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QUEST MEANS BUSINESS
Trump and Polish President Discusses Trade Tensions with E.U. And China; Some Tough News For Tesla Tumbling; Tesla Confirms It's Under DOJ Investigation; Google Signs Tech Deal with Nissan, Renault and Mitsubishi; Trump: FBI Shouldn't Get Involved in Kavanaugh Sexual Allegations; Putin: Russian Plane Downed in Syria Was Tragic Accidental Circumstance; Kim Jong- un Hosts Moon Jae-in for Third Inter-Korean Summit This Year; German Spy Chief Removed After Far-Right Scandal; Jack Ma: Trade War Could Last 20 Years; Japanese Tycoon to Be First SpaceX Tourist to the Moon; McDonald's Hit by Strikes Led by Me Too Campaigners. Aired: 3-4p ET
Aired September 18, 2018 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDRZEJ DUDA, POLISH PRESIDENT (Through a translator): We had a long conversation, very honest discussions and very strong at certain points as
well in terms of diagnosis of the situation in the area of the military security and energy security alike, and I am convinced that all of us are
going to draw appropriate conclusions from these discussions because, as I said, both sides presented their positions in many - absolutely many
elements they are concurrent.
As far as the assessment of the situation currently is, what kind of steps need to be taken in order to protect both the issue of security and the
issue of interests. These are business-related issues. I am convinced that, ladies and gentlemen, you are going to see the results of both our
meetings today and of the declaration that we have signed together with Mr. President. Of course we are talking about long-term processes so I'm sure
that you are going to see how this is going to be filled with content, and you will see concrete facts that will appear on the maps and also in
agreements and in purchases that are going to be realized.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Jon Decker of Fox, please.
JON DECKER, WHITE HOUSE CORRESPONDENT, FOX NEWS: Thank you, Mr. President, two questions for you, one on Judge Kavanaugh and also one on trade. On
Judge Kavanaugh yesterday you said we want to go through a full process. You said we want to make sure everything is perfect, everything is just
right. To that end, what would be the problem with the FBI reopening their background investigation into Judge Kavanaugh? Would you support such a
TRUMP: It wouldn't bother me other than the FBI, Jon, said that they really don't do that. That's not what they do. Now, they have done
supposedly six backgrounds checks over the years as Judge Kavanaugh has gone beautifully up the ladder. He's an incredible individual, great
intellect, great judge, impeccable history in every way, in every way. I feel so badly for him that he's going through this, to be honest with you.
I feel so badly for him.
This is not a man that deserves this. This should have been brought to the fore. It should have been brought up long ago, and that's what you have
hearings for. You don't wait until the hearing is over and all of a sudden bring it up. When Senator Feinstein sat with Judge Kavanaugh for long
period of time, a long, long meeting, she had this letter, why didn't she bring it up? Why didn't she bring it up then? Why didn't the Democrats
bring it up then? Because they obstruct and because they resist. That's the name of their campaign against me.
They just resist, and they just obstruct. Then, frankly, I think they're lousy on policy and in many ways they're lousy politicians, but they're
very good on obstruction, and it's a shame because this is a great gentleman. With all of that, I feel that the Republicans - and I can speak
for myself - we should go through a process because there shouldn't even be a little doubt. There shouldn't be a doubt.
Again, they knew what they were doing. They should have done this a long time ago, three months ago, not now. But they did it now, so I don't want
to play into their hands. Hopefully, the woman will come forward, state her case. He will state his case before representatives of the United
States Senate, and then they will vote. They will look at his career. They will look at what she had to say from 36 years ago, and we will see
what happens, but I just think he is at a level that we rarely see, not only in government, anywhere in life.
And honestly, I feel terribly for him, for his wife, who is an incredible lovely woman, and for his beautiful young daughters. I feel terribly for
DECKER: On trade, Mr. President, you announced new trade tariffs against China, trade tariffs are a very important part of your economic and trade
policy. In your first year in office, the US trade deficit increased by 12 percent, and last month we saw the trade deficit increase to, I believe it
was $72 billion. So my question to you is, is your trade tariffs policy working?
TRUMP: Well, we just started. We didn't do anything with respect to China because we wanted to have the benefit of China having to do with North
Korea, and they have been helpful. I hope they're still helpful. There's a question about that, but it got to a point where the numbers were too
big. This should have been done for the last 20 years.
TRUMP: If you look at the WTO, the World Trade Organization, that's when China really happened economically. That was like a rocket ship because
they took advantage of the rules of the WTO, and whoever was standing at this podium in this incredible White House in the Oval Office, they should
have done something about this long ago.
Over the last number of years, China has taken out of this country $500 billion and more - a year, $500 billion. That would go a long way for
Poland, wouldn't it? Rebuild your whole country, and that's what China did. They rebuilt their country with tremendous amounts of money pouring
out of the United States, and I've changed that around. And if you look at what's going on, our market is going up like a rocket ship. I don't want
their market to go down, but their market is down 32 percent in three months because we can't let them do anymore what they've done, and I
watched trade deficits because to me deficits are very important.
They're not everything, and they're not exact. Sometimes you can have, you know, a deficit and that's not such a bad thing, but when you have $375
billion in trade deficits and then many billions of dollars in other liabilities of all different types, you have to do something about it.
We are the piggy bank to the world. We've been ripped off by China. We've been ripped off by - excuse me, Mr. President - the European Union, of
which you're a part of. We've been ripped off by everybody, and I want to protect the American worker, the American farmers, the ranchers, the
companies, and we're not being ripped off, you will see, in a little while.
Speaking of that, we've come to a conclusion with Mexico. We have a wonderful deal for both parties. It was a very one-sided deal. Now it's a
good deal for both parties, very happy with it. The new president, had a conversation, and it was terrific. I think we're going to have very good
relationship. We'll see. We'll see. We want help on the border because we have the worst immigration laws in the history of mankind or womankind.
We have horrible, horrible immigration laws, so we want help, but we've come to a conclusion with Mexico. Canada has taken advantage of our
country for a long time. We love Canada. We love it, love the people of Canada, but they are in a position that's not a good position for Canada.
They cannot continue to charge us 300 percent tariff on dairy products, and that's what they're doing.
So there's a process. It takes a little time. The European Union wouldn't talk to us, they wouldn't talk to President Obama, wouldn't even talk to
him. And then I said that's okay. You don't have to talk to me. Jean Claude is a tough man, he's a very good man. I like him, but he's tough.
He's nasty, the kind of guy I want negotiating for me, but he's a tough, tough cookie, and I said to him, "We have to renegotiate the deal." He
said, "But Mr. President, we are very happy with the deal. We don't want to negotiate." I said, "You may be happy with the deal, but I'm not happy
with the deal." And he didn't want to renegotiate, and after three times, he still didn't want to renegotiate. I said, "That's okay. We don't have
to renegotiate any longer. We're going to put a tariff on all of the millions of cars you send into the United States."
And honestly, he was in my office so quickly from Europe that I didn't know they had airplanes that flew that fast. I said, "Where did you find this
plane?" And we have the semblance of a deal because it's to a large extent, economically all about cars. Cars are a very big factor, and they
send millions of BMWs and Mercedes into our country. So we are working on trade very hard. It's very important to me, it has been for 30 years.
I've been saying for 30 years. It started with Japan.
I talked about Japan. I was right. I talked about China, I was right. It's what I do, and I like doing it, but I like doing it for the people
because our country has been abused and taken advantage of by virtually every country that it does business with, and we're just not letting that
happen anymore, and that includes what I said previously about the military. Please.
DECKER: President Duda, welcome back to the US. As it relates to US-E.U. relations, as the President mentioned you are proud - Poland is a proud
member of the European Union.
DECKER: How would you describe US-E.U. relations right now? Did you talk about improving that relationship? Did you carry a special message to the
President from Mr. Juncker
DUDA (Through a translator): Sir, I would be very happy if it was Poland which would disrupt that trade balance of the United States. I really
would be happy if that was the case because my understanding as far as politics is concerned and carrying for the matters of your country is
similar to the view of Mr. President Trump. Mr. Trump is saying America first, and I'm saying Poland first, so we understand each other very well.
And it is hard for me to be surprised with the fact that Mr. President being a very experienced man, a man of success as far as business is
concerned, knows how to calculate. He knows how to calculate, and I think nobody puts that into question either in the US or in another place, and he
takes care of the United States. It lies in the interests of the country to have a balance to trade exchange, and this is something that we have to
take care of, and of course there is a clash of interest.
However, objectively looking, it is hard not to understand it, so there is always a competition of interest, and every business has a competition
interest. I represent Polish interests, whereas President Trump represents American interests. The whole thing is as follows: On important matters,
you have to strike an agreement to make sure that both countries win and lose as little as possible, and then we have an understanding, an
agreement, and then we can say that we are cooperating with each other on equal level, and I believe this is the kind of cooperation that Mr.
President would like to have with the European union. It will be hard to be surprised with that.
I'm listening calmly to that, and I would like Poland to be such a country, such an economic super power, that it would be a very important partner to
the United States. I said jokingly in the beginning that I wish it was Poland which disturbed the trade balance of the United States and our
exports to the United States, but I do believe that our cooperation is going to develop well on partners like principles.
TRUMP: The trade deal with South Korea has been fully renegotiated and is ready for signature. We may sign it at the United Nations or shortly
thereafter. That was a terrible deal for the United States. Now it's a fair deal, but that's been fully renegotiated in addition to Mexico and
some of the others that are very close . Thank you very much, everybody. We appreciate it. Thank you. Thank you, Mr. President.
DUDA (Through a translator): Thank you.
BIANNA GOLODRYGA, CNN HOST: Good evening. You've been listening to Donald Trump take questions with the Polish President. They discussed many things
-- Russia, trade and the allegations against his nominee for Supreme Court Justice Brett Kavanaugh.
Let's go straight to Sarah Westwood. She is at the White House. Sarah, what stood out to you from that press conference?
SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: Well, Bianna, President Trump was addressing the Brett Kavanaugh situation. He said that he feels badly
for Kavanaugh and his family saying, again, that he's open to this possible delay in the process, that he does think that Christine Blasey Ford, the
accuser of Kavanaugh should be heard.
Now, aides he expressed to CNN that they have been trying to get the President to stay in this measured tone, not to derail proceedings.
President Trump also sounding a little more defensive on his tariffs against China and other countries saying that his trade policy is just
getting started, perhaps suggesting that potentially the benefits of this policy haven't yet been realized, acknowledging that it hasn't been an
immediate success, and again, saying that he will potentially sign a new trade deal at the United Nations next week and that he's been pressuring
Canada to get on board with that renegotiated trade deal.
Right now, it's a bilateral deal with Mexico, but both Mexico and Canada have been hoping to make that a trilateral deal in which Canada is a
participant, so President Trump is suggesting that the door to that trilateral deal is not all the way closed, Bianna.
GOLODRYGA: With news that possibly as soon as next week that they would be signing a new trade deal with South Korea. What we saw there was also a
reaffirmation of the close relationship that President Trump has developed with the Polish President talking about Poland's contribution to NATO and
obviously the US as well.
The President not missing the opportunity to lash out at countries that he says are not paying their fair share.
WESTWOOD: That's right. He was highlighting the fact that Poland does meet its defense commitments. It's something that he has been adamant
about that other European nations should step up and meet that commitment to spend 2 percent of their GDP on their own defenses. It's one of the
reasons why he's developed that closer relationship with Poland. We saw that on display when he visited Europe last year. He did give a big speech
in Poland that was viewed as one of the fullest articulations of his foreign policy standing there in Poland.
WESTWOOD: So this was not his first meeting with this Polish President, but certainly, you could see on display both in the Oval Office and at that
joint appearance the warm relationship that they seem to have developed.
GOLODRYGA: All right, Sarah, we're going to have to leave it there. Thank you so much. Well, President Trump says he's just getting started when it
comes to tariffs and trade. US stocks are holding on to their gains in the final hour of trading. The Dow is up more than 200 points. The dollar has
recovered from early losses. That's because the escalation in the trade war isn't as bad as investors feared.
In china, the Shanghai Composite climbed nearly 2 percent coming off four- year lows. It's still down 19 percent for the year.
Well, President Trump says he's open to talks with China. Those are the words, but the war is growing more intense. It's like a game of pong,
every hit from one side is matched by the other. It's like that graphic we've created right there. Well, we've come into the latest round with the
tariff scores virtually tied at around $50 billion worth of goods each.
The US serves a strong hit, now on $200 billion worth. But the quick response from China, right away, $60 billion worth. Well, President Trump
is threatening to hit back hard - tariffs on $267 billion worth of goods. That covers all Chinese imports into the United States, and that means
China - sorry, I am distracted by these graphics here - that means China will have a difficult time responding in kind. And that would mean game
So let's bring in our referees, Paul Donovan is judging the economics. He's the global chief economist at UBS, and for the politics and U.S.
reaction, Catherine Rampell. She is a CNN political commentator and a columnist for "The Washington Post." Thank you both for joining us. It's
great to have these two referees on.
So Catherine, let me start with you. You have an article out today that says Trump could play scrooge this holiday season. That's talking about
the latest round of tariffs. You're saying that this could really impact a lot of Americans, a lot of his voters and a lot of people going out
anticipating to shop this holiday season. You say Trump's tariffs could make Black Friday truly bleak. Explain.
CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: So Trump has been warning us about this supposed war on Christmas for a while. I would argue that he is
now the primary perpetrator in the war on Christmas in that he is imposing tariffs on now something like $250 billion worth of Chinese goods. Many of
them are consumer goods. Many of them are on inputs that then become consumer goods, a lot of the products that will be affected are things that
are prime Christmas shopping targets. Things like TVs, mittens, hats, computers, some things that were supposed to be on the list have been taken
off. You know, a bunch of Apple products, for example.
But nonetheless, you're going to see some of that get passed through to consumers. We don't know exactly how much at this point, but consumers
themselves have been dealing with wage gains that barely keep up with inflation. Now, they're going to be expected to be paying more money for
their Christmas shopping as a result of Trump raising prices for them.
GOLODRYGA: And the President and his advisers saying we might feel a little bit of pain, but in the long run, we'll see the benefit of it.
Paul, a lot of reaction I've seen from China though is just confusion from policymakers over there not really knowing what to anticipate from the
President and a lot of analysts confused about how long this match of going back and forth can continue.
PAUL DONOVAN, GLOBAL CHIEF ECONOMIST, UBS: Yes, so I think part of the problem for the Chinese side is it's not always entirely clear who is
speaking for the administration. And of course, so much of trade protectionism comes under the Commander-in-Chief power, so ultimately rests
with the US President himself who can perhaps be quite a difficult person to predict.
But I think in terms of the length of the tariffs, this is quite important because I don't actually agree that this is going to necessarily damage
Christmas. It takes about four months for tariffs to filter through, even on consumer goods to actually hurt. Now, this tax on consumers is going to
damage, and it's going to, in all probability, lower US growth in 2019, but I think the staggered nature at the tax increase and the fact that it takes
about four months minimum for the taxes to pass through to the consumer means that certainly the consumer is not going to notice these at the
midterm elections, and they may not notice them until January or February of next year.
GOLODRYGA: And the President can point to the US economy, which he's been doing on a daily basis. The stock market is up triple digits today. He
pointed to the Chinese economy, which he noted has been weakening, and their stock market has been doing the same. How much longer can the
President point to these kind of metrics and assume that the US is always going to win?
DONOVAN: Well, I think the President can point to the metrics as long as he wants. The equity market has got nothing to do with relative economic
performance pretty much. I mean, equities are not an important part of the economy. Most Americans don't own equity. The listed companies only
account for a quarter of the economy and not necessarily the most dynamic and important part at this juncture.
China's equity market is largely irrelevant, so its economy, it doesn't say anything about it. China's economy of course is growing faster than the US
- substantially faster. You would expect that, it's an emerging market, middle income economy, so it would always be growing faster.
I think that these sort of judgments are probably quite tricky. The Chinese economy has been growing above trend growth for some time and is
now going to be slowing down. The US economy on a sugar high from the tax cuts that we had at the start of this year. The tax hikes that we're now
getting are not sufficiently quick to offset that, and so that gives you a temporary distortion.
But next year, the US economy is going to be slowing down. The sugar high of the tax cuts will be fading, and the tax increases that consumers are
now facing will be starting to erode growth.
GOLODRYGA: But of course, Catherine, would come after the midterms, and the President as well as both Republicans and Democrats alike are focused
on the midterms coming up. How much longer can the President go out there and point to a sugar high, like Paul alluded. I mean, he is right, most
American don't own stocks, but psychologically, especially when you have a President that's reinforcing a strong economy and pointing to a stock
market, psychologically, that does impact people and does impact voters.
RAMPELL: Well, maybe, yes and no. If you look at a lot of other metrics about the economy, we're more or less on the same trends that we had under
Obama. In fact, if you look at average monthly job growth, for example, or if you look at the unemployment rate. The unemployment rate is lower, but
the trend has been basically the same.
So the level of the economy is higher than it was, but if you look actually at the pace of growth at some of these other kind of metrics aside from GDP
growth, which I agree is largely because of a short term sugar high. A lot of it looks more or less the same. The other thing that I would point out
is that even if consumers don't feel these price increases right away, and I think they will actually feel them for some goods, but maybe not
everything, you still have other constituencies that are hurting.
For example, farmers, it's not only our tariffs, of course that are in play here. It's the retaliatory tariffs, and farmers, manufacturing workers,
other kinds of workers and industries have been hit by this retaliation. To some extent, Trump is trying to kind of allay their concerns with this
farmer bailout for example, but the question is, will all of those constituencies continue to stand behind him if, in fact, their wallets are
affected, which they could be between now and the midterms.
GOLODRYGA: And you see the friction within the Republican Party itself, not to mention within the administration. He has advisers that are pushing
for him not to impose new tariffs. He has others that are saying that that is the right thing for this administration to do.
Catherine, Paul, my two great refs, great to have you on. Thank you so much.
RAMPELL: Thank you.
DONOVAN: Thank you.
GOLODRYGA: Well coming up, some tough news for Tesla, which sent shares of Musk, the electronic car maker tumbling. We'll explain next coming up
after the break.
GOLODRYGA: Tesla has confirmed that it is now the subject of a criminal probe in the United States. The Justice Department is investigating
whether comments made by CEO, Elon Musk about taking his company private were illegal. Shares are on track to close more than 3 percent lower.
The 24-hour chart shows the steep drop in the minutes after the news broke. They were down more than 6 percent at one point. Tim Higgins is a reporter
at "The Wall Street Journal" and he joins me live from San Francisco. Tim, great to have you on.
I feel like this has been a slow moving story in the sense that that initial tweet seems ages ago. It was probably, what? Six weeks or so ago
from Elon Musk. How much damage did a single tweet and a few follow-up tweets have on the company and on his reputation as a CEO?
TIM HIGGINS, REPORTER, THE WALL STREET JOURNAL: Bianna, it was August 7th when he shocked the investment world of Wall Street with his tweet that he
was thinking about taking the company private and had secured funding to do so, and the shares shot up, and then they came down over time as it became
clear that maybe that funding was not as secured as everybody thought, and maybe it wasn't as finalized as everybody believed. That share price has
gone down, up and down about $100.00 difference.
GOLODRYGA: So explain the difference between what initially was an SEC investigation into the tweets and whether or not they were accurate and now
a Justice Department investigation?
HIGGINS: Yes, right. So the big question was when he tweeted that out, "funding secured," what does that mean. Now, Elon Musk has made the
argument that he believed he had funding there, that he thought he could get some help from the Saudi Foreign Wealth Fund, that they would invest
some money and that he could essentially take the company private by getting most of the investors who are already in the company to agree to go
But as the detail emerged, it was maybe not as nailed down, and so really the SEC Is likely focused in on that. The other question is what was his
mental state or his thinking of why he was doing this. Was he trying to maybe punish short sellers, which is those people betting against the
company, and there's already been several lawsuits by those investors against Tesla.
GOLODRYGA: And there was questions then about the strength and the competence of the board and whether or not they could keep Elon Musk in
check. They said that they had not been aware of him taking or thinking about taking the company private prior to that tweet. But it's funny,
because all of the analysts we spoke to afterwards said, yes, that notwithstanding, the company itself and the vision of this company and the
vision of Elon Musk is still what people are betting on and investing in.
We're seeing more competition, though, come up every single day. Today, there was news from Audi introducing their electric car. We know that the
Renault-Nissan-Mitsubishi alliance is partnering with Google. How much autonomy does Tesla have in this sector right now?
HIGGINS: Well, the challenge for the Tesla board is investors are really betting on Elon Musk, the entrepreneur in a way that, you know, publicly
traded companies aren't necessarily intertwined with their brand and their CEO, and so he's had this little bit of a runway as being seen as the
future of cars, and a wave of competitors is coming to try to eat his lunch.
We see Audi with their new electric car. It's going to be priced very similar to what the Model X Tesla's SUV is, and we're seeing Jaguar is out
with a new electric SUV this fall. A lot of people are coming after Elon Musk.
GOLODRYGA: Which companies should he be most concerned about right now?
HIGGINS: Well, the challenge with a company like Audi is that they've got a dealer network across the US. They've got a sales force. If there's a
problem with an Audi, they could take it to the local dealership and get it fixed whereas Tesla is still struggling with its own stores and how to do
kind of routine fixes, and we've seen weeks, if not months waits at body shops around the country that even Elon over the weekend acknowledged he is
having some troubles there.
GOLODRYGA: And I mentioned it briefly, can you give us some more detail about the announced Nissan-Renault and Mitsubishi alliance partnership with
HIGGINS: Yes, Google has the dominant force and search on your smart phone. Eight percent of the global smart phone market --
[15:30:16] GOLODRYGA: Can you give us some more detail about the announced Nissan, Renault and Mitsubishi alliance partnership with Google?
HIGGINS: Yes, Google has the dominant force and search on your smartphone, 80 percent of the global smartphone market, its operating system called
Android. For -- since 2005, it's really been trying to get into the car, seeing the car as the next smartphone.
But automakers have been really reluctant to let Google in, kind of unsure of what Silicon Valley would want its long-term view and goals. And so
automakers have been trying to do their own in-dash entertainment systems and they maybe haven't been so successful.
So really, a big break for Google getting into Renault, Nissan vehicles. This could be 10 million vehicles, starting in 2021. It's really seeing
the kind of emergence of Silicon Valley with the traditional auto industry.
GOLODRYGA: I'm still trying to figure out radios inside of cars. So this is way beyond my comprehension, but it's the car industry of the future if
not already today. Tim, thanks so much, we appreciate it.
HIGGINS: Thank you.
GOLODRYGA: Well, the trade war will be long and messy. That's the warning from the Chinese billionaire Jack Ma, why Beijing won't back down, up next.
GOLODRYGA: Hello, I'm Bianna Golodryga, more QUEST MEANS BUSINESS in just a moment. But first, these are the top news headlines on Cnn this hour.
U.S. President Trump says he doesn't think the FBI should look into a decade's old sexual assault allegation leveled against Supreme Court
nominee Brett Kavanaugh.
Trump says the FBI does not want to be involved. The Senate Judiciary Committee has invited both Kavanaugh and his accuser Christine Blasey Ford
to testify Monday. Russian President Vladimir Putin says the downing of a Russian military plane in Syria was a result of a tragic accidental
[15:35:00] The Russian military says Syria shot down the plane, but it blamed Israel for putting the plane in the line of fire. Israel says the
Syrian regime is fully responsible. The leaders of North and South Korea praised each other during talks as their third summit of the year.
Kim Jong-un is hosting Moon Jae-in in the North Korean capital Pyongyang. As the summit started, North Korean state media criticized the U.S. saying
it is totally to blame for soft talks on denuclearization. The head of Germany's domestic spy agency has been removed after claims he sympathized
with far-right party.
Hans-Georg Maassen had cast doubt on reports the right-wing protesters had chased migrants during recent protests. He denies being a far-right
sympathizer. Maassen will take up a new role in the German Interior Ministry.
Jack Ma says it's time to hunker down for the trade war. In the last 24 hours, the scale of the fight has grown dramatically with the U.S. and
China hitting each other with new tariffs. The chairman of Alibaba warned his shareholders this war won't be over anytime soon.
(BEGIN VIDEO CLIP)
JACK MA, CO-FOUNDER & EXECUTIVE CHAIRMAN, ALIBABA: It's going to last long. It's going to be mess. Maybe 20 years. Don't think it will stop in
20 months or 20 days. This thing will last long, if you want to have a short-term solution, there's no short-term solution.
(END VIDEO CLIP)
GOLODRYGA: Joining me now from Beijing, Robert Lawrence Kuhn is a long- time adviser to China's leaders and the author of "How China's Leaders Think". Thank you so much for joining us, we appreciate it. Your reaction
to Jack Ma's prediction and do you agree?
ROBERT LAWRENCE KUHN, AUTHOR: The public stance of China has to be strong. The legitimacy of the government and of the communist party is based on two
primary factors. One is the economic development of China celebrating this year, 40 years of reform and opening up.
We really haven't created an economic miracle in astonishing 50 times increase of per GDP per capital. So that has been terrific. The second
area is national pride and national rejuvenation. And frankly, China as almost every other country, of the two common conflict, the latter has to
Especially in China with a history of 100 years of bullying as they say by foreign powers, mostly western and the of course Japan. This has caused a
deep scar in the Chinese psyche. So you have all these factors that are coming together.
But I can tell you, the public stance of the government Jack Ma we just heard is very strong. And they have to be if you look at what President
Trump said, that is not a public posture for seeking solution. Not just threat of saying that 25 percent in January will go up with threatening if
you retaliate at all, we're going to -- maybe tariffs on everything else.
So that's a very aggressive stance and China really has no choice, but behind the scenes, I talked to economists, reading economist officials
every day. Everybody wants a solution and they want it a lot sooner than 20 years.
But number one, they have to have a government in Washington or people they can talk to that they will have confidence, that what they say will be
implemented and they want a solution.
Because many of the problems, if we look at the problems, many of them are consonant with what China needs itself, opening up markets is one of them.
Economists tell me all the time that China needs to open markets to have more competitiveness within China. That's good for China.
But they can't look like they're subservient or bowing to foreign pressures. I mean, we can go through each of the issues that are critical
and China has made progress in intellectual properties. Is it perfect, of course not, but they really need to do that.
They will reduce the amount of forced technology transfer. What they will not do is change their industrial motto, which is government support for
future industries. So that's a sticking point.
GOLODRYGA: So how --
KUHN: But I believe that they will the markets further, and this is critical.
GOLODRYGA: So how do you find compromise for another one hand as you've described. You've got a country that wants to come across as a super
power, equal to that of the United States, so any concessions would make them look weaker.
On the other hand, there's not much love lost for China in the United States as you know. Republicans and Democrats alike, some may not even
agree with most of President Trump's policies. Can't go out necessarily and throw their arms around China and support China openly to the voters.
So where do you come up with a middle ground to where both sides look like they're walking away with something?
KUHN: Well, certainly, that's the objective, you're absolutely right. There's no issue in American politics that the all sides of the spectrum
agree upon more than on China.
[15:40:00] In fact, on every other issue, one could say from the Bernie Sanders, Elizabeth Warren, Democrats on the left to Donald Trump,
Republicans on the far-right.
What -- however that spectrum is, they disagree on virtually everything we can say except China. So that's the reality we are dealing with. Nobody
expects this to be resolved before the midterm elections, that's for sure. But if we look at the detail at this, if the people who really know what's
going on, look at the detail, we look at the real issues, we have the trade deficit, but most people in the United States recognize that as a
There's a lot of things in there that are not accurate parts of -- due to the iPhone, China will get, you know, 6 percent, 10 percent of that, the
rest are components that go into China, services are $40 billion, that's not accounted, the Chinese tourists and students pay in the U.S.
It's very complicated number and benefits the U.S. because we have a lot of products that are cheaper prices. But there are five real reasons that are
problematic to the U.S. Close markets, intellectual property protection, industrial espionage which includes cyber theft, forced technology transfer
in JVs and government support.
Those are five real issues that the smart people in America are focusing on, and legitimately so.
GOLODRYGA: And --
KUHN: But these are I believe solvable because intellectual property, China is improving, industrial espionage, they're reducing and they have
reduced, there needs to be more. Tech transfer, I think that will be a limited. The two critical issues are government support of nations'
industries in China and the opening of markets.
I think ultimately, those two can be traded that viewers can recognize, that China can do some of those things with certain restrictions and really
open their markets more. I think that's the ultimate trade.
GOLODRYGA: As you mentioned, it's a long-term process, not anything we're going to see resolved in the next few months or even years ahead. Though
many people would say, would be easier from the American perspective if the president wasn't approaching it as a go-it-alone type of relationship and
getting out of TPP.
But that's for another conversation. Robert, we appreciate you joining us, thank you so much.
KUHN: Thank you.
GOLODRYGA: And coming up Elon Musk moon-shot mission gets its first passenger. A Japanese billionaire will make history in a space-set rocket.
We want your opinions after this break. You just head to cnn.com-slash- join.
[15:45:00] GOLODRYGA: As Tesla braces for a running with Washington, CEO ELon Musk is turning his attention skyward. One of his other companies
SpaceX has just named a first-ever lunar tourist. Japanese millionaire Yusaku Maezawa is going where no holiday maker has gone before -- around
Musk's space tourists won't be going alone in the skies for long blue origin and Virgin Galactic are also planning commercial passenger flights.
With a world of options and no connecting flights or airline alliances to worry about, who would you choose?
Go to cnn.com-slash-join to cast your vote. Will you fly with Elon Musk in SpaceX, Richard Branson in Virgin Galactic or Jeff Bezos Blue Origin or are
you sticking with the government-run carrier NASA? It's your choice at cnn.com-slash-join, get voting and we'll discuss the results in a few
Chris Davenport is the author of the "Space Experience" and he joins me live from Washington. So Christian, we finally have our first passenger, a
billionaire from Japan, only two dozen other people have done what he is setting out to do now. What do you make of this?
CHRIS DAVENPORT, AUTHOR: Well, it's interesting in what he has set out to do along with Elon Musk is to do it not just alone, but to bring six to
eight artists with him on this journey, this week-long journey around the moon. And the idea is to bring your architects and painters and sculptors
and writers, and have them be inspired and have this trip.
Billions informed their work and inspire their creativity, so when they come back to earth, that will inform everything that they do. And really,
it's an attempt to make this -- to spread it throughout a much larger audience. So you saw the two of them stand up there last night, and just
as how -- we should point out that this flight is scheduled to take place in 2023, it's a really ambitious timeline, it could get delayed.
The rocket that they would fly on, you know, doesn't yet really exist and it's unclear how much it would cost for Elon Musk and his SpaceX, his
company SpaceX to even develop it.
GOLODRYGA: And Elon Musk obviously, we've spent a lot of time focusing on his issues and the controversy over at Tesla. Is there a concern that he's
spreading himself too thin, and as you said, his 2023 and overly ambitious state.
DAVENPORT: That's always been a concern with Elon Musk who's got so many, you know, irons in the fire, he does so much. You know, you have seen --
it does -- all of this occurs against this backdrop with Tesla, you've got this defamation lawsuit from the cave diver, the SEC investigation and now
the DOJ investigation into Tesla.
But last night, when Elon was introducing this Japanese billionaire and talking about this lunar mission, you heard none of that and you have no
sense that any of that was affecting him. And even today, he was on Twitter tweeting out pictures of this mission, and you get the sense that
for Elon, you know, SpaceX is really sort of an oasis, and it allows him to think about the future and to dream in the future.
And while Tesla has had a lot of problems, SpaceX this year frankly, has been running very well and they're breaking all sorts of records, launching
rockets over and over again, winning contracts and really it's had a very good -- a very good year.
But you know, you can't discount all of these problems that are swelling on him, and he said -- he told the "New York Times" just recently that all of
that was weighing on him and his health, as he said, it's been an excruciating year.
GOLODRYGA: But it does give you the sense that despite all of these sort of wide-ranging -- some a bit too down the road, some a bit more -- you
know, more identifiable as something that we could see happen in the next few years that space travel has become something of a common, at least idea
for a lot more people in decades to come.
It's not something that people can never anticipate having -- happening to not only billionaires, but hopefully some day, average people as well.
DAVENPORT: Well, it's certainly the goal of all of these companies, not just SpaceX, but Blue Origin and Virgin Galactic. On their spacecraft,
they're talking about not going to orbit around earth or even to the moon, at least initially, they're talking about sub orbital dots, going straight
up and down.
Virgin Galactic; Richard Branson's outfit has more than 700 people who have signed up for this. They could have, they're already doing power test
flights where they're going higher and higher. Blue Origin has had, I think nine flights of their suborbital rocket, they haven't put a person on
board, they put a mannequin.
But you could see tourists flying by next year, the more they're able to do that, the more efficiently they're able to do it if they can do it safely,
you could eventually see the costs come down and more people doing this.
GOLODRYGA: The new sky-diving --
DAVENPORT: So, you know --
GOLODRYGA: Of the future perhaps. Chris, we could go on and on, on this topic. Unfortunately, we will have to leave it there, thank you so much.
DAVENPORT: Thank you.
[15:50:00] GOLODRYGA: Well, the voting is closed and the results are in, President Kennedy chose the moon, you chose Elon Musk to get you there with
SpaceX. NASA and Virgin Galactic split most of the other votes and Jeff Bezos gets little of for Blue Origin. He's doing all right though.
Well, certainly, McDonald's workers have a bone to pick with the chain. Sexual harassments complaints reveal how it handles the mistreatment of
women. I'll be talking live to one of the lawyers for those women.
GOLODRYGA: McDonald's workers have a message for management.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
GOLODRYGA: Emboldened by the Me Too movement, workers are staging a one- day strike to try to get McDonald's management to take stronger steps against sexual harassment. From Miami to Milwaukee, New Orleans to San
Francisco and cities in-between.
Organizers say it is the first multi-state strike in the U.S., specifically targeting this issue. Labor lawyer, Mary Joyce Carlson represents some of
10 women who have filed sexual harassment complaints against McDonald's in May. She says more sexual harassment claims in the U.S. are filed in the
restaurant industry than any other. And she is with me now on set.
And that is such an important point to make, that of all industry, this one is plagued by sexual harassment allegations and charges going back decades.
Why do you think this cause resonates now specifically with the focus on this industry?
MARY JOYCE CARLSON, LAWYER: Well, I think it resonates because of the Me Too moment that we're in. I know that we targeted this in 2016, we knew
there was a problem in the fast-food industry then. A survey had been conducted by Hart Research and the survey found that as many as 46 percent
of women reported some kind of sexual harassment in the industry.
And we filed a series of 17 complaints across the country. We were not able to achieve any, you know, substantial change with those complaints,
and then the Me Too movement arose and I think it's a good time for us to really make progress with this issue right now --
GOLODRYGA: And to bring focus and attention onto some of these women's charges which are stunning. Some of them first of all are as young as 15
years of age --
CARLSON: That's right --
GOLODRYGA: They're teenagers --
CARLSON: That's correct --
[15:55:00] GOLODRYGA: They come from lower social economic background --
CARLSON: That's correct.
GOLODRYGA: And some of these charges include management approaching them, making very explicit sexual comments towards them with even higher up
management disregarding it completely.
CARLSON: Yes, that's part of the difficulty with this. As you point out, these women are among the most vulnerable in the workplace. There -- all
these complainants are young, 15, 17, 20, 22. And none of them I have to say that really understood that what was happening to them was prohibited
It was illegal at the time it happened. They it didn't -- it wasn't right, they didn't like it, but they really didn't understand that there was --
there could be repercussions for this. And they did try to file complaints. And in some cases the management participated in the
harassment, in some cases, when they complained, the management ignored them or even ridiculed them.
For example, in the case of the 15-year-old, she was actually told by the manager you'll never win this fight, you'll never win this battle.
GOLODRYGA: Yes, and McDonald's being such a huge corporation, many of these franchises are independently owned which is what McDonald's will say
that this is run by an independent franchise, so we don't really have any involvement.
But that's not enough of the response clearly from management and higher ups at McDonald's. What do you hope the strike today does in the long-term
and changing some of the behavior at the company?
CARLSON: Well, we are hoping that we achieve change at McDonald's obviously, that's where these women work. But the women themselves are
hoping that the act of striking, the act of speaking out, the act of standing up courageously will inspire women across the McDonald's system
and across other low-wage industries to come forward.
GOLODRYGA: Yes, for some of these women, it's a luxury to put your job right and fight a cause like this, they've got to bring money and food home
to support family --
CARLSON: Right, that's right --
GOLODRYGA: Important to bring attention.
CARLSON: That's right --
GOLODRYGA: To some of the issues that they're struggling with on a daily basis. Mary Joyce Carlson, thank you so much, it's such an important
cause, appreciate you --
CARLSON: Thank you, thank you --
GOLODRYGA: Thank you. And we'll take a final look before the closing bell when we return.
GOLODRYGA: The Dow is up as the closing bell rings on Wall Street --
I'm Bianna Golodryga in New York, and Jake Tapper is next.