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QUEST MEANS BUSINESS
New Study Shows Hurricane Maria Killed 2,975 in Puerto Rico; French Environment Minister Quits; Angela Merkel Condemns Protesters Chanting Neo- Nazi Slogans; Aretha Franklin Fans Pay Tribute in Detroit; Canada's Foreign Ministry Resuming Trade Talks in Washington; GoPro Prepares for More U.S.- China Tariffs; Marijuana Stocks Growth Hits a Snag; Mining Stocks Lead the Way for FTSE; Stormy Daniels Appears in Vogue Magazine. Aired 4-5p ET
Aired August 28, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CORRESPONDENT, CNN: Okay, the Dow goes up little bit. The S&P and NASDAQ proved me wrong by eking out a little bit of a gain. We'll
call it all flat on the market and call it even. It's Tuesday, August 28th. Tonight ministers descend on Washington as Canada tries to get in on
the NAFTA action. Donald Trump promises actions after accusing Google of left wing bias, and Britain's Prime Minister starts her African tour, she
looks for new markets after Brexit. I am Paula Newton, and this is "Quest Means Business."
Good evening, right now, Canada is trying to get in on some of that NAFTA action - if it is even called NAFTA anymore. Now, that's the deal which
already has been agreed to between the US and Mexico.
The Trump administration is piling on the pressure on its northern neighbor now. Canada's Justin Trudeau remains confident though that he can get the
(BEGIN VIDEO CLIP)
JUSTIN TRUDEAU, PRIME MINISTER OF CANADA: We have been encouraged by the progress made and by our NAFTA partners over the past weeks. This was an
important step to moving forward on re-negotiating and improving NAFTA.
As you know, I spoke with both the Mexican President and the American President over the past couple of days and our team is right now in
Washington digging into the progress made and looking at what the next steps are. We will engage in a positive and constructive way as we have
always been and looking forward to ultimately signing a deal as long as it is good for Canada and good for middle class Canadians.
(END VIDEO CLIP)
NEWTON: The Canadians tell me where they didn't think a deal was possible in the spring, they do feel that the Trump administration does want a deal
now. But there of course is no guarantee that Canada wants that deal. Mr. Trudeau said he would defend the country's dairy sector, a key sticking
point here because it has been targeted by Donald Trump in the past.
And you heard him say that he would only sign up to a new trade deal if it was quote "good for Canadians." Now the US Treasury Secretary says
Washington is not worried about doing one deal or two.
(BEGIN VIDEO CLIP)
STEVEN MNUCHIN, US TREASURY SECRETARY: The President's objectives is to have deals with Mexico and have a deal with Canada, and if we could do it
with one deal, we'll do it with one deal, if we do it in two deals, we'll do it in two deals.
UNIDENTIFIED FEMALE: Mexico and Canada have been adamant in saying they want us to remain a tripartite deal, a trilateral deal. Hoes the President
feel about that? Is he willing to make sure that that takes place?
MNUCHIN: I think the President has been adamant that we want deals. That's what we're focused on, good deals.
(END VIDEO CLIP)
NEWTON: Good deals. Carla Hills is a former US trade representative, she was in that position years ago working on that original NAFTA deal. She
joins me from Washington. It seems that the President wants to kill all your hard work. But some skeptics have said, "Look, this is not a complete
redo of NAFTA no matter how you rebrand it that these steps are incremental." What (audio gap) trade policy? Representative Hills, can
you hear me?
CARLA HILLS, FORMER US TRADE REPRESENTATIVE: No, I didn't hear that.
NEWTON: Oh, no problem at all. We will pick up where we left off. Do you think this is a new rebranding of NAFTA or do you think materially so far
it looks like big change?
HILLS: Well, I hope it is when it is finished is an upgrade. The NAFTA is 25 years old and it needs to be modernized. So many things have happened
technologically and economically since it was initially negotiated. So I applaud the fact that we are adding rules to cover the new technologies,
intellectual property protection of those technologies and so many other things.
So it should be a win, win, win situation so all three nations can continue to be the most competitive region in the world.
NEWTON: But, perhaps it is just a win, win. Is it still a good deal if Canada is not included?
HILLS: Canada is our largest export destination. We are major partner with Canada. The three of us together make up a market of $19 trillion
dollars and 490 million consumers and we benefit from the synchronized supply chains that run across our borders. We would be a lose-lose-lose
situation if we were to break up the synchronization that has been so effective for our economies.
NEWTON: And yet, both Mexico and the United States have said, "Look, if it does not work out, it does not work out." Even - is this even possible as
you understand it because if you don't have Democrats like Chuck Schumer saying that, "Look, when it comes to things like trying to get deals
through the Senate, it is just not going to happen unless Canada is on board." What kind of leverage that could count going into these
negotiations, if any?
HILLS: We want to keep Canada in the negotiations and of course, we have Trade Promotion Authority which gives the President the authority to
negotiate. He has to say what he's going to negotiate and he said it was going to be a trilateral. And he has to follow the timelines and consult
with Congress, so it is far preferable that we proceed along the legal lines and not create legal dispute.
NEWTON: In terms of a negotiating tactic here, I have seen this change quite a bit over the last several months that we have been following it. I
mean, I don't think the analogy is too strong to say that Canada has a bit of a gun to its head right now. Does this vindicate the negotiating
tactics of Mr. Trump because as you know, Canada is already going to move on areas that they would have never moved before.
HILLS: Well, you know, in my own view to negotiate a trade agreement is both economics. You have to understand the economics of what needs to be
done. You also have to understand the politics and you don't want to lose good economic opportunity because you've messed up on the politics. So
let's hope we can get a win-win-win situation and continue to build on the magnificent partnership that we have built with our northern and southern
NEWTON: And in terms of the details that you've already seen on the US- Mexico deal, how much do you think that will advance the Trump administration's goal really is to bring those key manufacturing jobs back
to the United States and crucially back to some swing states.
HILLS: Well, the rules of origin are aimed to do that in the auto sector and I think those can be assimilated. It creates complexity, but it will
have some positive effects, so let's see if we are able to work with it. So far, the business groups have generally applauded, but they don't
applaud in my view if you tear the agreement apart, and it is just a bilateral agreement. I think you will lose that support that you need
politically and as I mention, trade agreements are not only economic but also political in their ramifications.
NEWTON: Yes, and you make such a good point because we know that calculus is being done every day in both the Oval Office and on Capitol Hill. Carla
Hills, thanks so much. Really appreciate it.
HILLS: It's always a pleasure to be with you.
NEWTON: Now, it was a muted day on the Dow as earlier gains were in fact wiped out. They weren't stellar gains either. The Dow ended up about 14
points higher. On "Quest Express," the mood of the stock exchange was that little bit of restraint is really not a bad thing. Take a listen.
(BEGIN VIDEO CLIP)
PETER TUCHMAN, STOCK TRADER, NEW YORK STOCK EXCHANGE: We've had a huge rally of 300 yesterday. We broke through all kinds of levels. We are
trading in record territory. After a while, the narrative about hitting new records and then the minute we are not hitting a new record on a daily,
we start to wonder what's going on, the cause and consolidation.
(END VIDEO CLIP)
NEWTON: Pause and consolidation. I can't believe that I have to do all of this work for just a little itty bitty record. Now, the Dow as we were
saying closed flat. We saw though new records finishes, yes we did, on both the S&P, not by much and of course, the NASDAQ. Which are actually
showing some healthier gains earlier in the day, but not so much right now.
Now, there are more signs US economy is heating up. US consumer confidence is at its highest point since the year 2000. Now, consumer spending makes
up nearly three quarters of economic activities. At the same time, though, house prices - and this is key - rose in the US by more than 6% in June.
This is twice as fast as wage growth, and in the US, the trade deficits and goods is getting larger, no surprise there. Analysts put this down to a
firmer dollar and uncertainty over those trade tariffs.
Mohamed El-Erian is the chief economic adviser at Allianz. Thank you so much for joining me today, we have got a lot to get through especially when
you take a look at this market, is it sustainable? And let's talk first about the economy itself, that 4% number, we have seen it. We get a
revision on GDP tomorrow. Do you think this a breakout point - never point the markets - is it a breakout point for the US economy?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: This is a breakout point in a sense that we're getting away from the 1.5% to 2% and more than
2.5% to 3%. It is also a break away in terms of the US growth potential is improving. Is it a 4% economy? No, but it is a better economy than it has
been in the past.
NEWTON: When people look at this market, they are thinking how high can it go and how high will it go and when do fundamentals fall apart? And for
people like me who are looking for inflation, will I see it soon or Jay Powell says, it doesn't seem to be in sight so far?
EL-ERIAN: Yes, inflation will go up slowly. I don't think it's the main worry. The main issue about this market and you've seen it is that it's in
a transition. Last year, it was a more dangerous market even though it was a less volatile market, it was more dangerous. Why? Because it was being
fueled by artificial monetary stimulus.
What we are in the midst of is a handoff - a handoff from monetary stimulus to more genuine growth creating policies and that is a very tricky
transition, that is why the market has been more volatile this year, that's why this is about a US story, it's not a global story. Other markets
aren't doing well as the US, so it's a different market.
NEWTON: You don't think the synchronized economies all around the world is going to happen? It's not synchronized growth?
EL-ERIAN: No, I think that is something that we foolishly fell in love with.
NEWTON: It sounded great.
EL-ERIAN: It sounded great, but what people didn't realize is that the economies were expanding for different reasons. And Three of the four
reasons were temporary in nature. So, no, the US right now is on solid footing. I would worry more about the sustainability of China and Europe
than I would about the US.
NEWTON: In terms of the monetary and fiscal policy, we will go to monetary first. I mean, the market loves Jay Powell and that makes me nervous? Why
is it making me nervous? Can you tell me not to be nervous?
EL-ERIAN: I think it makes you nervous because we were all worried that exiting unconventional policies - zero interest rates, pumping in
NEWTON: The quantitative easing.
EL-ERIAN: Yes, all of that would be really tricky. We didn't have a game plan for it. we had no - nothing to guide us and it turns out that the Fed
is doing it and doing it well. But be careful. It's one thing when the Federal Reserve does it. It's a completely different thing when three
Central Banks do it and it's only a matter of time when the Fed, the ECB and the Bank of Japan are all going to be getting out of the business of
NEWTON: And is that the roadblock that you're seeing up ahead? Is that the speed bump?
EL-ERIAN: It's one of the foreign certainties. I put it as the second uncertainty. My most worrisome uncertainty is global growth as a whole.
In particular, do other countries transition to a higher growth path? I would put monetary policy second, I would put trade third and I would put
Turkey and emerging markets fourth.
So if you're looking for a listing of potential risks, that is the order in which it would happen.
NEWTON: We were just having the discussion on trade. What worries you the most on trade, let's say even in a perfect world if they do get a
trilateral deal. We've still got Europe, we still have China. We even still have Japan.
EL-ERIAN: Yes, the big elephant in the room is China, right, and the good news is that this approach that has put on its head process, protocols -
anything you can think of have been turned upside down in this whole negotiation.
The good news is there is a sequence now. Mexico first and Canada second, European Union third and that allows for a unified approach vis-a-vis China
which is the toughest not to crack. So the good news is that, you could see now a path forward when many people worried about - that there wasn't
NEWTON: I have to go, but I can't leave without asking you, is this an indication of tax reform in the United States and Donald Trump's tax
EL-ERIAN: It is a vindication of tax reform, it's a vindication of deregulation and it is a vindication of the hope that we will also get
NEWTON: Okay, Mohamed El-Erian, thanks for coming. I know that Richard will miss you being here. I am going to say to Richard right now, wherever
you are, Mohamed likes me better. Because he is right here when I'm here.
Now, President Trump is saying Google is rigged against him. Is it? Would that even be possible? We'll discuss that next.
NEWTON: Now just in the last hour or so, US President Trump renewed his attack on Google adding Facebook and Twitter to the mix, why not? Earlier,
Mr. Trump accused Google of rigging its search results to prioritize unfavorable stories when users look for Trump news. Here are his latest
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE United States: See, I think Google has really taken advantage of a lot of people and I think that is a very
serious thing and it's a very serious charge. I think what Google and what others are doing, if you look at what's going on at Twitter, if you look at
what's going on in Facebook, they better be careful because you can't do that to people. You can't do it.
We have tremendous - we have literally thousands and thousands of complaints coming in and you just can't do that. So, I think that Google
and Twitter and Facebook , they're really treading on very, very troubled territory, and they have to be careful. It is not fair to large portions
of the population.
(END VIDEO CLIP)
NEWTON: Now, Google responded to the original attacks, and not those comments but earlier on Twitter, saying, "Search is not used to set a
political agenda and we don't bias our results towards any political ideology. We continually work to improve Google Search and we never rank
search results to manipulate political sentiment."
CNNMoney's senior media writer, Oliver Darcy is here with me. You know, here is the problem, Oliver, I can read that statement from Google, but a
lot of people think no, that's not true. You do skew the political results. What is the actual truth there pointing out that you know, Jack
Dorsey, the head of Twitter to Brian Stelter the other week actually admitted that yes, most of my staff is liberal.
OLIVER DARCY, SENIOR MEDIA WRITER, CNNMONEY: Yes, but he also said then right afterwards that they are trying to make sure that standards are
applied equally across political spectrum regardless of the personal bias ...
NEWTON: But I guess, there is no transparency in those standards. To most people who use their internet, it seems like a bit of black box and guess
what? That's what President Trump thinks, too.
DARCY: Right, and that's also what his supporters are hearing. Their supporters are hearing from the President himself, and then also from his
allies in the media, Fox News, for instance has for the several years pushed this idea that big tech is out to censor conservatives. They're out
to make sure that you only see liberal points of view. They've gone after Twitter and Facebook and so now, it's YouTube's turn and Google's turn.
But this is a long running theme and from sort of the media circle and the President seized on it, it really excites his base. I think that's what
you are going to see pushes forward because his base gets really excited when they hear these claims of censorship by big corporations whether it's
the media like CNN and the "New York Times" or whether it's Facebook and Twitter.
NEWTON: In terms of what he can do about it, whether anything has to be done about it, never mind, we've got these people in front of - we have
them on Capitol Hill next week, what can the President do about it?
DARCY: I am not certain what the President can do about it, but you can certainly aim to degrade their credibility by using as a bully pulpit as
the President of the United States to launch these baseless attacks on these corporations. It is really actually stunning, too. The US
Republican President is launching these attacks on private business. We seen him do that with Amazon and now, we're seeing him do it with Google.
It will probably be Facebook or Twitter tomorrow. It really just depends on what he's watching on Fox News it seems, but it is extremely striking,
right? The President of the United States who is a Republican is attacking using his bully pulpit to attack private business.
NEWTON: And even more striking because this is a President who his son-in- law, Jared Kushner bragged after the election that they used social media and everything that it entails to their benefit to win the election, and
more than that, one of the complaints about the election was not that people - that people were in their own echo chambers when it came to
whatever they felt, whether on the left or right.
I think the problem, though, still remains, Oliver, that these companies are not doing a good job of really being transparent about what the hell is
going on ...
NEWTON: ... inside their organizations. Can we get to the point where there is at least more transparency?
DARCY: I am not sure. The media corporations generally do not like being very transparent, so you've seen that with tech as well, with Facebook and
YouTube and Google. They just prefer not to be as transparent with the consumers. I think it will be helpful if they were, but at the same time,
I also think that regardless of the facts, regardless of whatever these corporations come out and say, there is going to be Fox News, the President
of the United States and other Republicans who are going to push this agenda forward irrespective of the facts, because it excites the base, it
whips up the base in to a frenzy, it gets them out to vote, and I think that's what this is about. This is politics and this is using these
corporations as the opponents because right now, there isn't really Democrats so they can go after the media, they can go after tech and that's
what they are doing.
NEWTON: And it may very well work out that way. We will wait to see those hearings next week. Oliver, thanks so much for coming. We really
Now, British Prime Minister Theresa May is on an African tour to shore up her post Brexit support. She definitely needs it. She's visiting South
Africa, Nigeria and Kenya. Mrs. May is trying to strike a positive note and that will be tough saying, "Leaving the EU without a deal would not be
the end of the world." She was trying to be positive, but it did not really quite work out that way. Have a look at this video though. She is
dancing there and unfortunately, that made a lot of headlines perhaps more so than the Brexit news.
At this point in time, Eleni Giokos is in Johannesburg. She joins us now live. We really do want to talk about this dancing video. I would never
be caught dead dancing that way. I think she did a fabulous job, thank you very much. She was very positive. Yes, we've got more of that video.
ELENI GIOKOS, CORRESPONDENT, CNNMONEY: Yes, let me tell, if he visit Africa - if you visit South Africa, you've got to dance. It part of our
culture. Politicians do it. Our President does it so, we are really delighted to have seen Theresa May getting into the swing of things.
NEWTON: That is such a great point, Eleni. And I'm glad you make it and we give her a little - cut her a little bit of slack on a day when she
sorely needs it. This whole issue, she was trying to be upbeat and say, "Well, we crashed out of Brexit," and that's absolutely fine, and yet, the
pound dropped on it and there are a lot of worried people in Britain right now.
Is there anything that she said at this point in time that will salvage that especially when she is supposed to be on this tour to try and strike
up new trade deals for Britain.
GIOKOS: Exactly. I mean, let's just look at the greater context of the scene Theresa May walks away with Britain's first post Brexit trade deal
and that being with African countries and that's of course a case to see just how important Africa is and specifically, South Africa in the great
scheme of things.
But back home, as she tries to unite a very divided conservative party, and of course, as she revives the aspect of the possibility of a no deal
Brexit, that's creating a lot of jitters and worries and of course, Britain getting ready to get out of this bit single market and then trying to seal
deals and trade deals with other countries. It's going to be really important to forge those relationships.
So with South Africa and in fact, five other countries on the continent, what she has managed to do is sign agreements that is going to be basically
replicating the European partnership agreement and copy and pasting that for a UK agreement with six African nations and that's going to mean a
seamless transition when Brexit does occur.
Remember, you know, when you've got trade deals that need to be renegotiated, re-decided upon and resigned, it would take a very long time
and that will also cause a big fallout for African countries and for South Africa in particular, we've got to take surplus with the UK. We export a
lot of agricultural products. If you go to London, you'll probably have eaten a lot of South African fruits, and it's very important for South
Africa just as much as it is for the UK.
And I think she walked away with a bit of good news today as she embarks on this three-day African visit.
NEWTON: Yes, and it's interesting that at this point, unfortunately, she do no right because this whole issues of replicating what the EU already
has in place, if she retraces their steps allover the globe, she might actually get somewhere with it.
GIOKOS: Yes, she might. And I mean, this is the whole point, it is try and minimize the fallout and of course, Brexit in a sense, it has also been
put on the fact that the UK can get new and better trade agreements with countries and I think that this is probably the starting point for them,
and she's also talking about a very ambitious plan to try and get the UK to become the largest investor in Africa by 2022 within the G-7 group and that
means going up against the United States.
But I think taking a step back and realizing that the UK for some time now has pushed aside African relations, hasn't really focused on investing on
the continent, but come in the Chinese focusing heavily on investing and trade deals and so forth.
GIOKOS: The US wanting to forge stronger relations as well with Africa. Now, the UK basically wanting to do the same and also, four billion pounds
is what she is saying is going to be invested in Africa over the next four years. So, a lot to come as she goes to Nigeria and Kenya, next, Paula.
NEWTON: Yes, we will see. We know that they will be talking about Brexit at every stop. Our Eleni Giokos, thank you so much. I told you earlier at
lunchtime that you stayed late, but now you really stayed late, but I appreciate it. Thanks, Eleni.
GIOKOS: Yes, it's really late. Yes. Goodnight. Stay safe.
NEWTON: Coming up, Canada is rejoining trade talks the day after the US and Mexico reached a preliminary deal that could replace NAFTA. We'll
speak to a former US Ambassador. That's next.
Hello there, I'm Paula Newton. Coming up in the next half hour of "Quest Means Business", the CEO of GoPro tells us how a trade war with China could
affect his company. And the pun potential is right out of control. You won't catch me doing it though. Marijuana stocks have been surging until
today actually. The CEO of cannabis company Cronos, will be joining me live.
First though, these are the top stories we're following here at CNN. America's Defense Secretary is warning Saudi Arabia that US support for the
Saudi-led coalition in Yemen is not unconditional. James Mattis says the Saudis must take every precaution to try and limit civilian deaths in
airstrikes and must support the UN Broker Peace Process.
A new study says Hurricane Maria killed nearly 3,000 people in Puerto Rico, much higher than the official death toll of just 64. Now, the Puerto Rican
government commissioned a study from George Washington University. Researchers say there were thousands more deaths in the US territory
between September of 2017 when the hurricane actually hit than February of this year.
Nicolas Hulot, the French Environment Minister is calling it quit. Here's how he did it, he said he is frustrated with his government not making
climate change a priority. But he made the announcement during a live radio interview without warning the president or the prime minister
German Chancellor Angela Merkel says there's no place in Germany for hate street. Thousands of far-right activists chanting neo-Nazi slogans during
an anti-immigration protest Monday night. Police are investigating 10 people for giving Nazi's salute; an illegal gesture in Germany.
Fans of Aretha Franklin have been saying their last goodbyes to the queen of soul. Her body is lying in a pose in her hometown of Detroit, lying
stretched around the block and outside the Charles Wright Museum of African-American history, her funeral will be held on Friday.
We want to turn now to our top story. The preliminary trade deal between the U.S. and Mexico has pushed Canada right into the spotlight, and now its
Foreign Minister Chrystia Freeland is rejoining negotiations. I'm actually told at the top of the hour she will be back negotiating with the U.S.
Trade Representative Robert Lighthizer.
Now, we want to bring in a former U.S. Ambassador to Canada, Bruce Heyman, he joins me now from Colorado. Happy to have you with us on what looks
BRUCE HEYMAN, FOR UNITED STATES AMBASSADOR TO CANADA: Good to be here --
NEWTON: Thank you -- looks like a very interesting day for Canada. You know, you say --
HEYMAN: Yes --
NEWTON: That there's a distinct possibility that this might actually happen this week. Why and why now and is it a vindication of Donald
Trump's negotiating tactics?
HEYMAN: So, let's walk through this. The President of Mexico, Pena Nieto, his term ends on December 1st. Ninety days before that is the notification
requirement that if he were to sign on to a NAFTA agreement, that needs to -- that notification needs to go to Congress. That's at the end of this
And so to get a NAFTA deal for Pena Nieto to sign, you really need to get that notification at the end of the week, and to get a real NAFTA deal, you
need all three parties. So here we are, three days to the end of the week and you have the Foreign Minister of Canada coming into these negotiations
for the first time in weeks.
But a lot has been accomplished in these negotiations with Mexico. So I think there's a real possibility that if compromise is in the air and USTR,
U.S. trade representative really wants to get a deal, I think there's a deal to be had.
NEWTON: The timing though here is fascinating to get it all done in one week. Now, we -- the Canadian(ph) summit, there's about a handful of
really tough issues, one of them is the --
HEYMAN: Right --
NEWTON: Dispute resolution mechanism that is in NAFTA.
HEYMAN: Right --
NEWTON: That means --
HEYMAN: Right --
NEWTON: That you actually get a referee to get a third party to come in and arbitrate --
HEYMAN: Right --
NEWTON: If there's a problem. United States doesn't want that, do you think that could be a deal breaker?
HEYMAN: It could be, I mean, 30 years ago, when the negotiations were starting in NAFTA and now NAFTA is going to be 25 years old this January,
the Canadians were going to walk away from the table if they didn't have this dispute resolution in place.
And so that could be a deal breaker here. That being said, I think it's not a binary outcome. I think that there are a lot of paths to getting
this done, and compromise has to be the word of the day. If it's there, I think they're past to getting that done.
NEWTON: Compromise, key word here. We heard from Prime Minister Trudeau just a few hours ago, saying I am not going to compromise on the dairy
issue. We have heard President Trump say over and over again, that American farmers are getting a bad deal.
That Canadians close off their markets to U.S. dairy products, the prices in Canada are kept artificially high for all dairy products. And Trudeau
saying, yes, and that's the way we're going to keep it right now, that's the way he's entering into negotiations.
Ambassador, if you'll allow me, we just want to hear Gary Tuchman; Cnn reporter went into Wisconsin a few weeks ago talked to the Wisconsin
farmers. Are they really upset about the supply management system in Canada? Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: My reaction is yes to Canada for supporting their dairy farmers. I wish they would support us here in this country.
UNIDENTIFIED MALE: Well, I would like to see quarter system, a supply management program put in place by Canada.
(END VIDEO CLIP)
NEWTON: Ambassador, I know you are no stranger to these issues. When you see these issues on the table this way, do you think it's something that
either side, President Trump or Justin Trudeau will have to compromise on if they want to get this deal done?
HEYMAN: And so there are paths to compromise on this, and I was deeply involved in discussions and negotiations around dairy when I was
ambassador, and worked directly with Senator Schumer and others.
[16:35:00] So let's just talk through this a little bit. Yes, they have supply management in Canada and yes, they protect their dairy, and yes,
they have higher prices than would normally be the case. But what they did do in the negotiations at TPP, they expanded the access for the TPP
They expanded access, under-ceded the European agreement, and I think that there's still room to get additional access to the market while at the same
time maintaining supply management. So what the Prime Minister said, he didn't want to give up supply management.
What the president is saying, they tax us 270 percent, but they really don't. Nobody pays that. They sell up to the quota. And the U.S. has a
trade surplus in dairy with Canada. So the president is using this a little bit as a roost to stir things up.
But you know, he does that from time to time.
NEWTON: And some people would say they're good negotiating tactics, at the end of the day when we come to this negotiation right now, I mean, these
were things -- these details that you're telling us about that you were involved in, you know, you and I both know this took months to kind of
They are trying to compress the schedule literally until 5 O'clock, Friday. Why do you think it can work now when it hasn't for years?
HEYMAN: So there's nothing like a deadline to produce outcomes. And so when you have this deadline -- you see, the new Mexican president is a bit
of an uncertain path here in these negotiations. He's already said he'd like to consider looking at some chapters, i.e. energy and renegotiate some
of those or even eliminate them.
So the president of the United States and his team know what they have with Mexico in hand. And so I think they have this unique moment here, just
over the next few days. Now, it sounds like a few days, but the people in the room are experts on trade negotiation, they've been dealing with these
issues for years and they've been talking NAFTA renegotiation for a year and a half.
Everybody knows what needs to get done, so if they're willing to compromise, I think they can get an agreement in principle. Now, they're
not going to dot all the 'Is' and cross all the 'Ts' by Friday, but they need to get enough done so they can send that letter of notification to
Congress. So they have that 90-day window --
NEWTON: Yes --
HEYMAN: And still get this thing done by the first of December.
NEWTON: Yes, a notification to that Oval Office to make sure it's something the president will accept. Ambassador, thanks so much for
joining us, really appreciate it as the deadline --
HEYMAN: My pleasure --
NEWTON: Looms this week. Now, GoPro is the latest in a string of companies to voice concerns about the Trump administration's trade tactics.
The CEO of the camera company tells Cnn, he is making contingency plans just in case the firm's Chinese suppliers are hit by U.S. tariffs.
He has been speaking to our Samuel Burke -- you know what surprises me sometimes when I hear a company say is like, well, if you thought you could
get these parts in the United States, the president would say to you, why didn't you try that first?
If you have a contingency now, why didn't you have that all along? Why are -- you know --
SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY NEWS CORRESPONDENT: Well, I think the answer is they don't think that they can get them in the United States.
It may not be China, but it would probably be somewhere else.
I think what's most fascinating here is that this company, Paula, hasn't even been hit by tariffs yet, but we're getting the insights, seeing that
they're already having to make these plans just in case. So I went mountain-biking with Nick Woodman, you're going to see me all geared up
with him as we go up the mountain.
And I was surprised that when I asked him, shouldn't a CEO of a tech company be focused on innovating, not the supply chain, and he told me
(BEGIN VIDEO CLIP)
NICK WOODMAN, CHIEF EXECUTIVE OFFICER, GOPRO: That's business. I mean, we're in the business of wowing our customers and then identifying the most
efficient way to run our business.
And so tariff concerns are something of a catalyst to take -- get us thinking about our business in new ways and if there are opportunities to
lower the cost of manufacture and better position ourselves for potential threats like tariff changes by moving our manufacturing out of China,
that's something that is prudent for us to look at.
BURKE: So it's nothing, you're saying this is a good thing, where we've got a lot of businesses very frightened, and you just not wanting to take
off the president or do you think it's actually a good time for you to re- assess with this reason -- the tariffs?
WOODMAN: We're fortunate that we have a very focused product line, and we have manufacturing partners that already have some facilities outside of
BURKE: So it's not a question of changing suppliers, it's just changing what facilities they use.
WOODMAN: Yes, right, it may not be as challenging for us to make that changes, it might be for another brand that has thousands of skills(ph) and
would need to disrupt the supply chain more to move outside of China.
BURKE: You've had a tough few years at GoPro with the stock price, now you've just had a very strong quarterly report, stocks went way up. What's
driving the growth right now at GoPro?
[16:40:00] WOODMAN: Well, people have speculated that we had a demand problem, and what we really had was a pricing challenge, whereby last year
in the fourth quarter, we sold not at the proven 199, 299, 399 price levels, we sold a $100 higher. And as we've shared -- sell through of our
products, that retail dropped significantly and we missed the quarter.
But as soon as we re-aligned our pricing with the 199, 299, 399 levels, that consumers want to buy from GoPro app, we saw our sell-through snap
back dramatically, and it's led to the company growing again.
(END VIDEO CLIP)
BURKE: GoPro used to trade at $80 a share, Paula, now, it trades just over $6, the last time I interviewed Nick Woodman back in January, it was when
he revealed the company is looking for a buyer, they haven't found a suitor yet.
But let's get back to the heart of the matter here, this Asia-supply chain. I pushed him, where are you going to go if it's not in China, if you get
hit by these tariffs, he didn't tell me where, but you heard him say they'll stick with the same manufacturer.
So it wouldn't be surprising if it's another country than China. You've got to start thinking then, who are the winners and losers? Are these
tariffs going to -- and hit GoPro? Well, I think the loser would be China, they're losing these manufacturing jobs.
But the loser would also be us, the consumers because if they have to move to another country, they would have already done it if it were cheaper. So
the prices are probably going to be more. Really, the only winner that I can see would be the country that can seize manufacturing jobs instead of
NEWTON: And may or may not be the United States, it is likely to be somebody in the Asia -- I've got less than a minute left. Is this GoPro
company the perfect example of what the president is talking about all the time.
You guys go there and the Chinese companies are ripping off your tech, your tech that is invented in the United States.
BURKE: Oh, absolutely, this is one of the reasons that we've seen the GoPro stock price tank over the past four years. Because they have these
Chinese competitors who put exactly what they invented in their technology into their own parts and sell it at a cheaper price.
But at the end of the day, it doesn't mean that the U.S. is winning just because they moved their production out of China. President Trump hasn't
given them an option that we're hearing about that would somehow make --
NEWTON: Right --
BURKE: The value of the goods cheaper here in the United States.
NEWTON: And so before China can say, well, we'll put tariffs on GoPros coming into our country if you don't --
BURKE: Absolutely --
NEWTON: Make them here. Samuel, thanks a lot. By the way, very quickly, it was not all shot on a GoPro, I asked Samuel that earlier, they -- I
can't believe he actually allowed you to shoot the interview with us --
BURKE: Of course when you go out, that's why they get you to go mountain- biking, they want crazy things in their sports, people they want to shoot on their cameras and some Cnn cameras as well --
NEWTON: Yes, good one, excellent. Look like fun. Now, the green goes red, marijuana stocks take a break from going higher and higher, but the
market appears to be very much invoked. So we'll speak to the CEO of a major marijuana company.
[16:45:00] (COMMERCIAL BREAK)
NEWTON: We're getting involved in wonders, the pan alert, a huge run-out in marijuana companies may have burned out slightly. Shares in the Cronos
Group closed out 8 percent today, however there's context here, we have to keep this in mind.
This comes after some massive growth, Cronos stock more than doubled in value in just the past month. Look at that chart, rivals like Tilray and
Canopy have also posted double digit growth, that's because some triple even, that's because drinks companies are reportedly interested in pot
I'm joined by the CEO of Cronos Group Michael Gorenstein, he is live for us in Toronto. I see you smiling, we just can't help ourselves with all of
these pans on the show, I wish they could help themselves. You guys have had an amazing run-up, I mean, the nine-trading sessions, you were up over
I know, you're taking a little bit on the chin today. The excitement is about the fact that like happened with Canopy growth and constellations
brands, the beverage makers are interested. Please tell me, put it on the line, are you talking to several beverage companies or are you talking to
one in particular, do you hope to be able to announce something in the next few days?
MICHAEL GORENSTEIN, CHIEF EXECUTIVE OFFICER, CRONOS GROUP: Well, you know, we think of ourselves at Cronos is a cannabinoid-platform company. Which
really and if you think of all the different range of products, the cannabinoids and cannabis may also be used in.
That spans beverage, food, different types of vaporizers and inhalation, capsules. So there's a number of foreign factors and I think it's
important for us to make sure we're considering all options.
But you know, we built ourselves to be successful as a standalone company, but we'll certainly explore any options that we feel can allow us to
ultimately deliver a more value to our patients or our customers.
NEWTON: Sorry, I had to get that question in there, I know you perhaps you cannot say, but we are -- I think the market, given your evaluation, it's
really expecting a deal. The question I have for you is there seems to be some debate as to what it will add to the market to have those beverage
companies involved beyond obviously monetary investment.
Will it take your company, but marijuana companies in general into a completely different direction?
GORENSTEIN: Well, again, there's a lot of different directions that companies can go, and I think historically, what you've seen is a lot of
investors have sort of -- five base case of your farmer, you're growing a plant and you're selling it.
But when you start realizing that you've got molecular complexities of pharmaceuticals with a different range of cannabinoids, different effects
you can have, and then how many areas you can differentiate and create products.
Beverage is one area though a lot of people hadn't previously thought of. We've got food, you have different -- and again different types of delivery
systems, and a lot of these companies that -- and people are discussing, they have very strong distribution networks, strong manufacturing, very
strong ability to ultimately build brands that resonate with consumers.
And I think that that's a wonderful thing to have them involved in that cannabis industry.
NEWTON: And what about in the other direction with FARMA in terms of them taking a bigger interest in cannabis company?
GORENSTEIN: Yes, I think certainly on the distribution side, and you see this a little bit more in Europe where it's less medicinal in the way we
think of it in North America and more pharmaceutical. So I think it makes a lot of sense, it'll probably be more, say, laser-focused in what they're
Specifically, which indication are you targeting? What's the ultimate formulation? But I think it makes a lot of sense for both industries to
NEWTON: You know, for a lot of people that are shocked at how far this has developed. I mean, I was talking to my producers today, and they were
talking to me about, you know, cooking contests with cannabis. You know, do you think we will recognize the industry in five years?
GORENSTEIN: Yes, I doubt it. I think that you know, what excited people at the beginning as you know, you look at the different projections and
it's always hard to get the exact data, but you know, people usually say it's between 150 and 200 billion in global revenue.
And that's really a base case where we have seen no true distribution channels, no real innovation, no developed brands, and that's really only
been used -- you know, it's pretty much recreational. So when you start looking at how large the pharmaceutical aspect can get, how large the --
you know, the different consumer products can get, the nutraceutical area.
Initially, we only thought of THC, now people are starting to recognize the benefits of CBD. But there are well over a hundred cannabinoids, and when
you know, the science behind it and our understanding of these cannabinoids continues to be unlocked, I think the industry will continue transforming
NEWTON: OK, we will continue to follow your story and others as more news breaks literally everyday on what's going on with your company. Appreciate
GORENSTEIN: Thank you.
NEWTON: Now, the European market had a mostly quiet day with one exception, the FTSE and its first trading of the week after a bank holiday.
The benchmark London index rose just about over half a percent.
[16:50:00] Mining stocks were the best performers, and that growing global optimism we were talking about over trade. Now, if you want to keep up to
date on the day's business headlines in just 90 seconds, try our daily briefing podcast, it's updated twice a day before and after the bell rings
on Wall Street.
You can just ask Alexa or your Google home device for your CnnMoney flash briefing every weekday. Now, the woman at the center of a political storm
in the United States appears in "Vogue Magazine". You don't want to miss this, we talk Stormy Daniels with a woman who just spent some time with
NEWTON: "Vogue Magazine" has just released images of the adult film actress Stormy Daniels who is at the center of a legal drama, of course, we
all know involving the U.S. President and his former attorney. Now, she's selling her side of the story profiled in an upcoming issue with her lawyer
The images you see here were shot by the iconic photographer Annie Leibovitz. Annie, of course, there's now the iconic writer Amy Chozick,
you spent a lot of time with her, I have to say it's a really fun read. You know, from one quote, you write she's blunt, foul-mouthed and funny.
The question I have for you is she also a feminist?
AMY CHOZICK, WRITER-AT-LARGE, NEW YORK TIMES: I asked her this actually, I asked her, does she consider herself a feminist because clearly a lot of
women have, you know, cast her in a feminist role and she said yes and no.
You know, she's definitely pro-women and she thinks women should be able to do everything that men could do, but she likes men. I mean, she said that
she has a cadre, very close girl friends in Dallas that she recently made. But she said before that, she really got along better with men.
She didn't always hit it off with women, and she also you know, likes when a guy holds the door open and pays for her bills. So she said, you know,
yes and no.
NEWTON: I mean, it's interesting the way she has become an opponent of Trump. In one sense, she nears him so perfectly, doesn't she? You know, in
one of the tweets after Michael Cohen pled guilty in court and implicated the president, her tweet was, "how do you like me now?"
And it begs repeating, you know, when they had this alleged affair, she was in her mid-20s, the president was 60.
CHOZICK: Right, I mean, she is very adamant that she's not part of the MeToo movement, and he didn't do anything to pressure her into having sex.
But I do think that she, you know, has become this sort of perfect foil to him.
[16:55:00] I mean, she is also sort of a flawed, public figure at this point, and she's, you know, also unabashed about -- she can't humiliate
her, and I think that's part of what has made her kind of so difficult for Trump to take on. She told me being in the adult film business is not like
I turn on Twitter and got called the whore for the first time.
You know, she sort of weathered a lot of attacks, a lot of sexism, a lot of harassment and it's given her this kind of pressure naturally, thick skin
that she uses now to take on the most powerful man in the country.
NEWTON: Yes, I'm being called that on the internet, welcome to the club --
CHOZICK: Yes, exactly.
NEWTON: This is what fascinates me though is what is the end game? You spent some time with her, you spent --
CHOZICK: Yes --
NEWTON: A lot of time with other legal experts and everything --
CHOZICK: Yes --
NEWTON: Else, what's her end game here? What does she want?
CHOZICK: Well, I did ask her that, you know, where does her story end? And she said, you know, people keep asking me that and it's very hard because
I'm in the middle of it. You know, when you're in the middle of the storm, you can't so to speak -- you can't necessarily see what's at the end.
I mean, she definitely wants to continue to pursue her civil suit, Michael Avenatti; her lawyer has said she thinks that -- he thinks the developments
with Michael Cohen could allow him to depose Trump, I mean, which would be, you know, an enormous development.
And so she's pressing on, but in a way, you know, you can't put this Genie back in the bottle. I mean, she can't go back to just being a Stormy
Daniels; adult film star, now that she has been cast as this cheat adversary to Donald Trump.
NEWTON: Yes, and we have to say she's been making the most of it, right? She's on tour, making a lot of money on that tour she goes. I found it a
little bit sad that her -- she's not seeing a lot of her seven-year-old daughter, and she has a lot of security around her right now.
CHOZICK: Yes, I mean, something I wanted to get at in the story is, what is the personal and psychological toll of being Stormy Daniels? And she's
had a lot of death threats, they've had to change hotel rooms in the middle of the night when notes are slipped under doors as being suspicious
packages left in her, you know, dressing room, at clubs.
And she has had to hire bodyguards, which is somewhat offset. You know, her profits. But yes, I mean, and she can't be home, she said she can't be
home in Dallas for too long and people will show up at her house, I mean, she's had to hire a tutor for her daughter and home-school her after --
NEWTON: Yes --
CHOZICK: After someone tried to take her picture. I mean, it's a lot.
NEWTON: Yes, I don't think anyone would believe her life as they could see it. Amy, thank you so much for some insight into all of this, getting
behind the headlines so to speak. If you want more on this article, and I highly recommend it, it's on vogue.com.
CHOZICK: Thanks so much for having me.
NEWTON: And that does it for us here on QUEST MEANS BUSINESS right now, I can let you know that Chrystia Freeland is on her way to the U.S.
Representatives Trade Office, they will begin again those talks on a trilateral deal and we'll continue to follow that news right here on QUEST
MEANS BUSINESS and on Cnn.
I'm Paula Newton in New York, the news continues right here on Cnn.