakis who was the minister at the height of the crisis joins me now on the phone. And Mr. Varoufakis,
do you accept that the crisis is over, everybody else is does.
YANIS VAROUFAKIS, FINANCE MINISTER, GREECE (via telephone): You mean everybody who has an interest in kicking a gigantic can down the road,
celebrating a solution which effectively enhances the problem, deepening the unsustainability of a Greek debt.
Look, Richard, it's another proud moment. And Europe, crime on a tradition of fraudulent bankruptcy sentiment regarding the Greek debt --
QUEST: Hang on, hang on Yanis --
Yanis, Greece gets $15 billion more as a cash buffer if necessary, and the majorities, the repayment days that push that 10 years out and last 10
years longer by which time of course you will have inflated down the debt.
VAROUFAKIS: Well, firstly, this rather then, Greece has been receiving a huge amount of money and the largest loan in human history without repaying
a single penny of it. In order to pretend that it is repaying its creditors.
So creditors are paying themselves on conditions that a shrinking Greece's capacity to produce the income that will repay those debts. This has been
happening since 2010, nothing new. You just mentioned $15 billion, that $15 billion is going to go from the taxpayers of Europe through repaying
the IMF, through repaying the European Central Bank, none of it is going to go to police, none of it is going to be developed.
As for the debt relief that you mentioned, it is an insult following an injury. What they're doing is they're giving Greece easy repayments for
the next 12 years until 2030. But there's no interest rates reduction --
QUEST: Right --
VAROUFAKIS: There's no debt restructure, all they will do is they will pile up that debt after 2030 with interest. The net present value they
collect were saying there's no --
QUEST: Right --
VAROUFAKIS: Reduction in the net present value debt, and you can see that because there's no reduction in the huge austerity that is going to be
demanded from the country for the next five years, and then after that they gave another 30 years.
QUEST: You would agree finally, Yanis that the economy in Greece, you know, there's growth, it's coming back, it's slow, but the economy is in a
much better condition than it was five, eight, ten years ago.
VAROUFAKIS: Richard, I am afraid that I will have to contradict you. I wish you were right and I hope, I mean, I pray that I am wrong, but I am
not wrong, I'm very much fair. Look, there's no recovery, the private sector is shrinking, back serving is not shrinking, but at the same time,
you have an even faster shrinkage of public expenditure.
There's no serious investment in the country, there could be no serious investment --
QUEST: Right --
VAROUFAKIS: In the country where everybody knows that the state is going to be bankrupt for another 30, 40 years. The banks are in huge trouble
with more than 50 percent non-performing loans. Companies owe to --
QUEST: Yes --
VAROUFAKIS: State, the state owes to companies, no one can --
QUEST: Right --
VAROUFAKIS: Afford to pay their debt. All that is happening is the kind of techniques, the stabilization at a very low level --
QUEST: Yanis --
VAROUFAKIS: It's a bit like saying that the bank is in a coma has recovered because some signs of life returned without hint --
VAROUFAKIS: Or that it is coming out of a coma.
QUEST: Good to -- try and have a good weekend, sir, we'll talk more about this, thank you Yanis Varoufakis joining us on the line. Now, Donald Trump
has threatened to impose major new tariffs on car imported to the U.S. from the European Union.
It comes on the same day that EU tariffs on iconic American goods came into effect. It all sounds like the opening salver(ph) with a costly trade war,
and it wouldn't be the first time the world has found itself in this position as Clare Sebastian explains.
[16:40:00] CLARE SEBASTIAN, CNN (voice-over): Nineteen-thirty, pro- vision(ph) was to enforce Herbert Hoover within the White House and the global economy was in a grip of a catastrophic depression. Two U.S.
Senators Reed Smoot and Willis Hawley set out to stem the tide through tariffs.
UNIDENTIFIED MALE: Smoot and Hawley were people who whose districts were you know, producing industrial products and competing with foreign
industrial products and looking for protection in order to help their districts.
SEBASTIAN: Smoot, Hawley or the Tariff Act of 1930 ballooned into hundreds of tariffs affecting all countries that exported to the U.S. As were
thousand economists that urged the president to veto the bill, warning for reprisals, they were right.
Countries from Europe to Canada retaliated overall U.S. exports fell by 40 percent in two years.
UNIDENTIFIED MALE: All we had is just an escalation around the world of tariffs going higher, most economists would say this didn't cost the great
depression and great oppression that had already started, but this made the recovery longer, made the great depression worse.
SEBASTIAN: Plus, when economy was repealed in 1934, these two figures have haunted U.S. administrations ever since.
RONALD REAGAN, LATE PRESIDENT OF THE UNITED STATES: Well, now, some of us remember the 1930s --
SEBASTIAN: This was 1985 --
REAGAN: Ghost of Smoot, Hawley rears its ugly head in Congress, if Congress crafts a depression-making bill, I'll fight it --
SEBASTIAN: While Reagan's rhetoric haunted free trade, some of its actions told a different story. Over the course of the 1980s, he put restrictions
and tariffs on Japanese cars, electronics and motorcycles to protect domestic companies.
REAGAN: Harley is back and standing tall.
UNIDENTIFIED MALE: Did that help certain U.S. producers? Yes, but it was probably, you know, harmful to the economy as a whole.
SEBASTIAN: And that refrain rang through again.
UNIDENTIFIED MALE: If this administration doesn't give us the kind of remedy --
SEBASTIAN: In 2002, the U.S. steel industry struggling under surging imports and falling prices. The Bush administration stepped in with
tariffs of up to 30 percent on foreign steel imports.
ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: I will say that steel needs time for breathing rooms so they can restructure.
SEBASTIAN: After about a year the World Trade Organization ruled them a violation and they were repealed. One study estimated 200,000 American
jobs were lost due to higher steel prices. Be it all-out trade war or trade disputes, history shows protectionism in all forms is brought with
rescue. Clare Sebastian, CnnMoney, New York.
QUEST: Rick Helfenbein would agree, he's the president and chief executive of American Apparel and Footwear Association. Levi's Jeans are being
tariffed not surprisingly, I suspect obviously you're against this, but it's inevitable.
RICK HELFENBEIN, PRESIDENT & CHIEF EXECUTIVE OFFICER, AMERICAN APPAREL & FOOTWEAR ASSOCIATION: I don't know, it's inevitable, but I will tell you
they're after jeans, they're after apparel, they're after footwear, this isn't going to help in any way, shape or form are emerging made in USA
You know, wasn't this the administration that said jobs, this isn't going to help jobs in America, this is going to hurt jobs in America. Frankly,
everybody knows trade wars just don't work. You just saw it, they don't work, it's a whole history of it.
From Smoot, Hawley on all the way through.
QUEST: But the problem is that the problem has a view which is a mercantilist view, a zero, some gain view, and he says that it's an unfair
trading system. Your members are going to be hit by this.
HELFENBEIN: Our members are going to be hurt by this, whether it's incoming, whether it's outgoing, whether we import, whether we export,
we're going to get crashed anyway you look at it. And in the industry right now, in America, apparel and footwear mostly imported.
QUEST: So what are you asking the president? What are you telling him? What's your association saying you want them to do?
HELFENBEIN: We -- first of all, we -- you know, he mentioned the other day, that's going on raw terms, I would sue everybody just fine. But
getting tariffs is only going to hurt business, it's not going to hurt anybody. You're going to get inflation, you're going to get prices going
through the roof, people are going to have disrupted supply chains, they won't be able to compete.
QUEST: Good to see you, thank you sir --
HELFENBEIN: Thank you --
QUEST: Thank you very much indeed, thank you. Coming up after the break, music festival season is around the corner and there are about campaign to
get more women in stage.
[16:45:00] (COMMERCIAL BREAK)
QUEST: QUEST MEANS "SHOW" BUSINESS on a Friday, it's the music festival season and if you look up the line-up, you'll see many are dominated by
male artists. The PRS Foundation which supports developing artists aims to change all of that.
It's leading an effort to make sure line-ups showcase male and female talent in equal shares. The chief executive Vanessa Reed is with me now.
Are they not?
VANESSA REED, CHIEF EXECUTIVE OFFICER, PRS FOUNDATION: They're not at the moment, so in the end, the U.S. 10 percent of headliners is a female, in
the U.K., in a sample of the major festivals, only 26 percent of the lineup was made up of female artists.
QUEST: No, you're not -- are we talking about total artists involved or headline artists?
REED: In those stats, the 26 percent is total artists involved, but our program is just simply about increasing the general participation of women
in festivals. And we're not trying to achieve --
QUEST: So why would they not be? Why would they not be there? I mean, if they're good and they can bring in an audience, you'll sign them up if they
can afford them.
REED: Well, historically did, the last women who have taken up sunrise since, there has been left women in festivals. But now the next generation
is really exploding, there's lots of talent there, but the workforce in festivals is very dominated by men.
I think there's been partners who are booking the same kinds of artists, and now the next generation really want change is you've seen on all the
social media campaigns that are calling out major festivals, they're not having enough room and in their line ups.
QUEST: What's the answer here? What is the answer to redress that --
REED: The Mary Crowe(ph) model, it's really important so we need to get women on to those stages and at the same time invest in the next
generation. That's why key change is supporting emerging female artists and industry professionals as well as getting more women on stages.
And it's incredible, we just reached a 100 festivals signing up to our 50- 50 then to balance sledge. So the real kind of urgency for change --
QUEST: But you -- come on, but you don't want -- you want the best artists.
REED: And why will they not be the best artists?
QUEST: No, they will be the best. I am just asking you, I'm just asking you, you want the best of artists, if when you look at the totality of
artists that you want to book for festivals, it happens to be that there's more men than women. Are you OK with that?
REED: I think people need to look harder at what's coming through the talent pipeline because there are just as many good women as there are men,
and it's just about using different channels to reach them. And you could apply that argument to any conversation about diversity.
The quality argument is always recurring, and I think it's the false one.
QUEST: Good to see you, thank you. We continue tonight, first it's Deep Blue, then Watson, now the next evolution in artificial intelligence from
IBM is here, we will introduce you after the break.
[16:50:00] (COMMERCIAL BREAK)
QUEST: OK, we know that AI is the future in some shape or form or description. IBM says its next great achievement in artificial
intelligence may already have arrived. In 1997, Deep Blue beat Garry Kasparov in chess. In 2011, Watson beat Ken Jennings in "Jeopardy".
Now IBM's AI has engaged with humans in a full live debate.
(BEGIN VIDEO CLIP)
IBM AI: Subsidizing space exploration is like investing in really good tariffs, it may not be fund to spend the extra money, but ultimately you
know both you and everyone else on the road will be better off for all of these reasons. I think the motion should stand.
(END VIDEO CLIP)
QUEST: Dario Gil is the vice president of AI and Quantum Computing at IBM. And who won the debate?
DARIO GIL, VICE PRESIDENT, AI & QUANTUM COMPUTING, IBM: Well, we had two debates on Monday, one, the clip we just showed debated the topic of
whether we should subsidize space exploration and actually the human was you know, judged by the audience, won the debate.
On the second debate that was had that night, was about whether we should use more telemedicine in healthcare and the audience thought that Project
Debater won the debate.
QUEST: And how much is Project Debater, how much is the computer able to adapt its argument and respond point-for-point even in the limited format
of this sort of debate?
GIL: Yes, that's a key point, actually, performing a rebuttal. The way the format of the debate happened is that the AI system had to create a
four-minute opening argument --
QUEST: Right --
GIL: The human had to do their own four minutes, saying, well, that is happening. The system has to be listening and extracting the key points
that the human is making and then construct another four-minute rebuttal.
QUEST: But true AI, and I know it's nascent and we're at the early start of this revolution, true AI requires artificial intelligence which means if
a different point of view that hasn't been programmed in is raised, the computer can adapt to it.
How far are we from that?
GIL: I would say in general that we have a narrow form of artificial intelligence that has began to work, we are still far away from two general
artificial intelligence. Having said that, given all the recent progress that has happened, including impressive feats already possible.
And there's example of that where we're starting to see an evolution or ability to master more and more natural language which for humans it's
easy, but for the computers has been phenomenally difficult.
QUEST: In this situation, I know these are basic questions for men like yourself who lives and breathes this stuff. But is the computer thinking,
is the computer just responding within its algorithms to -- as far as you know, which comes first, the chicken or the egg? And you know, in that
GIL: Well, the computer is not self-aware, right? So in that way, I mean, I think thinking typically, we also associate it with a form of awareness
when we use it popularly as a term. However, it is able to construct arguments and what has happened with Project Debater is that the feel of
computational argumentation --
QUEST: But --
GIL: Is emerging, right?
QUEST: If I suddenly ask you about flower arranging --
GIL: Yes --
QUEST: Or something, you know, not unreasonably your face would become alarmed and you would sort of look it up what on earth happens next?
GIL: That's right --
QUEST: In this debate on Space Exploration, if I suddenly advance an argument about gardening or golf, what does the computer do in that
GIL: Yes, so if he has enough body of evidence and you understood what that argument was or what the point was being made, he will make an attempt
to answer it.
QUEST: Or would it -- is it -- does it have the ability yet to simply say, no Richard, that is simply a stupid or Richard that makes no sense, I do
not understand what you're talking about.
GIL: It doesn't do that, it doesn't do that yet. Maybe that's the next step on what we have to do with Debater, right?
QUEST: And you're not about to do it either?
QUEST: Well, you've answered(ph) my point, the item you most debate on panels and seminars on AI, the one thing I've never fully understood is how
far we are on this road.
[16:55:00] GIL: Yes, so the field itself has been around for many decades, but I would say that we've made more progress in the last five years and in
the many decades behind -- you know, before us. But I would say we're still in the beginning of the full impact of artificial intelligence.
Like I said, the area around -- if you look AI learning, learning by example has made great progress, reasoning less so. So I think the future
of artificial intelligence is going to be the combination of this blend of learning through all the data we've accumulated and reasoning over the data
itself and the knowledge we accumulate.
That we humans do very well, the machines don't do that very well yet.
QUEST: Please assure me that it won't take my job, not take my career time.
GIL: I can definitely assure you it will not take your job.
QUEST: You sure?
QUEST: Have a good weekend, thank you very much indeed.
GIL: Thank you.
QUEST: We will have a profitable moment assuming I'm still here after the break and the machine hasn't taken over instead. This is QUEST MEANS
BUSINESS, it's Friday.
QUEST: Tonight's profitable moment, it is worthless taking a moment to too longer tonight for the profitable moment as we start to digest exactly what
has happened with the trade tariffs. Now, you remember of course that you've got tit-for-tat tariffs with China and the U.S. already enforced.
And you've got another potentially 250 billion coming down the road. And then you've got the question of the European Union stealing aluminum
tariffs and now Donald Trump is threatening tariffs on German cars coming to the United States.
If I could just leave it there, it would be fine, but I can't because you've now got trade tariffs between the United States and Canada which is
coming to force. You've got trade tariffs between the United States and Mexico -- oh, let's not forget the ones that Turkey has just introduced
against the United States, to say nothing of those that have come from Japan.
Why am I telling you all of this? Because if you look at the issue of a company like Denka(ph), you see in sharp focus the issue. For instance,
Denka(ph) cars built here in the U.S. will be tariffed if they go to China. Denka(ph) cars built in Germany will be tariffed if they go to the United
Harley-Davidson is being tariffed if it sends its bikes to Europe on steel that it's already paying more for because of the tariffs that were
introduced. You get the idea. The only thing you need to take away from this tonight is that in a trade war, no one wins.
Forget the sophistry, forget the arguments, in a trade war, no one wins. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New
York. Whatever you're up to in the hours ahead, I hope it's profitable. We'll do it again next week, have a wonderful weekend.