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QUEST MEANS BUSINESS
India Prime Minister Modi Wins Re-Election; U.K., Netherlands Kick Off European Parliament Election; President Trump Announces $16 Billion Bailout to Farmers Hurt By Trade War. Aired 3-4p ET
Aired May 23, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: It's looking like an ugly day on Wall Street. Investors are spooked as signs points for a protracted
trade war. It is May the 23rd, 2019.
The biggest losers -- energy and tech stocks, again, they're taking a hit over the U.S.-China tensions. And caught in the trade war, soybean farmers
react to the U.S. President $16 billion bailout plan. We hear from one on this show. And U.S. regulators telling CNN they are very comfortable with
the fixes Boeing is making to the 737 MAX. I am Isa Soares, sitting in for Richard Quest, and I, too mean business.
A very good evening. Tonight, Donald Trump bails up the American farmers caught up in his trade war. On Wall Street, in Washington and in America's
Heartland, the anxiety over the impact of the latest tit-for-tat tariff escalation between the U.S. and China is real. And we are expecting to
hear from the President in fact, any minute now at the White House. Mr. Trump will make remarks as he unveils his $16 billion plan to help farmers
and ranchers weather the trade war storm.
Meanwhile, the United States Trade Representative, Rob Lighthizer is in Paris. He is making a plan to just trade rules on China with his European
and Japanese counterparts. And then if we go to the other side, in Beijing, the Chinese Ministry of Commerce says trade talks can't resume
until the U.S. shows China and I'm quoting here, "mutual respect."
Well, let's have a look at how the markets are reacting to all this uncertainty and fears of prolonged trade war, Wall Street all taking this
quite hard. We will have a look at the big board. I think we've got to bring -- no, it's down at the front. If we have a look, down one and a
half percent, 430 points.
So IBM, United Technologies and DowDuPont really leading the way. It is really something we've seen throughout this week. The NASDAQ and the S&P,
we've seen also lower. Best Buy is falling. Now, you the NASDAQ down 2 percent, S&P down almost 2 percent, too. Best Buy, I was talking to you
about. The company says you might have to raise prices if electronics from China get caught up in the trade war.
In terms of energy stocks -- Chevron, Exxon, and many other energy stocks are also feeling it today. And it just goes to show you that this trade
war is really threatening global growth and hurting the demand for crude along the way. There is so many aspects of this that we need to discuss.
Art Hogan says that we are stuck in no man's land as the U.S. and China seem to be dig in for a longer battle. He is the chief market strategist
at National Holdings Corporation and he joins me now from New York.
Art, very good to see you. Thank you for being on the show. And now you know, I was reading your note, and you started your note with, "See the
stone set in your eyes. See the thorn twist in your eyes in your side, I'll wait for you." Of course, any of our viewers will know this is the
famous latest lyrics from U2. How much of these words about the trade standoff we're seeing right now, Art?
ART HOGAN, CHIEF MARKET STRATEGIST, NATIONAL HOLDINGS CORPORATION: Yes, unfortunately that's the problem. So you know, this is a marketplace that
have gone from making an assumption that we're going to have a trade deal and that was three weeks ago. So it hasn't been that long.
We've quickly pivoted to not knowing how bad this gets. And that's exactly where we are right now. So we're stuck in that middle area and with no
clear inclination that we'll have any new information. But you know, except, you know, perhaps the G-20 meetings.
So right now, we're making an assumption that we're going to go to worst case scenario and that's what's happening today. We're making that
assumption that we're going to escalate and put tariffs on the next tranche of $300 billion worth of Chinese exports into the United States, and China
will retaliate in kind and I think that's what the market is trying to recalibrate to.
And unfortunately, without new information, that's a natural place for investors to go.
SOARES: But like you said, Art, you know, both sides very much a digging in, digging their heels. How much can the market sustain this? I mean,
we're just looking at some of the stocks, if we can bring those up again, Pam. Red right across the board. We've seen a lot of the tech stocks,
under pressure today.
Look at the Dow Industrials, some of the big -- the big names that really under pressure. How long can this market sustain this, Art?
HOGAN: Well, you know, the answer to that will be how long is this standoff going to last? Now, the one interesting thing there is we don't
know if the administration thinks it would be better to put this in the rearview mirror before the elections in 2020. Or if they'd like to carry
this battle into the elections and wear it as a badge of honor.
And I'm not sure which -- and I've done that -- I think markets feel the same way. We certainly know on the China side. They feel like they don't
have mutual respect in the way talks were going and unfortunately, unless and until we can get to a point where they feel like they're being treated
fairly, at least in the discussion, then they're not going to come back to the table.
[15:05:07] HOGAN: So right now we're in that no man's land. I think the markets will get to a point where they say, perhaps there's the other side
to this coin. And there is the incredible possibility that both sides don't want to be in a long drawn out mutually destructive trade war, and
that both sides benefit from getting this behind us.
But unfortunately, we're just not there just yet. So I think the market is doing a pretty rapid job of getting to that worst case scenario. And we
probably have some more work to do on the downside.
SOARES: And that was going to be my question, when do you think that moment is? When do you think the markets will ask themselves that?
Because you think, Art, they will get worse before it gets better.
HOGAN: Yes, well, the trade taxes have certainly gotten worse before they got better. And I think the market has to as well. I think that you'll
see that, you know, the rotation now has gone from growth into defensive, and people are raising cash.
This has been true for two weeks now. So you know, we're certainly seeing -- and those names that are at the tip of the sword, whether it's Apple or
Caterpillar, or Boeing or any of the semiconductors are certainly down a whole lot more than the market is and that makes sense.
So there is some rational action in the marketplace that you're selling those China exposed names much more than you're selling the broader market.
But that said, I think there's more damage to be done unless and until we get better information on where we stand.
SOARES: But potentially more damage to be done. How about second half corporate earnings? Do you think that we will see some of that damage when
those are released?
HOGAN: So the second quarter is probably fine, because we didn't escalate until three weeks ago. So the second half will certainly be impacted as
well as the global economy if this persist, and especially if we escalate. So if we go to the whole megillah, and have all of Chinese exports with
tariffs on them, that is going to slow the global economy down and whatever China does to retaliate will exacerbate that slow down.
So that will manifest itself as slower economic data and certainly lower earnings and we'd have to do a rethink on what we think estimates should be
for the second half. We're not there yet. But that would be the offshoot.
So it's just that it's a function of time when we get back to the negotiating table, how long does that take? The longer it takes, the worse
it is for the market.
SOARES: One area that hasn't been very resilient in the last few days is definitely bond yields. How do you see those going?
HOGAN: Well, the flight to safety into Treasuries makes sense. So there's, you know -- there's kind of three ways you become defensive. You
sit in cash, you buy some of the defensive sectors, like we've seen the utilities, the REITs, the staples, the telecoms and -- or you by the U.S.
10-year and the purchase of the U.S. 10-year over the last couple of days and you know, call it two weeks has been phenomenal.
So we virtually got from a yield of two six down to two three and change. And that's a massive move and the backup in yields that we haven't seen in
a long time, and technically, if that gets much worse, we can be looking at things with a single digit yield on it in the not too distant future if
this lasts longer than we think it's going to.
SOARES: And now, finally, I just want to bring up the Dow Jones, down 430 points or so. Not so long ago, we were getting daily record highs. How
can stock markets or whether can stock markets you think will continuing making record highs with this trade war hanging over them?
HOGAN: Yes, the record highs was certainly made in a time frame, you know, months ago, where we thought we were on the doorstep of making a deal with
China and putting this behind us. And I think that was the euphoria that we're going through.
We had a Fed that had recently pivoted and become less hawkish. We certainly had better than expected first quarter earnings when we thought a
trade deal was on the way. We have to recalibrate that now. So even though we're about 4 percent away from those all-time highs, I think we can
get further away from those all-time highs, the longer this lasts.
SOARES: Euphoria and now reality. Art Hogan, thanks very much. Always great to hear from you. Thank you.
HOGAN: Thank you.
SOARES: Now in America's farms and ranches, people are suffering. Now, we've shown you the business side of the story, and now, we want to show
you the human as well as business. We're hearing from a farmer.
A survey from Purdue University revealed that most farmers don't think the trade will pain will end in fact, anytime soon. Darin Johnson is a fourth
gen farmer and a Director at the Minnesota Soybean Growers Association. He joins us by Skype from Wells, Minnesota.
Thank you very much for joining us. First of all, I want to get your reaction, Darin, to what we were expecting to hear from President Trump
offering $16 billion to farmers, will that help you?
DARIN JOHNSON, DIRECTOR, MINNESOTA SOYBEAN GROWERS ASSOCIATION (via Skype): Well, yes, I mean, unfortunately, yes, we are in dire need of that right
now. But we do want trade versus aid for sure. You know, we have trade partners that we've had for a long time. And we want to keep them
So we would much rather have the trade versus the aid. But we're in a time right now where we are suffering. So we do need it.
SOARES: Okay, you say you are suffering. Give our viewers right around the world, a sense of just how punishing these tariffs are being to
yourself, to your daily life and your business?
JOHNSON: Yes, you know, I mean, I do understand that, you know, we do need fair trade, you know, so the agreements that we had, they do need to be
adjusted and get caught up with the times, but we're still growing the same amount of crop in the U.S. as we always have.
[15:10:11] JOHNSON: We're still doing the same thing. So we have the crop that needs to get sold. And the only way that we can do that is to have
these relationships with other foreign countries to be able to export our crop because we do produce more crop in the U.S., than we use domestically.
SOARES: But Darin, I want to go back to -- I want to get a sense of your bottom line, how much is that hurting your bottom line? Would you say?
JOHNSON: You know, right now, with where the prices are right now, you know, we're just a quick guess, we're probably losing $100.00 an acre, you
know, but it isn't just us.
I live in a small community and it is -- our small community is suffering. You know, the Ag -- agriculture is what drives these small communities and
their economies. So that's a large part of it that really kills me to see that and see them suffering on Main Street in our small community where we
And for me, the picture right behind me is my -- I mean, that's my children. I am a fourth generation farmer and I want to be able to pass
that on to them as well. And right now, it's pretty dire right now. I mean, it's definitely -- I would point them in another direction and that
hurts me to say that.
SOARES: Yes. And how many acres do you have? Because I know you're saying about $100.00 or so an acre? How many do you have?
JOHNSON: We've got about 2,500 acres of soybeans.
SOARES: Yes. All right, very, very quickly, I want to ask you a quick question. We heard from the Agriculture Secretary Perdue who said that
China is going to pay for the $16 billion coming in. Do you think that China is paying for this? Or are you and your consumers paying for this?
JOHNSON: Oh, I guess I probably wouldn't want to make a comment on that. I think we're both ultimately paying for it. We need the trade. They need
us as much as we need them, because they import 100 million metric tons of soybeans in one year.
So every -- you know, two years ago, we were sending them 35 million to 40 million metric tons. So, you know, every third row of soybeans was going
to China, ultimately, you know, just one country. So it's a huge number.
So the relationships that we've had with them, guys, we need to make sure that we keep on moving forward because it's not sustainable like this.
SOARES: Yes, trade not aid, as you said, Darin Johnson there. Thank you very much. Thank you for taking the time to speak to us here on the show.
JOHNSON: Thank you.
SOARES: And still to come right here on QUEST MEANS BUSINESS. Boeing firmly back in the spotlight as regulators from around the world meet to
discuss fixes for the faulty 737 MAX after two deadly crashes.
And more misery for the residents of Venezuela facing widespread gasoline shortage in the world's most oil rich nation. We are live to you in
[15:15:58] SOARES: Welcome back to QUEST MEANS BUSINESS. In the next few minutes, we are expecting to hear from President Trump and as soon as that
happens, we shall bring it to you.
In the meantime, I want to bring the story back here to the U.K. because the British Prime Minister appears to be delaying a fourth vote on her
Brexit bill, amid intense pressure to resign from members of her own party.
Now the pound is currently flat. We can bring that up for you -- there it is against the U.S. dollar, although, it has fallen below $1.27 after the
resignation of key member of May's Cabinet that happened yesterday, at time, roughly this time on the show.
Nina dos Santos following the story for us and joins us now. Nina, let's start talking about this bill. It's no longer happening in early June, but
it's -- do we know whether it's been completely pulled or it is just temporarily?
NINA DOS SANTOS, CNN CORRESPONDENT: No, this is another one of scenarios that we've seen and this is about the fourth time that we've seen this type
of scenario where this very unpopular withdrawal agreement bill is about to go through the House of Commons.
Not the first time either that it's being pulled at the last minute. We saw that initially when Theresa May faced that historic defeat there. And
what essentially has happened here is she has tried to sort of mollify her stance to get Labour on board after, remember, more than a month of cross
party talks with the opposition members.
And to do that, she has put on the cards here, the potential possibility for Parliament to vote on a second referendum. So either whether you see
the confirmatory vote or a second referendum on the original vote three years ago, that is politically toxic for Brexiteers within her own Cabinet.
And that is why Andrea Leadsom who is of course the leader of the House of Commons said, "I cannot fundamentally bring forward and announce a bill
where there are elements of which I just cannot agree with."
SOARES: I mean, on Labour, yesterday, we had a Labour MP on the show and we talked about this option of a second referendum, asking the MP whether
she would back and she said we are not going to fall for that. They are simply not buying it.
Is it possible that Theresa May could tweak the bill somewhat and take out the second referendum so she appeases more those within her own party?
DOS SANTOS: If she can keep on to her job. If she can keep hold of her job.
SOARES: So many questions, absolutely.
DOS SANTOS: And that's the more immediate thing, really. It's rather than the question of when this withdrawal bill is going to come forward next
because of course, remember the third of June was always going to be an uncomfortable day that they were supposed to vote on it because, of course,
the U.S. President is heading to town for his big visit, as well -- state visit.
But the immediate future for Theresa May looks even more perilous largely because she is set to meet with the head of a key 1922 Backbench Committee
is it is officially known. This is a key influential committee of backbenchers of the Conservative Party that have a huge sway over who runs
the Conservative Party as their elected leader.
And that means when they're in government, it means who is the Prime Minister. Now, it's expected when she does have this meeting with Sir
Graham Brady, the head of that particular committee, she may well say, "Look, I'm going to set a closer date for my departure. I'm going to agree
ago sooner rather than later," to try and preempt a no confidence vote in her leadership.
But there's also rumors swirling, Isa, that there may already have been a secret ballot that's been held. And if she doesn't name a date to go or
say she will go soon, well, those sealed ballots could eventually be unsealed and then they could try and trigger a leadership contest from
SOARES: I do feel like we've been here so many times, isn't it, Nina? The key will be in the next few days whether she can sustain and she can hold
on to a job with so much pressure right around her from within her own party. Nina dos Santos. Thanks very much, Nina.
Now, Boeing 737 Max is once again under intense scrutiny. Aviation regulators from around the world are meeting in Texas to discuss fixes for
the model, which has been grounded, you remember since March. This follows two deadly crashes.
Now the American regulator says there is no timetable yet for the jets return to service and the Federal Aviation Authority's acting administrator
has told CNN there have been delays in Boeing software fix for the 737 MAX.
Drew Griffin joins us now from that meeting in Fort Worth, Texas. So Drew, we've got 30 or so international regulators meeting, but the acting head of
the FAA says it could take longer to take the jets off the ground. What are you hearing?
DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Well, the biggest question is when will Boeing actually present what it wants to the FAA to
convince this body to recertify the 737 MAX? And Isa, that has not happened yet, although Boeing has tried.
Boeing thought it had a fixed back in March, but an internal review sent that back for another review that took three or four weeks. And then what
we're learning is, although Boeing said that it had a software fix ready last week, we talked to the acting Administrator of the FAA just this
He explained that apparently it wasn't ready. Here's how he explains how this back and forth is going between tthe airline maker and the U.S.
Aviation authority here.
(BEGIN VIDEO CLIP)
GRIFFIN; Boeing put out a release last week saying -- I don't want to say the fix is in -- the software fix is complete, we're going to deliver this
to the FAA. That kind of faded in the wind. Did FAA push back on that? And say, no, this is not ready.
DAN ELWELL, ACTING FAA ADMINISTRATOR: It's a normal process.
GRIFFIN: So the answer is yes, though.
ELWELL: Well, Boeing gives us information, we review it, we give it back with more things we need, or when they don't get it exactly right, and
we're talking about hundreds of pages of technical data on a software update that they're doing. It's very normal for there to be a back and
(END VIDEO CLIP)
GRIFFIN: Isa, because of that normal back and forth that Daniel Elwell talks about, once the Boeing package is delivered here, you can expect
fairly quickly from the FAA to approve that 737 MAX to fly again within the United States.
But the big question is, what about the rest of the globe? That's what the meeting in here is about, trying to set up the parameters from the rest of
the world as to what the FAA is going to do to recertify this plane, ask questions from the other global aviation administration's what they want to
see. And then I think you will see a ripple down process for each of these organizations to decide on its own whether or not this troubled plane flies
again, and when it flies again.
But right now, we're dealing with a-who-knows-when this is going to happen, because the actual software package has not been formally delivered from
Boeing -- Isa.
SOARES: Yes, and like you clearly state, I'm sure other international aviation authorities will want to do their own checks, rather than just
take the FAA's word for it. But Drew, I was reading some heated exchanges and some of the pilots coming out, really doubting their trust -- the trust
in the airline, what are you hearing from them? What are they telling you about flying this plane again?
GRIFFIN: Absolutely. Yes, they're saying it on the record, they really were taken aback by what they found about the 737 MAX after the first
crash, Isa. I talked to the pilots, the Allied Pilots Association yesterday. They actually met with Boeing in November.
Now, this is after the first crash and explained to Boeing, "Look, we're upset we didn't know about this MCAS, this flight system. We're upset that
it only has one sensor triggering it. We're upset that it's not in the manual," and explained to Boeing, "You should take this plane out of
service, fix it, and then put it back up in the air."
Boeing insisted the plane was safe to fly. Lo and behold, months later, a second crash that really has rattled the pilots, the flight attendants, and
quite frankly, the flying public.
So even when this recertification happens, Boeing still has a big problem on its hand. It knows it's got airlines across the globe with pilots that
are going to be very leery about trusting Boeing anymore.
SOARES: Very much so. Drew Griffin there for us in Fort Worth, Texas. Thanks very much, Drew. Good to see you.
Now in Venezuela, add widespread gasoline shortage to the mounting struggles of working people in the most oil rich nation on the planet.
Residents are lining up for hours to fill up their cars. Some in fact spend the night in their vehicles to buy imported gasoline at sky high
prices. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE (through translator): This is the most expensive gasoline we ever bought. It's three days we cannot produce, three days
less, eating whatever, sleeping whenever because we cannot leave.
(END VIDEO CLIP)
SOARES: Well, the government blames the oil crisis on U.S. sanctions that have blocked oil exports. Opposition lawmakers say the shortage is due to
the mismanagement and corruption of Nicolas Maduro's government.
Stefano Pozzebon is in Caracas this hour. Stefano for so long, we have heard that Venezuelans been suffering from gasoline shortages. Why is this
[15:25:10] STEFANO POZZEBON, JOURNALIST: It is different, Isa, because there are few other things to take into consideration. It is the first
time that Venezuela is directly affected by the sanctions that the U.S. administration has slammed on its oil company, PDVSA, but it has
historically been able to complement the chronic mal-distribution and chronic malfunctioning actually of its facilities here in Venezuela by
tapping into the international oil and gasoline markets.
We have seen oil tankers arriving into Venezuela to bring diluents to mix with the Venezuelan crude in order to keep providing the oil to refine
gasoline for Venezuelans. But at the same time, it's probably -- it feels way more different because there is a feeling in Caracas that the
government is no longer able to find a way out of these -- find a way out of this hole that it seems it had fallen into.
And at the same time, the discrepancy between the fact that you have to queue for so long to fill up your tank and to find that the gasoline is
basically free here in Venezuela is growing into a sense of frustration and anger between the citizens who look at the situation with open eyes and
think how can this be possible and this is something, Isa -- you've been in Venezuela. You know how much Venezuelans rely on free gasoline for
For many Venezuelans, the fact that they have access to oil is pretty much almost consider a birthright because it's the nation with the largest crude
oil reserves in the world. And then now they find out they have to queue for hours perhaps a day, our cameraman here at CNN, had to cue for two days
in order to fill up his tank and come back to Caracas from his family's village over the last weekend.
And so it grows to a sense of frustration, desperation, but also just the feeling of how absurd this is frankly, Isa.
SOARES: Yes, absolutely. And I'm getting from what you're saying, Stefano, it does seem there is slightly more widespread and perhaps more
prolonged, and like you said, I have also seen them handing out free petrol free gasoline when I was there in Caracas.
Do you get a sense -- I mean, give our viewers a sense, Stefano of how much these U.S. sanctions have hurt or have they, do you think, have they
weakened Nicolas Maduro from what you can see?
POZZZEBON: Well, definitely they have weakened -- they have increased the sense of frustration. They've increased the sense of everything --
everything that could go wrong is going wrong in Venezuela. This is of course, that saying about the Law of Murphy that everything that could go
wrong goes wrong and Venezuela is here to prove it because it's a country that has all the potential to be a powerhouse in any aspect of, at least,
in energy and still has -- it cannot even fill the tanks for most of the people.
Nicolas Maduro has been able and its government have been able to mask the chronic corruption, malaise, inefficiency of PDVSA by piping into the
international market Citgo, which is a U.S. based refinery out of Houston that is controlled by PDVSA has for some time been sending free petrol down
here to Venezuela. This is no longer an option because of the sanctions.
So perhaps this sanction had the effect of de-masking the situation and making it clear how serious and dangerous the pothole that Venezuela is
finding itself into actually, Isa.
SOARES: Stefano Pozzebon for us there in Caracas, Venezuela. Thanks, Stefano. Very good to see you.
Now, Indian Prime Minister Narendra Modi wins a landslide victory in the country's general election. He will be returning to office for a second
term. In his victory speech, Modi said that his win is a guarantee of a bright future for the people. What does this mean for India's economy? We
have a guest after this.
[15:30:00] ISA SOARES, HOST, QUEST MEANS BUSINESS: Hello, I'm Isa Soares, there's more QUEST MEANS BUSINESS in just a moment. When U.S.
presidential contenders joined forces with McDonald's workers, and I sit down with the CEO. He's trying to cut down the cost of transferring money
abroad, but before that, the headlines for you at this hour.
Mr. Narendra Modi pulled off a stunning victory in the general election. That means he will serve another five-year term. In his victory speech,
Mr. Modi promised to make India strong as well as inclusive.
British and Dutch voters headed to the polls today to choose members of the European parliament. Other EU countries will follow in the coming days
with the election wrapping up on Sunday. It is the world's largest multi- country election involving more than 350 million voters in 28 nations.
Botswana has lifted its ban on hunting, and that includes elephants. The ban was imposed in 2014 in an attempt to deter poaching. But the
government now says elephants graze crops, kill livestock and destroy water supplies and sometimes injure people.
Violent Spring storms are battering central United States, Missouri and Oklahoma have seen tornadoes rip through cities and rural areas alike,
tearing apart buildings and homes. Several people were killed, officials are still assessing the full scope of the damage.
Well, as you just heard, India's Prime Minister Narendra Modi returns for a second term. The Indian stock market didn't quite celebrate that win,
closing lower after a brief surge. For more on what Modi's victory means for India and its economy, Foreign Policy Managing Editor Ravi Agrawal
joins me now from New York.
Ravi, good to see you. I was -- when I was reading on this story, Ravi, which I found fascinating for various reasons, but the most striking is
that you have a country that's suffering record highs of joblessness, slumping industrial production, and many of course being hit by this
currency ban, yet Modi still won with a landslide victory. Was economic policy not at the center of his campaign?
RAVI AGRAWAL, MANAGING EDITOR, FOREIGN POLICY: No, it really wasn't. And I think there's increasingly anecdotal evidence across the board in India,
showing that Indians are willing to sustain short-term economic pain in the hope of longer-term economic gain.
[15:35:00] And also, that this was an election that wasn't really fought on the economic grounds. You'll remember for much of the campaigning over
the last few months, the economy wasn't the main issue, but instead it was national security, and also national identity.
So identity, politics, Hindus and Muslims, that played a big role and it seems like ultimately, the people voted to give Modi five more years as
opposed to any number of other potential candidates --
SOARES: Yes --
AGRAWAL: That they didn't go for.
SOARES: OK, so Ravi, in that case, what does this mean for India and the economy? What would be the priority, do you think?
AGRAWAL: Well, there are several things that this government will need to deliver on that it promised actually not this time, but in 2014. Because
SOARES: Yes --
AGRAWAL: Modi came to power in a wave election in 2014, an election that was so decisive and that we thought would never happen again, and it has
happened again. But it's unlikely that he'll get another chance to deliver on all of these things.
So I think he's going to have to come good on some of his promises beginning with job creation because as you noted unemployment is at a
record high or a 45-year high, I think. But also larger infrastructure and development projects that he's promised for quite a while now. There's a
liquidity problem in the banking system in India. Those are all things that I think people will look for real deliverables in the next couple of
SOARES: Yes, because when he came to power in 2014, he did promise to give India's economy a real shot in the arm. Whether it's getting rid of red
tape or helping to boost investments. So do you -- from what you've heard from Modi, are these big reforms that were promised, are they going to
happen? Is he still hoping to deliver on these?
AGRAWAL: I think he is, and there are some advances that have been made. So I think he's been able to cut red tape a little bit, I think. India's
sort of ease of business rankings in the World Bank have also improved. There are some aspects of business sentiment that have improved.
Which explains this week's stock market rise, even though today it sort of pared down at the end, that there was a lot of excitement among investors
when they realized that Modi was coming back. So I think there's some positivity there. But you know, Modi and his decisiveness have not always
gone down well for this economy, you'll remember demonetization, the cash recall --
SOARES: Yes --
AGRAWAL: That India tried in 2016, that turned out to be disastrous, but they're real hit for GDP growth. So I think Modi will try to channel that
decisiveness in a different way this time, taking on more tried and tested economic reforms instead of the more adventurous ones that he tried the
last time around.
And the other thing there is that, with oil prices rising, he won't have the leeway that he did in 2014. So the world scenario has also changed
SOARES: Very true. He definitely has his work cut out, Ravi. How much -- I want to get to you, your first answer you talked about, the economic
policy not being center. How much of that was his campaign and his success in the polls, more about the man rather than the policy, do you think?
AGRAWAL: Well, this was a referendum on Modi and it was an election that pitted Modi the man, not really the party of the BJP, but Modi the man
against every other candidate running against him in 543 different seats across India. So the BJP --
SOARES: Wow --
AGRAWAL: Successfully turned what is essentially a prime ministerial race into a more presidential style campaign. And in doing that, in framing the
narrative in that way, I think Modi was able to project himself as a decisive strong man-type leader who was able to be tough on terror, who was
able to stand up to Pakistan, and those are things that it seems like a younger generation of Indians quite like.
You know, I think when Indians look at someone like Modi who is brash and confident and globetrotting, and he's seen hugging President Obama and
hobnobbing with President Putin in Russia, they like the look of that clearly, and it seems like that's why they voted for him.
And also because there wasn't a clear alternative. I think most Indians realized that even if they were to vote for the Congress, the main
opposition party, it really wouldn't come to power. It would have to form -- a license to form a tenuous coalition. So they've gone for a decisive
SOARES: Ravi Agrawal, fascinating. I can talk with you for much longer on this, I appreciate you coming in, thank you, good to see you, Ravi.
AGRAWAL: Thanks, Isa.
SOARES: Now, McDonald's workers aren't loving it. They're holding protests right across United States joined by some presidential candidates
as the fast food giant gets grilled by shareholders. I'll be taking live - - talking live to a lawyer in fact, who is fighting to help the chain's workers. We'll be back after a very short break.
[15:40:00] (COMMERCIAL BREAK)
SOARES: I promised you we'll hear live from President Trump, he's about to speak. Let's listen in.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Has been very good. So we're here with the vital action support for the American farmers, people
that we love, people that have been going for a long time and they've done really well, and they have ups and they have downs. It's a wild business
but you wouldn't trade it for anything. I know that, right?
UNIDENTIFIED MALE: Yes --
UNIDENTIFIED MALE: Yes --
TRUMP: I know that 100 percent. We're grateful to be joined by Secretary of Agriculture Sonny Purdue, Sonny, thank you very much. Sonny, great job.
Thanks also to representatives, G.T. Thompson, thank you, thank you very much. Lloyd Smacker(ph) and Mike Conway(ph), thank you fellas, appreciate
it very much, been very helpful.
Along with Missouri Agricultural Director Chris Chinn. Thank you, Chris, great job. Also with us today, several of our nation's greatest farmers
including American Farm Bureau President Zippy Duvall, Zippy has been so good to me. Thank you, Zippy, I appreciate it very much.
Along with members of the Farm groups representing producers of corn, soy beans, wheat and pork. For years, our politicians have allowed other
countries to steal our jobs, punish our workers and target American industry and American agriculture. I can't say this is just the Democrats,
but in particular the Democrats have done absolutely nothing about this.
From the year 2001 when China joined the World Trade Organization, which was by the way a disaster, until the year 2016, the United States lost more
than 60,000 factories and millions and millions of jobs. China imposed massive barriers to American farm products -- you people know that very
well, right? Very well.
And engaged in theft of trade secrets from American agro business. We racked up nearly $4 trillion in trade deficits in goods with China during
those years. And the numbers are absolutely astounding what's been happening over the last ten years in particular.
But you go back 30 years and you wouldn't even believe it. This is a massive transfer of wealth from the United States to China, financing
China's infrastructure, commerce, technology and military. And you've heard me say it many times before, we helped rebuild China.
You've also heard me say, I don't blame the Chinese, I blame the people that were standing right here before me and their representatives to allow
that to happen, to allow China to get along and be able to do that. And they did it like nobody else has ever done it before.
And you know the United States has been taken advantage of for many years by many countries, but nobody has done it like China. To end these chronic
trading abuses, my administration took necessary and very lawful action to protect America's economy, security and farms.
[15:45:00] We're taking swift action to remedy all of the injustice that's been done over the years, in particular, you could say with our farmers.
They're patriots, they stood up and they were with me. They didn't say, oh, you shouldn't do this because we're going to have a bad year.
Because they've had 20 bad years if you really look. You take a look at those charts, way back longer than that. It's just been a steady spiral
down. So we will ensure that our farmers get the relief they need and very quickly. It's a good time to be a farmer, we've got to make sure of that.
So today, I'm announcing that I have directed Secretary Purdue to provide $16 billion in assistance to America's farmers and ranchers, it all comes
from China. We'll be taking in over a period of time hundreds of billions of dollars in tariffs and charges to China, and our farmers will be greatly
We want to get them back to the point where they would have had if they had a good year. This support for farmers will be paid for by the billions of
dollars our Treasury takes in. We'll be taking in depending on what period of time we're talking, many billions of dollars, far more than the 16
billion that we're talking about.
But the $16 billion of funds will help keep our cherished farms thriving and make clear that no country has veto on America's economic and national
security. Can't let that happen ever. And if you remember, not so long ago during the time of our negotiation, and China broke the deal with us,
and that's OK, that's fine.
But during that time of negotiation, if everyone remembers, we had periods where China would target our farms, right? They would actually target.
They took an ad in a newspaper from Iowa -- began saying lots of bad things about the administration, about the fact that we're negotiating too tough,
we're not going to make a deal, but they steal intellectual property by the billions.
Someone estimated it at $300 billion, nobody knows how you estimate it, but somebody does, they say $300 billion a year in theft, intellectual property
theft. So we can't let that happen. Our economy is booming, our nation is prospering, and now is the time to insist on fair and reciprocal trade for
workers and for our farmers.
I remain hopeful that at some point, we'll probably get together with China, if it happens, great, if it doesn't happen, that's fine. That's
absolutely fine. And I look forward, I'll be seeing President Xi at the G20 very shortly. Many of you are going to be there, many of the media
present, you'll be at the meeting.
And we look forward to that. But in the meantime and maybe for a long time, I appreciate the incredible bipartisan support that my administration
has had on trade and trade policy, especially as it pertains to placing very massive tariffs on China.
And just so you understand, these tariffs are paid for largely by China. And a lot of people like to say by us -- in fact, Larry Kudlow was quoted
but they didn't have the second part of his quote which was a very good quote. China subsidizes a lot of businesses.
And China came out and in subsidizing the business, they pay for a big portion of that tax. But right now, a lot of companies are moving out of
China because of the tax. They're moving to non-tariffed countries. So it's a bad thing for China, we don't want that, but that's just the way it
But we're taking in tremendous amounts of tariffs, and you don't have to pay by the way, tariffs for companies when they move into the United
States. You move to the United States, it's very simple business, there are no tariffs to pay. And many companies are already planning to move
back to the United States or to move to the United States for the first time so they don't have to pay the 25 percent tariff.
But they're moving to Vietnam, they're moving to other places, but we'll get plenty of them. Our country must maintain a united front to achieve
maximum results for our people. Very simple. For years, farm income has declined. And we're talking about many years.
This year, however -- and I was a little surprised to see this because I know that there's been really a trade attack on our great farmers. Net
farm income because our economy is doing so well, it's forecast to be nearly $8 billion higher than in 2016. Did you know that?
[15:50:00] You're doing better than you were doing in 2016, nobody told me that. But that's because our economy has been so strong, our economy is
about as good as it's ever been, maybe better than it's ever been.
And the agricultural exports are expected to be $10 billion more than in 2016. It's not bad, you've done a good job. We both have. We all have.
The farmers have. So we're fixing broken trade deals to open up markets for American exports including with the brand new U.S., Mexico, Canada
agreement. An agreement that the Democrats in Congress, many are supporting, I must say or they've told us they're supporting it regardless
I don't think Nancy Pelosi understands a deal is too complicated, but it's not a complicated deal. It's actually not a complicated deal. It's a deal
that's going to be many times better than NAFTA, I consider NAFTA to be one of the worst trade deals ever made in the history of our country.
I think the World Trade Organization, Larry Kudlow, maybe even worse. Maybe even worse because of what it's done with respect to trade and
international trade and trade with China, what it's done for China and how much money our country has been losing to China every year.
So World Trade Organization has been really bad, but the NAFTA has been one of -- one of the worst deals ever made in trade. Just last week, we
reached an agreement with Canada and Mexico to lift major tariffs on American agricultural, and we opened up the beef exports with Japan. Did
you know that? Right, that's a big deal.
So we opened it up with Japan, first time ever. So beef is now going to be starting to flow to Japan and our folks that do beef, they are very much
happy, they were shocked to see that one, but it's happening. It's happening fast, and I think things probably are going to happen with China
fast because I can't imagine that they can be thrilled with thousands of companies leaving their shores for other places.
We're saving our farmers and ranchers from ridiculous regulations also, and we're as of next week, we're signing some additional voiding of some really
dumb regulations, Sonny, that will make farming a lot easier, a lot better. And one of the regulations we did, waters of the United States rule, it
sounds beautiful, but once you open the document, it's a total catastrophe and you know that better than anybody.
I got rid of it, I terminated it. it's got a beautiful title, everything inside is a disaster for our farmers and actually for our country. We're
ensuring that Ethanol remains a vital part of America's energy future, and we increased it to E15, and that's tremendous for in particular for the
most part our corn farmers.
For corn and the people in Iowa and lots of other places are very happy. I just did it, and recently and I made a promise during the campaign that I
was going to do it, and I don't know if it had an impact, but I won Iowa by a lot. And perhaps it did, perhaps it didn't. I don't really care.
So right thing to do, so you're going to be at E15, which is something I think you've been waiting for, for a long time. And we're going to also
make that available year-round. They had it for a period of eight months, now we're going to make it year-round. That was a ridiculous rule.
We're fighting for a rural broadband, improving rural healthcare and bringing new prosperity to distressed rural communities through Opportunity
Zones. Opportunity Zones, Tim Scott and I and others have worked so hard on Opportunity Zones, they're really working far greater than anyone
thought, including me.
People are coming in, they're investing large amounts of money in places that they would have never invested before. Inner city location and
others, and it's been incredible. It's one of the reasons African-American unemployment is the lowest ever, Hispanic, Asian, the lowest ever. We have
the lowest unemployment rates ever and we have today, literally today -- I just saw another report, it's been this way for a while.
The most people working in the history of our country, working today, so that's really great. Mike, I mean, you look at that, that's pretty good
too, right? So our nation will always be proud of the unmatched grit and faith and skill of the American farmer.
It's my honor to do what we did. I want to thank Sonny Purdue and all of the people that worked so hard on getting this done. It's being
implemented right now, billions of dollars is already flowing into our treasure that we never saw before.
We never saw 10 cents from China. China didn't give us anything. Now, they're giving us billions. And some of that money is going to go to the
farmers to help them out during a period where trade has been very unfair to them. So I'm very honored to have done this for you and I don't
consider the gift at all, it's not a gift.
[15:55:00] You know, one of the meetings I talk about, I've never seen anything like it, about six months ago, I was with an American farmer, I
had about 25 of them in the cabinet room, and I said, well, you know, maybe what we can do during the trade, this was in the midst of big portion of
trade with China.
In the meantime, China agreed to buy tremendous amount of soybeans, but this was before that. And they were really going and they were, as I said
they were advertising and doing a lot of negative things to our farmers. And I said, you know what we'll do, we're going to do a subsidy program,
we're going to help you and one of the farmers looked at me and said, we don't want subsidies, sir.
I said what are you talking about you don't want subsidies, everybody is asking me for subsidy. Everybody, Sonny, is asking us for money. They
don't care what you call it, they all want money. And they didn't want money. He said just give us a flat table, just give us a level playing
He said we don't want any handouts, we don't want subsidies, we don't want anything, sir, just give us a level playing field. And I said I can't
believe you're saying it, literally, I've been with so many different groups, and if I've said I'm going to give you subsidies or I'm going to
give you money, they jump this, so happy.
Your people did not want it -- you understand exactly what they told you, the potato man --
UNIDENTIFIED MALE: Yes, I did --
TRUMP: Right? They don't want it. Because nobody can compete with us, nobody has the equipments we have, nobody has the skills we have, and I
would say nobody has the soil and land we have. Wouldn't you say that? So --
SOARES: You have been listening to President Trump there surrounded by farmers and ranchers from soybean, wheat, pork and potato producers. Many
of them there, surrounded by him as the president announces a $16 billion government aid package to help them in light of the raging trade war that
we're seeing with China.
This is to help in terms of compensate for the blow that they're feeling in regards to that trade war with China. He said, this is not a gift. He
also said that these tariffs will be paid for largely by China. We'll have much more after a very short break.
SOARES: Well, the escalating tit for tat between China and the U.S. regarding tariffs, well, that's having an impact on the markets. Something
that we have seen throughout this week. The Dow Jones down more than 1 percent or so. We've seen a lot of the tech shares being hit, including
IBM, United Technology.
That does it for us for tonight, thanks for joining me, I'll leave you with the closing bell.