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QUEST MEANS BUSINESS
Global Vigils Mark 30 Years Since Tiananmen Square Massacre; U.S. Imposes New Travel Restrictions on Cuba; The Trumps Host Reciprocal Dinner for British Royals. Aired 3-4p ET
Aired June 4, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Good evening, I'm Julia Chatterley in New York with a special hour of QUEST MEANS BUSINESS. We are
in the final hour of trading on Wall Street with the Dow on pace for its best day in months. Thank you, Jay Powell. We will be discussing that
later in the show.
But for now, what you're looking at right now is live pictures outside Winfield House in London, of course. You can see the First Lady Melania
Trump and President Donald Trump, of course. Guests will be arriving any moments and they will be welcoming them. This is the U.S. Ambassador's
residence in London, of course. It will be capping the second day of President Trump's State Visit in the U.K.
They're just talking quietly as you can see to themselves as they await those guests. Bianca Nobilo, I think joins us now as we are awaiting the
arrival of more people for the dinner. The Queen of course, not attending this dinner tonight. I don't believe, but she is going to be represented
by the Prince of Wales and the Duchess of Cornwall.
Bianca, are you with us? What more can we expect tonight? It's been a pretty whirlwind day, of course, a lot of politics and some interesting
comments on trade, of course and the future relationship with the U.K., too. What do you make of it?
BIANCA NOBILO, CNN CORRESPONDENT: Well, you put it well, Julia. This dinner caps off these two days the Trumps have enjoyed in London. It is an
affair which will be meticulously planned. The First Lady has a huge role in that.
It's held at the Ambassador's residence in Regent's Park. It is again another very lavish affair, but nothing on that State Banquet which we saw
last night. And overall, the lawmakers I've been speaking to, the members of government that I've spoken to were concerned about this trip before it
happened, and the main goal was that it would go off without great incident.
And so far, barring those insults towards the Mayor of London, Sadiq Khan from President Trump right before he landed, it has managed to be given
that there's a lot of controversy with President Trump priced in, it's managed to be a fairly successful trip.
The monarchy have done their job. They've allowed a smooth set of proceedings to go past with the Trumps, and they've enjoyed all of these
spectacles together, which would have been very important to the President who is somebody who has expressed great reverence for the Royal Family. He
has Scottish heritage himself.
So everything has gone pretty much the plan, even the news conference today and today was the day focused on politics and trade. So it was likely to
be a little bit more controversial than yesterday, which was laden with Royal protocol.
Today, we had President Trump to be very conciliatory and he praised Prime Minister May who is resigning at the end of this week, but he said that she
doesn't get enough credit and that he applauded her negotiating strategy, saying that she might even be a better negotiator than him -- a rare moment
of self-deprecation from the President there.
He also weighed in somewhat to the conservative leadership contest, discussing how he liked Boris Johnson, Foreign Secretary Jeremy Hunt who he
has had a lot of face time with over the last few days and mentioned Michael Gove.
But President Trump is known to interfere with domestic politics. He did that last time he was here for a working visit, by sharing his thoughts on
Brexit and how it should be conducted.
So given what the expectations were, and they were low from the people I was speaking to, this has gone off pretty well as a visit so far.
So there will be many within government who will be breathing a sigh of relief, as far as the official proceedings go, that everything has gone
pretty much to plan all the while there have all sleeping a lot of protest and huge opposition from the Labour Party Chief, Jeremy Corbyn, the leader
of the Labour Party, who could potentially become Prime Minister, leading one of the protests against Donald Trump today and addressing everybody
there, saying the focus should be on peace and stability.
And we later then found out the President Trump had actually invited -- sorry, that Jeremy Corbyn had actually invited Donald Trump to a meeting,
but Donald Trump declined, he said, because Jeremy Corbyn was too focused on the negative, and he chose not to meet him and said he never had met
So there's been a couple of bumps in the road. But all in all, it's a side to President Trump we don't see often one, which was a lot more
reverential, and certainly yesterday when the Queen was involved, a more refined and polite side of the President.
CHATTERLEY: Yes, absolutely. And as you pointed out, as well, as far as the broader concerns were concerned here, sticking to the script, the
President today, I think perhaps made a real difference.
And what you just saw there was live pictures of course of Prince Charles and the Duchess of Cornwall meeting President Trump and the First Lady and
heading in to the U.S. Ambassador's residence there.
Hala, I'll bring you in here to and let you hand over for, as Bianca was describing, a pretty busy day so far.
[15:05:12] GORANI: Sure, we'll see you in a few minutes there, Julia, because we're starting to see these arrivals that Winfield House. One of
our guests a few minutes ago said essentially this is the most beautiful residence in all of London with a garden the size of several football
fields, that really this is going to be a lavish affair, not on the scale of a Royal Banquet at Buckingham Palace, obviously, but they're really
going to be putting on, rolling out the red carpet for their guests -- key politicians, business leaders, VIPs -- both British and American are going
to be invited to this event, to this reciprocal dinner as it's called to thank the Queen, Her Majesty, the Queen for the Banquet.
Prince Charles is representing, by the way, the Royal Family there with the Duchess of Cornwall. Bianca Nobilo joins me once again there from Winfield
-- from actually, in fact, outside 10 Downing Street, but we do have a live feed from Winfield House. Who is expected to be on the guest list tonight?
We saw Prince Charles that was expected, but who else?
NOBILO: The guest list is being kept pretty tight for this event. We do know that Prince Charles and Camilla will be in attendance tonight. Where
all the focus has been today is on these other meetings which the President has held at Winfield House, which came as something of a surprise.
I was told by sources earlier in the week that there was so-called executive time for the President to use his discretion this afternoon, and
he did. So he chose to meet with Nigel Farage, the man who is synonymous with the Brexit project, so called Mr. Brexit and they've had a bond that's
gone back a year or two.
In fact, President Trump actually invited Nigel Farage onto the stage in one of his campaign events back in 2016 in America. Nigel Farage said that
that was a good meeting that Trump was in -- was on good form that he believed in Brexit. So that meeting happened.
And then the President also met with two -- I don't think it would be unkind to say -- very peripheral figures in British politics. That would
be Iain Duncan Smith, the former leader of the Conservative Party, and Owen Paterson, two Brexiteers, you wouldn't necessarily expect that the
President would choose to meet with, they also visited him at Winfield House.
Now, we understand that an invitation was extended to Boris Johnson to meet with the President, but he declined that for this evening, because he wants
to focus on a campaign event because this visit has happened and he is in the British media being intertwined with the Tory leadership contest, which
is happening, even though it doesn't officially start until next week, it is already underway.
And Boris Johnson, who his sometimes referred to in the media as the British Trump, even though that's somewhat of an oversimplification, is
considered to be the front runner in that contest -- Hala.
GORANI: All right, Bianca. We'll go back to Winfield House and to you as well, once we see more arrivals this evening. I want to bring in David
Sim. He is a lecturer at University College London in U.S. History. Thanks for joining us. So special relationship, we heard that term a lot.
Where does it originate?
DAVID SIM, HISTORIAN, UNIVERSITY COLLEGE LONDON: Well, the term itself originates in 1946. Churchill coins it in a speech that he gives after the
Second World War to characterize this close relationship that of course, has won the Second World War, but it has deeper roots.
I mean, this is really a late 19th Century phenomenon. In the late 19th century, liberal elites in both the United States and Britain feel
themselves confronting issues of immigration, of industrialization, of urbanization, and in this period, they feel a sense of shared identity.
They struggled with the shared problems of modernity, but it's really at that point we're talking about here, the Age of Gladstone when this
rhetoric first begins to emerge.
GORANI: So it has roots that, as you say, are much deeper. And these are themes that are current themes today. Anxieties about immigration, and
whether or not shared, because we heard the Prime Minister and the President both talk about, quote, "shared values and history," right?
SIM: I mean, I guess one of the primary differences here is that in this period in the late 19th Century, both Britain and the United States are
outward facing. They are the engines of globalization.
What we're seeing this time is a reaction to globalization, both in Brexit --
GORANI: A retreat.
SIM: Absolutely. So in terms of the Brexit vote, and in terms of the Trump presidency, we're seeing a critique of globalization and the
entrenchment of this relationship, which is no longer as outward looking and rather more insular now protecting these nations from globalized
GORANI: Well, where once globalization benefited the countries, I guess, here they have, at least within their countries, groups of people who
believe globalization is a threat.
SIM: Yes, yes, absolutely. And those are two groups that are in the ascendant, both in the United States and in Britain.
GORANI: Now, how will history remember this meeting -- this State Visit -- because there's been so much criticism directed at President Trump because
of his rhetoric, because of how he is demonized in the eyes of some Muslims and immigrants and he has said things about women that were unsavory, et
cetera and those who criticize Donald Trump and dislike him, some of them sometimes intensely don't believe he deserved a State Visit.
[15:10:15] SIM: No, of course. I think one of the kind of interesting paradoxes about this visit is that you're seeing a separation of Trump from
the United States.
But actually, the Trump visit has given voice to a pro-American sentiment in its expression of anti-Trumpism. So British audiences who are obviously
very anti-Trump have differentiated between the two and you're seeing a kind of sympathy with Americans who are also enduring the Trump presidency,
just as we are enduring the Trump presidency.
GORANI: Right. Because here when you say obviously, he's not popular, you base that on what? On polling?
SIM: On opinion polls, on news coverage in general. I mean, he is really a divisive figure and an unpopular figure.
GORANI: But also, when you're saying this similar anti-immigrant and nationalistic forces, there's ideological kinship. There's not -- it's not
an accident that the President today welcomed Nigel Farage, for instance, at Winfield House.
SIM: No, of course.
GORANI: Iain Duncan Smith who is a hard Brexiteer as well, former leader of the Conservative Party, he wanted to meet with Boris Johnson. Instead,
they had a 20 minute phone call, because Boris Johnson is involved in a campaign event for the leadership of the party. So he is reaching out and
wanting a relationship with those particular men.
SIM: Yes. And I mean, let's give him credit here. I mean, he is reading the wave of the future. I mean, one of the ironies of this trip is that it
couldn't be worse -- worse times. Donald Trump is negotiating with a Prime Minister who has no political authority. He knows that, she knows that.
And in the sense, you can see the logic of meeting with this next generation of Tory leaders, people who six months from now, he is going to
have to come back and deal with if that trade deal is going to get off the ground.
GORANI: It could have been even more awkward, you know how?
SIM: How is that?
GORANI: If the meaningful vote for had gone ahead on June 3rd and she'd lost.
SIM: Meaningful vote 72 --
GORANI: But that didn't happen.
SIM: Thank goodness. Thank you.
GORANI: So there was that off the table. David, maybe it's a really -- I don't know for the Prime Minister not having to worry about that. David
Sim, thanks very much.
Julia, we will have much more a little bit later on this visit. Back to you for now in New York.
CHATTERLEY: Thank you very much for that and we look forward to it. All right, we're going to take a break here on the QUEST MEANS BUSINESS, but
for now, President Trump may be playing the gracious guest over in Britain, but back home, he is threatening to cause new rifts with America's
neighbors warning Mexico once again that tariffs are coming.
And antitrust laws used for railroads back in the 1800s are the same laws that police Silicon Valley today in the United States. Congress though
looking to change that. All that after this. Stay with us.
[15:15:19] CHATTERLEY: Welcome back to the show. Amid all the pomp and pageantry of his State Visit to Great Britain, President Trump couldn't
resist the opportunity of sending a warning to his neighbors on the other side of the Atlantic.
Speaking alongside Theresa May, President Trump warned Mexico it will face tariffs by next week, and they'll keep going higher until it helps curb the
flow of migrants across the U.S. border.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Mexico shouldn't allow millions of people to try and enter our country and they could stop it very
quickly, and I think they will.
And if they won't, we're going to put tariffs on and every month those terrorists go from 5 percent to 10 percent, to 15 percent, to 20 percent
and then to 25 percent. And what will happen then is all of those companies that have left our country and gone to Mexico are going to be
coming back to us and that's okay.
(END VIDEO CLIP)
CHATTERLEY: CNN senior White House correspondent Pam Brown joins us now from London. Great to have you with us, Pam. Can't help noticing the
difference once again between the message that the President was sending and what we're hearing from the Mexicans here with the Foreign Minister
saying there is 80 percent chance of reaching some kind of negotiated solution here. So what's going on?
PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Right. Yes, it was a bit of a dichotomy there when you look at the comparison. President Trump
at this joint press conference with Prime Minister May stood very firm on the tariffs on Mexico. It's a controversial policy.
Republicans on Capitol Hill have been trying to discourage this. They are against the President putting tariffs on Mexico, particularly for this
reason to stem the flow of migrants - undocumented migrants over the border. They don't think that this is the solution.
And it did not appear from what you heard from President Trump today that they are close to reaching this deal. He was asked by a reporter about
whether it was enough, whether what Mexico has done in the wake of that announcement in stemming the flow of undocumented migrants was enough. And
the President said absolutely not, that those tariffs will go into effect on June 10th and they will continue to escalate.
And he also made clear that Mexico will pay for it, a very different to and from what you're hearing from Mexico, more optimism on that side, that
something could be struck before the tariffs go into effect.
And what was interesting is on that moment, in particular, what you saw was vintage Trump. For the rest of the press conference, he really seemed sort
of jovial. He was complimentary of Prime Minister May, something that we hadn't seen in a while. He had actually been critical of her in the past
over her dealing with Brexit.
Today, though he said she deserves more credit, that perhaps she is a better negotiator than him. He was self-deprecating, which is something we
rarely see from the President.
But when he came to Mexico, when he was asked about that, it was vintage Trump standing firm, saying, "No, those tariffs will still go into effect.
What Mexico has done to this point simply isn't enough."
CHATTERLEY: Yes, it's going to be fascinating to watch particularly when you've got key Republican senators here going, "This is the wrong thing to
be doing at this moment." And it's prejudicing NAFTA mark two. It's going to be interesting to see. Pamela Brown, thank you so much for that.
All right, despite the harsh trade warnings from President Trump, U.S. markets were soothed by Federal Reserve Chair Jay Powell speaking in
Chicago today. Powell said the Fed could step into steady the ship if Donald Trump's trade war begins to rock the U.S. economy. Listen in.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: I'd first like to say a word about recent developments involving trade negotiations and other matters.
We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic
outlook. And as always, we will act as appropriate to sustain the expansion with a strong labor market and inflation near our symmetric 2
(END VIDEO CLIP)
CHATTERLEY: Let me give you a look at the effect of those remarks. We've got the Dow up around 450 points, its best day in fact, since February.
The S&P 500 climbing some 1.9 percent towards its biggest one-day gain since January, and the NASDAQ spiked by more than 2 percent back out of
correction territory. So initially it was below 10 percent from the recent highs.
Paul La Monica with me to break it all down. Paul, I am mystified. I'm looking at the speech, "We will act as appropriate to sustain the
expansion." Markets are a party.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think, Julia, clearly the investment community is interpreting "act as appropriate" as code for we
will cut interest rates if the economy starts to backslide because of the effect of all these tariffs and the trade war that we are seeing.
It does seem like it is perhaps a bit of an overly ebullient reaction, but for the day at least, it is risk on type environment. Again, you look at
the only two stocks I checked before coming up here that were actually lower today, Verizon which is a classic, defensive yield play.
[15:20:10] CHATTERLEY: Yes.
LA MONICA: And Coca-Cola, boring consumer staples. So everything else is higher.
CHATTERLEY: So it's a risk-on day.
LA MONICA: Exactly.
CHATTERLEY: As we, as we call it. You know, it's interesting. I spoke to Mohamed El-Erian of Allianz this week and he said, "Look, the Fed needs to
indicate that they are willing to cut rates here, because otherwise, we're going to find ourselves in a situation where the market throws a tantrum
again," and perhaps we go back to the kind of sell off that we saw back in December. I mean, who is in charge here? Is it investors? Or is it the
LA MONICA: Unfortunately, you could argue that going back to the Bernanke years and then it continued with Janet Yellen, and now with Jerome Powell,
the market does seem to have the sway over the Federal Reserve, for better for worse.
When the market throws a temper tantrum, the market, the Fed seems to act as if there's no other way than to just placate and give the market what it
wants. As a parent of young children, I know that doesn't always work because they then take advantage of you, and that is what I think investors
are doing to the Fed right now.
CHATTERLEY: I guess we could make the point that we're only really taking back around as much as we've lost in the last couple of sessions, for
example. I mean, we saw the big tech sell off yesterday in particular.
So if you look at it in that kind of light, then perhaps it's only taking back a little bit of what we've lost him and we're still significantly off
the highs here, but still dangerous territory for the Federal Reserve.
LA MONICA: Yes, I think the key is when the Fed has its next meeting, and we see what those dot plots look like and what their economic projections
are, and what Jerome Powell says in the press conference, is he going to signal that, yes, my bad, so to speak, we shouldn't have raised rates in
December, we hear you loud and clear. Here comes the rate cut to take back the December rate hike.
But then we're going back on hold because hopefully, maybe politicians will get their act together and we'll have a trade deal and we won't need to cut
But that's going to be I think, very interesting. I'm not so sure the Fed wants to signal that it's going to aggressively cut rates when they're
already low. And the job market is still healthy, and we're not necessarily in recession territory yet. So that's going to be I think,
very interesting to see.
CHATTERLEY: Yes, another fine line to be walked by Jay Powell of the Federal Reserve. Paul La Monica, thank you so much for that.
All right, the pinch of the President's Trump's trade war is being felt across the United States. In Arizona, on the border with Mexico, the City
of Nogales imports nearly 3 million tons of Mexican produce a year. Now business leaders there say their livelihoods are at risk. Vanessa
Yurkevich has more.
VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT (voice over): This month, Jaime Chamberlin is expecting truckloads full of grapes from Mexico. But he
wasn't expecting to pay tariffs.
(BEGIN VIDEO CLIP)
JAIME CHAMBERLAIN, PRESIDENT, CHAMBERLAIN DISTRIBUTING: So 5 percent for now is absolutely horrible. Going to 10, 15 percent, 20 percent, I can't
even -- I can't even imagine.
(END VIDEO CLIP)
YURKEVICH (voice over): Chamberlain imports 100 percent of his fruits and vegetables from Mexico to his warehouse in Nogales, Arizona. If the
President's tariffs take effect next week --
(BEGIN VIDEO CLIP)
CHAMBERLAIN: We have red peppers coming out of Sinaloa.
(END VIDEO CLIP)
YURKEVICH (voice over): Chamberlain, who voted for Trump, will pay more to bring his produce across the border.
(BEGIN VIDEO CLIP)
CHAMBERLAIN: These are not good ideas and this is not the way I would do things. But this is the way the President is choosing to do things because
of the Congress that we have. You know, I'm not always going to be on the side of the President.
(END VIDEO CLIP)
YURKEVICH (voice over): The U.S. imports $26 billion of agricultural products from Mexico each year, and manufacturing dwarfs that.
(BEGIN VIDEO CLIP)
RICHARD RUBIN, PRESIDENT, JAVID LLC: We're shipping $450 million annually across the border. For my customers to pay an extra $100 million, I'm not
sure that they're going to stick around.
(END VIDEO CLIP)
YURKEVICH (voice over): Richard Rubin owns 26 factories in Mexico, importing materials for American companies which he says provides millions
of U.S. jobs.
(BEGIN VIDEO CLIP)
RUBIN: Mexico is our friend, right? Mexico deserves the respect and the dignity. It's not a business, it's a country. And this should be solved
(END VIDEO CLIP)
YURKEVICH (voice over): Guillermo Valencia brokers trade deals between U.S. and Mexican companies.
(BEGIN VIDEO CLIP)
GUILLERMO VALENCIA, PRESIDENT, VALENCIA INTERNATIONAL: We're throwing punches in the dark because we don't know what to expect. We know that we
have to take this President serious. Some people are saying he is just threatening. But we can't just assume he is just threatening.
(END VIDEO CLIP)
YURKEVICH (voice over): As the broker, Valencia ensures tariffs are paid. His company imports and exports products to Mexico.
(BEGIN VIDEO CLIP)
VALENCIA: This is a component for a major U.S. manufacturer that's producing electric cars.
YURKEVICH (on camera): So this could be in someone's back seat one day?
VALENCIA: Absolute -- it will be in someone's back seat one day. So if you haven't bought this car yet, there's going to be an increased cost to
YURKEVICH: Because of the tariffs?
VALENCIA: Because of the tariffs, right. And it could be up to 25 percent. And it could be more because if this product went back and
through a couple of times, depending on the amount of times, it could be 50, 70 percent. Tariff upon tariff, upon tariff, upon tariff.
[15:25:09] CHATTERLEY: CNN's Vanessa Yurkevich reporting there for us. Now, the Trump administration imposed major new restrictions on travel to
Cuba, saying Cuba plays a destabilizing force in the Western hemisphere, and a stark reversal of Obama era policy. The White House will ban most
educational and recreational travel to the island.
U.S. Airlines tells CNN they will review the order and take the appropriate measures to comply. CNN's Patrick Oppmann has more.
PATRICK OPPMANN, CNN CORRESPONDENT: If you are a U.S. citizen, and you were hoping to go to Cuba and hadn't planned your trip just yet, you may
have waited too long. The Trump administration on Tuesday rolled back much of the Obama-era opening with the communist-run island. It is going to be
much more difficult for U.S. citizens to travel to Cuba now.
The Trump administration said that essentially what they've done is made it illegal to go to Cuba as a tourist, what they called veiled tourism that
even though tourism is restricted, travel is restricted to Cuba.
Now one category of people who travel will no longer be allowed. These were the organized group tours, also how people came to Cuba on U.S. cruise
ships, and that will no longer be prohibited. It's not clear if cruises will be prohibited as well. But it's going to be a lot tougher for
Americans to go to the island.
It's essentially rolling back the changes that were made under President Obama and the Trump administration said they're doing this because of
Cuba's assistance to Venezuela. Cuba is backing to the Maduro regime and the Cubans is quote, "a communist foothold in the region."
This will obviously have an impact on the Cuban government. Hotels were full with Americans. Americans were the second largest category travelers
after Canadians, so this will hurt the Cuban government.
It's always going to hurt U.S. cruises, U.S. airlines because you have less people coming from the U.S. and Cuban entrepreneurs. These are people who
have opened up restaurants and Airbnb's and apartment rentals to meet this increased demand of all these Americans coming and there'll be many, many
less Americans coming because even though while some categories of travel will still be allowed, this is really how many, if not most Americans came
the island, and it will now be prohibited.
President Trump says that he is taking a very different tact towards Cuba, much more sanctions and the Cuban economy which is already suffering will
likely suffer even more. Patrick Oppmann, CNN, Mexico City.
CHATTERLEY: All right, we're going to take a quick break here again, on QUEST MEANS BUSINESS, but still to come, we'll be back live in London where
President Trump is mixing business with pleasure, hinting at least about what a post Brexit trade deal with the U.K. might just look like. Stay
with us. We're back in two.
[15:30:00] JULIA CHATTERLEY, HOST, QUEST MEANS BUSINESS: Hello, I'm Julia Chatterley, we'll be back to London and Hala in just a moment for the
latest on President Trump's state visit to the U.K. First, though, let me give you the headlines on CNN at this hour.
Marking the 30th anniversary of the Tiananmen Square massacre when hundreds, possibly thousands of pro-democracy protestors were killed by
security forces in Beijing. This candlelight vigil took place Tuesday in Hong Kong. Mainland China forbids any commemorations.
Sources are disputing last week's report the top North Korean diplomat was executed. The sources confirmed that Kim Chol was blamed for failure of
February's U.S.-North Korea summit, that they say that instead of being executed, he was forced to sit in his office writing statements of self-
Sudan's military leaders are drawing international criticism after Monday's crackdown on pro-democracy demonstrators. At least 35 people were killed.
Sudan's transitional military council is promising national elections within nine months, but critics vow to continue their opposition.
The U.S. is announcing major new restrictions on U.S. citizens traveling to Cuba. The new policy blocks organized tour groups and U.S. cruise ships
from stopping in the island. U.S. Treasury Secretary Steve Mnuchin says the move is a result of Cuba playing a quote, "destabilizing role in the
western hemisphere". And those are the headlines this hour. Now give you back to Hala in London. Hala?
HALA GORANI, HOST, GORANI TONIGHT: All right, Julia, thanks, see you in a little bit. The Trumps are playing host right now to the British royal
family. They're holding a dinner at the U.S. ambassador's residence in London to cap the second day of President Trump's state visit here.
The queen is represented by her son, the Prince of Wales and the Duchess of Cornwall. There you see them there in the footage just moments ago being
welcomed by the U.S. President and Melania Trump. Now, for those of you interested in this sort of thing, would like to know the menu.
I understand that it opens with fresh tomatoes and burrata cheese before a grilled filet of beef. It's been a whirlwind day as the morning agenda
turned from pomp to policy. First, it was a business breakfast at St. James' Palace before a press conference with the outgoing Prime Minister
The Trumps were then given a tour of the Churchill war rooms, that is the underground bunker from where Britain directed its war efforts against
Nazi, Germany. Trans-Atlantic Trade was top of the agenda on Mr. Trump's second day in Britain. The president spent the morning at a breakfast with
a U.K. business leaders.
And hours later, Mr. Trump repeated his calls for a trade agreement in a press conference. The president said a post-Brexit deal would have quote,
"phenomenal potential", and claimed it could see U.S. trade with Britain double or even triple. Hadas Gold is in London, and Hadas, maybe you've
seen the "Evening Standard", this is the front page, let's do this deal. This is what the U.K. press has picked up on at least so far at the end of
day two of the state visit.
HADAS GOLD, CNN BUSINESS CORRESPONDENT: Yes, Hala, I don't think that you can look at all of the pomp and circumstance and the gracious way with
which the U.K. welcomed President Trump without thinking in the back of your mind about that free-trade deal that the U.K. will definitely need
and want after Brexit because they will be in a much different negotiating position they are currently as part of the EU.
Now, President Trump says that's a good thing for the U.K. and a good thing for the United States that they will negotiate an even better deal. And as
you noted, he claims this would increase trade by even two to three times which could potentially -- I guess an inward trade is now just around 200 -
- just over $200 billion a year, would really raise up the amount of trade between the U.S. and the U.K.
But the U.K. will be in an interesting position post-Brexit because the U.S. has already noted that it will want certain concessions in a potential
free-trade deal with the United Kingdom.
[15:35:00] This includes everything from agricultural tariffs and changing the standards of the food that the U.K. accepts, that's where this whole
idea of chlorinated chicken comes in here. But the EU has different standards than the U.S., and the U.K. could find itself in a precarious
position trying to balance the U.S. won mandated concessions with the EU.
Now, the U.S., while it is the largest single country trading partner for the U.K., the EU as a nation -- as a collection of nations, more than 20
nations together, actually accounts for even more than the U.S. does. But still, the U.S. will be a very important trading partner because of the
post-Brexit landscape where the U.K. will likely lose some of its trade with the EU and hopefully, it's hoping to make it up with the U.S. trade.
But for also Donald Trump made the statement today during that press conference about the National Healthcare System and opening up that as part
of the trade deal, potentially letting U.S. companies be involved in the NHS by their selling of pharmaceuticals, even allowing U.S. companies to
bid on contracts from the NHS, and that got quite a bit of blow-back here in the U.K. including from some candidates for Prime Minister like Matt
Hancock saying that it's not going to be on the table.
But of course, all of this is dependent on Brexit and when and how that happens in October is the current deadline. But we still don't know what
an actual Brexit deal will look like, Hala.
GORANI: Right, indeed whether it will happen on October 31st, whether there will be an election before that or after that. It's also uncertain
going forward, thanks very much Hadas Gold.
It's what the president might demand from the U.K. in return for striking a trade deal that has many people here worried as Hadas was saying there.
Let's go to Kate Andrews; Associate Director at the Institute of Economic Affairs. The president is saying trade could increase two to three times.
But in order for any of that to happen, certain markets need to be opened by the U.K., perhaps lowering some of the food safety standards or the
agricultural standards that the U.K. has upheld and that most Britains are attached to in order to make that happen.
KATE ANDREWS, ASSOCIATE DIRECTOR, INSTITUTE OF ECONOMIC AFFAIRS: I think this is a political storm in a tea cup. The reality is that if the NHS
were put on the table by the USA, the U.K. could take it off the table during the negotiating process. The U.S. does not get to dictate all of
the terms of a free-trade deal.
It's a deal for a reason, both sides have to come together. Also American companies already can put in bids and indeed win bids for NHS contracts.
This isn't the breaking news that many people want to see it to be. The reality is that the NHS is a real sacred cow in the U.K. to call for any
kind of change or any kind of reform as a big no, especially for politicians.
So I think that this is being built up in many ways, almost as a signaling point about how much one might care for the NHS. It seems deeply unlikely
that the U.K. would negotiate --
GORANI: Yes --
ANDREWS: On the NHS. Agriculture seems more likely because the evidence around things like chlorinated chicken actually suggests that it can reduce
the amount of food poisoning, but this is all going to be part of that negotiation. Nothing is said and done until both countries sign on the
GORANI: Right, but then you have the U.K. in a much more vulnerable position post-Brexit. It might lose some of its trade with the EU,
certainly the weaker partner here in any trade negotiation with the U.S. as opposed to when it's part of an economic bloc like the European Union.
ANDREWS: So certainly the case that when any country or bloc is doing a trade deal with the U.S., it can be a difficult circumstance. U.S. is a
big power from that perspective. But there are some benefits for Britain being out on its own. For example, it can decide what its own red lines
are. If the EU is doing a free-trade deal with the U.S., which it is attempting to do at the moment, all the countries have to sign up to.
But the U.K. is in a much better position to do something faster. Now, you make a very good point, whatever the U.K. decides with the U.S., they then
in turn have to turn to the EU and say, are you comfortable if any U.S. products potentially get over the border?
It's not going to be a walk in the park. But it's certainly the case that Britain out on its own can probably draw up deals faster and just stick to
its own red lines rather than having to take into account the red lines of the other 27 countries in the European Union.
GORANI: Sure -- oh, it gives you more flexibility, whether it gives you more negotiating powers and other questions. And by the way, Kate, I want
to tell you that we have some news about who will be attending this reciprocal dinner. So we understand that the first lady will be sitting
next to the Duchess of Cornwall, Camilla, the spouse of Prince Charles and Mr. May, unsurprising seating arrangement there.
President Trump is sitting between the Prince of Wales and the Prime Minister as well. We understand Secretary Mnuchin, the Treasury Secretary
and the Secretary of State Mike Pompeo, Ambassador Bolden who is a national security adviser, Sarah Sanders who is the press secretary, Mick Mulvaney,
Tony Blair is part of this, and then --
ANDREWS: Yes --
GORANI: Obviously other assembled VIPs. Tony Blair, I wonder, what's your -- there were rumblings that he would be attending this dinner. What do
you make of that?
[15:40:00] ANDREWS: Well, they've brought in all of the big political hitters. Tony Blair is a very interesting character in British politics at
the moment, because obviously, he represented and oversaw such a successful time for the Labor Party in U.K. politics.
But the Labor Party has very much shifted to the left. Many in the party now denounce many aspects of Tony Blair. But of course, when Tony Blair
was Prime Minister, he also helped facilitate that very special relationship between the U.S. and the U.K., and you might think if the
Prime Minister attended something similar in the U.S. that former presidents could be invited.
It doesn't strike me as that odd. But my goodness, what -- to be a fly on the wall and to be able to talk about what politics was like back in the
'90s and early 2000s --
GORANI: Yes --
ANDREWS: Compared to what it's like now, the rhetoric, everything has so dramatically changed.
GORANI: Sure, Kate Andrews, thanks very much, really appreciate it. Julia, I have actually a more detailed version of this menu. So heritage
tomatoes with fresh burrata and garden basil which is basically mozzarella to me, grilled filet of beef, pommes anna, watercress puree, you have some
carrots to go with that. And then for dessert, summer berries, home-made vanilla ice cream and Muscovado Sugar -- I'm not sure how to pronounce that
one? Trille(ph), yes, it's a French word, isn't it? Yes.
So, what do you make of that, Julia?
CHATTERLEY: Where's the chocolate?
GORANI: It's such a pretty basic menu, I mean, so was the banquet menu, I don't know where the chocolate is. What is the chocolate?
CHATTERLEY: Yes --
GORANI: I don't think they had chocolate yesterday either.
CHATTERLEY: No, I know, I'm like skip to the dessert and work backwards. Where's the chocolate? It sounds very nice --
GORANI: Exactly --
CHATTERLEY: You know, no indigestion in this meal.
GORANI: No, absolutely, simple and solid, I like that type of menu, nothing too complicated. Anyway, that's what we have for you for now,
Julia. We'll have a lot more on CNN a little bit later. But for now, back to you in New York.
CHATTERLEY: Thank you very much, and again, we'll look forward to that, certainly I like talking about food and the dresses of course as well.
Camilla and the first lady looking beautiful. All right, coming up on the show, Silicon Valley bashing is well and truly en vogue. Democrats,
Republicans, Americans and Europeans, they're all getting in on the regulatory reaction. The question is, will it have bite? We'll discuss.
[15:45:00] CHATTERLEY: Welcome back to the show. U.S. House Speaker Nancy Pelosi says the era of self-regulation is over for Silicon Valley.
Democrats have warned Amazon, Apple, Facebook and Google that the anti- trust investigation is coming. Representative David Cicilline is leading the charge. He says it's time for laws from the 1800s to finally be
(BEGIN VIDEO CLIP)
REP. DAVID CICILLINE (D-RI): These are statutes that were written mostly during the time of the railroad monopolies. Is a very different economy
today. So one of the things we're going to have to look at is do our anti- trust statutes today meet the needs of the 21st century economy? Is price the only relevant consideration?
I think that's one of the things we have to look at. But no one should think all of this is free. This is data which is being collected, used and
so this also preventing competitors from entering the marketplace which typically will drive down prices. So, the question about anti-competitive
conduct and what it means to the consumer is a real issue.
(END VIDEO CLIP)
CHATTERLEY: Attacking Silicon Valley is clearly popular these days. Donald Trump and the Republicans claim the likes of Facebook and Google
have a quote, "anti-conservative bias". The president has criticized Apple for manufacturing outside the United States and he says incorrectly accused
Amazon of abusing the U.S. Postal Service.
Democrats meanwhile slam social media companies for not doing enough to stop fake news. Now, they're launching this anti-trust investigation and
threatening new legislation to rein them in. At the same time, the Federal Trade Commission and the Department of Justice have struck a rare deal.
The FTC will be keeping an eye on the likes of Amazon and Facebook, while the Department of Justice, DOJ will be watching Apple and Google. Of
course, across the Atlantic, the U.S. has been a thorn in the side of Silicon Valley for years and it shows no sign of letting up.
Maureen Ohlhausen is the former commissioner at the FTC and she's now partner of Baker Botts anti-trust practice. Maureen, fantastic to chat you
again and to have you on QUEST MEANS BUSINESS once again. Is it true when you hear someone saying that the kind of laws that we're using right now
date back to the 1800s, that's what we're using to tackle Silicon Valley today. I mean, that's a travesty, surely.
MAUREEN OHLHAUSEN, FORMER COMMISSIONER, FEDERAL TRADE COMMISSION: Well, the laws are written very generally to stop any competitive conduct or
agreements. And there's been a hundred years of court interpretation and agency enforcement doctrine to update those laws to the modern day.
So, there's been major enforcement actions against companies like Microsoft, IBM before that. So the anti-trust laws have kept up, though, I
think there is a question about whether they're -- they need additional powers or changes to the current anti-trust laws.
CHATTERLEY: I mean, you made that point, the last time you were on the show, you said, look, the FTC can only act with the teeth or the bite that
Congress has given it right now. Do you think when you look at the noises that we're hearing from both the Democrats and the Republicans here,
that we could actually see the two sides come together and give more powers to regulators because surely otherwise we're not going to see real potent
progress here on greater regulation?
OHLHAUSEN: Well, I disagree that we necessarily need more regulation. I think the question is, is there any competitive conduct happening in the
markets today? Do the agencies have the right level of enforcement and the right tools to challenge it? And then if there's a decision that there's
anti-competitive conduct and somehow it can't be reached, I think at that point is where the discussion is necessary to say, do the anti-trust laws
need to do something different?
But I don't think we're at that point yet. I think we're still trying to figure out those first two questions.
CHATTERLEY: Do you see anti-competitive behavior when you look at these big companies, the Amazons, the Apples, the Facebooks, the Googles?
OHLHAUSEN: Well, not necessarily because one of the things we need to have a clear handle on is what is actually anti-competitive. If you're
competing hard and you're offering consumers the best choices, the best options, you're bringing out new products, better prices, more convenience
and you end up winning the race, that's not illegal under American anti- trust law.
Ad I would be concerned if that was illegal. But on the other hand, if you have companies who are taking actions to keep competitors out of the
market, not by competing the hardest, but by engaging in some kind of exclusionary behavior that doesn't benefit consumers. That's where anti-
trust agencies should focus their attention.
CHATTERLEY: It's quite fascinating to me, because if I look at the approach the Europeans have taken, they've tackled Google, Alphabet, time
and time again, and they've pushed for this and they've actually fined them. And yet, the United States is in -- bit on the back foot on this and
hasn't. So is there a mismatch?
[15:50:00] You're saying actually that the Europeans are getting it wrong or actually is the United States -- to your point earlier on the show,
OHLHAUSEN: So there's a different law in Europe, it's called the abuse of dominance standard, whereas in the U.S., we are looking at whether there is
anti-competitive conduct. And they're slightly different standards.
I think one of the questions is whether there are negative impacts for consumers, not just competitors, but for consumers that the U.S. anti-trust
laws can't reach. And I think that's where the conversation should be focused.
CHATTERLEY: So, what we saw in the markets yesterday was $130 billion to $140 billion of market cap wiped out for some of these big tech players.
Even in our wildest imaginations, any kind of fine that's coming is going to be nowhere near that size quite frankly. And even if it does come,
there are those who look at this and say, look, it's going to take years.
Would you agree the action, affirmative action to do something about this could take years if it even comes?
OHLHAUSEN: If there is an enforcement action, if any of these changes are signals lead to any kind of investigations, then complaints, then
litigation through the courts, it will take several years. Now, Congress is considering some members of Congress, Mr. Cicilline in particular
mentioned this, they're considering whether the anti-trust laws should be changed.
I think that also would take several years. But anti-trust law is not the only factor that affects competition in the market, and even the hearings
in the house are focusing on this. Are there other regulations that might be dampening a competition that can be changed more quickly rather than
bringing a largest anti-trust enforcement action or trying to get the anti- trust laws themselves changed. Are there other types of regulation that need to be examined as well.
CHATTERLEY: Wow, this conversation just convinced me there's a huge buying opportunity in some of these names. Maureen, wow, thank you so much for
that. Maureen Ohlhausen speaking there --
OHLHAUSEN: My pleasure --
CHATTERLEY: Thank you for joining us. All right, we're going to take a quick break, when we return, Facebook investors clambering for change when
it comes to Mark Zuckerberg's control. The problem is they're not going to get it. We'll discuss, stay with us.
[15:55:00] CHATTERLEY: Facebook feeling pressure from its own shareholders according to a new regulatory filing. Sixty eight percent of
ordinary investors want Mark Zuckerberg ousted as chairman. That's up from 51 percent last year. The catch is, the man they want out holds 58 percent
of the voting power and overruled them at this year's meeting. CNN's Heather Kelly joins me now.
Heather, it was a symbolic shareholder revoke because no matter what they vote for here, it means absolutely nothing because Mark Zuckerberg holds
all the power.
HEATHER KELLY, CNN BUSINESS TECH EDITOR: Yes, and this isn't the first time they've had one of these symbolic votes. They seem to be doing it
kind of every year these days, knowing full well that as they're not named Zuckerberg, their votes ultimately won't matter enough to make a
CHATTERLEY: When will it ever make a difference? I'm just looking at what the votes were, 83 percent of outside shareholders as we call them, they
also backed a proposal to try and scrap this dual class structure in the shares that mean and allow Mark Zuckerberg to be so much more powerful.
I mean, even if that gets to a 100 percent, it's irrelevant, you either own the stock and you just get on with it or you sell the stock and move on.
KELLY: Yes, and I think that was basically the plan when it was set up like this seven years ago when Facebook went public. Mark and a number of
insiders, some co-founders, Sheryl Sandberg, they have these voting shares that are worth ten times as much as regular shareholders, and it's exactly
for these reasons. So when there are down times or controversies, they can kind of keep their leadership the same and carry on with minimal pressure
from the outside.
CHATTERLEY: You know, it's interesting and you make the great point, Heather that this was the case when they went public. They make this clear
to investors right from the get-go. This is the structure, like it or leave it --
KELLY: Yes --
CHATTERLEY: And we've seen other companies recently, Pinterest for example doing exactly the same thing. There's nothing wrong with this and they're
making it clear to shareholders. It's simply a choice thing.
KELLY: Yes, and Lyft also. So I think a number of the companies --
CHATTERLEY: Yes --
KELLY: That are choosing to IPO this year kind of have that decision to make. Are they going to go the Facebook route, keep more control and it
seems to kind of have minimal pushback --
CHATTERLEY: Heather, I'm just going to interrupt you actually because I do want to get to London -- apologies for this, but we are getting some live
pictures from inside the dinner that President Trump is hosting for the royal family in London. I just want to bring in Hala Gorani as we listen
in and see if we can hear anything that's going on.
I can see a smiling President Trump there, sitting next to Prince Charles, of course, as we were expecting. And Hala, you were saying this earlier
that the seating arrangement here obviously very interesting as well.
GORANI: Certainly, I mean, it's unsurprising there because this is a reciprocal dinner and Prince Charles is representing the queen at this
dinner, he would be seated to the right of Melania Trump, the first lady. I'm seeing -- catching a glimpse there of Ivanka Trump at the next table,
Theresa May seated to the left of the U.S. president.
We're seeing Prince Charles as you mentioned as well. There's Melania Trump to her left, is the spouse, Mr. May, who is obviously the husband of
the outgoing Prime Minister Theresa May. And there you have kind of an assembled group of VIPs from the business world, from the political world.
I also saw Jeremy Hunt who's the Foreign Secretary and who is a man who was praised by the president today during that news conference in London. He
is one of the leading contenders for the leadership of the Conservative Party and a hopeful in terms of becoming the next Prime Minister alongside
Boris Johnson who is the front-runner.
So everybody seemed in a relaxed mood and people have remarked that the president of the United States himself seemed quite relaxed over the last
several days. And that's our first glimpse of what's going on inside Winfield House for this reciprocal dinner that is going on as we speak,
CHATTERLEY: Yes, it was fascinating to see, and I agree with your point, everything that I watched today, a very comfortable, relatively comfortable
president of the United States and Theresa May, I'd argue too. I mean, quite nice for her to be able to do this and not have to worry about the
implications afterwards and negotiating any broader trade deal as well.
We'll continue to watch the developments if we get any further live --
GORANI: Yes --
CHATTERLEY: Pictures on CNN, we will bring them to you. But I just want to give you a look right now at the last few minutes of trade on Wall
Street. We got the Dow up some 514 points right now, it looks like it's going to be the best day for the Dow since February as we were discussing
earlier. The S&P climbing around 1.9 percent, the biggest one day gain since January if indeed we manage to close at that level.
The Nasdaq up over 2.6 percent as you can see out of correction territory as a result of the rally. Only two stocks are keeping the Dow from going
30 for 30 in the green. As Paul La Monica mentioned, Coca-Cola and Verizon are down. Two of the consumer staples, Nike the leader up more than 5
percent, Apple also jumping 3.5 percent.
And that is the closing bell this Wednesday. Of course, you can see the caucus there, Skechers, in fact, ringing the closing bell this evening.