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Iran Warns US Against Threats After Deadly Attack On Troops; Israeli PM Netanyahu Calls For UNRWA Mission To End; Ukraine And Russia Carry Out Major Prisoner Exchange; EU Leaders To Try To Unfreeze Ukraine Aid; Chinese Hackers Are Determined To "Wreak Havoc" On U.S. Critical Infrastructure; Senators Grill Social Media CEOs About Online Child Safety; Houthi Rebel Attacks Disrupt International Shipping; Sheep and Cattle Stranded off Western Australia; Egypt, Ethiopia, Iran, Saudi Arabia, UAE to Join BRICS; Hong Kong Bargain Hunters Head to China's Shenzhen; Boris Nadezhdin Submits Presidential Paperwork; Explorers Discover What Could be Amelia Earhart's Plane. Aired 1-2a ET
Aired February 01, 2024 - 01:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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KIM BRUNHUBER, CNN ANCHOR: Hello, I'm Kim Brunhuber. Welcome to all of you watching us around the world. Ahead on CNN Newsroom. Iran warns the U.S. that any threats it makes won't go unanswered. The comments followed President Biden's remarks that he's decided how to answer the drone attack that killed three American soldiers in Jordan.
Israel's prime minister calls for an end to the UN's main aid agency in Gaza after accusing 12 members of being involved in the October 7 attacks. And E.U. members meet in a few hours hoping to free up billions of dollars in much needed aid for Ukraine stalled by internal disputes.
UNIDENTIFIED MALE: Live from Atlanta. This is CNN Newsroom with Kim Brunhuber.
BRUNHUBER: We begin this hour with a warning from Iran where one official says any threats made by the U.S. won't go unanswered. That word from the chief of the Islamic Revolutionary Guard just one day after U.S. President Joe Biden said he'd made a decision on how to respond to the drone strike that killed three U.S. soldiers and injured dozens more.
Iran pointed to the, quote, words of American officials in the announcement Wednesday without elaborating further. Listen to this.
(BEGIN VIDEO CLIP)
GEN. HOSSEIN SALAMI, CHIEF COMMANDER, ISLAMIC REVOLUNATIONARY GUARD CORPS (through translator): The common chapter between the U.S. and Iran is that we know each other. You know that we do not leave any threats unanswered. While we are not looking for war, we are not afraid of war and we do not run away from it.
(END VIDEO CLIP)
BRUNHUBER: Now, that warning comes as the White House formally assigns blame for the drone strike, saying the U.S. believes the Islamic Resistance in Iraq was behind it. Now, that's an umbrella group of a number of Iran backed militias, including Kata'ib Hezbollah.
Now, the attack in Jordan on Sunday targeted a small U.S. military base and marked the first time U.S. troops have died under direct fire in the Middle East since Hamas's October 7 attack on Israel.
All right, joining me now is CNN military analyst and retired U.S. air force Colonel Cedric Leighton. Thanks so much for being here with us. So President Biden's been urged to hit him hard in the words of one senator. What's his most likely option here?
COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Well, Kim, I think most likely option for President Biden is that he is going to have basically a multi layered response. And what that means is he's going to go after certain things probably in Iraq and in Syria that pertain to the Iranian proxies, (INAUDIBLE) groups, basically that Iran helps to finance and in many cases helps to train that are spread throughout those two countries.
I don't believe he will strike Iran at this particular point in time, but there are also some options that he has in the unconventional side of things, which could include special operations attacks as well as cyber attacks. And those could potentially include Iranian targets.
BRUNHUBER: Why not strike Iran? I mean, some are know this is the only way to truly, you know, deter Tehran.
LEIGHTON: Well, in many ways, there's the degree of proportionality that has to happen here. We have to remember that this attack occurred on Jordanian soil, not on U.S. soil. So that's one factor in the equation.
The other thing is it did not occur at one of the major military bases that the U.S. had in the Middle East. So it's a matter of degree. Of course, the loss of the three soldiers is extremely tragic. And that's the reason why there's going to be a response that may take place over not just one day, but over a period of not weeks.
So that's, I think, one of the key elements here, Kim, and you know, as far as not going directly, I think the main reason for that is the escalation that would then ensue is something that the Biden administration wants to avoid.
BRUNHUBER: You use the word proportionality. I'm wondering, how big does Biden have to go? I mean, a tit for tat probably won't deter them. And then the opposite, I mean, what would be the effect if the response isn't seen as strong enough?
LEIGHTON: Yes, that's, of course, a big risk that the administration is going to take. So if the response is not seen being strong enough, then they're going to -- the Iranian proxies and even Iran itself are going to feel emboldened. And the most likely scenario in that case is that the attacks against U.S. bases will continue perhaps at an even higher pace than we've seen up until this point. And it's been pretty extensive.
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When you think about the 165 or so attacks that have occurred since October the 7th. So there's a risk here. But the fact of the matter is that neither Iran nor the U.S. say that they want war. And that's going to be the key ingredient here. They want to basically let it be known that they're not happy with what happened and that they wanted to stop, but they're not willing to go to the final extent of going for an all out conflict.
BRUNHUBER: Right. But, you know, the deaths of U.S. soldiers here, does something fundamentally change here? Does this suggest that the status quo of sort of limited strikes on militia bases in Iraq and Syria, that may be over?
LEIGHTON: I think that part may be over, the limited strikes, you know, as far as us going after militia entities in Iraq and Syria, I think what we're going to see is perhaps more attacks on leadership entities that belong to groups like Kata'ib Hezbollah or other members of the umbrella group that you spoke about earlier, those are the kinds of things that we can see.
And I think that is going to be something that is probably going to be sustained for some time, and it may happen at a time when we least expect it.
BRUNHUBER: All right. Always appreciate your analysis. Cedric Leighton, thanks so much for being with us.
LEIGHTON: You bet, Kim.
BRUNHUBER: The UN's key aid agency in Gaza is facing a crisis that threatens its very existence. Israeli Prime Minister Benjamin Netanyahu is now calling for an end to UNRWA. He also specifically accuses UNRWA officials of being complicit in the October 7 Hamas attack against Israel.
Now his comments come as Sweden joins a growing list of countries that have suspended funding to the agency after Israel's claims 13 staffers were involved in the massacre. U.N. Secretary Ggeneral Antonio Guterres says he was, quote, personally horrified by the allegations, but the U.N. acted immediately and terminated the staffers. And if UNRWA shut down, the situation in Gaza could become catastrophic. Here he is.
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ANTONIO GUTERRES, U.N. SECRETARY-GENERAL: I underscored the importance of keeping UNRWA's vital work going to meet the dire needs of civilians in Gaza and to ensure its continuity of services to Palestine refugees. UNWRA is the backbone of all humanitarian response in Gaza.
(END VIDEO CLIP)
BRUNHUBER: CNN's Nic Robertson has the details from Tel Aviv.
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NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, the number of countries pulling their funding from UNWRA continues to grow, Sweden one of the latest to join this growing list. And Prime Minister Benjamin Netanyahu speaking on camera with a number of foreign ambassadors today, giving the strongest indications yet that Israel wants UNRWA to be essentially removed and also making new allegations that leadership officials within UNRWA were complicit, he said, in the October 7 massacres.
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: And we have discovered in the last few weeks that UNRWA officials were complicit in the massacre. And I think it's time that the international community and the U.N. itself understand that UNRWA's mission has to end.
UNRWA is self-perpetuating. It is self-perpetuating also in its desire to keep alive the Palestinian refugee issue. And we need to get other U.N. agencies and other aid agencies replacing UNRWA if we're going to solve the problem of Gaza.
ROBERTSON: So far, UNRWA isn't responding to any specific allegations being made by the Israeli government. The U.N. has UNRWA under review and investigation at the moment. They're waiting for that to be completed. But they are saying that if their funding isn't restored, then they will be forced to shut down UNRWA operations at the end of February.
But an indication of how much UNRWA is still required on the ground their operative in Khan Younis, which is the center of a now almost two-week long intense IDF military operation. Ten days now, it's been going on around several hospitals in that area. The population have been told to relocate. And UNRWA says in that area alone of Khan Younis, 184,000 people have now registered for their support.
And in the north of Gaza as well, an MSF team was able to get to the Al-Shifa Hospital, which they haven't been able to reach for long time.
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And they described absolutely dire conditions that they were taking in some medical support, some fuel to the Al-Shifa hospital. And they said when they got to the Al-Shifa hospital, it was barely functioning, but it had now become a refuge, they said, for 50,000, 50,000 displaced people inside of the north of Gaza, which really gives an indication of the vital importance of hospitals in the current scenario where so many homes are damaged, so many people are forced from their homes and are looking for safe shelter.
But the conditions described by the MSF Doctors Without Borders was of a very, very dire situation in the north of Gaza, underscoring, of course, the importance of humanitarian aid getting into Gaza at this time. Nic Robertson, CNN, Tel Aviv, Israel.
(END VIDEOTAPE)
BRUNHUBER: About 400 former POWs are headed home after a major prisoner exchange between Russia and Ukraine. Both countries say around 200 troops from each side were released on Wednesday. That was the first prisoner swap since a controversial plane crash in Russia a week ago.
Moscow said Ukraine shot down a Russian military jet that carried dozens of Ukrainian POWs to a separate prisoner swap that day. But Kyiv says Russia never showed any video of a large number of human remains to back up its allegation.
Russian President Vladimir Putin now claims that Ukraine used a U.S. made patriot missile to hit the plane.
In the coming hours, European Union members will try to get on the same page about future aid to Ukraine. They'll meet in Brussels to try to unfreeze billions of dollars in aid that's been stalled because of internal E.U. disputes.
Now that's happening as Russia is on the offensive across the front lines and Ukraine needs all the help it can get. On Wednesday, the E.U. said it expects to deliver only about half of the artillery shells it promised to Ukraine by March. The EU's foreign policy chief says the consequences already show on the battlefield.
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JOSEP BORRELL, EU FOREIGN POLICY CHIEF: Ukraine need more ammunition. There is a big imbalance on the fire capacity from one side on the other, and this gap has to be filled.
(END VIDEO CLIP)
BRUNHUBER: Ukraine's spy chief stressed the need for more ammunition and weapons in a wide ranging interview with CNN. He also downplayed the risk of the U.S. leaving Ukraine out in the cold even as aid is frozen in Congress. CNN's Frederik Pleitgen reports from Kyiv.
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FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): With Ukraine facing a Russian onslaught in many frontline areas, Kyiv says continued us military aid is more important than ever, Ukraine's military intel chief tells you shells.
KYRYLO BUDANOV, HEAD OF UKRAINEAN DEFENSE INTELLIGENCE (through translator): Shells one of the most decisive factors in this war. It's about quantity, not so much the quality as the quantity. Next, there are assault aircraft. These are aircraft of the type that the United States has, like the A-10 Thunderbolt 2, and so on. This is what can really help inflict a military defeat. PLEITGEN (voice-over): But further military aid to Ukraine hangs in
the balance as Democrats accuse former President Trump of derailing a possible compromise. Budanov says he's not concerned about Trump.
BUDANOV (through translator): He is an experienced person. He has fallen many times and gotten back up again, and this is a very serious trait. To say that he and the Republican Party are lovers of the Russian Federation is complete nonsense.
PLEITGEN (voice-over): But the Russians are currently on the offensive. On the front lines, we've seen Kyiv's forces suffering a severe lack of ammunition, struggling to hold the line. Still, Budanov says he believes the tides will turn and Ukraine will attack.
BUDANOV (through translator): In my opinion, the main events on the battlefield will start happening sometime in the spring or early summer.
PLEITGEN (voice-over): Vladimir Putin wants Kyrylo Budanov dead. The Ukrainians say Moscow tried to assassinate him at least 10 times. Recently, Budanov's wife and several bodyguards fell ill after what Kyiv says was poisoning by a, quote, heavy metal but they survived.
The military intelligence directorate is said to behind an increasing number of cross border attacks, targeting key infrastructure inside Russia and the occupied territories. While never claiming responsibility, Budanov tells me Russians can rest assured the war has come to them.
BUDANOV (through translator): I believe that the plan includes all major critical infrastructure facilities and military infrastructure facilities of the Russian Federation.
PLEITGEN (voice-over): With Ukraine's offensive essentially stagnant, the Kremlin is currently feasting on rumors. Ukrainian President Volodymyr Zelenskyy is close to firing his top general, Valerii Zaluzhnyi, and possibly installing Budanov as his successor, the spy chief Koi.
PLEITGEN: Isn't that something that weakens the country? If it appears as though the president and his top general are not on the same page?
BUDANOV (through translator): I am also the head of one of the military agencies. I personally have no conflict with anyone.
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PLEITGEN: You know, people were talking about you possibly being the new general.
BUDANOV (through translator): If I was appointed yesterday, would we be meeting?
PLEITGEN (voice-over): Fred Pleitgen, CNN, Kyiv.
(END VIDEOTAPE) BRUNHUBER: And as Fred mentioned, a source tells CNN Ukraine is expected to formally announce the dismissal of the army chief by the end of the week. Now, the move would be the most significant military shakeup by Ukrainian President Vladimir Zelenskyy since the start of Russia's invasion almost two years ago.
Chinese hackers lying in wait, preparing to unleash on the US. That's the new warning from the FBI. We'll have the details.
Plus, tech leaders grilled on Capitol Hill, top social media executives lay out their plans to protect children. But lawmakers say it's too little, too late. Stay with.
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BRUNHUBER: The FBI director has issued an ominous warning to U.S. lawmakers. Chinese hackers are getting ready to wreak havoc and cause real world harm to the United States by targeting essential infrastructure. Details from CNN's Brian Todd.
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BRIAN TODD, CNN CORRESPONDENT (voice-over): The FBI director was blunt and dire with his warnings. Americans have paid far too little attention, Christopher Wray says, to what he calls a multipronged assault on U. S. national and economic security by Chinese hackers.
CHRISTOPHER WRAY, FBI DIRECTOR: China's hackers are positioning on American infrastructure in preparation to wreak havoc and cause real world harm to American citizens and communities. If and when China decides the time has come to strike.
TODD (voice-over): What could Chinese hackers target that would cause harm inside the US?
WRAY: Our critical infrastructure, our water treatment plants, our electrical grid, our oil and natural gas pipelines, our transportation systems.
TODD (voice-over): Wray didn't say that Chinese hackers are actively targeting those systems now, but that they're lurking inside critical infrastructure so they can use that access and be ready to strike at a later date.
JAMES LEWIS, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: You do reconnaissance, you identify targets, you identify the way in. That's what the Chinese are doing.
TODD (voice-over): U. S. officials have been on to the Chinese hackers and have been trying to head them off. CNN reporting that the FBI and the Justice Department, using a court order, have taken steps to protect hundreds of devices in the U.S., devices connected to infrastructure that are being targeted by Beijing's hackers.
Steps including removing malicious code from those devices. But the Chinese hackers are still believed to be deeply entrenched in U.S. infrastructure and security officials say that's partly America's fault.
JEN EASTERLY, DIRECTOR, U.S. CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY: The truth is, the Chinese cyber actors have taken advantage of very basic flaws in our technology. We've made it easy on them.
TODD (voice-over): How have Chinese hackers been let in the door to America's plants, pipelines and servers?
LEWIS: The first thing is that the Chinese have figured out that if you go after small offices and home offices, people are going to be as protected as they are at work. And you get into somebody's home office and then you can get to their work network.
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The second is, and this is a big theme for the administration, is we write software without thinking about security.
TODD (voice-over): What U.S. officials now fear that if China invades Taiwan and the U.S. tries to respond militarily, the Chinese hacking efforts could hinder that response.
LEWIS: They can cripple the logistics that's support armed forces in East Asia, rails, pipelines, airplanes, airports. They could make it very hard to support troops who are deployed overseas.
TODD: Chinese authorities have consistently denied engaging in any state sponsored hacking, often saying that China itself is a frequent target of cyber attacks. Recently, CNN reported that Chinese leader Xi Jinping told President Biden in November that China would not try to disrupt the U.S. presidential election. To that, FBI Director Wray just said he doesn't trust those assurances, saying he'll believe it when he sees it. Brian Todd, CNN, Washington.
(END VIDEOTAPE)
BRUNHUBER: Top social media executives endured searing criticism on Capitol Hill on Wednesday over concerns for children's online safety. The heads of X, TikTok, Snap, Meta and discord testified about efforts to block material that hurts young people's mental health or exposes them to sexual exploitation. It was clear there was urgency from lawmakers to address the issue. Listen to this.
(BEGIN VIDEO CLIP)
DICK DURBIN, U.S. SENATE DEMOCRAT: Online child sexual exploitation is a crisis in America.
TED CRUZ, U.S. SENATE REPUBLICAN: Every parent I know, and I think every parent in America is terrified about the garbage that is directed at our kids.
JOHN KENNEDY, U.S. SENATE REPUBLICAN: To some extent, your platform has become a killing field for the truth, hasn't it?
(END VIDEO CLIP) BRUNHUBER: Meta CEO Mark Zuckerberg pushed back against some form of criticism from lawmakers. But in a dramatic moment, he stood up and personally apologized to families of people harmed by social media. Listen to this.
(BEGIN VIDEO CLIP)
JOSH HAWLEY, U.S. SENATE REPUBLICAN: You're on national television. Would you like now to apologize to the victims who have been harmed by your product? Show them the pictures. Would you like to apologize for what you've done to these good people?
MARK ZUCKERBERG, META CEO: I'm sorry for everything you have all through. No one should go through the things that your families have suffered.
(END VIDEO CLIP)
BRUNHUBER: CNN's Tom Foreman has details on the Senate hearing.
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LINDSEY GRAHAM, U.S. SENATE REPUBLICAN: But you have blood on your hands.
HAWLEY: Your product is killing people. Will you set up a victim's compensation fund with your money, the money you made on these families sitting behind you? Yes or no?
TOM FOREMAN, CNN CORRESPONDENT (voice-over): Mark Zuckerberg, founder of Facebook, whose company owns Instagram, pushed into apologizing to families who say they were harmed by online content, some waving pictures of children who died or killed themselves. It was an astonishing moment. Yet the billionaire head of Meta dug in anyway.
ZUCKERBERG: And this is why we invested so much and are going to continue doing these three big efforts to make sure that no one has to go through the types of things that your families have had to suffer.
UNIDENTIFIED MALE: Your platforms really suck at policing themselves.
FOREMAN (voice-over): Against a torrent of accusations from the Senate committee about enabling sexual exploitation, election meddling, fake news, drug abuse, and child endangerment, the heads of five tech giants tried to push back.
JASON CITRON, CEO, DISCORD: We very much believe that this content is disgusting.
LINDA YACCARINO, CEO, X: X will be active and a part of this solution.
FOREMAN (voice-over): But the fury kept coming in a rare show of unity between Democrats.
AMY KLOBUCHAR, U.S. SENATE DEMOCRAT: One-third of fentanyl cases investigated over five months had direct ties to social media. FOREMAN (voice-over): And Republicans.
HAWLEY: 37 percent of teenage girls between 13 and 15 were exposed to unwanted nudity in a week on Instagram. You knew about it. Who did you fire?
ZUCKERBERG: Senator, this is why we're building all --
HAWLEY: Who did you fire?
ZUCKERBERG: I'm not going to answer that.
FOREMAN (voice-over): There was plenty of heat to go around as the tech bosses were scorched with claims their products promote anxiety, depression, and violence, especially among young people.
MARSHA BLACKBURN, U.S. SENATE REPUBLICAN: Children are not your priority. Children are your product.
FOREMAN (voice-over): But no one was hit harder than Zuckerberg, whose attempts at defense at times were literally laughed at.
ZUCKERBERG: My understanding is that we don't allow sexually explicit content on the service for people of any age.
UNIDENTIFIED MALE: How is that going?
ZUCKERBERG: You know, our --
UNIDENTIFIED MALE: Is there any one of you willing to say now that you support this bill?
FOREMAN (voice-over): Many of the lawmakers are intent on overturning a long standing federal law that immunizes those companies from lawsuits over user generated content and putting tough regulations in place.
KLOBUCHAR: It's time to actually pass them. And the reason they haven't passed is because of the power of your company. So let's be really, really clear about that.
FOREMAN (voice-over): And while the tech bosses say they're happy to work on safeguards, skepticism ran rampant.
GRAHAM: Nothing will change until the courtroom door is open to vid of social media.
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FOREMAN: Sometimes in hearings like this, lawmakers seem like they just don't understand how tech really works. But they do understand human suffering. They know the political power of that and they know how to count votes, as one of them noted today. And big tech could be on the wrong side of the next one and facing regulations like never before. Tom Foreman, CNN, Washington.
(END VIDEOTAPE)
BRUNHUBER: Now, earlier I book with Jim Steyer, a child safety advocate and CEO of Common Sense Media, and I asked him what he thought of Mark Zuckerberg's apology. Here he is.
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MARK STEYER, CEO AND FOUNDER, COMMON SENSE MEDIA: He basically legalistic mumbo jumbo overall in his testimony. And I think it was probably very painful for him then to have to apologize to the families. Bu, you know, he's like a well-rehearsed witness in a trial. But at the end of the day, the facts just are against what he and Facebook and Instagram stand for. So I think it was pretty embarrassing, probably for him.
BRUNHUBER: I mean, there is, you know, as you saw, there are plenty of skepticism that social media companies will do anything effective about all the problems. And of course, they have a financial incentive not to do that.
But even if they did want to do more, any reality to the defense that they made that the social media sphere is too vast, the companies just don't have enough resources to police them effectively?
STEYER: No, I think that's a ridiculous argument. And by the way, they are trillion dollar companies. They are literally in the case of Facebook, say, or some of the other tech giants, the richest companies in the history of the world, not just the United States, but globally.
And so obviously, they have the resources to do it. But as you mentioned, in the world of Facebook in particular, you are the product. You're used to sell advertising. So the truth is, the senators are correct in their criticism and they're also correct in their cynicism about some of Mark Zuckerberg's responses.
But they've done nothing to protect kids and families in America. They haven't passed a major tech regulation in over 20 years, since Mark Zuckerberg was in kindergarten. So the senators are speaking loud. But the key, as Senator Klobuchar said, is show me the money, pass the law. It's about time that Congress did its job.
BRUNHUBER: You've said that it reminds you the testimony that we saw out there, that it reminds you of testimony from tobacco executives, you know, during the 90s. But the legal action against those companies, it was successful because they could prove that tobacco is harmful. In the case of social media, how robust are those links? I mean, the evidence isn't as strong there.
STEYER: It's actually very strong. You know, the truth is this, if I'm a former prosecutor, and I'm also the person who spoke to the attorneys general of the United States two years ago and said that you should sue Meta for the issues that they now have sued them for the attorneys general.
And I would tell you in a court of law that suing Facebook or some of the other platforms for the harms done to minors is a slam dunk win. (END VIDEO CLIP)
BRUNHUBER: That was Jim Steyer, CEO and founder of Common Sense Media.
While the BRICS Economic alliance is about to double in size, just ahead, we'll see who's joining the block and what it could mean for oil prices and the world economy. Stay with us.
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BRUNHUBER: According to U.S. Central Command, American forces have carried out a new round of airstrikes in Yemen, this time against ten Houthi drones and a drone control state station.
Now, this is the latest in a series of attacks meant to destroy the weapons of Iran-backed rebel groups before they can be launched at shipping lanes. The strikes follow a close call in the Red Sea. We're told a Houthi missile came within a mile of a U.S. destroyer, the U.S.S. Gravely, before it was shot down. That's the closest any Houthi attack has ever come to a U.S. warship.
CNN's Paula Hancocks looks at how the ongoing militant threat has disrupted international shipping.
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PAULA HANCOCKS, CNN CORRESPONDENT: Bab Al-Mandab, a small bottleneck in the Red Sea, which translates as "gate of grief".
For centuries, it was mainly the undercurrents and reefs that captains feared. Today it is the Houthi rebels attacks from neighboring Yemen sparking global diversions away from the Red Sea.
Shipping Research from the London Stock Exchange estimates that diverting a tanker from Asia to northwest Europe around the Cape of Good Hope, as almost $1 million per voyage, while doubling the shipping time.
How much of that will be passed onto the consumer is not yet clear. But some analysts say the impact may not be as dire as feared in the short-term.
SIMON MACADAM, CAPITAL ECONOMICS: In terms of how this could actually feed down the supply chain to the end consumer and boost the price level of goods and services that we consume in our economies. But the value of the shipping service is actually a very, very small fraction of the total value of the good or service that you're buying.
So there is actually limited scope of that to seriously cause inflation.
HANCOCKS: The severity of the impact will inevitably depend on the length of the crisis. VINCENT CLERC, MAERSK CEO: Initially, we thought this was going to be a fairly short disruption. Now I think our base case is more going towards month of disruptions. And that means a lot more cost.
HANCOCKS: The International Monetary Fund warned this week that attacks in the Red Sea, coupled with the ongoing war in Ukraine risk spikes in food, energy, and transportation costs. They also want that if there were to be an escalation into a wider conflict in the Middle East it would threaten global growth.
MACADAM: It's not the shipping costs themselves that are you know, getting out of hand. It is -- this endangers energy supplies ban, which the oil prices rise. Then we'd see gas prices rise and against that, that is the sort of thing that's going to spoil the party.
HANCOCKS: China, just the latest affected country to call for an end to the disruption on Tuesday.
WANG WENBIN, CHINESE MINISTER OF FOREIGN APPAIRS: The Red Sea is a crucial international trade route for goods and energy? We hope to avoid tensions in the Red Sea and call for an end to attacks on civilian vessels.
HANCOCKS: Disruption in the Red Sea follows disruption of Ukraine's wheat exports after Russia's invasion. It also follows chaos in the shipping industry during the COVID pandemic another reminder of just how sensitive global supply chains can be to unpredicted shock.
Paula Hancocks, CNN -- Abu Dhabi.
(END VIDEOTAPE)
BRUNHUBER: And those attacks in the Red Sea have had an unexpected consequence for a ship full of livestock. Right now more than 14,000 sheep and 2,000 cattle are stranded off the coast of western Australia in the middle of a heat wave.
A ship was headed to the Middle East but have to divert away from the Red Sea because of the security concerns.
And joining me now is Amber Wilkinson with Nine News in Perth, Australia. Thanks so much for being here with us.
So I understand the ship is off the coast behind you there and we can't see it in the shot. But explain what authorities and exporters are trying to decide what to do next. I mean, what are the options here?
AMBER WILKINSON, NINE NEWS REPORTER: Kim, a number of options are being explored now. As you mentioned, MV Bahagia is sitting off the WA coast.
It did come in to dock here at Fremantle just before four this morning. It was reloaded with food and supplies and has been sent back off out the coast for another night. Now that's because the Australian Department of Agriculture is
currently reassessing an application to re-export the animals. But until that decision is made, it will be forced to sit idle for another night.
[01:34:48]
WILKINSON: These animals have spent a total of 26 nights at sea. There's about 15,000 animals on board there. And as you mentioned, they're sweltering through really hot conditions here in WA but vets have told us that the animals are doing really well and there's no sign of disease on board the ship.
Now, if the decision is made to bring some of these animals to shore, it's still not clear what will happen to them or where they'll go, but they will be subject to really strict biosecurity measures, despite the fact that they haven't left the ship, they boarded here in Fremantle at the start of January and they headed off towards the Middle East.
They would turn it back around due to those security concerns in the Red Sea. Now, farmers want to see the ship sent back on its way out to the Middle East and have those animals re-exported. Animal welfare charities want them brought off the ship and assessed here claiming that a lengthy journey like this one is really quite cruel to the animals.
But right now, Kim, those animals are still sitting in a state of limbo tonight.
BRUNHUBER: I see. All right. Is there any sense or maybe a fear that this might not be a one-off? that this might happen again to other similar exports in the future?
WILKINSON: Well as long as this conflict keeps going, it very well could happen again. Exporters are hoping that the government has taken a bit of a lesson on this one, and hopefully will be able to instate a bit of a plan going forward.
It's happened once hopefully we can stop it happening again.
BRUNHUBER: All right. Appreciate it. Amber Wilkinson, thank you so much.
South Africa's foreign minister says five more countries are joining the BRICS block. The current economic alliance includes Brazil, Russia, India, China, and South Africa. And now Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates will become members.
Argentina declined an invitation to join. The group of emerging market economies will bring together the world's biggest oil exporter Saudi Arabia, and the biggest importer China. Some are expecting the expanded block to gradually shift to currencies other than the U.S. dollar to conduct trade. The BRICS countries have also discussed a possible common currency. All right. Let's go to Los Angeles now and Ryan Patel, senior fellow
at the Drucker School of Management at Claremont Graduate University. Good to see you again.
So in terms of GDP, BRICS would still be, you know, way smaller than the G7, but still it, it is significant right?
RYAN PATEL, CLAREMOND GRADUATE UNIVERSITY: It's big news, right? I mean the BRICS have been meeting -- the bloc has been meeting year over year, adding these next countries were still supposedly another 30 countries are looking to join.
So with the combined economy now worth $28.5 trillion with a new group as 28 percent of the global economy.
Then you think about the population, Kim. Just think about the population for a second. 3.5 billion combined with all those countries that's 45 percent of the world population. And then the kicker in this and you kind of mentioned it among adding Saudi Arabia to that group, 44 percent of the worlds crude oil will be producing between that group.
So when you think about those numbers overall and those countries that are joining, they're not joining just because. They're joining because it's beneficial to them. There will be a lot of synergies and I think we live in this multi global world now.
And so this is not a surprise, it's only going to get more where there's a lot of G20 countries in there too Kim. So it's not -- these are powerful countries come together.
BRUNHUBER: Yes, absolutely.
Getting away from dependence on the U.S. dollar is a priority, but I mean, what's the alternative here?
PATEL: Yes, so this is the kicker in all of this, right? This is where there's some tension with the U.S., with western countries in general that the idea to move away from the U.S. dollar, you know, that's always been a rhetoric.
This last meeting in 2023, it did not get brought up and part of the reason why the idea of moving away though it's not a new one, but it's a very difficult one to execute it because it's a complex kind of task around it because you need to have an alternative currency that everybody agrees on.
There's these challenges, like global trade and financial systems. So there has to be some stability. And in any of those countries, if there's a lack of it and they choose to go to a currency, it will devalue that trade within each other. And obviously then doing the opposite of what that block has come together is to strengthen the economies.
And there's some risk there which many of them don't want to do until they've kind of have that alternative currency to it. So the dollar is still fine for now, but that is the long-term idea
for many of those countries to do that. And specifically in Brazil, Russia have talked about it, but nothing new came out of it last year.
BRUNHUBER: All right. So you mentioned it. More countries are queuing up to join. And of course, the more countries that gravitates, you know, away from the U.S. I mean, that's a huge boon to China and to Russia.
PATEL: Yes, I mean, a lot of it if you think about it, it's the inflow of investment from infrastructure too, right. China has made a lot of investment to Africa. It's no secret. And what they've done there. And you know, obviously that has gained to their silk road trade all those other things that they've continued to have.
[01:39:43]
PATEL: And I think that the dependence for Russia you mentioned right, is to depend more and show that they have more allies in the economic -- economic game.
So I think this is planned (ph) moves. I don't think it's new, but I also think that it's here to stay when you think of these alliances and how economy has worked. I don't think it's gotten weaker between the original BRICS that has occurred.
BRUNHUBER: Yes. And the aim of BRICS, they say is to establish, quote, "a fairer international order". So obviously they'll deleverage their collective economic weight to help in terms of a wider political ambition. In the end was this driven more by economics or by politics do you think?
PATEL: Thats a great question. You and I know the answer that question is both, right? You know, I think part of that is to kind of ease that some of that pain. It's super clear from the rhetoric from any of these countries and what certain countries are opposed to.
I also think that in here to originally the idea, if you recall, it was the IMF, the World Bank weren't able to lend to some of these countries and the BRICS nations started this new development bank to lend money, right? I think by the end of 2022 they've lent $32 billion to emerging nations. And why is that important?
Is because that means more investment from these countries to create that relationship, creates that funnel. And so to your point, it allows that political and economic trade and relationships to be tangled into. We have that conversation among whatever country that they are part.
BRUNHUBER: Of a lot of momentum behind this. Interesting to see what the effects will be to us all.
Ryan Patel in Los Angeles, good to see you. Thanks so much.
PATEL: Thank you.
BRUNHUBER: All right.
Well, the country that said no to a BRICS membership, Argentina is seeing turmoil over its proposed economic reform.
On Wednesday, protesters clashed with police outside Argentina's Congress as lawmakers debated reforms pushed by President Javier Milei. State news agency says police used tear gas to clear the demonstrators in Buenos Aires but no one was injured.
The proposed reforms are a key part of the president's plan to tame inflation, which reached more than 200 percent in December, include a string of austerity measures and privatizations, but they face immense opposition from unions, human rights groups, and others.
Cuban officials say they're delaying their plan to increase the cost of fuel after a virus infected government computers. Now that 500 percent price hike had been scheduled to take effect on Thursday, official say it will happen in the future.
Cuba's government is justifying the astronomical price jump by saying they no longer receive enough donated oil from allies and can no longer afford to subsidize fuel. The Cuban state owns all gas stations and the fuel price increase threatens the country's already failing economy.
And rising prices are concerned in Hong Kong as well. Residents have found it's actually cheaper to cross the border into mainland China to get better deals rather and the Chinese economy will take any help it can get right now.
CNN's Marc Stewart reports.
(BEGIN VIDEOTAPE)
MARC STEWART, CNN CORRESPONDENT: A shopping three in a place once known as the world's factory floor, the city of Shenzhen. From Hermes bags and giant bears from Toy Story at the local Costco to deals in name brand stores, and local markets, Shenzhen is drawing shoppers not just from mainland China, but from across the border in Hong Kong.
UNIDENTIFIED FEMALE: I guess it's about half price and maybe one (INAUDIBLE) very competitive.
STEWART: In recent months, more than 400,000 Hong Kongers have made the trip every weekend, some for the sole purpose of shopping. This includes YouTube or Andy Tsui, who's trying to create a following based on this craze.
After taking a train, clearing customs, and crossing into mainland China, we caught up with him and his friends in the heart of Shenzhen.
First stop a toy store. Next, Peking Duck at a popular local restaurant. He makes this trip once or twice a month.
ANDY TSUI, HONG KONG SHOPPER: Many thing about food, shopping because it's vital. Buy toys, it's very -- the price very cheap compared to Hong Kong.
UNIDENTIFIED FEMALE: See something beautiful and you just buy.
STEWART: The reasons behind the consumer craze are clear. The Hong Kong dollar is strong, not to mention the eagerness to explore post pandemic.
The retail rush extends beyond the mall as other shoppers savor an American brand. One of the biggest drivers these days is this new Costco store in Shenzhen. You can certainly get paper towels in bulk. But there's also market specific merchandise like these snacks for Chinese new year.
What's happening here, the result of a sluggish Chinese economy, meaning fewer mainland consumers flocking to Hong Kong's luxury stores with Hong Kong residents like Andy bringing back the tradition of cross-border bargain hunting in the opposite direction.
[01:44:55]
STEWART: Marc Stewart, CNN -- Shenzhen, China.
(END VIDEOTAPE)
BRUNHUBER: All right.
Still ahead, Vladimir Putin makes a new assertion about the Russian military plane that crashed last week and for the first time calls for an international investigation. We'll have that story and more, next. Stay with us.
(COMMERCIAL BREAK)
BRUNHUBER: It's been more than a week since a Russian military plane crashed in the Belgorod region near the Ukrainian border.
And now Russian President Vladimir Putin set claims the plane was shot down by U.S.-made missiles. Listen to this.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Here I am officially taking this opportunity and saying that we ask to send international experts and to conduct this investigation to assess the available physical evidence that the plane was shot down by the Patriot system from a specific place and at a specific time.
I have already said it was at 11:10. There were two launches from territory controlled by the Ukrainian authorities.
(END VIDEO CLIP)
BRUNHUBER: He claims to U.S. Patriot missiles were launched from Ukraine and caused the plane to crash. Ukraine for its part has persistently said it won't use missiles donated by western allies beyond its own borders. And Kyiv hasn't taken responsibility for the incident.
Moscow claims the crash killed 65 Ukrainian prisoners of war who were set to be exchanged in a prisoner swap. Ukraine says there's no evidence any POWs were on board and CNN isn't able to independently verify claims by either side.
A former Russian lawmaker opposed to the war in Ukraine is one step closer to getting his name on the presidential ballot. The Kremlin has said he's not a rival to Vladimir Putin. And his candidacy still has some hurdles to clear.
CNN's Clare Sebastian reports.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Boris Nadezhdin has now done everything he can to try to get on the ballot in Russia's upcoming presidential election. The decision now rests at least on paper with Russia's Central Election Commission which has ten days to make a decision.
And Nadezhdin himself admitted that even though he actually collected double the number of signatures needed, even though there were lines outside his headquarters, he could still be denied on a technicality.
Another anti-war candidate was barred about a month ago because of alleged errors with her paperwork. Well, it is a given that Putin will win this election. But the reason why Nadezhdin matters is because he's revealed a rare spark of dissent and anti-war feeling in Russia, a spark that he says is growing fast.
Will it boil over into protests if he's not allowed to run is a big question. This is what he had say about that on Wednesday.
BORIS NADEZHDIN, RUSSIAN OPPOSITION PRESIDENTIAL CANDIDATE: Not under any circumstance. Never will I call on my supporters to violate Russian law. I am acting on principle, in strict accordance with the constitution of the Russian Federation with the laws of the Russian Federation.
[01:49:47]
NADEZHDIN: So there won't be any calls to action, no unsanctioned demonstrations, no God forbid some kind of Maidan for me. Never, whatever might happen.
However, I believe that all Russian citizens have constitutional rights, one of which the 31st article is the right to gather peacefully without weapons and express your opinion.
SEBASTIAN: Well, there was a caveat at the end there, but no, Maidan he says referring to the protests that toppled Ukraine's pro-Russian president a decade ago.
Well, this is not a crisis, but it is a delicate moment for the Kremlin. If he's allowed to run the speculation is, this gives Putin an opportunity to defeat an anti-war candidate, securing what he could then say is a renewed mandate to keep fighting.
Then again, that anti-war sentiment that Nadezhdin has exposed could grow. If on the other hand, he's barred, then the Kremlin might be able to nip that spark of dissent in the bud but, of course, risks appearing rattled by it.
Clare Sebastian, CNN -- London.
(END VIDEOTAPE)
BRUNHUBER: All right. Coming up, the legendary pilot Amelia Earhart disappeared nearly 87 years ago. Now some explorers believe they might have figured out what happened to her. That's next.
Stay with us
(COMMERCIAL BREAK)
BRUNHUBER: Investigators are finalizing a preliminary report on the door plug that flew off a Boeing 737 Max 9 jet while in flight almost four weeks ago. The head of the U.S. National Transportation Safety Board says the report could include what they observed after taking apart the Alaska Airlines plane's door plug in the lab.
The spokesperson says investigators want to make sure the report is right.
(BEGIN VIDEO CLIP)
JENNIFER HOMENDY, NATIONAL TRANSPORTATION SAFETY BOARD: It's critical in any investigation that throughout the investigation that we build that timeline. So we understand what happened at certain points leading up to the event, prior to the event, during the event, afterwards to help us do our analysis and develop our recommendations.
(END VIDEO CLIP)
BRUNHUBER: Airlines have resumed flying the Max 9s after they were grounded shortly after the incident. Alaska Airline says it will complete inspections of all 65 of its 737 Max 9s by the end of this week.
A team of deep-sea explorers say they may be close to answering one of the 20th century's most perplexing questions. What happened to Amelia Earhart? They believe they may have found the aviator's plane at the bottom of the Pacific Ocean.
Lynda Kinkade has the story.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Amelia Earhart on a globe-girdling flight with navigator Fred Noonan took off for a (INAUDIBLE) ocean waste (ph) and was never heard from again.
LYNDA KINKADE, CNN CORRESPONDENT: It's one of the world's greatest mysteries. Nearly 87 years ago, American aviation pioneer Amelia Earhart was attempting to become the first female pilot to circumnavigate the globe. Her plane, along with her and her navigator vanished.
On July 2, 1937 they departed late Papua New Guinea, bound for Howland Island about 4,000 kilometers away when their plane was lost over the central Pacific Ocean.
The pair were nearing the end of their journey. Earhart's twin-engine Lockheed Electro (ph) was never recovered. Their remains never found.
Now these new image may be the key to bringing some closure to Earhart' story. Pilot and real estate investor Tony Romeo of South Carolina based company Deep Sea Vision, led a team on a 90-day expedition to look for the lost plane in an extensive search.
[01:54:53]
KINKADE: The group of underwater archaeologists and marine robotics experts scanned more than 13,000 square kilometers of the ocean floor when they spotted an anomaly, roughly 161 kilometers from Howland Island where Earhart was planning to refuel.
TONY ROMEO, DEEP SEA VISION: The twin vertical stabilizer back are very clear on the sonar image and those were very distinctive of Amelia Earhart's aircraft.
KINKADE: They used an underwater drone with sonar mapping capability.
ROMEO: The technology we used was a Hugin 6000. There's only a handful of them in the world. And the 6000 is 6,000 meters so it can go all the way down to floor ocean depths of 6,000 meters to the bottom of the ocean. And then basically flies like a drone back-and-forth scanning the seafloor for anything interesting.
KINKADE: Romeo and his team plan to return to the area soon to confirm that the object is in fact Earhart's plane while also looking into the possibility of bringing it to the surface.
ROMEO: We need to go and take a look and put a camera basically on the target. We need different equipment, probably an ROV to go down there with some alarms and some pagers that can take a look at the target, take a look out sitting in the soil and in the mud, on the sand, on the sandy bottom of the seafloor.
KINKADE: The fate of the legendary aviator has inspired many explorers to undertake similar pursuits without success. Now this group hopes to finally put to rest the mystery that has captivated generations. What happened to Amelia Earhart and her plane?
Lynda Kinkade, CNN.
(END VIDEOTAPE)
BRUNHUBER: A new study funded by NASA shows earth's moon is shrinking. Its circumference has s lost 45 meters in the last few million years. Researchers say the satellite's core is decreasing in size as it cools. And that results in creases on the surface.
Now, picture a grape shriveling into a raisin. The creases lead to moonquakes and landslides that make the surface less stable than scientists previously thought. That could be a problem at the lunar south pole where the U.S., India and Russia are exploring. China has plans to create lunar habitats there in the future.
All right, I'm Kim Brunhuber. CNN NEWSROOM continues now with Rosemary Church. That's next.
Stay with us.
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