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Trump Warns Iran ahead of Attending Dignified Transfer; Hegseth Clashes with Senators over Extra Funding for Iran War; Middle East Analyst Says U.S.-Iran Ceasefire Was Doomed to Fail; Epstein Model Recruiter Found Dead; Trump's Trade War; Trump Approves Civilian Nuclear Deal with Saudi Arabia; Louvre's Apollo Gallery Reopens; Pan Am Plane Wreckage Found 74 Years Later; Thousands Isolated by Flooding in Chile. Aired 10-11a ET
Aired July 22, 2026 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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UNIDENTIFIED MALE (voice-over): Live from CNN Abu Dhabi, this is CONNECT THE WORLD.
ELENI GIOKOS, CNN ANCHOR AND CORRESPONDENT (voice-over): Welcome to the second hour of the show. I'm Eleni Giokos in Abu Dhabi.
President Trump threatens to bomb and destroy an Iranian bridge or every power plant every time Tehran targets a ship in the Strait of Hormuz,
intensifying pressure on Iran.
Meanwhile, four vessels bound for the Bab-el-Mandab strait turn back as Yemen's Houthi rebels threaten to blockade another critical global oil
chokepoint.
And a French model recruiter, who, for years, connected young women with convicted sex offender Jeffrey Epstein, is found dead at his home near
Paris.
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GIOKOS: In one hour, U.S. president Donald Trump will attend the dignified transfer of the latest American service members killed in the ongoing war
with Iran. The four service members killed recently increased the U.S. death toll in the war to 18.
With negotiations stalled, president Trump says the U.S. is preparing to attack Kuh-e Kolang Mountain, also known as Pickaxe Mountain.
And just a little over an hour ago, he warned Iran in a social media post that the U.S. will bomb and destroy one bridge or power plant anytime Iran
targets a ship in the Strait of Hormuz. President Trump just spoke a few minutes ago on his way to the dignified transfer. Let's take a listen to
that.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're going to Dover. Some of you are going with us to honor our heroes and they are indeed great heroes,
actually.
They said and they -- all of them said very strongly, we can't let -- we cannot let Iran have a nuclear weapon. They won't have a nuclear weapon. So
we're going to honor them. And one of the hardest things to do -- for me, it's one of the hardest things to do as a president but has to be done.
QUESTION: As we -- as we go to honor these soldiers, do you have an update on the investigation to how they were killed in Jordan?
TRUMP: No, they're doing that. That'll be released. It -- you know what?
QUESTION: (INAUDIBLE)?
TRUMP: Well, they're going to pay a big price.
They're getting -- they're getting -- they're being decimated.
QUESTION: Is that report inaccurate, sir?
QUESTION: What do you say to families of these fallen soldiers, when Americans are largely against this war?
How would you ask them?
TRUMP: Well, Americans aren't against the war. The -- a poll -- a poll just came out. Americans don't want high gasoline prices but they're not
against the war. That just came out loud and clear in a poll.
QUESTION: Sir --
TRUMP: Nobody wants Iran to have a nuclear weapon.
Do you want Iran to have a nuclear weapon?
You think it's good?
Go ahead.
QUESTION: (INAUDIBLE) what will you say to them today?
TRUMP: All I'm going to say is we love you. We love your child. And that's what they are to them. They're their children. There's no games, no
nothing. That's their child. And all you can do is throw out your heart.
Thank you. Thank you very much.
(END VIDEO CLIP)
GIOKOS: I'm joined now by Stephen Collinson.
Stephen, good to have you with us. We just heard from president Trump there on his way to the dignified transfer. You know, listening to that -- and he
says it's one of the hardest things to do as president -- take me through what we're expecting today and just on the back of those comments from
president Trump.
STEPHEN COLLINSON, CNN WHITE HOUSE CORRESPONDENT: Yes. A dignified transfer ceremony is the return of the remains of American soldiers killed
abroad. We saw this obviously, a lot during the early years of the 20th -- 21st century with the Iraq and Afghan Wars.
It's a very solemn ceremony. You typically only get news coverage from a distance. It's that Dover Air Force Base in Delaware. And this is something
presidents have tended to do. Not all of them necessarily speak about it beforehand.
But Donald Trump does things the way he does and he's had some criticism in the United States for the way he has referred, in social media posts, to
some of the dead from this war.
So there are obviously all sorts of solemn, ceremonial aspects of what is going on today. And as always, there's a political dimension when the U.S.
is at war abroad.
GIOKOS: Yes, exactly. And to be honest, when we see what is going on over the last 11 days, there's major escalation.
[10:05:00]
And we don't know what the offramp will be. it's interesting that the Americans are saying that Iran doesn't show that it's willing to look at a
diplomatic offramp here.
But the question is, is the United States willing to do so, even though president Trump, a short while posted, that he's willing to bomb a power
plant or a bridge for every vessel that is struck in the Strait of Hormuz?
COLLINSON: Yes. And that's another threat of escalation rather than moving toward an offramp. What I think the U.S. side is wary of at the moment is
another ceasefire. There's been talk in the diplomatic community overseas of perhaps a 10-day ceasefire to try and revive that memorandum of
understanding with Iran that collapsed.
The problem with that is, I think that the U.S. side would see that as a way for Iran to reconstitute somewhat its forces, to reposition those that
are vulnerable to this latest wave of U.S. bombing.
In some previous conflicts, negotiation has actually taken place during military hostilities. I think the U.S. would probably prefer that scenario.
But at the same time, we had a congressional hearing yesterday in Washington where Pete Hegseth, the Defense Secretary, was really under a
lot of pressure from Democratic senators.
And he wasn't really able to specify any offramp for this war, to say what success would look like. In the end, it now appears that the U.S. war aims
have narrowed down to reopening the Strait of Hormuz and stopping Iran from getting a nuclear weapon.
That is a very vague formulation and it's something that seems to augur perpetual military action against Iran. If it's not always daily and
intense, it seems to be something that the United States would have to be involved in for a considerable period of time.
So expectations in Washington, as the bill for this war hits $37 billion already, that this isn't going to end anytime soon.
GIOKOS: OK. So I want to play this conversation with U.S. Representative Pat Harrigan, a Republican, and Audie Cornish from earlier today. Take a
listen.
(BEGIN VIDEO CLIP)
REP. PAT HARRIGAN (R-NC): I've advised the administration we've got to do one of two things. There's one of two ways forward in Iran. We either have
to declare victory and leave or we have to actually do what is necessary to put the Iranian regime in a box.
AUDIE CORNISH, CNN ANCHOR: Which is?
HARRIGAN: Where they have to make very difficult decisions. We have not yet set the conditions for that to happen.
(END VIDEO CLIP)
GIOKOS: Do you believe that those are the only options that the United States has right now?
COLLINSON: Well, the problem with the first one declaring victory, leaving, that will be exceedingly hollow if Iran is still controlling the
Strait of Hormuz. And I think that's why Trump might have been tempted for that.
But it would be politically unsustainable. The congressman says that Iran needs to be put in a box. What exactly he is referring to is unclear.
Is he talking about sending in ground troops to try to overthrow the regime?
That would be massively expensive, would cause extreme disruption and many U.S. casualties. I don't think that's an option.
And the fact that either these two supposed options are not really an option for the president, I think, explains where we are now in this
stalemate, where concentrated aerial attacks by the U.S. may be able to degrade Iran but may not change its philosophy regarding its desire to hold
the Strait of Hormuz.
And then the U.S. can't get out of it. So the president is in a trap. It's not clear how he gets out of it.
GIOKOS: All right. Stephen Collinson, thank you, as always, for your insights.
All right. So as Stephen mentioned, the soaring cost of the Iran War was laid bare on Tuesday when the U.S. Secretary of Defense appeared on Capitol
Hill. Pete Hegseth told a Senate committee that the war so far has cost the United States more than $37 billion. CNN's Brian Todd joins us now from
Washington with more.
Brian, good to see you. I mean tough questions for Hegseth around the cost and how much longer it's going to last. The timeline keeps changing.
How is -- how is this all going?
BRIAN TODD, CNN CORRESPONDENT: Well. It's not going well, at least when secretary Hegseth faces Democratic senators Eleni, as he did yesterday.
You know, I've covered a lot of hearings that secretary Hegseth has testified in. All of them got contentious at one point. None of them got as
contentious as the one on Tuesday.
As Eleni points out, the context here is that secretary Hegseth is asking Congress for $67 billion additionally, in addition to the $37.5 billion
that's already been spent on the war.
And in doing so, in making that request, he got really hammered by at least three Democratic senators on the course of the war, the administration's
prosecution of the war and what the end game really is.
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The most contentious exchange came with senator Gary Peters, a Democrat from Michigan, who said that basically the -- Iran was, you know, had not
been defeated, that this has been, quote, in his words, "an utter and complete failure," this war.
And said that even with that, here's Hegseth coming and asking for more money.
And he said, if you want this money, how is the strategy going to change going forward?
Here's that exchange.
(BEGIN VIDEO CLIP)
SEN. GARY PETERS (D-MI): So what's different, Mr. Hegseth, Secretary Hegseth?
PETE HEGSETH, U.S. SECRETARY OF DEFENSE: I think your characterization of this incredible effort as a failure is reckless and I think it's
irresponsible and I think it smears the sacrifice of the troops that are out there making on behalf of the American people to ensure that Iran never
gets a nuclear weapon.
Shame on you and others who call this a quagmire and a failure and then you want to turn around and say you support the warfighter. Either you do or
you don't.
PETERS: Is the nuclear material still there, sir?
HEGSETH: I can get you a ticket out to CENTCOM and talk to what those Americans are doing, how committed they are to this effort and how they
want to ensure that Iran never threatens their families with a nuclear weapon.
It is that -- that's the kind of intensity that our warfighters have about making sure that Iran isn't capable of doing that.
PETERS: Secretary Hegseth, if you listened to my comments, you told -- you -- would have heard me say how amazing our warfighters are.
HEGSETH: I heard failure. I heard exactly what you said.
PETERS: I will tell you on how I used the word failure because I used the word failure to their leaders. You, sir, are the failure. Not the men and
women who are on that front line. Not the men and women who hold up their honor with distinction.
But if there's a lack of a winning strategy, they're in harm's way. Their leaders have failed them. And that's what's happening. We have political
leadership. You, you don't have a strategy. You don't have a long-term plan to actually win this war. Win the war.
The men and women are going to be able to do it but they need to have leadership. When will you show leadership?
When will you show leadership?
HEGSETH: Why don't you show some leadership and stand up for your fellow Democrats who won't fund the troops, who stand and play partisan politics
while you don't give us the money?
(END VIDEO CLIP)
TODD: That was the most contentious exchange. He also got into some heated exchanges with Democratic senators Jon Ossoff and Kirsten Gillibrand,
again, about the money and again about his declaration and president Trump's declarations throughout the war that Iran had been defeated, that
their military had been decimated.
Hegseth also claimed that the U.S. has been in control for quite some time of moving ship traffic through the Strait of Hormuz, even though ship
traffic has dropped sharply and Iran has basically cut off ship traffic in the Strait of Hormuz.
He said that there's been a covert effort by the U.S. to move some traffic through and that they've pushed about 400 million to 500 million barrels of
oil through there under the nose of Iran during that time, Eleni.
That was quite an extraordinary claim by secretary Hegseth, even though most, if not all, of the Strait of Hormuz has been basically shut off by
the Iranians at this point.
GIOKOS: Yes. And a lot of the traffic showing that shippers are opting for that northern route.
You know, after the hearing, how are U.S. senators feeling about Hegseth testimony?
TODD: They're not feeling too great about it, Eleni. I mean, they're complaining that basically, again, you know, he's they're asking for this
money, $67 billion in additional funding, but he is not really being clear about the end strategy about just how much they're going to continue to
prosecute this war.
Here's a compilation of some sound that we got after the hearing from some Democratic senators.
(BEGIN VIDEO CLIP)
SEN. RICHARD DURBIN (D-IL), DEMOCRATIC WHIP; CHAIR, SENATE JUDICIARY COMMITTEE: They can't explain how this money is going to be spent.
SEN. CHRIS COONS (D-DE): I wish secretary Hegseth would spend less of his time blaming Biden and his predecessor and more time focused on delivering
clear answers to important questions.
SEN. JOHN KENNEDY (R-LA): We need to come up with a way to explain to the American people why we went in and how we're going to get out. Congress
needs and the American people need some straighter answers.
(END VIDEO CLIP)
TODD: So even some Republicans voicing some frustration there, Eleni. I'm not sure exactly when secretary Hegseth is going to appear next before
members of Congress.
But you can envision that, again, unless there are some clearer answers coming from the administration, from the Pentagon here, it's going to be
contentious as long as this war lasts.
GIOKOS: Yes. And we don't know when it will all end. Brian Todd, thank you so much. Good to have you on the show.
My next guest believes the U.S.-Iran ceasefire was always doomed to fail because, as she writes in "Foreign Affairs" magazine, "Unless a ceasefire
is followed by sustained diplomacy, it risks becoming a mere pause that warring parties use to prepare for the next round.
"And when underlying disputes remain unresolved, they risk erupting and cascading across the region."
Sanam Vakil directs the Middle East and North Africa Programme at Chatham House and joins me now live.
Sanam, really good to have you with us. There's so much going on right now. And I think the most recent post by president Trump, where he says if Iran
strikes any vessel in the Strait of Hormuz, they're going to be targeting a power plant or a bridge.
[10:15:00]
And it just shows the position that we're in right now.
I mean, how are you reading into this scenario, this reality we're in, where the timeline keeps changing and keeps being extended?
SANAM VAKIL, DIRECTOR, MIDDLE EAST AND NORTH AFRICA PROGRAMME, CHATHAM HOUSE: Well, I think this is not a good phase of this conflict. It seems
that we are a downward spiraling.
And the fact that president Trump is using such threats indicates that the United States and his circle around him might be assessing that there are
not too many options to further degrade or dislodge the system in power in Iran.
And so he's hoping that these threats will move the dial. Unfortunately, they're probably not going to move the dial at all. And I think Tehran will
continue to harden, continue to demonstrate dangerous retaliatory capabilities as we've seen play out over the past 11 days.
And, you know, this means that this could just bump along, drag along and slowly widen and escalate, rather than get both sides back to the
negotiating table, which is really where they should be.
GIOKOS: We also heard new renewed threats and it's specifically focused on a mountainous range called Kuh-e Kolang, which is also referred to as
Pickaxe Mountain. And president Trump saying they're going to be striking that very soon. They're trying to get to whatever enriched uranium exists
in Iran.
What are you reading into this new target?
VAKIL: Well, you know, the target range is expanding because the United States is looking to strike what it can, to declare victory or to force the
Iranians to submit and come back to the negotiating table.
There's been also suggestion or leaks that Iran might have moved its centrifuges to Pickaxe Mountain. And that's perhaps driving this potential
U.S. strike that could be coming.
You know, we have to also consider what the Iranian response to that might be. Thus far -- and, you know, it pains me to try to explain it this way --
both sides have tried to be proportional. even though, of course, attacking desalination plants and, of course, Iranian strikes on Kuwait in
particular, I would say, have been disproportional.
But this war, you know, the longer it drags on, the more the United States is looking to pressure Iran and the more Iran continues to respond, again,
means that this war is going to widen.
What's troubling to me is there is no real clear off ramp. There are negotiators that are trying to bring down the temperature. There is a
proposal being floated for another 10-day ceasefire.
And at the same time, the Houthis in north Yemen are threatening ships in the Bab-el-Mandab. And, you know, should that happen, it risks bringing
further strikes on north Yemen, breaking the ceasefire between the Houthis and president Trump.
And then, boom, you know, we will be in something bigger and that will have additional shock on the economy, which oil prices are not really reacting
to. At the same time, this has become somewhat normalized.
GIOKOS: Indeed. And, you know, even though oil prices have risen somewhat, they haven't completely factored in all the risks and the uncertainty
that's out there.
You know, the United States has consistently said that they've been able to degrade a large portion of Iran's military capabilities. And yet here we
are. The Gulf region has been dealing with retaliatory strikes from Iran over the past 11 days.
And the question is, how long can Iran keep this up for?
And what is the reality out there in terms of Iran being able to continue to strike Gulf neighbors?
VAKIL: Well, you know, obviously we don't know what they still have up their sleeve. Some of the strikes on Jordan indicate that they're using new
missiles, new technology, that have been able to get through and cause damage, including loss of American life.
So, you know, it foreshadows that there is more in their kit that we have not seen. Certainly the United States is a formidable and the key
superpower. But bombing Iran or obliterating everything in sight isn't really going to get to the crux of the problem.
This is a system that feels that time is on their side. Having survived the war, they're going to continue to fight for their long-term existence and
resilience and the survivability of the Islamic Republic.
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GIOKOS: Yes. And the United States, in the meantime, he takes it, the Defense Secretary is, you know, lobbying for more funding to keep this war
going, asking for another $67 billion after spending already over $37 billion.
And I wonder what this means in terms of the optics of the United States and the government and people in the United States being behind president
Trump and what he's trying to achieve in the Middle East.
VAKIL: Well, I think polling clearly indicates that Americans are very skeptical and unclear of what president Trump is trying to achieve. This
war has proven to be far more costly than anyone anticipated, certainly has gone on longer.
And the goals and the goalposts continue to change. We've shifted from regime change to opening the Strait of Hormuz to no nuclear weapons. And
nobody's even talking about Iran's nuclear program or obtaining some verifiable deal in that realm.
You know, my view is that president Trump is too focused on either forcing Iran to submit -- and that indicates he still doesn't understand his
adversary. But the other problem is that all sorts of deals and dealmaking coming from that White House remains transactional.
And these transactional deals, as I've written along with my colleague, Neil Quilliam, are not sufficient enough to solve the problems that are
currently on the table. They can buy us some time, bring about a ceasefire.
But they're not going to, on their own, get us to a political settlement. And we should be thinking big on what that political settlement is going to
look like. Otherwise, the region is going to be in an attritional war for quite some time to come.
GIOKOS: Sanam Vakil, great to have you with us. Thank you so much.
Ahead on CONNECT THE WORLD, a French model recruiter with links to Jeffrey Epstein has been found dead in his home near Paris. We'll bring you that
story right after this.
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GIOKOS: A professional model recruiter, who worked with the late sex offender Jeffrey Epstein, has been found dead in his home in France. Daniel
Siad arranged for young models to meet with Epstein and was paid tens of thousands of dollars. That is according to the Epstein files.
Siad was also facing accusations of abuse. A model accused him of rape in 1990 when she was working with him. He had denied the allegations. We have
CNN's Melissa Bell in Paris with more details.
Melissa, good to see you. The autopsy has yet to be performed.
But have police released any information about the cause of death?
MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: Nothing at all. Nothing to suggest whether there was -- they believe there was foul play or
whether this was accidental or natural death.
We know nothing for the time being, Eleni, from the authorities, simply the fact that his body was found in his home in this suburb very close to
Paris.
[10:25:05]
Now he had been facing a lot of renewed scrutiny recently as a result of the latest releases of Epstein files. Our affiliate, BFM, says that his
name was listed no fewer than 2,000 times in the Epstein files.
And he was also the subject, as you say, not just of those accusations dating back to 1990 but also these probes that are ongoing into the links
between Jeffrey Epstein and the modeling world, including a French probe that would have been looking specifically into the links between Jeffrey
Epstein and Danielle Siad.
And that is the context in which he was facing all of this pressure that his lawyer has alluded to in speaking after his body was found.
Now very recently, Katie Polglase, CNN's investigative correspondent, had a chance to meet up with him and to put questions directly to Danielle Siad
about his links to Jeffrey Epstein and the fact that he had continued introducing him to young models even after his 2008 sex conviction.
Danielle Siad, as you're about to hear, continued to claim his innocence and to say that he believed that the models would be well treated. Have a
listen.
(BEGIN VIDEO CLIP)
DANIEL SIAD, PROFESSIONAL MODEL RECRUITER: My work with him has been strictly professional. I never doubt that, because I never heard anything
from anyone I introduced him who came back to me that they had a bad -- a bad situation with him.
I did not know a lot about him until when he comes to Paris. And I told you again. He said he passed -- he, too, to the -- to the government. So for
me, he is free man. He's clean. He was such a powerful person.
And how can I not trust him?
(END VIDEO CLIP)
BELL: The Epstein files also suggest that, over the years, Jeffrey Epstein had paid tens of thousands of dollars to Danielle Siad. So clearly he was
the subject of all of this renewed scrutiny, both from the media and the judiciary here in France.
But for the time being, Eleni, we know nothing about the circumstances of his death, simply that this is the latest macabre twist in the fallout from
the Jeffrey Epstein files. And also a reminder, I think, of how far and wide his misdeeds went.
GIOKOS: Right. Melissa Bell, really good to have you with us. Thank you so much.
Coming up on the show, trade talks are ramping up as the U.S. announces new tariffs on Canada. We will be discussing this move and how it's reigniting
trade war concerns. That is coming up next.
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GIOKOS (voice-over): Welcome back to CONNECT THE WORLD with me, Eleni Giokos. These are your headlines.
U.S. Central Command says U.S. forces conducted an 11th straight night of strikes against Iran. A statement says the strikes are focused on freeing
up shipping in the Strait of Hormuz. Iran is responding with attacks against its Gulf neighbors.
Former Venezuelan president Nicolas Maduro and his wife are back in a U.S. federal court today for a pretrial hearing in their narcoterrorism and drug
trafficking case. Federal prosecutors and defense lawyers are seeking a June 2027 trial date. That is according to a court filing.
Both have pleaded not guilty and are in a federal custody as they await trial.
Severe storms in the U.S. are blamed for historic flooding and multiple tornadoes across parts of the mid-Atlantic and northeast regions. In West
Virginia, flood waters drenched roads after more than 12 centimeters of rain fell in just six hours, in one of the hardest hit counties.
Severe thunderstorms also spawned tornadoes and damaging winds from Kentucky to New Jersey.
New today, Yemen's Iran-backed rebel Houthis are warning shipping companies not to use Saudi ports or they may be targeted. That is according to an
email that was sent to companies by the Houthis' shipping coordination channel, known as HOCC.
I received a copy of that email from one of the shipping CEOs, who said that it was sent to his clients.
And you can see here that it reads, in part, "The Yemeni armed forces have decided to impose a ban on maritime navigation to and from Saudi ports."
It goes on to say that any vessels which do not follow, quote, "may be subject to targeting in any location within the operational reach of the
Yemeni armed forces."
CNN has reached out to HOCC but so far we have not heard back. CNN business senior reporter David Goldman is covering the story for us from New York.
David, really good to see you. I mean, Bab-el-Mandab strait is this new front that potentially could wreak more havoc on the oil market and,
frankly, the maritime sector as a whole.
What are you seeing right now?
DAVID GOLDMAN, CNN BUSINESS SENIOR REPORTER: Yes, you got that right. I mean, this is one of those straits that is becoming another pinch point for
the oil market. Remember because no one could get oil out of the Strait of Hormuz, out of the Persian Gulf, through the Strait of Hormuz, well, Saudi
Arabia said, well, that's fine.
We'll just pipe a bunch of oil west to the Red Sea and get it out through the Bab-el-Mandab strait. And so you can see that this Houthi warning is
certainly sending oil prices significantly higher, because if that strait is now closed, well, there's only one way for oil to go and that is north
through the Red Sea, through the Suez Canal.
And that's not really a great way to get it to the customers that really need it, which is Asia.
Right?
So most of the oil that Saudi Arabia had been pumping, which is like 4 million to 5 million barrels a day, most of that was destined for Asia. In
fact, around 2.5 million to 3.5 million barrels per day was going through that Bab-el-Mandab strait.
Now it doesn't appear that the Houthis are actually doing much to enforce this blockade right now but it sounds like they might not even really need
to, just by saying that they will attack ships. That has led several of them to just do a U-turn and turn around.
And so here we go again. If there's no way for oil to get out of the Strait of Hormuz, if there's now no way to get oil out of the Bab-el-Mandab
strait, well, then, you know, we're in another situation where oil might have to go up a little bit higher.
And it looks like already oil has gone around $5 a barrel higher. And I'm being told it could go up to $100 a barrel. Again, those are prices that we
haven't seen since late May, early June. Eleni.
GIOKOS: Yes. All right. David Goldman, good to have you with us. Thank you so much.
GOLDMAN: That sigh is the appropriate reaction.
GIOKOS: A lot going on.
(LAUGHTER)
GIOKOS: I know. It's like we're in the same cycle. It's just, you know. Anyway, we'll see what happens in the next few weeks. We hope for the best.
Thanks, David.
GOLDMAN: Thank you.
All right. In the meantime, speaking of here we go again, trade talks between Canada and the U.S. are set, to, quote, "intensify" after the Trump
White House announced 50 percent tariffs on some Canadian goods. Canada's prime minister Mark Carney was asked by reporters if he would consider
imposing retaliatory tariffs. Take a listen.
(BEGIN VIDEO CLIP)
MARK CARNEY, CANADIAN PRIME MINISTER: All options in terms of how we would respond if they do come into effect, that's part of what we'll be
discussing with premiers (ph).
GIOKOS (voice-over): The U.S. has framed the tax as a response to what it says are Canada's longstanding trade barriers.
(END VIDEO CLIP)
[10:35:04]
GIOKOS: Mohamed El-Erian is the chief economic advisor of Allianz and a professor of the University of Pennsylvania's Wharton School. He joins us
now live from Greenwich, Connecticut.
Mohamed, really good to have you with us. I mean, when we say, here we go again, 50 percent on Canada in terms of tariffs on a range of goods, 25
percent on Brazil, a range of goods, I mean, are we back to trade war and tariff war scenarios?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: Thanks for having me, Eleni.
So the headlines are worrisome. As you pointed out, 50 percent on Canada, 25 percent on Brazil, with the possibility of another 12.5 percent, 10
percent soon on at least 60 countries, I see this as a continuation of where we've been with two very important qualifications.
One is look at the list of exemptions. So the headlines are worrisome. But if you look at the amount of goods that are exempted, you are somewhat less
worried.
And then the second element is more fundamental, is what does it mean for whatever remains of the global order?
So in the case of Canada, what does it mean for what we used to call NAFTA and now USMCA?
So I think the immediate impact is not as bad as many fear. However, the longer term questions remain really consequential.
GIOKOS: So let me ask you the longer term question in terms of what remains of the global world order as we know it. I mean, in terms of, you
know, trade rules still surviving this massive confrontation, even between allies.
EL-ERIAN: And that's the big question on everybody's mind. There are alternatives that some countries are thinking about, China or a middle
power coalition.
But realistically, that cannot substitute for the system we've had since World War II. So there are two possibilities.
One is what Gordon Brown, the former prime minister of the U.K., calls managed globalization lite. So it's a lighter form of globalization and
it's managed in order to contain the negative effects of the previous globalization.
And the other one, Eleni, is much more worrisome, is total fragmentation. I'm hoping that somehow we will end up in the managed globalization lite.
But it's far from a sure thing
GIOKOS: I mean, what are the probabilities of total fragmentation?
Because it just feels that we're heading toward that because everyone's in it for themselves. I mean, they're seeing trade as in tariffs specifically
as a tool. And frankly, some even saying that it's sort of, you know, imposing sanctions but in a lighter way.
I mean, how are you reading into the probabilities here?
EL-ERIAN: Yes. And it's part of the broader phenomenon. You just talked about chokepoints, maritime chokepoints in the Red Sea, in the Strait of
Hormuz. This is a period of what's called geoeconomics, whereby we weaponize economic tools. That is what's happening.
The big surprise so far is, one, retaliation has been limited and, two, the marketplace and the global economy has proved to be much more agile in
trying to reconfigure different supply chains.
You know, I am the one who -- I worry that if we continue to weaponize economic tools, the agility of the global economy will not be as big.
What does it mean to the people listening?
Unfortunately, it means structurally higher inflation, higher prices and it also means lower growth. So this is something that that we really want to
avoid. But the risk is considerable.
GIOKOS: Yes. Well, speaking of weaponization of economic tools, it's not just tariffs, right?
We're seeing you know, maritime, you know, waterways that are being completely weaponized.
What is worrying you the most in terms of what you're seeing playing out on a global level?
What's the thing that's keeping Mohamed up at night?
EL-ERIAN: And you know, let me just go with the list. We've weaponized the international payment system. We've weaponized industrial policy. So it's
very attractive to the national security apparatus because it seems to be costless.
You don't need to be -- put boots on the ground. You can put pressure on both allies and adversaries but there are economic costs.
What worries me is that I can't figure out what the endpoint is. You spoke earlier about the U.S.-Iran conflict. It's not clear where the endpoint is
there. It's not clear where the endpoint is on tariffs. It's not clear where the endpoint is on the weaponization, the border (ph) weaponization.
[10:40:00]
So what keeps me up at night is trying to figure out, where is this endpoint?
Where is the circuit breaker to make sure that this doesn't end up in fragmentation?
GIOKOS: Mohamed, really good to have you on. Uncertain time, unprecedented times. We appreciate your insights. Thank you.
All right. Coming up, president Trump has reportedly struck a landmark nuclear deal with Saudi Arabia. We'll have the details on that right after
this.
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GIOKOS: President Trump has just approved a landmark civilian nuclear deal with Saudi Arabia. That is according to two U.S. officials.
The deal would give Saudi Arabia access to the materials necessary to make a nuclear weapon, including enriching its own uranium. But a U.S. official
says, under the deal, international oversight would be limited.
The agreement would be announced as soon as Wednesday and is already getting pushback from U.S. and Israeli lawmakers.
Joining us now live is Kirsten Fontenrose, former senior director for the Gulf at the U.S. National Security Council.
Kirsten, thank you so much for joining us. What an important time to be speaking, that we've basically seen this decision that has come through,
according to officials.
What do you make of the headlines here?
KIRSTEN FONTENROSE, FORMER SENIOR DIRECTOR FOR THE GULF, U.S. NATIONAL SECURITY COUNCIL: There is a lot of debate, even within the U.S., about
whether this deal is a good idea, now or ever.
These are not new debates, though. This conversation with Saudi has been in place since about -- for about 10 years this has been on the table. And in
the meantime, Saudi has flirted with other options for nuclear energy, some that are worrying to the U.S., like a Chinese partnership.
And then the U.S. has been watching competition from places like France or South Korea. So this is the U.S. kind of reemerging in this industry at a
global level.
GIOKOS: OK. So Israeli Democrats party chair Jared Golden (ph) posted quote this on social media, saying, "Nuclear capabilities without stringent
monitoring requirements and without a framework of relations with Israel is a condition amount to a dangerous reality for the State of Israel."
How much of a blow is this to Israel?
FONTENROSE: For Israel, this is tough but they knew this conversation was happening. I mean, frankly, since November, this has been in discussion,
even within the U.S. administration. Congress has been debating it.
Lindsey Graham was certainly a leader in opposing a U.S.-Saudi deal without normalization with Israel. And, you know, there are conversations about
whether his passing has opened the opportunity for this to then fly through before U.S. midterms.
You know, in the U.S. system, in Congress. But for Israel, this is concerning. They have long opposed any proliferation of nuclear energy in
the Arab states. The opposition to decoupling it with normalization is rather new. But other folks will say, hey, look, we haven't seen
Netanyahu's administration prioritize normalization.
[10:45:04]
We've seen Saudi be willing to have that conversation if there was a pathway to a Palestinian state. So it's really on Israel that this
conversation is not happening in that context. Lots of different parties here in the U.S. and Israel and in the Arab world discussing that.
GIOKOS: Yes, there's a lot of things going on there. I mean, it's quite interesting because we know that president Trump is quite transactional.
You mentioned normalization with Israel. We don't know what conversations are happening behind the scenes.
But the timing is certainly interesting. And also the treatment of Saudi being allowed to enrich uranium, whether it's low grade or high grade, is
very different to, for example, the UAE, that imports enriched uranium for its nuclear power plants.
So what do you believe is happening behind the scenes?
Because the timing is really interesting.
FONTENROSE: That will be very interesting to watch because you've got both the U.S. pursuing this deal with Saudi while it is bombing Iran because of
its nuclear program.
And you have the UAE, which has been committed to all of the protocols the U.S. and the international community requested since 2009.
So the UAE has so far been quiet about this. I mean, it's brand new breaking news but they've known this was coming. You may see them -- this
is an opportunity potentially for them to renegotiate their own deal.
And I would expect you would at least raise that. But I think part of why you're seeing the difference between the treatment of Saudi and Iran here
is simply that Saudi has met this administration's asks on a number of other foreign policy topics.
While Iran has obviously been quite opposed to the U.S. on foreign policy topics and been a problematic actor for the whole region in terms of its
foreign policy.
GIOKOS: Yes, I mean, it's quite interesting. A U.S. Republican congressman, Marlin Stutzman, said this about Saudi, a U.S. lawmaker saying
Saudi is a friend to the West. Here's the sound bite. Take a listen actually.
(BEGIN VIDEO CLIP)
REP. MARLIN A. STUTZMAN (R-IN): The Saudis are really the stable balance in the Middle East. I visited Saudi Arabia. They've come a long way from
where they were before. Obviously, the crown prince is a friend of the West and he's a friend of America. And we also know that they are always keeping
a check on Iran.
(END VIDEO CLIP)
GIOKOS: What do you make of that comment?
FONTENROSE: Yes, I think you're seeing you're seeing gratitude from congressional members for the fact that Saudi has both hosted U.S. military
personnel in this conflict but also that Saudi has played well with others in terms of OPEC.
Plus, you know, making the president's life a little bit easier during this conflict with regard to oil prices at home. You also have members grateful
for the leadership that Saudi showed last spring in U.S.-Russia talks and U.S.-Ukraine talks.
Saudi-backed Syria stabilization led the sanctions relief push through in 2025. They joined the Gaza board of peace alongside Qatar and Egypt.
They've continued to buy American defense articles rather than cheaper Chinese or Russian options.
They've got that new strategic defense agreement, the F-35 package with the U.S. They pledged $600 billion in investment in the U.S. in May of last
year and then they raised it to $1 trillion in pledged investment in November. So you're seeing Republicans and some Democrats show Saudi a
little bit of love for that and a little bit of trust.
GIOKOS: Yes, I mean, it's a really interesting development. And we know that the conversation had begun with President Joe Biden. But I wonder
whether you believe that this deal could be derailed, you know, if Israel really pushes back on this.
FONTENROSE: It could be derailed. I don't think the Israeli pushback is what's as relevant. I mean, you will see that. And that will be registered
in congressional opposition.
But you also just have the potential for Congress to block this with a two- thirds majority vote. That's unlikely to happen. They would have to block a presidential veto of disapproval -- long process.
But in essence, it's just unlikely to happen that you'd have a two-thirds opposition vote to blocking a presidential veto in this administration. It
hasn't happened so far, at least not before midterms.
GIOKOS: All right. Kirsten Fontenrose, thank you so much. Good to have you on the show.
We're going to a short break. Well be back with more news in just a moment.
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[10:50:00]
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GIOKOS: In Paris, a gallery at the Louvre museum has reopened. That's nine months after France's crown jewels were stolen in a shocking heist.
The thieves were disguised as construction workers and there were some arrests. But the jewels have not been recovered. Security at the museum has
been boosted with additional surveillance and cameras.
It has been 74 years since a Pan Am flight crashed off Puerto Rico in a disaster that would change the future of airline safety. And now the
resting place of the Clipper Endeavor has finally been found.
Search teams using sonar and an underwater drone located the wreckage in the deep waters of Puerto Rico's northern coast. Our Tom Foreman has
details on this discovery and how the 1952 crash made modern air travel safer.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Oh, God.
UNIDENTIFIED MALE: That's a plane.
UNIDENTIFIED MALE: Whoa, whoa, look at that.
TOM FOREMAN, CNN CORRESPONDENT (voice-over): For the search team, the discovery of the lost Pan Am plane is a sensation. After 74 years in the
sand and salt water, many thought this Douglas D.C.-4 would never be seen again.
But there it is, ghostly images of the aluminum body, the wings, even the logo, found after years of tireless work by the Air Sea Heritage
Foundation, the Discovery Channel and Deep Sea Vision, which brought a highly-advanced underwater drone.
JOSH GATES, HOST, "EXPEDITION UNKNOWN": And that sonar vehicle, which is autonomous, went down to almost 2,000 feet below the surface. And when we
first saw the sonar image and saw the outline of that plane, it just took our breath away.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (voice-over): Fly first class or tourists on Pan Am's radar-equipped Super 7 Clippers.
FOREMAN (voice-over): In the decade after World War II, as civilian air traffic boomed, Pan Am was a global leader. The Clipper Endeavor promised a
then-quick eight-hour trip from Puerto Rico to New York City on Good Friday, 1952.
But shortly after takeoff, two of Endeavour's four engines failed, along with efforts to turn back. The old accident report says all aboard survived
the violent, watery impact but passengers were not told where life jackets were located or instructed in their use prior to ditching.
Confusion over life rafts and escape exits followed as the plane sank in three minutes; 17 people survived amid pitching seas and swirling sharks,
52 did not.
UNIDENTIFIED FEMALE (voice-over): Welcome aboard.
FOREMAN (voice-over): But the flight arguably has saved many, many lives since because it directly led to the creation of regulations requiring
passenger safety briefings before every takeoff.
UNIDENTIFIED FEMALE (voice-over): Locate the exit nearest to you.
FOREMAN (voice-over): A legacy for the living from dozens who were lost for so long and whose resting place now has been found.
(END VIDEO CLIP)
GATES: This flight and this tragic accident really changed aviation, fundamentally changed it forever. And we're all safer because of this
accident. And so I think we owe them a real debt of remembrance.
FOREMAN: Of course, Discovery and CNN are owned by the same company and Discovery plans to have a special show about all of this later in the year.
What they do not plan to do is in any way disturb the wreckage or the remains of these folks who lost their lives so tragically so many years ago
-- Tom Foreman, CNN, Washington.
(END VIDEOTAPE)
GIOKOS: A scorching heat wave is searing parts of Europe and fueling wildfires from Spain to Algeria. In southern France, Provence is seeing its
biggest wildfires of the summer, with more than 1,700 hectares burned in the past day. Hundreds of firefighters are working to keep the flames from
spreading further and out of control.
An out-of-control wildfire has now been burning in central Spain for a week. It scorched more than 29,000 hectares of land and forced some 1,200
people to evacuate their homes. And with temperatures expected to top 40 degrees Celsius for the next few days, there is little relief in sight.
Flooding in Chile has killed at least 10 people and left more than 100,000 isolated after a powerful storm front submerged the coastal city of Las
Salinas (ph) after days of heavy rain.
[10:55:07]
The floodwaters have destroyed or severely damaged many homes and roads, cutting off communities from lifesaving resources. Officials are trying to
get emergency aid to the hardest-hit areas. The government has declared a state of emergency in the region that is being affected.
Tropical storm Bertha is turning the Gulf -- in the Gulf of Mexico right now, pushing tropical moisture north and raising the flooding risk along
the U.S. East Coast. Severe thunderstorms are sweeping through the Ohio Valley and into the mid-Atlantic, causing a life-threatening flash flood
emergency in West Virginia.
Millions of people are under severe thunderstorm watches across 10 states, from southern Illinois to Delaware. In New York, two people had to be
rescued from stranded cars and tornadoes were reported in Kentucky, Ohio and New Jersey.
That is it for CONNECT THE WORLD. Stay with CNN. "ONE WORLD" is up next. I'm Eleni Giokos. I will see you tomorrow.
END
