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Amanpour
Interview with German Parliament Member Norbert Rottgen; Interview with "The Haves and the Have-Yachts" Author Evan Osnos; Interview with Flexport Founder and CEO Ryan Petersen. Aired 1-2p ET
Aired June 05, 2025 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[13:00:00]
BIANNA GOLODRYGA, CNN ANCHOR: Hello, everyone, and welcome to "Amanpour." Here's what's coming up.
Chancellor Merz meets Trump at a time of deep tension between Europe and the U.S. German lawmaker, Norbert Bruton joins me from Berlin.
And Trump brings back a travel ban putting citizens of 12 countries on the do not enter list. We'll get the details from the White House.
Then "The Haves and the Have-Yachts." Author Evan Osnos joins me with his deep dive into America's super rich.
Plus, tracking the impact of Trump's tariffs. Ryan Petersen, founder of Flexport, tells Walter Isaacson what changes he's seeing in the global
supply chain.
Welcome to the program everyone. I'm Bianna Golodryga in New York, sitting in for Christiane Amanpour.
It's become a rite of passage for world leaders, the Oval Office meeting with President Trump. Today it was the turn of the relatively new
chancellor of Germany, Friedrich Merz.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: Well, first of all, I'm glad to meet, because I've been dealing with the chancellor and he's a very good man to
deal with. He's difficult, I would say. Can I say that? It's a positive.
FRIEDRICH MERZ, GERMANY CHANCELLOR: Go ahead.
TRUMP: You wouldn't want me to say you're easy, right?
MERZ: No.
TRUMP: Yes. He's a very great representative of Germany. I think all we want is just going to have a good relationship.
(END VIDEO CLIP)
GOLODRYGA: But there are areas of serious tension. Germany is a focal point for much of Trump's ire towards Europe, and a key priority will be to
stave off looming tariffs.
Also high on the agenda is Ukraine. Berlin is a strong supporter of Kyiv and to this Friedrich Merz is also facing a White House that openly backed
his far-right rivals, the AfD, in Germany's recent elections. Infamously Vice President J. D. Vance came to the Munich Security Conference in
February and condemned the German political establishment for excluding the AfD and for what he regarded as a lack of free speech.
Joining me now from Berlin is a member of the German Parliament for Merz's CDU Party, Norbert Rottgen. Mr. Rottgen, thank you so much for taking the
time. So, a lot of nervousness now for world leaders, both friend and perhaps those with icier relationship with the United States and President
Trump given the outcomes that we have seen of some of the most recent Oval Office exchanges, what did you make of todays?
NORBERT ROTTGEN, GERMAN PARLIAMENT MEMBER: This -- so, I admit everybody was on the tender hooks regarding this meeting. And now, everybody can say
this was a really good meeting. And I would say particularly the atmosphere, it was a really positive atmosphere. It was a distinct
atmosphere of friendliness and friendship. And I would say for both sides, perhaps particularly for the president, but also for Chancellor Merz,
personal relationships matter. And I would say this was a great start of a personal relationship, which will become important for the state-to-state
relationship and our political partnership, which has become so important and will remain important in the future.
GOLODRYGA: It was obvious that there was mutual respect and admiration between these two men. And notable, because while they had spoken on the
phone, they don't have a history with each other, like other European leaders do have with President Trump. What were some of the top agenda
items for the chancellor going into this meeting, and at least from what we saw before cameras? Do you think he made a point to address them all?
ROTTGEN: No, I think he particularly addressed the most important and pressing issue and challenge we are dealing with, we think, together. And
this is the fact that the land war of past centuries has returned to Europe, the war of Russia against Ukraine, and it is our determination and
it's our obligation that we together make this war a failure in order to ban again war from Europe, and he addressed that. And the chancellor was
very clear in his assessment, who is responsible for this war, about the brutality and the illegality of this war.
[13:05:00]
And he made it in a clear, distinct way. And it was -- I would say this was very important and it contributed to the political substance of this
conversation. It was not just small talk and having a good atmosphere, but he contributed politically particularly regarding this most important issue
and challenge.
GOLODRYGA: I was actually struck, I have to say, by how determined the chancellor was and putting blame solely on President Vladimir Putin for the
start of this war and for the fact that this war is now into its third year and how brutal the war is. We've had previous European allies and leaders
who have tried to use some of the language that president -- clearly, they share the chancellor's views, but they've come to the White House trying to
stay on point with President Trump's language, and that is, we just want to see this war come to an end.
It was notable that the chancellor went a bit further, especially given this analogy that President Trump made when asked about the state of the
war right now.
(BEGIN VIDEO CLIP)
TRUMP: Sometimes you see two young children fighting like crazy. They hate each other, and they're fighting in a park. And you try and pull them
apart. They don't want to be pulled. Sometimes you're better off letting them fight for a while and then pulling them apart. And I gave that analogy
to Putin yesterday. I said, President, maybe you're going to have to keep fighting and suffering a lot because both sides are suffering before you
pull them apart, before they're able to be pulled apart.
(END VIDEO CLIP)
GOLODRYGA: What did you make of that analogy by President Trump? Did you find it appropriate? And obviously, the response then from the chancellor
was clear, to put the blame solely on President Putin.
ROTTGEN: Yes, and I would say this made this meeting so convincing and important because the chancellor answered in a very friendly way, but he
did not shy away from being clear on substance. He put the blame clearly on Russia that is targeting civilian objectives and targets in Ukraine.
Russia, he accused rightly of kidnapping children, bringing them to Russia. And he was very clear on that, and he did it in a friendly, but a frank
way. And he -- this really was a very good style and it showed his personality and the political mission bringing into this partnership. And I
would say this frankness and clarity and friendliness was a very, very convincing mixture that chancellor brought in into this meeting.
GOLODRYGA: Yes, there was a moment where President Trump described the satellite images that he and I would imagine western leaders have been
privy to and just how gruesome they are on the battlefield. And it was the chancellor who quickly turned around and said, these are the tactics of
Vladimir Putin and Vladimir Putin only. Ukraine does not use their weaponry to target civilians. That was an interesting statement there and poignant
given that Germany and under this new chancellor is determined to continue to support Ukraine.
And on the issue of defense spending, he's also said that Germany is pledging to increase to 3.5 percent of GDP of their military spending.
Obviously, that going from 2 percent. We have the secretary of defense saying they ultimately need to get to -- all NATO allies need to get to 5
percent. Is that a realistic goal from Germany's perspective, given all the economic challenges the country's facing?
ROTTGEN: So, we are convinced and the entire new government is convinced that it is realistic because the threat we are facing from Russia, which
goes beyond Ukraine, is real and realistic and we have understood the new situation. We have understood that Germany and Europe have to become an
important and major European security power in order and while we want America to remain a European security power. And so, we have to massively
increase our defense spending because there is a massive fundamental threat.
[13:10:00]
Russia is re-arming and reorganizing its army far way beyond only waging war in Ukraine. And we are preparing for additional capacities of Russia to
even attack a NATO member state in only few years' time. And we have understood now the seriousness of this threat, and we are preparing to
defend it, we have to increase deterrence in order to avoid a widening of the war and the attacks coming from Russia.
GOLODRYGA: Is that an assessment, in your view, shared by President Trump? Especially when you hear him describe what he sees as a personal animosity
between President Putin and President Zelenskyy when he says, you know, they just needed -- may need to fight this out at the park like school
children do. And maybe the best remedy is to let them take it a bit further. That's not how the rest of the world or much of NATO allies see
where Putin is going here. Do you worry that perhaps President Trump is not on board with some of your concerns?
ROTTGEN: I would say frankness is a necessary element in this partnership, and there have been different views, and a major objective of European
diplomacy is to keep America as an important contributor, remaining important contributor to European security on board. And this presupposes
that the Europeans have to increase our credibility on contributing to European security.
Yes, we see different approaches, but we see also and can observe that more and more there is increasing evidence that Putin is definitely not
interested in anything that the American president wants to do him, which is to be ready for negotiation, to be ready for peace. Putin is ready for
war and he's determined to continue this war. He's determined to reestablish, again, a Russian empire in Europe, and I would say it's
increasing evidence also for the president that this is the real intention of Putin.
And so, I'm quite optimistic that more and more, the European and American approach vis-a-vis the war of Putin and Russia against Ukraine, that our
approaches are more and more aligning and that we are learning again that unity is the core strength -- has been the core strength and will be the
core strength of the West. So, I'm quite optimistic about the future.
GOLODRYGA: Where the two countries are not aligned, and I'm frankly surprised it didn't come up in the roughly 40-minute press conference is
the president's tariff policies right now. Because the United States has an impending 50 percent tariff on U.S. -- on E.U. imports, I should note. This
is clearly an issue that's going to be raised during their private conversations right now.
And I'm just wondering how can Chancellor Merz best negotiate against these tariffs? And if they are in fact imposed, how is Germany prepared to
respond?
ROTTGEN: Yes. Firstly, I have to say, and I have to admit, you are right. There is a disagreement, I would even describe as fundamental. They -- one
of the most beautiful words in the English language from the perspective of the president is tariffs. And we consider one of the most beautiful words
of the English language, free trade, freedom, economic freedom, because we are convinced that benefits the people, business, and the entire economy.
I would -- and the U.S. for Germany is the most important, the biggest trading partner outside the European Union. So, I would be cautious and I
would say that Germany has an interest to avoid any kind of spiral of tariffs and counter tariffs and retaliation and so on. So, we would -- I
would argue that we give this a bit of time. I would say we have strong economic and historic evidence for -- on our side, for our view.
And I would say increasingly it's becoming clear that the American, the Trump approach on tariffs is not working well for the American consumer,
for the American industry. The treasury market is responding to that. So, I would say over a shorter period of time, it'll turn out that this is not an
approach, the Trump approach on tariffs that is benefiting the American people and economy, and it is by that, and for that reason, I would say not
a sustainable path also politically.
[13:15:00]
GOLODRYGA: Well, it was interesting to hear Chancellor Merz say the last time he was at the White House was under a different president many decades
ago, President Ronald Reagan, who was an advocate, as you are, of free trade. We'll see where those negotiations go. Norbert Rottgen, thank you so
much for the time. We really appreciate it.
ROTTGEN: Thank you so much for having me.
GOLODRYGA: And stay with CNN. We'll be right back.
(COMMERCIAL BREAK)
GOLODRYGA: Well, President Trump is bringing back the travel ban on Wednesday. He signed a proclamation to bar nationals from several countries
from entering the U.S. citing security risks. The ban will fully restrict entry from 12 countries, including Afghanistan and Chad. Seven other
countries face partial restrictions.
Trump also on Wednesday ordered his attorney general and White House counsel to investigate former President Biden and his team, exploring
whether some of Biden's actions were legally invalid because they were done without his knowledge. The former president called that allegation
ridiculous and false.
Kevin Liptak is at the White House for us with more on this. And this is the skepticism now and the mounting, I guess, scandal created by this White
House about whether or not President Biden was of sound mind when he was in office and how often he used the so-called auto pin.
To quote President Trump during this press conference, he said, it's the scandal of I think the decades or of many, many years or the century,
however he described it. What is behind this investigation? And we heard from President Biden briefly respond to it. But how are other Republicans
responding?
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, and we should say that Biden's response is pretty clear that he said that he was in charge during
his presidency, that no one was making decisions for him. But it is clear that President Trump is very interested in injecting this directly into the
political bloodstream. And you saw him in the Oval Office essentially searching around those reporters, looking for someone to ask him a question
about the autopen, which is one part of this proclamation that he signed last evening.
The autopen is a machine that signs documents on behalf of the president or other politicians. And we should say that the Justice Department has said
that the autopen, a document approved by it carries the full weight of the law, carries the full weight of the president's signature. That was a
decision that they made back in 2005 during the George W. Bush administration.
But clearly, President Trump is very interested in fanning what is essentially a conspiracy theory that aids to President Biden because he was
not of sound mind, were making decisions for him and were signing documents on his behalf using this machine.
Now, we should say, you know, certainly documents were probably signed during the Biden administration using an autopen, but there's no evidence
that President Biden wasn't aware of what they're doing. What the proclamation that President Trump signed this week does, his orders, his
Justice Department, his attorney general and the White House Counsel's office to investigate whether, for example, pardons or commutations were
done without the president's knowledge.
[13:20:00]
It also directs those entities to investigate whether there were people around President Biden who conspired to shield from the public, the
president's condition. And of course, we do know President Biden deteriorated in the final years of his presidency. He aged. We saw that on
full display in the debate with Donald Trump that eventually led him to dropping out of the race.
But the Biden advisers and President Biden himself have said that there was no cover up, that there was no conspiracy to conceal what the president was
doing and the president's condition there in the final months and years of his presidency.
GOLODRYGA: Yes. And when asked if there were specific proclamations or documents that he's aware of or has evidence of that President Biden signed
without being of sound bind, I don't think he had an answer for that question. He just called this a huge, huge scandal.
The question now about the president's executive orders in this travel ban. We saw a similar travel ban put in place with an executive order during
Trump's first days in his first turn. That was quickly overturned by the courts. What's different this time, Kevin?
LIPTAK: Yes. And I think it's clear that Trump's advisers have learned from that experience. You'll remember he put it into place very early in
his first term. It created enormous amount of chaos and confusion, and it was almost immediately challenged in courts. Eventually, his advisers went
through multiple different versions. Finally, a third version of that original travel ban was upheld by the Supreme Court, in part because they
sort of strengthened the justification behind their selection of the countries who were targeted, saying that these countries weren't sharing
enough information with the U.S. about people who are coming into the United States, which is the same justification that they're using this time
around.
And when you talk to legal experts, they do say that the Supreme Court's eventual decision in 2018 to uphold that third version of the travel ban
will make it harder for challengers to come to courts this time around. The White House and President Trump saying that they have selected this list of
12 countries because they haven't received assurances that there is proper vetting in place, that they don't feel as if these countries have a good
enough idea of who is coming to the United States.
There are certain carve outs to this, I think most notably for athletes coming for the World Cup and for the Olympics, which will be occurring in
the United States over the next couple of years. But I think it's evident that even if this travel ban does resemble, in a lot of ways, what the
president did his first time around, that the president and his team are trying to show their work in a way that will be upheld in the court.
So, for example, the president on his first day in office signed this executive order directing the secretary of state, the Justice Department,
the Department of Homeland Security to go through and look at these countries and come up with a list of countries that didn't provide the
proper amount of vetting. That amount of work that went in ahead of time I think was for a legal reason. And I think we'll make it harder for this to
be challenged in court going forward.
GOLODRYGA: But we can expect that it will be challenged. We'll see how things result there. Kevin Liptak, thank you so much.
Well, our next guest is perfectly placed to discuss all of this and more, including the very public breakup it appears between President Trump and
Elon Musk. A lot to discuss with Evan Osnos, previously the author of the biography of President Biden. His new book is a deep dive into America's
super rich, called "The Haves and Have-Yachts." He joins me from New York.
A lot to get to. You're the perfect guest, given your extensive background in multiple areas here. Let's start with this long-awaited conversation
between President Trump and President Xi finally taking place. It is notable that the Chinese embassy made a point to say that this call came at
President Trump's request. They've been very public about their frustration about the lack of a call thus far. And this comes as tensions between these
two countries as it relates to the tariff freeze, the tariff policies between the United States and China have really ratcheted up over the last
few days.
The president saying that that China has walked away from some of the commitments they made, that led to that pause. The president saying that
this call resulted in a very positive conclusion for both countries as student visas appear to be reinstated. When asked today in the Oval Office,
he said he loves Chinese students and welcomes them now. He said that these talks would occur soon between their economic teams, and that President Xi
and President Trump both invited each other to their own respective countries for a state visit. What do you make of all of this, Evan?
[13:25:00]
EVAN OSNOS, AUTHOR, "THE HAVES AND THE HAVE-YACHTS": Well, this is the first warm indicator of any progress in the relationship in a very long
time. I mean, for broader context, Bianna, as you know, the U.S.-China relationship has sunk really to its lowest point, I think, in half a
century since the U.S. and China began talking when Henry Kissinger went over there, it's now at the point where, as the Chinese embassy statement
indicated, they were waiting this out. They were waiting until the Trump administration, which after all introduced the tariffs that precipitated
this back-and-forth war. They were waiting for Trump to say, please come and talk. Please, let's get on the phone.
And look, there was an awkward moment. You'll remember a few weeks ago when the administration here had said that they were in talks with the Chinese.
The Chinese said, no, actually, there were no talks going on at that point. I think this is progress and it's worth noting the fact that there is going
to be trouble ahead, even though they are at the beginning of a conversation, the underlying facts remain what they are, which is to say
that the United States is hoping and expecting that China will make concessions.
But China's belief is that it has a fundamental strategic competition with the United States that goes beyond trade, that goes beyond these issues of
one product line or another. And they are not going to make casual concessions that they think would tip the scales on a confrontation that
may last for decades to come.
GOLODRYGA: Let me move on to the autopen scandal, I guess as we will describe it. President Trump there really hoping to be asked about that,
what he calls the scandal of the century here. And as someone who has reported extensively on Joe Biden, it is fair to say that he did
deteriorate, both physically and mentally over the last few years. And a lot of this information coming to light now and new reporting. I'm
wondering, looking back, was there anything that you perhaps overlooked, didn't spend enough time following up on? And what do you make of this
autopen investigation?
OSNOS: You know, I think in every case of a presidency, there are things that aides will say afterwards that they don't say at the time. It's a
permanent frustration. But I think it was especially true in this case where there were, at the moment that Biden dropped out of the presidential
race, there were aides who came forward and said, as I think everybody now agrees, that it was a disaster for him to run for that second term.
I remember in my last interview with him, in January of 2024, when I said - - I came out of there thinking, this man is gambling with his legacy, and if he bets wrong, then history will judge him harshly. And I think what it
came down to in the end was a refusal on his part, ultimately to be able to accept the portrait that the world had of him that was in such contrast to
the portrait he had of himself.
And he had spent his life basically telling himself that he could prevail over the doubts, and he overread that lesson. And in fact, he couldn't
prevail over the doubts.
GOLODRYGA: Is there any reason though for you to believe that while he was in office -- because I think it's pretty much acceptable that he probably
was not in good physical or mental shape for perhaps another term, but while he was in office, because this is where this investigation is focused
on, that there were times when he wasn't of sound mind and yet, was using this autopen to sign certain proclamations or make executive decisions.
OSNOS: Well, it's fair to say an autopen has been a part of the presidency for a very long time. Donald Trump's administration uses it. Joe Biden's
administration uses it. Obama did and so on. It's a valid question to find out were there, in fact, any instances in which he was -- it was being used
improperly. But as you indicated earlier, there is so far nothing been offered or presented by the Trump administration that suggests that there
was.
Look, I think this is part of this broader question of what was Biden doing and not doing in the final months of his presidency? What you've heard his
aides say is, look, we were shocked to see him on the debate stage and the condition he was in June. And I'll tell you, as I said on that night, I was
shocked to see him in that condition too. He was not the same person that he had been elected a few years earlier. And I think, ultimately, the
American voters made that clear and that's why he was forced out of the race.
GOLODRYGA: Let's turn to the other big headline this week. And I think that what we've seen unfold today, just what appears to be a public breakup
between President Trump and Elon Musk over his signature tax and spending bill. President Trump had this to say following I think repeated now
multiple days where Elon Musk has publicly taken two x and trashed this bill. Here's how the president responded when asked.
[13:30:00]
(BEGIN VIDEO CLIP)
TRUMP: Elon and I had a great relationship. I don't know if it went well anymore. I was surprised because you were here, everybody in this room
practically was here as we had a wonderful sendoff. He said wonderful things about me. You couldn't have nicer. He said the best thing. He's worn
the hat. Trump was right about everything, and I am right about the great big beautiful bill.
(END VIDEO CLIP)
GOLODRYGA: Now, Elon Musk had been brought into the White House famously to cut fraud, waste, and abuse, and had prioritized what he viewed as
wasteful spending and even set a goal of cutting $1 to $2 trillion from the federal budget. When you look then at the figures from the Congressional
Budget Office about what this bill will do, will increase deficits by $2.4 trillion over the next 10 years, cut taxes by 3.7 trillion over the next
decade and reduce spending by 1.3 trillion over that same period of time, largely through cuts to healthcare and food stamps.
Now, those who are defending the president and are outraged by Elon Musk's behavior say that it's all coming from a place of personal greed and
priorities, and that it's because he took away the EV mandate. But what do you think about this public blowup and what does it say that the world's
richest man is worried about U.S. deficits?
OSNOS: You know, we are living in unprecedented times, Bianna, and I don't mean that in a funny or abstract way. I mean, it is literally true that the
world's richest man has never had an office in the White House complex or control over a department of government with the kind of control that Elon
Musk had, even at the heyday of large fortunes in American history, the Carnegies and the Rockefellers.
And in a sense, the inevitable perhaps breakdown in this relationship was born to the fact that these are two men who have lived much of their adult
lives now in total control of the world around them, able to prune the information they get, the agreement and disagreement they get. They're very
accustomed, frankly, to being surrounded by people who tell them that they're right all the time. And all of a sudden, Elon Musk found himself in
the position of being in Washington where you're subject to the constant scrutiny and inspection by the American public. And I don't think,
ultimately, that the public liked what it saw. You saw a 71 percent drop in Tesla's profits and out he went.
I think, in this case, this is probably going to be a conflict that carries on, because neither one of them has much of an -- at this point, has much
of an instinct to repair it. I think in Musk's case, he seems to have decided that part of his own image rehabilitation involves putting some
distance between himself and the president.
GOLODRYGA: Yes, and this gets to your books -- book, "The Haves and Have- Yachts." Clever title there. A field guide to the ultrarich. Currently, we should note, there are more than 3,000 billionaires in the world, and you
write nearly one-third of them are here in the United States. And in the years between President Trump's first term and now his second inauguration,
the wealth held by America's billionaires more than doubled.
We saw all of those tech billionaires sitting there at President Trump's inauguration, many of them publicly distancing themselves in the first
term. Now, they're invited guests with front row seats in the second term. This increase in billionaires in the country, is that viewed as a positive
or negative by the majority of Americans in your view?
OSNOS: It's a fascinating question. In fact, we have pretty good data on that. There was a poll done last year in which Americans were asked what
they think about it. 59 percent of Americans said they think that billionaires are making the country less fair. And yet, an identical share
of Americans also said they themselves want to be billionaires, which I think actually points to something the underlying phenomenon here, which is
Americans are ambivalent about big money. They're both cynical and aspirational, and it's sort of always been that way. That's part of the
American idea.
But what we've seen over the last few years is that people are getting much more frustrated. It feels to them as if you have to be part of this club.
The -- in some cases, almost literally. You have Don Jr., the president's son, starting a private club in Washington with an initiation fee of up to
half a million dollars called The Executive Branch.
More broadly, Bianna, there's been a trend over the last generation that the number of billionaires in the world, there were only about 66 in 1990.
Today, in the United States, there are more than 800. And you might say, well, maybe that's a sign of tremendous prosperity. There is, of course,
huge wealth creation going on, as that number suggests. And yet, today, only about half of American adults say that they could not afford a $1,000
emergency expense in that same period of time when billionaires have really proliferated in this country, the median hourly wage has only gone up 20
percent, and that's the puzzle.
[13:35:00]
How do you take this period of tremendous innovation, we have new technologies like A.I. and robotics that are going to transform the
workplace, transform the terrain of wealth, how do we make sure it's getting into the hands of the people ultimately who helped to build and
sustain those products?
GOLODRYGA: And then juxtapose that with some of the dispatches you wrote about, you saw firsthand about the enormous amount of wealth and how some
in America are spending their money. What was some of the craziest thing that you have seen?
OSNOS: Well, we are living through a period in which people are finding, as one CEO in Silicon Valley said to me, he had bought a yacht and he said
it's the best place to put excess capital. I mean, these are machines that are quite literally the length of a football field. They're the most
expensive objects that humans have ever figured out how to own.
In other cases, people who might have gone to a concert in the past and bought front row seats or maybe sat in the sky box, they can now afford to
pay to have that pop star come and play at their house. I went to a children's party in Chicago where they had the rapper, Flo Rida,
performing.
And look, we're just living in a period now that reminds us in some ways of the Gilded Age more than a century ago when you had this extraordinary
concentration of wealth. You had the advent of new technologies, but you had a growing sense among Americans, including some elite Americans who
said it may be that we're passing down a path here that is not sustainable, and we have to make sure that a little bit more of this is being
distributed fairly.
GOLODRYGA: Yes, there's an acronym I didn't know about until now with your book, LOA, that's super yacht owners comparing their length overall of
their oversized vessels. Talk about something that's really unrelatable.
Final few seconds here, where does Trump lie in this? He is someone who's obsessed with wealth, who respects it, who appreciates it, talks about the
gold fixtures in the Oval Office, but many of his supporters view him as a populist. And when he says that he's putting tariffs in place, it's because
he said he's doing it to bring some of these construction manufacturing jobs back to the United States. Where do you put him here?
OSNOS: You know, I have spent a lot of time reporting in places like West Virginia over the years, and I remember talking to a coal miner there
actually who voted for Donald Trump because Trump said, I'm going to bring the coal mines back. And look, the fact is that coal mines haven't come
back.
But that person, that coal miner said to me, actually, look, I am also bothered by the kind of gap of wealth that I see in this country. He had
heard about CEOs making 400 times what a regular worker makes, and he said, I don't know any man who is truly worth 400 other men. He said, I -- have
you? And in some ways, I think that's the crux of this question, is, how do -- what do we value? Are we going to measure our country by length overall,
or are we going to find perhaps richer and deeper ways of valuing work and worth?
GOLODRYGA: A fascinating question. Evan Osnos, it's always good to see you. Thank you so much.
OSNOS: You too. My pleasure.
GOLODRYGA: And we will be right back after this short break.
(COMMERCIAL BREAK)
GOLODRYGA: Now, to the ever-evolving saga of Trump -- of the Trump administration's tariff policies, which business leaders say are raising
hell across the country. Ryan Petersen is the founder and CEO of global logistics platform, Flexport. He joins Walter Isaacson to discuss how
companies are responding to the changing landscape and what consumers can expect.
[13:40:00]
(BEGIN VIDEOTAPE)
WALTER ISAACSON, CO-HOST, AMANPOUR AND CO.: Thank you, Bianna. And, Ryan Petersen, thank you for joining the show.
RYAN PETERSEN, FOUNDER AND CEO, FLEXPORT: Hey, it's great to be here. Thanks for having me on.
ISAACSON: You have this company called Flexport, which helps people ship goods across borders. Tell me what the, on again, off again, up and down
nature of terraces is doing.
PETERSEN: It's been really difficult. So, we help businesses ship their products from wherever they're made to wherever they're sold across
actually 147 countries. But our biggest market, biggest destination is the United States. And companies that are going through this kind of bullwhip
whiplash effect have been, on some level, somewhere between paralyzed and just kind of stuck, like they don't know how to plan anything.
And a lot of them are kind of -- they're -- there's a mix of emotions, anger, feeling like they're -- everything they built got taken away from
them overnight. And then kind of the next day it's relief and celebration. So, it's been a crazy couple of months ever since -- really since the
election.
ISAACSON: You probably got a higher visibility than almost anybody into exactly what's coming into and the United States. Tell me what you're
seeing in the numbers.
PETERSEN: Yes. I mean, the most interesting that we saw was after April 9th, which is the day that the tariffs took effect on China, and that was
when you had 145 percent duty. Immediately, that week, good -- the imports of goods from China, the bookings of new shipments coming from China went
down by 60 percent, and that's true within our own customer base at Flexport, but also true across the wider industry. So, you had a 60 percent
decline in ocean freight volumes for about five weeks. And then --
ISAACSON: And what does it look like now? Can you see what ocean freights are coming in?
PETERSEN: Yes. And so, that lasted about five weeks. And then, when the terrorists were relaxed and dialed back to 30 percent on China, you then
had this huge surge of bookings. And it was basically people making up for lost time that they had these goods. And now, they're worried that the
tariffs may go up again 90 days later. So, they want to get as much in as they can at the 30 percent rate.
So, you've actually had an increase of 80 percent above the pre-tariff, pre-April 2nd norm that we had. So, it's a huge surge. And in the meantime,
the ocean carriers, so these are the companies that operate the ships, they've pulled about 25 percent of all the container ships going from China
to the U.S. and move them to other trade lanes, especially down to Latin America, to Africa, to some other trades.
And so, there's not enough capacity now to move all those containers. So, the price of freight in the last two weeks has gone up about three X over
where it was before the tariffs hit. So, it is kind of like importers can't catch a break. One day, you know, the tariffs get relaxed, everybody's
happy, and then the price of freight goes up three times.
ISAACSON: You previously said there'd be mass shortages this summer, given all the turmoil and the new tariffs, were pretty much getting into summer
now. Do you still see that?
PETERSEN: Well, the -- my view on shortages really if they don't do anything about the tariffs and they kept them at the 145 percent, they've
relaxed it. And so, now, you see this big surge of goods coming in. So, I wouldn't say mass shortages. However, all these goods, it's still not
enough to make it up for that five weeks where you had only 40 percent of the normal cargo flows coming from China to the U.S. We had five weeks of
really depressed volume. You've had two weeks of big bookings, but not enough ships to move all that cargo.
So, you are going to see some degree of shortages. I wouldn't call it mass shortages, but you're going to see a lot of -- really, it probably gets
reflected in high prices because whenever there's scarcity of goods, whoever does have goods can charge kind of whatever price they want. So,
that's actually the real driver of inflation in all of this.
ISAACSON: Give me some of the early indicators you see of things that are going to cost a lot more, where there may be shortages.
PETERSEN: Well, one of the big ones is apparel. A lot of the apparel in brands in this country were using an exemption called di minimis, and that
actually allowed you to ship items one item at a time, individual products duty free from overseas. And so, and that was taken away for goods made in
China, which is 70 percent of those.
So, any apparel made in China is going to go up quite a bit. You've already seen that take hold, where some of these e-commerce brands have raised
prices 30 percent or more if they were previously using the de minimis, which a lot of them were. And then, just broad categories, furniture is a
big one. Furniture's also going to get especially hard hit by these high ocean freight prices just because you can't fit that many couches in a
container. So, if the price of a container goes up a lot, you know, it's not shared by that many items. So, kind of larger, bulkier stuff is what
gets hit by the high ocean freight prices.
[13:45:00]
And then duties, yes, it's a kind of across the board with the 30 percent duty, anything made in China. The stuff -- it's really better something
(ph) that's not affected, which is kind of electronics, semiconductors, you know, your smartphone got an exemption.
ISAACSON: You said -- a little while ago, thousands and then millions of American small businesses, including many iconic brands will go bankrupt
this year if the tariff policies on China don't change. How quickly does a trade deal need to be done to prevent that from happening?
PETERSEN: Yes. And you know that was really about the 145 percent. At 30 percent, it seems like businesses can absorb it. They're not happy at all,
and it definitely hurts their P&L, but I don't think it wipes them out. But where we are, you know, is -- in August, this is going to go -- they said
August 30th now for a lot of products, it's going to go back up to 54 percent. That was the -- when they first announced 54 percent, that was
really a catastrophic day for importers from China.
And so, it's somewhere in that range where if that comes back to 54 percent, I do think you're going to see a huge wave of companies start to
fail. And that's imminent in middle of August. It will be here before you know it. So, we'd like to see either this gets extended or a deal gets done
before then, but I don't have any inside view into what's happening with the negotiation right now.
ISAACSON: Walmart, CEO, Doug McMillon, and I think their chief financial officer, John Rainey, and others have said, it's definitely just going to
have to be passed on to some extent to consumers. When you're talking to your people, to what extent are they going to pass this on to consumers and
to what extent do you think they can absorb the new tariffs?
PETERSEN: It's pretty relatively straightforward to look at it mathematically, and it's all about what's the profit margin of that
business. If it's a very, very profitable business where they buy the goods cheap and sell them for a lot more, the tariff for members on the wholesale
cost, it's on the cost of what they pay for. So, those companies can -- but the reality is most companies and Walmart's in that category are trying to
be cost leaders. They're trying to have low cost, and that means they don't put a huge amount of margin on their product.
And it's -- therefore, you know, when the cost goes up, they're forced to pass it through. So, I think that's the reality for most companies, they're
going to have to pass it through close to a hundred percent. And that's what we see in the e-commerce world. You've seen these brands have
effectively come through. A lot of them have actually added a line item in the checkout that says, import charges or customs charges. And customers
are kind of pretty understanding about that. Tariffs have been so much in the news that they haven't been a lot of pushback so far.
But the reality is we don't know until this really stays for a while and you see how much is demand repressed, are people just buying a lot less
stuff? That's what you would predict and people start spending their money on other things that are made in America, whether -- and it doesn't have to
be things, it can be services, it can be going out to eat, travel, et cetera.
ISAACSON: You talked about how people have to change their supply chain, if something happens on China, and then maybe they're going to try to do
Vietnam or maybe even other places. How hard is it -- explain to me how that works. How easy is it to say, let me shift my supply chain based on
the changing tariff regimes?
PETERSEN: It's really hard because, I mean, you have to build a new trusted relationship with a new factory that can make your goods at scale
with quality, and it's your product, right? It's the lifeblood of a company. So, it is not a simple proposition at all.
One of the things that's made it a little bit easier, ironically, is that Chinese companies are actually setting up factories in other countries to
make. So, you could still work with the same company, at least.
ISAACSON: Do you think that the administration might try to stop that workaround, I'd call it?
PETERSEN: I assume that this is on their radar and not something that they love. I don't know exactly how to do it legally because they are setting up
an entity, it's in Vietnam. The way -- Vietnam or Thailand. You see a lot of this in Cambodia. There's factories being built in Mexico that are owned
by Chinese, but it's a local entity. They're doing the right thing. They're doing it legally in terms of making it a product of Vietnam.
But there are a lot of Chinese components that go into that. So, they'll bring goods down to Vietnam, do a process that's called substantial
transformation. It's kind of a fancy term, but it just means that you've done enough transformation of the goods to legally qualify it under U.S.
Customs Law as made in Vietnam or made in Thailand, that makes you subject to the duty rates in those countries.
I think what the Trump administration would like to see happen is that those countries sort of take the American side and say, hey, you have to
put duties up on Chinese imports, including the components that are going into your products. That's probably the best mechanism they have, is sort
of saying, hey, Vietnam, if you want to have low tariffs, you're only at 10 percent right now, if you want to keep it there, you've got to agree to
some kind of a deal on these Chinese components coming in to make it more difficult.
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So, there's some -- definitely some room for negotiation there, but I don't know how exactly you can structure it legally.
ISAACSON: You've kind of explained a pretty complicated rigamarole. To what extent does that add to the inefficiency and the cost in general of a
supply chain?
PETERSEN: Just a huge amount. I mean, first off, the labor cost is higher in some of these places. That -- and not just like raw, OK, you want to
hire someone off the street, but the skilled labor. A lot of these are real craftsmen jobs. You talk to people doing apparel and they'll tell you, the
highest quality apparel now is in China. The best (INAUDIBLE) is the best technique and skilled workers there. So, you move to another country by
definition, taking a step down on quality.
It's really funny for people, you know, my age, where that was not the idea 20 years ago at all. So, China's come a long way on quality. But the
inefficiency of trade. You know, you are shipping items more than once from China to Vietnam than from Vietnam to the U.S. And ironically, you might
actually increase trade from a technical term because that's two trade shipments instead of one. And so, you're seeing, yes, ad complexity here,
ads cost, inefficiency, time. Time is money. So, you -- it takes longer to, you know, keep moving things around to different parts of the world. So,
yes there's nothing efficient about it.
ISAACSON: These tariff uncertainties, as you've talked about, have led to some supply chain shocks, and we had that a few years ago when COVID led to
that. Do you think that there's some lessons there that we may have to just reevaluate the whole notion of these supply chains?
PETERSEN: Well, it, there are. We learned a lot in COVID. One thing we learned was that companies -- you know, the price of freight is very
inelastic, which means you don't ship more stuff just because the price of freight is cheap. And it turns out you also really don't ship less stuff
because the price of freight is expensive. You ship the amount of stuff that you can sell out of profit. And the price of freight tends to be
relatively marginal around the edges on that. And so, the world can absorb a lot higher prices of freight than we ever expected.
Tariffs are different though because, you know, a 50 percent tariff -- the average price of a container is about a hundred thousand dollars' worth of
goods in there. So, that's $50,000 extra. Price of freight, you know, we saw in COVID it went to $20,000 and people begrudgingly paid it, but 50,000
is another story. So, we're going to find out what that elasticity is. How much do people just keep shipping the same amount? So, that was one set of
lessons there, was just the freight markets themselves being really dynamic and subject to big price swings.
The other one -- and do you want to source globally? Should we think more regionally or, you know, stop depending -- having such complex global
supply chains? The reality is that companies are always going to try to make their products as cheaply as they can. That's -- that is the job at
the end of the day of companies. Make great products cheaply. Whoever does that the best will win, the consumer will grow. It's a Darwinian kind of
ecosystem.
And so, there -- that's the game that's being played on -- that's the game on the field. You'll -- the government job is to set the rules and then
companies have to go and find a way to make money. And they will always look for opportunity. And this is a long run trend. You know, COVID was a
moment in time. We have a moment in time now. There's changing landscape. But global trade has gone on for thousands of years, and in fact, we've had
about 4 percent annual growth in global trade since the Mongol invasions for 800 years. You've had this steady exponential growth.
And so, my view is sort of like, yes, there's repositioning here, but human nature is you want to find the best manufacturer at the lowest price so you
can make a profit. You want to find your best customer. You don't really much care what country they are, what they look in. You're looking at the
attributes of what their prices that they charge and what they pay. And therefore, you're going to want to do global trade.
Governments will try to reign that in, but the market forces are such that it'll be very hard for it. The cat's out of the bag, in a sense.
ISAACSON: Ryan Petersen, thank you so much for joining us.
PETERSEN: My pleasure.
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GOLODRYGA: And finally, with the American president meeting, Germany's leader against a backdrop of war in Europe, and the United States appearing
to turn inward under Trump, let's take a quick look back at a time when the opposite seemed true.
On this day, 78 years ago, U.S. Secretary of State George Marshall addressed Harvard's Alumni Association and said that America needed to help
rebuild its enemies as well as its allies.
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GEORGE MARSHALL, FORMER U.S. SECRETARY OF STATE: It is logical that the United States should do whatever it is able to do, to assist in the return
of normal economic health in the world, without which there can be no political stability and no assured peace.
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[13:55:00]
GOLODRYGA: Of course, that became known as the Marshall Plan. And historian Margaret McMillan reflected on its importance recently with
Christiane.
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MARGARET MCMILLAN, HISTORIAN AND AUTHOR: Those, of course, in charge in the United States in the period after of the Second World War, including of
course later on President Eisenhower, who'd been the Supreme Allied Commander in the Second World War, knew very well what war could cost.
They'd seen it for themselves, they'd experienced for themselves, and many of those in charge in the U.S. also had seen what had happened in the Great
Depression when countries put up tariff barriers and world trade dropped off and everyone suffered.
And so, there was really an attitude, I think, in the United States and elsewhere in Western countries after the Second World War, that we all
benefit when we trade with each other, we all benefit when we share prosperity. And I think that was the foundation of that long period of
growth and prosperity after the Second World War.
(END VIDEO CLIP)
GOLODRYGA: Very, very poignant words. And that is it for now. Thank you so much for watching, and goodbye from New York.
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