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First Move with Julia Chatterley

Beijing Imposes Measures On U.S. Politicians After Detaining Media Tycoon, Jimmy Lai In Hong Kong; President Trump's Orders On Coronavirus Relief Sparks Confusion Amid Questions Over Their Legality As Well, Protesters In Beirut Call For The President's Resignation After Last Week's Explosion. Aired 9-10a ET

Aired August 10, 2020 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:24]

ZAIN ASHER, CNN ANCHOR: Live from New York, I'm Zain Asher in for Julia Chatterley. This is FIRST MOVE and here is what you need to know.

China sanctions. Beijing imposes measures on U.S. politicians after detaining media tycoon, Jimmy Lai in Hong Kong.

Executive action. President Trump's orders on coronavirus relief sparks confusion amid questions over their legality as well.

And growing anger in Lebanon. Protesters in Beirut call for the President's resignation after last week's explosion.

It is Monday. Let's make a move.

All right welcome once again to FIRST MOVE. I'm Zain Asher filling in for Julia Chatterley. Let's begin with a look at the U.S. markets with less

than half an hour to go before the opening bell. Let's take a look here.

It is looking like a mostly flat, slightly higher in terms of Dow futures open with the NASDAQ and S&P 500 beginning the week near record highs. All

this despite fresh uncertainty over new emergency aid from Washington.

President Donald Trump signed four executive actions over the weekend, intended to give help to needy Americans after negotiations in Congress

collapsed last week. Mr. Trump's measures, however, would give jobless workers fewer enhanced benefits than before, and the benefits won't begin

flowing right away. It is also likely that this Executive Order will be challenged in court, or rather all of them will be challenged in court.

Meantime, stocks are posting gains in Europe. A new study shows, European investor sentiment rising for the fourth straight month with the most

upbeat outlook coming from Germany.

Asian stocks were mixed. Chinese stocks rose slightly at mid-market, friendly inflation numbers as well. But U.S.-China relations have taken a

fresh turn for the worst in just the past few hours and that's where we begin in terms of today's drivers.

China has sanctioned prominent U.S. politicians and officials accusing them of behaving badly on Hong Kong related issues.

There are 11 names on Beijing's list, including some faces you might recognize there, Senators Marco Rubio and Ted Cruz as well and Tom Cotton

and Congressman Chris Smith. It comes as police in Hong Kong arrest media mogul Jimmy Lai under the new security law.

Ivan Watson joins us live now. So, Ivan, just talk to us about this arrest of Jimmy Lai. What legal grounds was his arrest based on?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, well, this was a clear show of force by the Hong Kong Police, by the government here when

they sent more than a hundred police officers to the headquarters of Jimmy Lai's newspaper, "Apple Daily" and raided that paper.

Really an overwhelming number of blue uniformed police officers, and then Jimmy Lai and at least eight other individuals arrested there and they

appear to be arrested on suspicion of breaking the controversial new National Security Law that Beijing imposed on this city on July 1st,

accusing some of the suspects of colluding with foreign powers and that that would be a threat to national security.

This is pretty remarkable. July 1st, when the law was put into place was seen by critics here in Hong Kong and around the world as breaking China's

deal with Britain to ensure that Hong Kong enjoyed autonomy until at least the year, 2047.

China was rewritten the rules and we're now seeing that implementation on the ground coming very quickly, with the arrest of more than 20 people in a

period of under a week and a half on suspicion of breaking this National Security Law -- in a month and a half, rather, that at least a dozen

activists have been banned from running for office in elections that were supposed to take place next month.

And those legislative elections for Hong Kong have been postponed at least a year by the authorities here on the ground, some say pretext of the

coronavirus and health risks here.

And now we have a move against a news organization here whose leader has been a fierce critic of the Communist Party in Mainland China, seen by many

to be a move against freedom of the press here, freedom of assembly has been under attack with thousands of people arrested over the course of the

last year, the demonstrations against the government.

It's virtually impossible to now hold a protest in the streets of Hong Kong right now. All of it adds up to a historic crackdown and a sign that

criticism of the authorities will not be tolerated at the levels that Hong Kong had enjoyed for decades, up until really a month and a half ago --

Zain.

[09:05:37]

ASHER: Yes, and despite the crackdown, "Apple Daily" saying they're continuing their operations no matter what, despite the arrest.

I want to turn to the deteriorating relationship between the U.S. and China because China retaliated and imposed sanctions on several key U.S.

lawmakers.

I mean, just walk us through, you know, what this symbolizes in terms of the U.S.-China relationship and also what these sanctions actually entail

in practical terms.

WATSON: That's right. I mean, it's another tit-for-tat move. On Friday, the Trump administration announced sanctions on 11 top officials here in

Hong Kong, including the city's Chief Executive, Carrie Lam, accusing her, the Secretary of Justice, the Secretary of Treasury -- sorry, of Security,

the current and former Hong Kong Police Chiefs, of undermining the autonomy of Hong Kong and stripping away democratic freedoms here, any of their

assets in the U.S. would be seized.

And on Monday, we hear from Beijing that at least 11 officials, I believe, in the U.S. are being hit back with sanctions. They include Senators Marco

Rubio, Ted Cruz, Tom Cotton, and Representative Chris Smith. They've all been largely behind legislation criticizing China for alleged human rights

abuses.

But the sanctions go on to include individuals like Kenneth Roth, who is the Director of Human Rights Watch. Back in January, he was denied entry to

Hong Kong at Hong Kong Airport after flying here from the U.S., when he planned to unveil a Human Rights Watch Annual Report here in the city, and

he was turned back.

Quite interesting to see him and the leaders of several pro-democracy institutions in the U.S., like the NDI and IRI also included on this list.

It is a sign that Hong Kong is also, in addition to the crackdown taking place here from Beijing and the Hong Kong authorities, there is a broader

deterioration of ties between the world's two largest economies, as China and the U.S. continue to sling barbs against each other and we really don't

know where this can end.

I think it's safe to say that these are the worst relations between Beijing and Washington that anybody has seen in decades -- Zain.

ASHER: Ivan Watson live for us there. Thank you.

All right, there are plenty of questions at this hour after the U.S. President issued four executive actions over the weekend, aimed at

extending coronavirus relief. This, after negotiations between Republicans and Democrats for a new economic aid package collapsed.

But there are questions about how exactly the orders are actually going to work and whether they really will help Americans in need. Let's bring in

Christine Romans joining us live.

So before we get to whether or not they actually will help Americans, Christine, are these orders even legal?

ROMANS: From Nancy Pelosi to Ben Sasse, the Republican senator saying that they are contrary to the Constitution, that this is a presidential power

play and the President taking too much power.

But what the President is doing is he is saying, yes, I'm making a power play because Congress failed to come up with another round of stimulus.

They couldn't agree and the American people need help, workers need help, out-of-work Americans need help, and the President stepping forward with

four specific moves he says will help them.

It's the how and the when that is the big issue, right, Zain? I mean, because assume that they're legal, right, and assume there isn't a legal

challenge, which could actually happen, these jobless benefits the President is proposing is a cut from what they were getting, $600.00 a week

extra. But there's a lot of devil in the details here.

The Federal government will put up $300.00, the states would have to put up $100.00 for a $400.00 extra bonus check for people who are out of work, but

you would have to stand up and build a whole another kind of infrastructure for that. It wouldn't be processed through the state plans that we have

now.

How long would that take? Well, you know, employment law experts say that could take weeks, that could take months. So will there be a check this

week or next week for out-of-work Americans for $400.00? Probably not.

ASHER: And in terms of what the executive action doesn't cover, I mean, I know you talked about whether or not they were legal in the first place,

but they don't really do much to help small businesses at all in terms of the Payroll Protection Program.

ROMANS: Right, so look, that was being negotiated under this new phase, the new round of funding from Congress. Those talks fell apart so you don't

have another round of PPP here. You also don't have another round of stimulus checks to all families, something that was passed in the House

version way back in May, something that Republicans also have been eater to provide just getting money into the hands of workers.

[09:10:30]

ROMANS: As we get through the money into the hands of everyone, as we just try to weather the storm here right now. So this is four initiatives that

the President is making a move on. There's a lot of talk about whether he should -- whether it is appropriate, whether it's legal to do. But he has

done it, and so when will there be relief to actual people? That's just still unclear here.

There's a payroll tax deferral, which the Treasury Department, the White House does have the legal authority, I'm told, to do, to defer some payment

on those taxes. Now, that means the employers have to fix their -- fix what they were taking out of paychecks so people have a bigger paycheck. Maybe

that's something that people will see in the near-term. Those are for working people who are making less than $100,000.00 a year.

That was something the President really wanted, both the Republicans and Democrats were cool on that. That was not likely going to be in any kind of

stimulus package passed by Congress.

ASHER: All right, Christine Romans live for us there. Thank you so much.

ROMANS: Thank you, Zain.

ASHER: Saudi Aramco's profit dropping nearly 75 percent in the second quarter from a year ago. But the world's largest oil company says it will

maintain its dividend this year.

Eleni Giokos has the details. So Eleni, just explain the rationale here, because they are going to continue paying the dividend, $19 billion in the

second quarter despite the fact that there are other oil companies that are cutting back their dividends and demand for oil has plummeted. What's the

thinking here?

ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Absolutely. I mean, you're so right to say that the other international oil companies are doing

something completely different because they want to preserve cash.

Yet, to have Saudi Aramco saying look, for a full year, dividend commitment, we're sticking to it. It's going to be a total of $75 billion

if you look at the second quarter payment, almost $19 billion. And if you juxtapose that against what you see on the net income front, profits are

down around 73 percent to $6.6 billion. This is a huge drop here.

But if I look at first half earnings as a whole, we're talking about $23 billion. They're saying that they are looking good on the cash flow front.

They also have to go to the markets to raise debt. That's going to be the reality.

But remember that just a few months ago, we saw oil prices going into negative territory. It was actually Saudi Arabia and Russia engaging in a

price war that resulted in very low oil prices.

Remember that the Saudi Arabian government, Zain, owns 98 percent of Saudi Aramco, so most of their dividend is going to be going to the Saudi Arabian

government. It's a time that is really crucial for a government to be propped up with any money possible.

And if I look at what they were saying during the call a few moments ago, they were saying they're resilient. They are agile. They are very different

to all the other international oil companies and they also were able to complete a really crucial acquisition of SABIC that means, they propelled

further into around 50 markets around the world.

So this is just a really interesting company to look at. It's the crown jewel of Saudi Arabia, and of course, Zain, very different to what we are

seeing on the other oil major front as well. So, a good one to watch.

ASHER: Certainly. Eleni Giokos live for us there. Thank you.

And these are the stories making headlines around the world. Angry protesters in Lebanon clashing with police in the aftermath of last week's

massive explosion. The death toll has reached 160.

Ben Wedeman is live in Beirut for us. So, Ben, listen, we all know that at this point, the Lebanese people desperately want change. There were

protests happening over the weekend, but what does that actually look like in concrete terms? What is the first step beyond resignations?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what we've seen is already at least three government ministers resigning and seven members

of Parliament. What this means is, what this disaster, the explosion Tuesday evening in the Port of Beirut means that the government, the state,

the Lebanese State writ large has failed the Lebanese people.

In addition to this catastrophe that happened here in Beirut, you have an economy in free fall, you have the number of COVID cases increasing, record

numbers by the day, and the people have no faith in not just this government, but the Lebanese State.

Now, at the moment, the Cabinet of Hassan Diab, the Prime Minister is meeting -- it is expected that perhaps in the coming hours that the

government will resign, but we still are not certain about that because some of the pillars of that government, Hezbollah and Amal, the two Shia

parties, do not seem at this point -- these parties that are part of the government do not at this point seem willing to take that step, to see the

government resign.

[09:15:27]

WEDEMAN: So confusion reigns, uncertainty is really the air we breathe at the moment here in Beirut. But what is beyond certain is the anger of the

people.

We saw these protests that turned into clashes with the security forces Saturday and Sunday. We were earlier today in the neighborhood's worst hit

in that explosion, and what we saw is the government is absent.

You see policemen sitting around in the shade drinking tea while ordinary citizens are doing their best in terms of helping those who have been

affected, trying to clean up the damage, handing out sandwiches and water to the volunteers. But the state writ large is absent -- Zain.

ASHER: So people want the government to resign. You're saying that that might happen. There's a possibility there, but we'll wait and see what

happens in the coming hours.

At this point though, the next thing they want is an independent investigation and of course, accountability. Will they get that?

WEDEMAN: If you look back into the history of Lebanon, there have been a series of high-profile assassinations of Presidents, Presidents-elect,

Prime Ministers, former Prime Ministers, journalists, other prominent public figures, and really none of those investigations ever got to the

bottom of it.

Some of them found the men who pressed the button or pulled the trigger, but in terms of the larger events, the assassinations and the murders, very

little has ever been achieved in terms of accountability.

And it's worth noting that the investigation into the assassination of former Prime Minister, Rafic Al Hariri on the 14th of February, 2005, the

verdict of the International Special Tribunal for Lebanon was due to come out this past Friday, but because of events here in Lebanon, that was

postponed.

By and large, most people have very little faith in certainly any investigation conducted here in Lebanon into this event in particular. And

at this point, it doesn't appear that an international investigation is going to take place.

There is an ongoing investigation which has international assistance, but the final verdict, if that ever comes out, would be a Lebanese verdict.

And people you speak to on the street, they say perhaps we'll get some information about what really happened, but it may be five, 10, 15, 20

years away -- Zain.

ASHER: I see. All right, Ben Wedeman live for us there, thank you so much.

Protests have erupted across Belarus after disputed election results showed a landslide victory for incumbent President Lukashenko. Dozens of people

were reported injured in clashes between demonstrators and police after state-run exit polls gave Mr. Lukashenko more than 80 percent of the vote.

Violence broke out in parts of Chicago overnight. Stores were looted and police say they came under fire. Bus and train services into Downtown

Chicago have been halted as police try to restore order there.

Still to come on the show, as confusion reigns over President Trump's stimulus executive actions, what are the chances it will help those who

need it most?

And why China and the U.S. must dial it down and avoid any chance of conflict. We'll hear the fears of the former Australian Prime Minister,

Kevin Rudd, next.

(COMMERCIAL BREAK)

[09:22:17]

ASHER: Welcome back to FIRST MOVE coming to you live from New York where U.S. stocks are on track for a mostly flat open this Monday. News that

China is imposing sanctions on 11 U.S. officials for their positions on Hong Kong is pressuring stocks a little bit. It's yet another example of

worsening U.S.-China relations.

Twitter shares meantime are higher premarket amid reports that it has been in talks to buy TikTok's U.S. operations from China's Bytedance. Microsoft

is in the running to buy up the assets as well after President Trump's moves to ban TikTok in the U.S. where stocks end up this week will most

likely hinge on the state of emergency aid.

Talks in Washington -- talks collapsed late last week with both sides far apart in terms of a price tag. President Donald Trump's executive actions

signed over the weekend would give needy Americans some relief, but there are huge uncertainties about how these measures will be implemented.

Joining me now is Catherine Rampell, CNN's economic commentator and "Washington Post" columnist as well. Catherine, thank you for being with

us.

So, just in terms of these executive actions, we all know that Congress has the power of the purse here. Are his actions legal? Is this a clear case of

executive overreach? What are your thoughts?

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: It's a little bit unclear at this point whether in fact all of these orders are legal, are on the right

side of the Constitution for that matter. Congress, as you point out, is supposed to control power of the purse, but two of these orders/memorandum,

would in fact allow -- or Trump says that he would be deferring payroll tax payments.

That's supposed to be a responsibility to lay and collect taxes, that is up to Congress, and then another memorandum would essentially create an

entirely new unemployment insurance system because under current law, Trump can't shift money around within the existing unemployment insurance system

without an act of Congress. So there is some uncertainty here.

ASHER: And in terms of the states, I mean, even if it wasn't illegal, in terms of the states, they would have to top up the missing portion for the

unemployment insurance, and a lot of states simply cannot afford that right now given the coronavirus has torn through their revenues.

RAMPELL: Right, states are dead broke at this point. Their revenues are down, their costs are up. They don't just have money lying around to throw

at desperately poor at this point unemployed workers in their states.

So Trump is asking them to kick in another $100.00 per out-of-work employee, per out-of-work American that they do not have. But beyond that,

they would also have to create, again, an entirely new unemployment insurance system to administer those benefits, which in and of itself would

cost money, time, resources, et cetera.

[09:25:06]

RAMPELL: And so if you're a state and you want this assistance, but it's illegally dubious whether this would hold up in court. It costs a lot of

money to set up a new system. The whole program probably won't last more than two months, are you really going to pony up that money, given those

circumstances?

I think the answer is likely no for most states.

ASHER: So with only a couple of months to go until the election, who is winning the PR war here? Because obviously, Republicans, their angle is,

really, listen, we're trying to get this done for the American people. Donald Trump's angle is I'm trying to get this done, I'm trying to sign

these executive orders, but look, it's the Democrats. It's Nancy Pelosi that's holding your money up.

Are the Republicans winning here in terms of convincing the American people that the Democrats are to blame?

RAMPELL: That's an excellent question. I mean, I think we have to remember that the House, the Democratically controlled House actually did pass

another bill that would provide some sort of coronavirus relief that included an extension of unemployment benefits, as well as aid --

desperately needed aid to states and localities, money for testing and tracing, money for nutritional assistance, money for rent assistance, et

cetera. The Republicans haven't really put forward a bill yet.

Trump can claim that he has broken through the log jam and passed these executive actions to try to address the problem, but if in fact those

executive actions don't do anything, which I fear will be the case for at least three out of four of them, it's not clear if he is going to win over

a lot of new voters with his argument that he's on their side, that he is making progress.

ASHER: One sort of more controversial piece of the executive actions were the payroll tax holidays. It's technically a deferral, not a cut, although

President Trump has said that it is possible that he could forgive it if he is reelected.

What do we know for sure about the legality of the payroll tax deferral in terms of what can actually happen?

RAMPELL: Sure. So it would take an act of Congress to forgive those deferred taxes, to turn the deferral into a tax cut. Trump cannot do that

on his own. Now, maybe Congress would do that. They have been reluctant. Actually, lawmakers in both parties have been reluctant to pass a payroll

tax cut so far, partly because those payroll taxes are used to fund Social Security and Medicare, and short-changing Social Security and Medicare

trust funds is quite controversial.

So I think it's probably unlikely -- or at least you shouldn't assume that that will happen. The question is who will be left holding the bag? When

these payments are due and they will be due in 2021, either employees will be hit with a sudden bill, a tax bill that they did not save for, or

probably more likely under U.S. Tax Law, their employers, their bosses will be responsible for making good on payments that their employees didn't pay.

And because of the complicated way that the Tax Code works, the employers could actually end up paying more in additional taxes than their employees

saved.

So the upshot is that this could all amount to a tax hike next year, even though Trump is obviously touting it as a potential tax cut. But who knows

given what Congress may or may not do between now and then.

ASHER: Exactly. So much uncertainty. Catherine Rampell live for us there. Thank you so much. Appreciate it.

We'll be right back after the opening bell. Don't go away.

(COMMERCIAL BREAK)

[09:31:29]

ASHER: Welcome back to FIRST MOVE. U.S. stocks are up and running this Monday. The major averages are trading mostly flat, as we begin the new

trading week. The Dow is up about 119 points. All of this amid fresh concern over worsening U.S.-China relations and uncertainty over new

government aid for jobless Americans.

All of the major averages posted solid gains last week, with a small cap Russell 2000 the best performer, up some six percent.

In corporate news, Kodak shares are tumbling more than 35 percent in early trading. The U.S. will not give the company a more than $750 million loan

to make chemicals for drugs until the SEC concludes its investigation into alleged wrongdoing at the company.

The investigation reportedly stems in part from how Kodak publicly disclosed the government loan, which sent the company's stock soaring more

than 600 percent at one point last month.

Okay, I want to turn now to some breaking news. Lebanon's government is expected to step down today in the aftermath of the massive explosion in

Beirut last week that killed at least 160 people.

A senior Lebanese government source telling CNN the government could declare a caretaker government soon. Three ministers have already quit.

This comes as angry protesters clashed with police across Beirut.

Much of the spotlight on Lebanon right now is on the dramatic street protests and demand for political reform, but we can't forget for some

families, their biggest nightmare after the explosion still is not over. Some people are still missing.

And although that number has dropped to less than 20, that's little consolation for loved ones still waiting desperately and clinging onto

hope.

CNN's Arwa Damon meets one family fearing the worst.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Michele hasn't slept in three days. Neither has her sister-in-law with whom she

shares the same name and a love for Joe, husband and brother.

Michele struggles to form words and sentences in Arabic, never mind in English. Joe is an electrician at the port.

And this is the last video she got from him on Tuesday night.

Minutes later, the entire building he was filming would explode. Jennifer, Joe and Michelle's oldest child was in Beirut.

(BEGIN VIDEO CLIP)

MICHELE ANDOUN, JOE'S SISTER: So she heard the explosion and she started crying and shouting, this is my dad's -- (speaks in foreign language).

TEXT: It was live on TV. She said, "This where my dad works."

DAMON: Oh, she knew that's where her dad worked.

MICHELLE TANIOS, JOE'S WIFE: (Speaking in foreign language)

TEXT: Oh, poor Joe.

(END VIDEO CLIP)

DAMON (voice over): The entire family was frantic, calling Joe nonstop.

ANDOUN: At night, Joe opened his phone for 21 seconds. Her father heard voices, deep voices, that's what he said and then nothing.

(END VIDEO CLIP)

DAMON (voice over): Another call also seemed to have gone through on Wednesday for 43 seconds, but there was silence on the other end. He must

be alive they thought. They had to get to him.

Joe is a strong, clever. He would have figured out a way to save himself. They comb through videos shot by others from other angles, looking for any

clues to give teams locations to search.

(BEGIN VIDEO CLIP)

DAMON (on camera): You think that's Joe?

TANIOS: Yes. This is him.

DAMON: You think that one of those people is Joe?

TANIOS: Of course.

UNIDENTIFIED FEMALE: We are sure and he was filming from here.

(END VIDEO CLIP)

[09:35:08]

DAMON (voice over): It's the building right in front of the grain silo, a building that is now buried, but they still had hope. There's an operations

room deep underground. They heard there are bunkers.

Three bodies were pulled out, but no, Joe may he is deeper in, deeper under somehow still alive.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They would have to keep searching.

(END VIDEO CLIP)

DAMON (voice over): Michelle was born in the U.S., the children also have American passports. Joe was just about to get his visa. All that now seems

like a different reality.

(BEGIN VIDEO CLIP)

ANDOUN: He loves life. He wanted to go to America because it's better for her, for Jennifer, for Joy, for their future, but not for him.

(END VIDEO CLIP)

DAMON (voice over): The women are trying to shield the children from their grief.

JENNIFER, JOE'S DAUGHTER: (Speaks in foreign language).

TEXT: My shoes smelled bad so they washed me.

(END VIDEO CLIP)

DAMON (voice over): Jennifer doesn't know daddy is missing. Joy is thankfully too young to fully understand. Maybe they will never have to

tell the girls their daddy is dead.

That night, the fourth after the explosion, the crews were searching around the clock, searching the area where the family believe Joe would be found.

Clinging to the hope that he could somehow still be alive.

At 4:00 a.m., they sent us a heartbroken message. Joe's body had been found.

Arwa Damon, CNN, Beirut.

(END VIDEOTAPE)

ASHER: Heartbreaking story there. World Vision is focused on helping Lebanon's children after the devastating blast. Rami Shamma is the Field

Operations Director for World Vision Lebanon and joins us now from Beirut.

I'm not sure if you just heard Arwa Damon reporting there. Just a really difficult time for those waiting and praying to hear from loved ones who

have gone missing. A lot of them hearing bad news at this point.

Now, for those who did survive the blast, the biggest fear right now is the pending humanitarian crisis. Walk us through that.

RAMI SHAMMA, FIELD OPERATIONS DIRECTOR, WORLD VISION LEBANON: Hello? Can you hear me?

ASHER: Hi, Rami, can you hear me? Yes. Can you hear me?

SHAMMA: Yes. Hi, I can hear you well. Yes, I'm just trying to figure out some of the words that are not coming out of my mouth after I heard the

story, and I think that this story is one of thousands of stories of people who have been impacted directly or indirectly, by the explosion.

I guess one part of the story was the word "hope" and I believe that at some point this family might have lost hope in terms of finding their

beloved person, but many times the hope should still be there for many of the people who still have a chance in this life and who are able to

rebuild, and I think we should start from here.

ASHER: Okay, so we all know that Lebanon's economy has really suffered greatly, but for those people who want to rebuild, who want to start over,

what is the greatest need at this point? Is it food? Just because Lebanon imports, I believe it's 80 percent of its food, or is it medical supplies,

particularly because so many hospitals have been very badly damaged?

SHAMMA: Yes, it's very hard to prioritize at this stage what is needed the most, because everything is a need at this stage. For people who would need

some medical support and medical attention, this is the first level of intervention that organizations with this specialty should be tackling.

And for people who really need just some food to survive the one week or the one month or two months' time until they actually start rebuilding

their houses, this is their basic need.

There are some families which actually don't have correct and proper shelter. They either don't have houses at all, they have resided at their

parents or their friends or their families' houses outside of Beirut, and these are people who will stay in this case and this situation for a very

short period of time.

So we really need to think about how we can systematize the shelter support for those families, and there are the families which have had their houses

damaged and yesterday, unfortunately, there was rain, which was very weird in Beirut, but it actually rained at night.

And so a lot of us felt the despair and the unfortunate circumstance that those families with no rooftops, with broken glass, with broken doors, and

they had to go through this night, even some of those families, what was left out of their furniture was put outside and this could have also been

damaged by the rain that happened.

[09:40:07]

ASHER: Yes, so they had to endure the rain in addition to having no home or what was left of their home completely ruined.

A lot of people are blaming Lebanon's current crisis on incompetency, mismanagement and of course, corruption.

CNN is reporting now that Lebanon's government is likely to step down today. What's your reaction to that?

SHAMMA: I think the first level of either trust or mistrust in the government, it relies on the accountability. People need to see that the

government has taken a stand in terms of how they reacted to this explosion, and I believe people want to see something happening in terms of

either rebuilding of the country, or in a certain way, holding the people accountable for this.

This is a very crucial period of time which the Lebanese politics is going through, because it's also related to the geopolitical influence, and here,

we just have to wait and see on what will be the next steps to this.

But I think that people want to see something change and people want to see something moving to the better. People want to live a better life. People

want to stay in the country. Lots of my friends, they have left their opportunities outside just to stay in this country and this is out of hope,

you know.

We want our children to be raised here, we want our children to grow here. We want our children to have a better life than what we had during the

Civil War or after the Civil War or through all of the periods that we were going through.

ASHER: Rami Shamma, thank you so much. Appreciate it.

We'll be right back.

SHAMMA: Thank you.

(COMMERCIAL BREAK)

[09:45:00]

ASHER: Returning to the escalating tensions between China and the United States, with the Presidents Trump and Xi Jinping ramping up the rhetoric.

Today, Beijing ordered new sanctions on major U.S. political figures and other officials as well. Both sides' battle over trade, technology,

national security, and human rights.

In a sobering assessment in "Foreign Affairs" Magazine, the former Australian Prime Minister, Kevin Rudd, warns that diplomatic relations are

crumbling and raise the possibility of armed conflict.

Mr. Rudd is President of the Asia Society of Policy Institutes joins us live now. So, Mr. Rudd, just walk us through this. You believe that armed

conflict is responsible and is this relationship at this point in your opinion, quite frankly, beyond repair?

KEVIN RUDD, PRESIDENT, ASIA SOCIETY OF POLICY INSTITUTES: It is not beyond repair, but we've got to be blunt about the fact that the level of

deterioration has been virtually unprecedented, at least in the last half century and that things are moving at a great pace.

In terms of the scenarios, the two scenarios which trouble us most, the Taiwan Straits and the South China Sea. In the Taiwan Straits, we see

consistent escalation of tensions between Washington and Beijing, and certainly in the South China Sea, the pace and intensity of naval and air

activity in and around that region increases the possibility, the real possibility of collisions at sea and collisions in the air.

The question then becomes one, does Beijing and Washington really have an intention to deescalate or then to escalate if such a crisis was to unfold?

ASHER: How do they deescalate? Is the only way at this point -- how do they reverse the sort of tensions between them -- is the main way at this

point that a new administration comes in in November and it can be reset? If Trump gets reelected, can there be de-escalation? If so, how?

RUDD: Well, the purpose of my writing the article in "Foreign Affairs," which you referred to before was to in fact talk about the real dangers we

face in the next three months. That is before the U.S. presidential election.

We all know that in the U.S. right now, that tensions, or shall I say political pressure on President Trump, are acute, but what people are less

familiar of, within the West is the fact that in Chinese politics, there is also pressure on Xi Jinping for a range of domestic and external reasons as

well.

So what I have simply stated is, in this next three months where we face genuine political pressure operating on both political leaders, if we do

have an incident that is an unplanned incident, a collision in the air or at sea, we now have a tinder box environment, therefore the plans which

need to be put in place between the grown-ups in the U.S. and Chinese militaries is to have a mechanism to rapidly deescalate should a collision

occur.

I'm not sure that those plans currently exist.

ASHER: Let's talk about tech, because President Donald Trump, as you know, is forcing Bytedance, the company that owns TikTok to sell its assets and

no longer operate in the U.S.

The premise is that there are national security fears and also this idea that TikTok is handing over user data from American citizens to the Chinese

government. How real and concrete are those fears or is this purely politically motivated? Are the fears justified, in other words?

RUDD: Well, as far as TikTok is concerned, this is way beyond my pay grade in terms of analyzing the technological capacities of, A, the company, and

B, the ability of the Chinese security authorities to back door them.

What I can say is this is a deliberate decision on the part of the U.S. administration to radically escalate the technology war. In the past, it

was a war about Huawei and 5G. It then became an unfolding conflict over the question of the future access to semiconductors, computer chips, and

now we have, as it were, the unfolding ban imposed by the administration on Chinese-sourced computer apps, including this one for TikTok.

So this is a throwing down of the gauntlet by the U.S. administration.

What I believe we will see, however, is Chinese retaliation. I think they will find a corporate mechanism to retaliate, given the actions taken not

just against Bytedance and TikTok, but of course against WeChat.

And so the pattern of escalation that we were talking about earlier in technology, the economy, trade, investment, finance, and the hard stop in

national security continues to unfold, which is why we need sober heads to prevail in the months ahead.

ASHER: Kevin Rudd, former Prime Minister of Australia. Thank you so much for being with us.

When we come back, a room with a troubling view at the Marriott. The latest second quarter results from hard-hit travel and hospitality firms coming up

next.

(COMMERCIAL BREAK)

[09:52:18]

ASHER: Welcome back to FIRST MOVE. Two of the industries hit hardest during the COVID-19 crisis have been hotels and travel.

Today, Marriott Hotels and Royal Caribbean Cruises reported how badly they did in the second quarter. Clare Sebastian joins us live now to break it

down.

And Clare, Royal Caribbean is particularly interesting because there were no cruise sailings in the second quarter. So what do earnings look like

when you can't even do business at all?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Zain, there's no way to sugar coat it. This is a zero revenue environment for Royal Caribbean and

other cruise lines and it was not a pretty sight. This earnings, they reported a net loss of $1.6 billion, their revenue was down about 94

percent year-on-year, so sailing at all in this quarter and possibly, probably the same again in the second quarter. They just canceled sailings

through the end of October globally in conjunction with the C.D.C. and their various efforts to sort of ensure the safety of those sailings.

They haven't been able to do that yet, so it's likely the next quarter will look just as bleak. They have withdrawn guidance of course for the year.

They say that they do expect to make a loss. But one interesting thing is that you know, they are offering -- they are doing what they can basically

to keep their customers. They're offering what they call future cruise credits. People can defer their sailings until the next year and they say

that only around half, 48 percent of customers who are booked on canceled sailings have asked for a full refund.

And they do say, Zain, one very small bright spot in this. It is that that bookings for 2021 are trending well. So that is one bright spot. In other

words, very bleak earnings picture.

ASHER: And for Marriott Hotels, we know that obviously, occupancy rates over the past couple of months have been depressed. They have been a lot

lower. For Marriott, walk us through what their earnings were and is the worst actually over for them?

SEBASTIAN: Well, the company says it is. The CEO, Arne Sorenson on the call just now said that he believes that Q2 was the bottom, notwithstanding

another major resurgence in COVID-19 cases.

This, again, not a particularly pretty picture for Marriott. They lost $234 million in the quarter. Overall revenue was down 72 percent, but crucially

two things, they say, one, that the trend overall throughout the quarter was of an improvement. Every sector they say is improving month on month.

Occupancy rates for example were down 11 percent in April, in the week ending August 1st, up to 34 percent, so that is a good sign, and they are

also looking to China where they do a significant amount of business.

They say occupancy rates there are up to 60 percent, so that, they say, shows the resiliency of demand for their hotels once travel returns and

once the virus is under control.

So again, no guidance from Marriott, but they do say things are trending for the better.

[09:55:08]

CHATTERLEY: Just in terms of knowing what the future holds. Obviously, economic activity in certain states is improving but the number of COVID in

certain states is also rising as well.

So isn't the picture for Marriott going forward going to be naturally very uncertain?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, and they did admit that, Zain, and I think, you know, it is crucial to point out for both of these

companies that they are battening down the hatches. They are bolstering their cash positions. They're trying to cut costs on things like cutting

back on sales marketing expenses, furloughs, even job cuts.

Marriott says that they are relying for the moment on a greater improvement in leisure travel than they are in business travel, which is of course a

greater part of their business and they expect that leisure travel will continue to show strength, even through September once schools go back in

theory, because of remote working and remote school. So that is one thing to watch going forward.

ASHER: All right, Clare Sebastian live for us there. Thank you.

That's it for the show. I'm Zain Asher. I'll see you tomorrow, same time, same place.

(COMMERCIAL BREAK)

[10:00:00]

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