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U.S.-China Trade War Escalates as Huawei CFO Arrested; Global Stocks Tumble on Detention of Chinese CFO; French Government Is Deploying 65,000 Extra Security Forces; George H.W. Bush Soon to Be Laid to Rest; Saudi Energy Minister Says Trump's Input Taken into Consideration. Aired 2- 3p ET

Aired December 6, 2018 - 14:00   ET


[14:00:00] HALA GORANI, CNN HOST: Hello everyone, we are live from CNN London, I'm Hala Gorani, tonight a big scandal in the world of tech. How

the arrest of a senior Chinese executive could throw a major spanner in the works of trade talks between Beijing and Washington.

Also, tonight. Tens of thousands of French security services will be on the streets this weekend. More protests are expected. Even the Eifel

Tower will be closed. The United States says good-bye to its 41st President. We're live in Texas as George H.W. Bush makes his final


Let me show you live pictures from Texas right now as the United States says farewell to George H.W. Bush. This is the final journey. It's on a

train for the President. It's a regular train line. It was named after the President. His wife that passed away a few months ago. They enjoyed

train travel a lot. They'll be going to Texas A&M University in a little bit. The family is already on board. It is a rainy day, a gray day in

Texas. There will be a ceremony and the family will continue on to the George H.W. Bush Presidential Library in Texas. We'll have more coverage

on this funeral, a solemn day for Americans a little bit later in the program.

Let's turn back to the trade war between the U.S. and China. It has gone from an economic fight to a legal one. The chief financial officer of a

huge technology giant in China, Huawei, has been arrested in Canada. There is a picture of her. The US asked Canada to detain Meng Wanzhou and wants

her extradited.

There's no word what the U.S. is charging Meng with but there are reports the U.S. has been investigating her for violating the sanctions against

Iran. China wants an explanation for what is going on and is demanding that Meng be released. CNN business and tech correspondent Samuel Burke is

here with more on that story. We don't know what she is being charged with right now. She has been detained for several days.

SAMUEL BURKE, CNN MONEY BUSINESS AND TECHNOLOGY CORRESPONDENT: Since Saturday. It's an incredible turn of events. Not just in the way things

have ratcheted up for the United States and Huawei but the trade war. And just in the past few minutes we heard from Canada's top cybersecurity

official saying that they are prepared for retaliation from Huawei. This is one of the biggest, most important and most controversial tech companies

in the world.


BURKE: Global markets are trembling. A wildcard has been thrown into the U.S.-China trade war.

UNIDENTIFIED MALE: Huawei chief financial officer is facing charges in the U.S. complicating sensitive talks to end the trade war.

BURKE: Meng Wanzhou isn't just the chief financial officer of Huawei, one of the largest telecoms company in the world. She's the face of the

company. The daughter of Huawei's founder and many see her as the heir apparent. Now just when it seemed like the trade war may cool down.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: China has been terrific, President Xi has been terrific.

BURKE: Meng has been under arrest in Canada since Saturday at the request of the American government. So far China's response has been very measured

merely asking the U.S. for an explanation.

UNIDENTIFIED MALE: This caught them by surprise. They are probably formulating what is the best way to move forward.

BURKE: Huawei says Meng faces on specified charges in the U.S. In April "The Wall Street Journal" reported the U.S. Justice Department was

investigating whether Huawei violated U.S. sanctions on Iran. They say they comply with all applicable laws, regulations and sanctions saying the

company adding the company has been provided little information regarding the charges and is not aware of any wrongdoing by Mrs. Meng.

UNIDENTIFIED FEMALE: Right now, we are seeing steep losses across the globe.

BURKE: Fears the arrest could open a new front on the trade war. Writing this type of action will affect the atmosphere around the negotiations

making them less likely to bring a sustainable settlement. Tech stocks among those bearing the brunt of the selling Thursday. Huawei isn't a

publicly traded company but its suppliers' stocks plunged on the news. Markets are concerned if China perceives the U.S. moves as political it

could retaliate.

UNIDENTIFIED FEMALE: Is it a consequence? The market is arguing it wasn't.

[14:05:00] BURKE: Huawei and Apple are fierce competitors and this year for the first time Huawei moved ahead of Apple to become the second largest

smartphone maker in the world. Even so, Apple has major exposure in China with around 20 percent of its revenue coming from there. Making one of

America's most valuable companies a prime target.


BURKE: What's incredibly fascinating is so many were surprised that China was so measured today but keep in mind they were caught off guard by this.

Imagine if Tim Cook were arrested or if he had a daughter and she was arrested, imagine the political pressure domestically to eventually respond

to this.

GORANI: When will we know if she will be extradited to the U.S.?

BURKE: This is probably the most interesting part, extradition in Canada to the United States could take months if not a year. So, she could be

there for a long time. You set up a trade war like this and you have this wildcard and things could go in directions that nobody could ever imagine.

GORANI: I don't think anyone including Donald Trump wants a trade war to last a year. It's extremely damaging to the economy of both countries.

Samuel Burke, thanks so much for that report. And Samuel mentioned that this arrest rattled stock investors worldwide.

These renewed fears about the trade war between the United States and China sent Asian stocks down about 2 percent but you can see what happened in

Europe. Over 3 percent across the board for the FTSE and CAC 40 and Zurich SMI. And in New York the Dow Jones industrials were down more than 700

points earlier, they have bounced back though. Not panic but if you take it cumulatively the losses over several sessions

it's significant what is going on.

Let's bring in CNN business correspondent Paul La Monica with more. So how worried are investors? I see we have bounced back off session lows but it

is still a very negative picture over the last few sessions.

PAUL LA MONICA, CNN BUSINESS CORRESPONDENT: It's safe to say the optimism we had about a trade sort of detente if you will between President Trump

and President Xi has clearly ended and now, once again, investors are nervous about what relations between these two countries are going to be

like for the foreseeable future. And not just that but I think the arrest of Huawei's CFO is something that could have more global ramifications

because when you look at what is happening with China versus the rest of the world, many global leaders have agreed that they are not happy with

China's increasing clout in the tech sector. Even if they weren't thrilled with Trump's tariffs, they could buy into this notion that they weren't

thrilled with Huawei and ZTE, some of those companies how they're becoming more dominant. So, this might have more of a backing from global leaders

which could be concerning.

GORANI: If we're talking about several months up to a year before Meng is extradited then we're talking about that length of time where there are

trade disputes and trade tensions between the U.S. and China. This is something that investors and markets will hate.

LA MONICA: Exactly. They're not going to be happy about the fact that uncertainty is back in full force. Even if you throw trade off the table,

a lot of people feel the U.S. economy should slow as the sugar rush of the stimulus from the tax cut earlier this year starts to fade. So just add

this on top of that and it's not good news for the U.S. markets.

GORANI: Sure. Thank you very much. Let's analyze this a bit more. Jamie Metzl joins me now, he's an author and a senior fellow at Atlantic Council.

Why is the U.S. making such a move, do you think? Requesting the extradition of such a top Chinese executive? What's behind it?

JAMIE METZL, AUTHOR AND A SENIOR FELLOW AT ATLANTIC COUNCIL: There's a lot of things. First is that the United States has been concerned for a number

of years about the activities of Chinese companies like Huawei, like ZTE. First for theft of U.S. intellectual properties. But then for violating

U.S. sanctions regimes. In particular these high-tech companies have licenses for and use a lot of U.S. components. It's been pretty brazen in

the past that these companies are selling into Iran, North Korea and Cuba and other sanctioned U.S. countries and now after the experience of ZTE

where the Trump administration first took a hard line and then backed off, Huawei allegedly has kept going violating the sanctions so there's a strong

statement that is being made in this particular case.

[14:10:00] But it is in the context of a much bigger issue, a much bigger concern of the United States which the increasing tensions with China that

aren't just about this and are just about the deficit. It's about addressing some big structural problems in the Chinese economy which

threatened U.S. future growth.

GORANI: Sure. So how is China likely to react here?

METZL: They are going to react --

GORANI: They've been subdued so far. She was arrested December first, it's been several days.

METZL: China has bigger fish to fry than this. This is a big deal but getting the trade relationship with the United States wrong is a much

bigger deal. So, this is a shot across the bow but China is going to be relatively restrained. Because they don't have an interest in risking

everything based just on this, even though this is certainly significant.

GORANI: So, they're going to let a top executive you think be extradited to the U.S. and tried potentially in the United States in court.

METZL: They're going to put pressure on the Canadians but the Canadians will be in a very difficult position. The Canadians probably won't be able

to hand her back to the Chinese. They have an extradition treaty with the United States. There will be a hearing and that will require an internal

process inside of Canada. Maybe there will be some negotiation involving the United States and China and Canada. Maybe Huawei will make some kind

of promises to amend its ways and its relationships with Iran and Cuba and others. So, there are a lot of things that could happen but again I don't

think China is going to put this issue on the top of their priority list because there are much more significant issues currently at play.

GORANI: What I find interesting, Huawei, I will be honest, I mean I was familiar with the name, I knew it was a Chinese tech giant, I had no idea

how big. They're bigger than Apple in terms of actual mobile hand set sets. The biggest tech component company in the world. We're talking

about a dominant business and could prolong a trade war? And trade wars are extremely damaging. Not just to China but to the United States as well

and to a President who has sold himself to the American people as the man that can perform miracles for the U.S. economy.

METZL: This is a big deal for China but not as big of a deal as the broader trade war. The trade war will play out on its own terms. In many

ways irrespective of this. The U.S. is pushing for less theft to intellectual property, greater market access, less technology transfers

from U.S. companies to China. That's what the United States wants. China is going to try to pay off the United States with just deficit reduction by

buying more soybeans and more natural gas and if China is forced to make big structural changes that's going to have huge domestic repercussions in

China. That's the big game. This is certainly significant but as important as it is, the story of this one arrest is not the main story.

GORANI: I'm glad you made that clear. The U.S. national security adviser said he knew in advance of this arrest but he wasn't sure that the

President was made aware. They were in Argentina at the time. Thank you. Appreciate it. A few French Presidents have seen their time in office

untouched by protests and now in a major way it's President Macron's turn. The government fears major violence in Paris this weekend as the so-called

yellow vests protests are showing little sign of easing. The Eifel Tower is going to close and the national football league is postponing two major

matches. Last Saturday saw the worst rioting in decades. Hundreds were injured and arrested.

The yellow vest movement may have begun in opposition to fuel tax hikes they have grown to encompass broader grievances over inequality and

injustice with the blame laid at President Macron's door.

Where does the country go from here? Jim Bittermann joins me now live from Paris.

[14:15:00] The government backed off. They said there wouldn't be the fuel tax hike. We heard you and we're going to cancel that measure, and that

didn't do anything to calm the protests down. Why not?

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I think if they had done this three weeks ago, Hala, there wouldn't be all the

problem. The fact is it's too late now to do -- just do one concession they're fairly minor compared to that one. They have been cancelled now.

But that's not enough. Everybody is involved in this thing. We have farmers and truck drivers are going to go on strike. Students today, 200

high schools blocked and some universities shutdown. And everybody that's been affected by any of the Macron reforms, and there's been a number of

them over the last 18 months while he's been in office, has been brought to floor by this yellow vest movement and they're bringing the complaints out

they're preparing for the worst this weekend. 65,000 security personnel are mobilized across the country. They're anticipating violence because

there's been very active threats. One of the yellow vest movement members said we're going to Paris to not only demonstrate but to kill. Another

yellow vest moment last night was a debate on our sister network and he said we are going to storm the Elysee Palace. He was asked what he going

to do when you get there? And he said were going to invade the place.

GORANI: I lived in France a long time. French people love a protest. That's known about France, but these demonstrators, some of them are so

extreme, so violent. I guess my question is why are most French people still supporting a movement that is acting in this way?

BITTERMANN: Yes, the polls show about 70 percent are. A lot of people do have the direct grievances with the government. They're worried about

their pensions and minimum wage and they worried about all sorts of cost of living adjustments and that sort of thing. So, they do have problems in

their lives. And so, for the legitimate demonstrations, in fact, have been fairly peaceful. It's just that these demonstrations in Paris,

particularly, although in other cities in the country there have been pretty violent as well. These demonstrations have turned violent because a

lot have joined in and people that are bent on causing trouble join in and that's part of it too. But, you know, it's a mix of things and unlike

previous demonstrations here, this is so widespread across the country. So much a grass roots movement that there's no organization behind it. In

previous demonstrations you had union leaders that would take a little responsibility about keeping security during their demonstrations. No 2007

when they were burning the cars in the suburbs, more than 6,000 people were arrested. This time around there's only 1,300 arrested. It gives you a

difference in scale compared to what has happened here in the past.

GORANI: So, if it's leaderless, if it is dozens of different demands rolled into one and we're not sure, how would the government start

addressing the situation? Who do they talk to? How do they figure out how to calm things down?

BITTERMANN: He's been accused in the past of being arrogant and has largely ignored the other political parties during his 18 months in office.

He asked them to help to change the situation and better the situation and we just saw in the last few hours here, social network interventions by

members of his party in the parliament. All saying stay calm. Protest if you want, but make sure that it remains non-violent and there's no

guarantee that that's going to be the case but at least they're trying to calm things down because they really do seriously fear that things could go

very badly this weekend and could threaten the presidency.

[14:20:00] GORANI: Sure, that is going to be a question whether or not politically this government can survive, I couldn't imagine being a tourist

this weekend and having the Eifel Tower closed and museums closed. Security personnel patrolling the streets. Thanks for joining us. We'll

keep our eye on that story.

I want to show you live pictures from Texas as the United States says good- bye to its 41st President. He is making his final journey there. He is on a train there with his family. They departed Union Pacific auto facility

for Texas A&M University. The train time is about 2.5 hours. You can see people there lining the route. Really bidding farewell to their 41st

President. There was a very moving memorial service yesterday. Today is the day of the funeral and it's really saying good-bye not just to the man,

not just to the statesman, but also to a different era in American politics. More on that later in the program. Still to come tonight,

Yemen's warring factions sit down to peace talks but it may be too late for many of these victims.

Also, OPEC is trying to hammer out a deal to stop the deep plunge in oil prices but efforts to cut production are getting push back from the U.S.

President Donald Trump. We'll be right back.


GORANI: Just getting to the peace table is considered a milestone for the warring factions in Yemen. The UN special envoy to Yemen because the talks

just underway in Sweden they critical opportunity to end the civil war now seen as the world's most dire humanitarian crisis. Relief organization say

20 million people in Yemen are hungry and nearly 2 million children are acutely malnourished. Thousands already suffered agonizing deaths. In the

four years that civil war has raged, public services and safety nets virtually collapsed putting millions at risk.

[14:25:00] Nima Elbagir has more on some of these horrors of war and as always with stories out of Yemen, I must warn you, the video you will see

is disturbing.


NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: At the front lines, every inch of territory gained and lost has been brutally fought over.

Paralyzing Yemen and ravaging its people as the world finally works to force the U.S. backed Saudi led coalition and Iranian backed Houthi rebels

to an agreement for so many here, it's already too late.

What we're about to show you is almost unmanageable in its horror. These are his last gasps. Filmed inside a local clinic. He died as the medical

team fought to revive him. His desperate father borrowed the money to bring him here. All he is leaving with is a little body wrapped in white.

In hospitals and clinics across Yemen, time is running out. He is also 9 months old and struggles to even keep has eyes open. Support for the war

is waning and many U.S. lawmakers want out, although the U.S. Secretary of State says without American involvement, life here would be worse. It's

hard to see how.


GORANI: Often, we say they're starving. Really, we should say they're being starved. This is an entirely man-made situation. Hopefully these

talks will yield something tangible.

Now to a crucial meeting in Europe. OPEC members are debating cuts despite pressure from Donald Trump to keep the taps wide open. Crude oil prices

have plunged over the last several months and the cartel wants to stop the bleeding. But we're learning that OPEC members failed on how much they're

willing to cut.

Let's go to John Defterios, he is live at that OPEC meeting in Vienna. Tell us what happened today.

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, it's a pretty nasty game of geo-politics and not mixing well with oil. The aspiration coming

in was to cut 1.3 million barrels a day and send a strong message even to Donald Trump that they want to rebalance the market. To remind our viewers

we have had a $25 correction between October and November. In fact, the month of November was the worst month since the global financial crisis of

2008. But Donald Trump has different designs, he wants high production and low prices and everybody was surprised when they

said the Saudi minister said that this cut was too excessive. And he tried to come

in with a lower cut of 1 million barrels a day. So, I asked him at the start of this nasty scrum, at the start of the meeting today, are his

decisions being influenced by the Trump administration because of the support for Saudi Arabia and particularly for the crown prince of Saudi

Arabia. Let's take a listen.


KHALID AL FALIH, SAUDI ENERGY MINISTER: I think at the end of the day we are sovereign countries. We will make the decision in the best interest in

all countries as well as our belief for the best interest of our consumers and that includes the United States. We will take his input into

consideration. And other major producers like developing countries who are also very fragile and need affordable energy to continue to grow,

especially during 2019 when there's many head winds into the global economy. All of this will be taken into consideration.

DEFTERIOS: Do you feel compromised by the President's support for the crown prince because he gave such a strong backing to Mohammad bin Salman?

Do you feel like you have less negotiating power around the table here and you need more collective support from OPEC?

AL FALIH: We appreciate the support his Royal Highness the Crown Prince is getting from many quarters around the world. You've just seen the tour

that he made in the Arab world and the great reception here and the G20 in Argentina. And the relationship between the kingdom and the U.S. does not

hinge on any single variable or issue. And certainly, our freedom to discuss and debate and to consider all options here and in Vienna within

the context of today, OPEC and tomorrow OPEC plus is not compromised in anyway.


[14:30:00] DEFTERIOS: The minister of energy for Saudi Arabia. That's not the market view, by the way. We had a 3 percent correction and after all

the euphoria after the deal between Russia and Saudi Arabia at the G20 meeting, those gains have been wiped away. It's not the view in the U.S.

Senate as you know as they form legislation after that briefing from the CIA director to put sweeping sanctions against Saudi Arabia, perhaps even

reaching the crown prince Mohammad bin Salman.

GORANI: All right. Still to come, tonight, from celebrities to political friends, to his big extended family, fond farewells to a President that

embodied the greatest generation.

A remote island in Denmark. No one lives there. In fact, it was once used to house sick and contagious animals, but the Danish government has plans

for it. To put migrants there. We'll tell you why, after the break.


GORANI: America's 41st president is nearing his final resting place. George H.W. Bush's extended family, celebrities, friends in his adopted

hometown of Houston, Texas said their farewells at St. Martin's Episcopal Church. Mr. Bush and his wife Barbara worshipped there for decades.

Bush's longtime colleague and confidant and secretary of state, James Baker shared warm and grateful memories about his best friend earlier.


JAMES BAKER, FORMER U.S. SECRETARY OF STATE: He was not considered a skilled speaker, but his deeds were quite eloquent. And he demonstrated

their eloquence by carving them into the hard granite of history. They expressed his moral character and they reflected his decency, his boundless

kindness and consideration of others. His determination always to do the right thing and always to do that to the very best of his ability.


GORANI: The casket was taken from the church to a nearby train station. Family members are accompanying it. It's a 110-kilometer journey to Texas

A&M University. These are live aerial pictures for you.

The site of the Bush presidential library and museum is there and the burial will take place there. So it's been a moving few days for those who

served with George H.W. Bush. He's remembered both for his military and political service and for instilling that pride in his children and their

families and really, I think, it's still in the last few days.

Stephanie Elam joins me now along the route. Whatever political side you were on, it's just a bygone era now. We're all saying goodbye to another

time as well as to the man himself. Tell us what's going on where you are now.

STEPHANIE ELAM, CNN CORRESPONDENT: Oh, that's very true, Hala. I think even the fact that this is what the president wanted. He wanted his final

journey to be done by this train. This train led by a locomotive which bears his name. Bush 4141. It's painted to like Air Force One and it is

bringing the casket which is open in some way. The side of the train is open so you can see the casket inside the train so that people can really

wave goodbye.

[14:35:01] And where I am right now is on the way to College Station. And you can see people are lining up here despite the rain. They are out here

to pay their respects to a man who chose Texas as the place that he wanted to have as his home, to raise his family.

Lots of people who have been out here since the morning. We got here and people have been trickling in all day long. As you can see, you look up at

the buildings. They've got their flags up here. It's really a quaint town of Navasota here in Texas.

But it's giving that opportunity that people here in the Lone Star State to say goodbye to one of their sons. And you do feel that there is a

difference, Hala, with the way he's being remembered. The respect, the giving back. All of that, that has been expressed so much throughout these

different ceremonies and funerals. You can feel that that's really appreciated here.

GORANI: And by the way, we were showing our viewers some live images of that train, from the side of the train where you could read Bush 4141on

that locomotive. And you can see that along the route, people -- I mean, there sort of groups of people that are lining the route to pay their

respects. It's -- I mean, it's kind of a -- it's a very nice thing to see in a way this type of respect for a fallen leader.

ELAM: It is.


ELAM: It is. And just the pride people feel for him and also the fact that they want to be here and it's an ode to a different era. Simply

because you think about how many different former presidents travelled by train to their final resting place. And this is exactly what he wanted to

have happen here.

So it is, like you're saying, it is definitely a nod to yester year.

GORANI: Yes, absolutely. All right. Thanks very much. Stephanie Elam in Texas there with coverage there of the final journey for George H.W. Bush

aboard that train to Texas A&M University eventually for his burial at the presidential library. Not too far from the campus of Texas A&M.

All right. Now to an alarming story out of Denmark. The government is making plans to move what it's calling unwanted migrants to a remote


Here it is. It's called Lindholm Island. It was once used as a research center for contagious animals. And they're planning on shipping humans

there. This plan is part of a controversial deal struck between the center right government and the populist anti-immigrant party.

The Danish immigration minister wrote on Facebook, "When you are unwanted in Danish society, you should not be a nuisance for regular Danes." She

added, "The migrants will be getting a new address."

The plan is still to be passed by parliament. And as you can imagine refugee advocacy groups are saying this is the very definition of

dehumanizing and have condemned the proposal.

Now to the U.K., crisis talks in Downing Street. The British prime minister summoned set to deliver senior ministers to number 10 earlier

today. Theresa May met with key lawmakers for about an hour and this comes just five days from that big vote in parliament. That deal of hers. Will

it passed or will it be voted down?

She is doing everything she can to rally support for the Brexit deal. Amid reports some cabinet members are urging her to rethink the vote itself.

Over dears it will end in catastrophic defeat for her.

This comes as MPs, members of parliament continue debating the deal in parliament. We've heard the prime minister warn there's no renegotiating

another deal. And today, Britain's finance minister repeated that. This is Philip Hammond and what he had to say.


PHILIP HAMMOND, CHANCELLOR OF THE EXCHEQUER: Mr. Speaker, I have observed this process, close quarters for 2.5 years and I'm absolutely clear about

one thing, this deal is the best deal to exit the E.U. that is available or that is going to be available.

The idea that there is an option of renegotiating at the 11th hour is simply a delusion. We need to be honest with ourselves. The alternatives

to this deal are no deal or no Brexit.


GORANI: Hadas Gold is across the story and she joins me here in the studio. So I mean, look, you got to hand it to her. She is hanging on.

She is fighting on every single day trying to convince her cabinet members, members of parliament of her party, please back this deal.

HADAS GOLD, CNN INTERNATIONAL BUSINESS REPORTER: I mean, she's really in an impossible position and we're in the middle of this five-day debate for

the vote on Tuesday and this comes after she had, and arguably her government had the toughest day, and you would say 40 years on Tuesday when

they had these three contempt votes.

And what she's trying to do now is trying to a little bit of wiggle room to try to convince enough MPs to get on to her side. She doesn't have a lot

of room. She can't lose a lot of votes on this because it's starting to look very dire. I mean, if the vote was taken today, I would bet that she

would lose. It depends on how big of a margin that will be. That would determine her own political future.

[14:40:08] But now something that she's suggesting has to do with that subject that we're always talking about with Brexit which is the Irish

border and the backstop that insurance policy and what would happen at the Irish border. She is now suggesting possibly to give members of parliament

a little bit more of a say on that. Here's what she actually told the BBC just this morning.


THERESA MAY, BRITISH PRIME MINISTER: There are all these questions about how you go in and then how you -- if you're in the backstop whether that

continues, what regulations are in there. All of these issues that I'm exploring and I'm exploring in terms of the sovereignty of the U.K., the

role of parliament and being able to have their say.


GOLD: But here's the issue. She has this interesting balance she has to keep because she wants to get as many MPs on her side as possible but she

goes too far enabling them have more of a say. She risks Brussels saying, hey, wait a second, that's not what we agreed to. So she's in really dicey

territory right now. There is some talk. Some people are saying, well, maybe they'll move the vote. Maybe they'll change the date. So far, we

don't see any indication.

GORANI: But she didn't rule that out.

GOLD: She didn't entirely ruled it out. And listen, things are changing in this process, seemingly by the hour. I mean, even before I came on set,

there were some tweets flying around about possibly more discussions of moving that date and as we see, there's cabinet ministers, apparently,

they're trying to convince her to move it. She seems pretty firm, though, that it's this deal or nothing.

GORANI: OK. And what about the possibility of a second referendum? Because there were reports that this is an idea that she's floating around

now. Maybe in an effort to scare Brexiteers into backing this deal they consider to be imperfect.

GOLD: Right. That is something that a lot of people have been calling for but Theresa May has said over and over and over again, as long as she is in

power, key point is as long as she is in power, there be -- there will not be a second referendum.

I do want to cite this one quote. This actually came from Winston Churchill's grandson, Sir Nicolas Soames, was saying in parliament today

arguing during the debates on this Brexit deal. And he was saying something that I think was notable, considering where we are in the world

of politics. He said, a no deal Brexit or second referendum might push Britain into the kind of loathsome and hateful partisan bitterness that

disfigures American public life.

So it's something fate of the U.K. that want to -- maybe that will convince the Brexiteers.

GORANI: I think they have plenty of division in this country to go around these days.

Hadas Gold, thank you very much. And of course, we'll be following this. And next week, we will be -- we will have special coverage of that vote in

parliament and see what that means for Theresa May. Thanks so much.

The ongoing Brexit turmoil is not good for British businesses. We've already heard from the Bank of England and major firms making dire warnings

if the country crashes out with no deal.

But there are some firms that are seeing a golden opportunity in a hard Brexit. Anna Stewart has that story from Derbyshire, England.


ANNA STEWART, CNN BUSINESS REPORTER (voice-over): It's the sound of routine far from the shouting in Westminster. Since 1961, David Neiper has

made classic British clothing, trousers, coats, and night gowns for ladies of a certain age.

CHRISTOPHER NIEPER, MANAGING DIRECTOR, DAVID NIEPER: We have a mature customer base and they buy directly from the designer's work which are here

behind me.

STEWART: Britain's major manufacturers, those in aerospace and automotive have warned of calamity if parliament doesn't pass Theresa May's Brexit

deal next week. Here in Derbyshire, management politely disagrees.

NIEPER: If there was a referendum tomorrow, I would still vote the same way and I would encourage our MP to vote against the withdrawal agreements

next week in parliament.

STEWART: Sales are up nearly 15 percent since the 2016 referendum. Mostly thanks to weaker sterling.

NIEPER: It predicted the economy would go down. It went up. The stock market should go down, it went up. All of the official predictions have

been wrong.

STEWART: Most here aren't clear what parliament is even voting on.

UNIDENTIFIED FEMALE: The deal that's being proposed right now, not a lot of people know what it is. We don't know what it is. We don't know what's

written in the papers. Everybody is falling out with everybody else in parliament.

STEWART: The business may look like a throwback from an earlier era but it generates about $20 million in annual revenue. A third from customers in


Now if there were tariffs, if we had a hard Brexit, that's going to cost you more. Are you going to pass that cost on to the consumer?

NIEPER: No, we won't pass it on. It won't make a difference.

STEWART: So you see this as an opportunity?

NIEPER: It's a catalyst for change and it's just what Britain needs is a shot of adrenaline to start producing in Britain again.

STEWART: And that could be bad news for its European suppliers. David Nieper gets its yarns and printed cloths from Devou (ph), a fabric company

in the foothills of the alps. That company says a no-deal Brexit could sink its significant U.K. business.

[14:45:06] And David Nieper may deliver the first blow. It's invested millions in this new fabric factory to make more at home.

NIEPER: One of the most important things for us is that we have continuity of supply chain. And so we've taken the decision to bring more of the

supply chain from Europe into the U.K.

STEWART: A homegrown firm hoping the prime minister's deal falls apart at the seams.

Anna Stewart, CNN, Derbyshire.


GORANI: -- to Kerch Strait confrontation with a military message for the Russians.


GORANI: The U.S. military is stepping up its support for Ukraine in the wake of the Kerch Strait Air confrontation between Russia and Ukraine.

The U.S. Air Force flew an observation mission over Ukraine Thursday without getting customary Russian approval. Also, sources say the U.S.

Navy is making preparations to sale a warship into the Black Sea where Russia seized Ukrainian ships and sailors last month.

An American military spokesman says while the United States seeks better relations with Russia, the Kremlin must end its increasingly provocative

and threatening activity.

Fred Pleitgen joins me now live from Moscow. What has been the reaction of Russia to all of this?

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, so far, the Russians have done very little in the wave of reaction. They mocked the

United States a little bit. But, of course, they are quite angry about this situation.

The one thing that we've been seeing here, Hala, is that things are really continuing to ratchet up between the Ukrainians and the Russians. The

U.S., of course, has placed itself squarely on the side of the Ukrainians saying, look, it was the Russians who are at fault for that incident that

took place there in the Kerch Strait, to begin with.

And then you had that NATO foreign minister's meeting a couple of days ago where the U.S. said, look, there has to be some reaction to what they call

that provocative behavior by the Russians. That flight crossed probably parliament to the U.S. getting approval from the Turks to possibly sail a

warship into the Black Sea. Another one.

And then, of course, you have another incident also on the pacific side of things where the U.S. sailed a warship close to where Russia operates as

well. The Russians, for their part, continue to really verbally, at least, attack the Ukrainians. You have the Russians saying that they believe that

the Ukrainians might be planning what they call offensive operations and putting offensive infrastructure, as they called, into place near that

area. The Ukrainians, of course, firing back.

So that conflict still very much simmering while the U.S. and Russia continuing or really starting to trade barbs over all of this as well.


GORANI: All right. Fred Pleitgen, thanks very much for that update from Moscow.

How many times a day do you pick up your phone to surf the web or check social media feeds? It's an everyday habit for many of us, but people in

Cuba could only dream of such a thing until now.

The government in Havana rolled out 3G internet service for mobile phones for the first time ever. Cuba has long been one of least connected

countries in the world.

[14:50:07] And until today, people could only access state-run e-mail accounts on their cellphones.

Now, they're free to surf to their hearts content if they can afford the costly fees. And there you go. Joining the rest of the world and having

their heads buried in their phones all day, probably.

More to come including climate change is destroying Australia's stunning Great Barrier Reef and that could mean economic disaster for millions.

We'll take a look at what scientists are doing to save it, with a special report. We'll be right back.


GORANI: Leaders from around the world are gathering in Poland this weekend next for a climate talks, trying to find a way to keep global temperatures

from rising more than two degree Celsius.

But experts are warning that goal actually may not be ambitious enough. A U.N. panel recently found that if earth's temperatures rise by more than

1.5 degrees above preindustrial levels, the global impact of climate change grows exponentially.

CNN is exploring the consequences of past inaction once spotlight in the battle against climate change of Australia's Great Barrier Reef. The rise

in global temperatures has already caused massive coral leeching and that could mean economic disaster for millions.

Here's Ivan Watson.


IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): An underwater snowstorm. That's how a veteran marine biologist describes the

annual event when the coral on the Great Barrier Reef begins to spawn.

PETER HARRISON, PROFESSOR, SOUTHERN CROSS UNIVERSITY: The coral spawning is always magical and it was great to see all these egg-sperm bundles

coming off these corals.

WATSON: This year, scientists are on the scene, scooping coral spawn. It's an experimental effort to save this natural wonder of the world from

the ravages of climate change, a pilot breeding project aimed at increasing the fertility of coral.

HARRISON: The baby corals are going into big floating lava pools on the reef system. So it's really exciting that we can go from these ideas,

capturing coral spawn at small scale and starting to scale it up to much larger areas, many more pools and literally millions of larvae being

developed on the reef.

WATSON: Off the coast of Australia, the Great Barrier Reef is a sprawling marine habitat that's larger than Italy. But it's in trouble. In the

summer of 2016, vast amounts of coral suddenly started bleaching, turning bone white.

DAVID WACHENFELD, CHIEF SCIENTIST, GREAT BARRIER REEF MARINE PARK AUTHORITY: What we saw in 2016 and 2017, the marine heatwaves that led to

coral bleaching and the death of coral was like nothing we've ever seen before.

WATSON: Scientists estimate the record warm temperatures killed more than half of the coral in the Great Barrier Reef in just two years.

CNN traveled to Australia last June, to look at a government effort to pump hundreds of millions of dollars into projects to help save one of the

country's largest tourist attractions. With temperatures milder in early 2018, there were signs of recovery.

UNIDENTIFIED MALE: But we did see little ones coming regenerating back.

WATSON: Going back.


WATSON: At the tips of some of the dead coral, these little spots of color, right?

UNIDENTIFIED MALE: Yes. And they'll grow again, as long they don't bleach again.

[14:55:06] WATSON: But with the Australian summer fast approaching, meteorologists are issuing ominous warnings. A heatwave in the nearby

state of Queensland has already contributed to raging bush fires. With the climate's warming trend continuing, scientists have revised their previous

target. They now say it's crucial to keep temperature rise to 1.5 degrees above preindustrial levels instead of two degrees in order to avoid looming

planetary disaster. Scientists fear marine heatwaves will likely follow.

UNIDENTIFIED MALE: When we think about forecasting the weather for the Great Barrier Reef, the climate of the entire planet and the Great Barrier

Reef has already changed and it is still changing. And so it's getting harder for scientists to be confident about predictions of the future.

We're entering into uncharted territory. Almost every year is warmer than usual. And, in fact, that's becoming the new norm.

WATSON: That's why Professor Peter Harrison's breeding project targets heat resistant coral.

HARRISON: These corals that have survived the last two bleaching events we know are heat tolerant. And, therefore, they are the ones that we really

need to be kept on the spawn farm, because they will provide larvae that gives us a fighting chance to try and overcome the problems of increasing

sea temperatures and mass bleaching reefs.

WATSON: It's an ambitious effort to save a marine habitat. But given the scale of the challenge, for now, it's just a drop in the ocean.

Ivan Watson, CNN.


GORANI: And we end on these live images coming to us from Texas. The final journey for the 41st president of the United States. It's a train

ride that started about 45 minutes ago. It's two and a half hours total to Texas A&M university. There will be a ceremony there and then on to the

presidential library, not too far from the campus of Texas A&M.

Today is the final farewell for George H.W. Bush. We'll have a lot more news on the other side of this break. I'll see you next time.