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Governments and Airlines Condemn Belarus over Diverting a Ryanair Plane; China Clamps Down on Bitcoin Miners; "Fast and Furious," Movie Gives Hollywood its Best Weekend Opening of the Pandemic. Aired 9-10a ET
Aired May 24, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:14]
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Live from New York, I'm Alison Kosik, in for Julia Chatterley. This is FIRST MOVE and here is your need to
know.
Flight fury. Governments and airlines condemn Belarus over diverting a Ryanair plane.
Crypto cave-in. China clamps down on Bitcoin miners.
And "Fast and Furious." The action movie gives Hollywood its best weekend opening of the pandemic.
It's Monday. Let's make a move.
Welcome to once again to FIRST MOVE. Great to have you with us again. Let's begin with a check of the markets. U.S. stocks are on track for a higher
open across the board as we kick off a new trading week on Wall Street. It looks like tech is currently in the lead in the premarket. It looks like
stocks are stable, but checking out some crazy price action in crypto.
Bitcoin bouncing by some 12 percent right now after tumbling to below $32,000.00 levels over the weekend. New moves by China to curb Bitcoin
mining has helped trigger this latest round of volatility with some Chinese crypto miners saying they will suspend operations. China also announcing
today that it will increase regulation of commodities. Markets to root out speculation and price manipulation in products like iron ore amid rising
inflationary fears.
Iron ore, a key ingredient in steel, is down almost four percent in trading right now after hitting all-time highs earlier this month. Aluminum, zinc,
and nickel are weaker on these regulatory concerns.
All right, let's get right to the drivers.
Belarus faces strong criticism and mounting questions over the arrest of an opposition activist after his plane was forced to make an emergency
landing. He was on a Ryanair flight traveling from Greece to Lithuania when it was diverted over Belarus. Fred Pleitgen joins me now live.
Fred, you know, this basically sounds like a state-sanctioned hijacking. What's the latest?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, that's exactly what the Ryanair CEO, Michael O'Leary said. He called it state-
sanctioned hijacking or state-sanctioned piracy.
At the beginning, Ryanair said that they had gotten word from air traffic control there over Belarus that there was apparently some sort of bomb
threat and had then been told to land at the nearest airport which they had been told was Minsk and also the Belarusian authorities, they actually
confirmed that they did send up a fighter jet as they put it, to escort that plane there to Minsk.
Well, Ryanair has now said that the more info they get, the more it seems as though that was all a pretext. In fact there might be a sort of
explosive device on the plane and that the Belarusian authorities simply wanted to get their hand on this blogger, on this activist and journalist,
called Roman Protasevich, who was actually one of the people who helped organize the protests against Alexander Lukashenko, the longtime dictator
of Belarus last year.
The platform that he founded was really instrumental in showing some of the police brutality that was being used by the authorities there. So certainly
someone that Lukashenko would have wanted to get his hands on. And there's a lot of folks in Europe, you look at European leaders, there has been a
lot of reaction coming in, who say it's a really, really dangerous precedent to, as they believe happened, that a dictator at his behest could
have a plane land there to get his hands on an activist or a journalist that he is critical of.
And then, also, of course, there is the possible ramifications for air travel in Europe.
One of the things that many European nations are talking about especially nations like Lithuania, for instance, of course, directly affected by this,
they are saying, look, maybe the European Union might have to declare the skies over Belarus to be unsafe, which could have big repercussions for
instance for the flagship carrier of Belarus, Belavia, but then also of course for planes from European nations, other countries possibly as well,
actually flying over that airspace. So that's certainly something that the European Union might be thinking about as they go to their Council meeting
later today -- Alison.
KOSIK: Fred, where is the opposition activist now? Is he being detained? What's going on there?
PLEITGEN: Well, that really is part of the most troubling thing in all of this. CNN spoke to an adviser, Svetlana Tikhanovskaya, who of course says
that she is rightful President actually of Belarus because of course, the opposition has accused Alexander Lukashenko of rigging the last election
and that adviser says that they are very troubled by the fact that Roman Protasevich is in detention by the Belarusian authorities.
[09:05:00]
PLEITGEN: They say that they believe that he is going to be interrogated for at least several days. They say that torture could be used against him.
Right now, it is absolutely unclear where he is. It is unclear where he is being held or how long he will be held.
But one of the things that we have to keep in mind is that he is actually on a terrorism list by the Lukashenko regime, which means that, you know,
if bad comes to worse, he could face the death penalty in Belarus.
Now, of course, those are all things that have the opposition very concerned, have the U.S. very concerned, and have the European Union very
concerned. All of which are saying, this man needs to be released immediately. So far, obviously, the Belarusian regime under Alexander
Lukashenko not budging at all in all of this.
So this situation is not only ongoing but I would say is actually heating up there right in the heart of Eastern Europe -- Alison.
KOSIK: Oh, yes, I would agree with you. Lots of ramifications that you just mentioned.
Fred Pleitgen, great talking with you.
Ryanair's CEO says the rerouting of its aircraft on Sunday amounted to state-sponsored piracy. That agency is the one that regulates the skies,
and it agrees the diversion may have broken international rules.
Anna Stewart joins me live now.
You know, we did hear Fred allude to some of this already, but I want to hear what you've been hearing about the implications for airlines traveling
to and from or flying over Belarus after this incident.
ANNA STEWART, CNN REPORTER: Good morning, Alison. Yes, there are certainly some calls for some corners of Europe for a really strong response and one
targeted very much at aviation particularly actually from the governments of Lithuania and Poland.
Now, some of the proposals out there for what they could do include closing Belarus airspace for E.U.-registered aircraft, preventing E.U. aircraft
from traveling to or from the country.
Also the suggestion, as you heard from Fred, that they could ban the national carrier of Belarus from, Belavia from entering E.U. airspace as
well.
That said, right now at this stage, the European aviation regulator has made no real sort of major change to its rules or to its guidance.
Lithuania has actually taken a different approach. From 3:00 a.m. tomorrow, they are going to prevent any aircraft that takes off or lands at their
airports from traveling in Belarus airspace.
Big industry bodies like I.A.T.A want to see an investigation take place by all the relevant national authorities while Belarus's Foreign Ministry has
said, and I will quote, "They were in full compliance of international rules."
Many believe that they did breach the Chicago Convention, that is the big international convention governing the most basic rules of aircraft and
airspace safety. As Fred mentioned, there is an E.U. Leaders' Summit later on this afternoon, so currently, their guidance from the regulators hasn't
really changed, but we will be watching to see whether that prompts a stronger response -- Alison.
KOSIK: Are you hearing from other specific airlines taking their own actions or making their own decisions as to whether it's safe to fly over
Belarus?
STEWART: Yes, that's been interesting because the overall guidance from the regulators hasn't really changed. However, two airlines, one Latvian
carrier, airBaltic, they say they have decided to avoid entering Belarus airspace until the situation becomes clearer or a decision is issued by the
authorities.
We had a similar response as well from Poland's LOT Airline. They say they are making, in terms of flying plans for Belarus. All the other major
airlines we've spoken to so far, I am thinking KLM, Lufthansa, Ryanair, and they are operating as usual. We saw a Ryanair flight traveling from Cyprus
to Estonia travel in Belarus airspace earlier today.
All of them believe that the safety and the security of the aircraft aren't in any way compromised at this stage, but they are looking for guidance
from those regulators, from the authorities, and they will change tact depending on what happens there -- Alison.
KOSIK: Okay, Anna Stewart, thanks for all of that information.
The price of Bitcoin is showing signs of a claw back after the cryptocurrency suffered a hammering over the weekend. It fell 13 percent on
Sunday with regulation in China driving the downward pressure.
Clare Sebastian joins me live now. You know, this is nothing new here. We have seen this volatility, but what's happened now? What has China done?
Why does it matter?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Alison, you are absolutely correct to say this is nothing new. We've seen a lot of
incremental moves from China over the past weeks and months and years when it comes to crypto. They have made it very clear that they are not
supportive of the idea in general, but this is a big one, not because we have major policy details. We actually don't really know what they're
planning to do.
But for two reasons. One, because of who delivered it. Very influential Vice Premier, Liu He, you'll remember him as the guy who sort of delivered
the U.S.-China trade deal with the Trump administration. He made this announcement in a meeting of finance officials in China.
And second, because they are not just targeting trading now, they are targeting mining. This is what has got the sort of crypto space on alert,
because depending on who you ask, between two-thirds and three-quarters of the world's mining happens in China.
This is the process that not only sort of unearths new Bitcoins, but supports the whole network, facilitates transactions. So if that was to go
away in China, it would be a huge existential problem for the Bitcoin network. It could slow it to a crawl, it could make new mining and new
transactions really difficult.
So, this is why we are seeing this reaction today and also, we saw reaction from companies that make the mining computers and provides services.
[09:10:21]
SEBASTIAN: A couple of them have said that they are not going to do that. They are suspending that to clients in China.
So, a pretty big deal for the Bitcoin market, but it's come back up a little bit. This was a sort of V-shape, a bit like what we saw last
Wednesday. It went down 13 percent, and it has regained most of that now -- Alison.
KOSIK: And we're seeing it regain and we are used to this volatility, I guess. But you know, the last few weeks have really been crazy. So, this is
more than just, you know, Elon Musk tweeting or these actions by Chinese regulators, there is more going on here that we need to know, and is this
sort of -- I hate to say, maybe a nail in the coffin for Bitcoin?
SEBASTIAN: I mean, you know that Bitcoin is very divisive. It would depend who you ask. Some are saying yes, some are saying don't worry about a
little volatility. We are still sort of going to the moon here and Elon Musk continues to tweet about it.
But like, yes, headline risk is a big deal in this market. Elon Musk has moved the market multiple times. Regulations in China. We also saw last
week in the U.S. that the Biden administration has asked the I.R.S. to make sure that Bitcoin transactions from businesses over $10,000.00 are reported
just like cash, but you have to look to the inner workings of this market as well, because there's a lot of leverage.
We see people borrowing money to buy crypto and Mark Cuban, who is a key proponent of crypto mentioned this in a tweet over the weekend calling this
the great unwind pointing to how people have borrowed money in the case of his tweet, he talks about Ethereum and how they are, you know, he says,
unwind on stake, remove liquidity, repay.
So he is pointing to that level of leverage. That's why we see these moves amplified, because people borrow money to get in, to make more money and
then when the price goes down, they have to get out quicker. So he is talking about that.
Perhaps we saw some of that leverage cleaned out with these big moves in the last week, but it's hard to know -- Alison.
KOSIK: But now, we are surprisingly seeing firms like Goldman Sachs kind of come around. I saw a report saying that there is a new piece of research
from Goldman Sachs, its head of Digital Assets, and the firm is now saying that Bitcoin is now considered an investable asset. We are seeing Bitcoin
go mainstream, and now, we are seeing firms that were, you know, saying no way. They are saying, okay, now we believe in it to come forward like
Goldman Sachs. What's an investor to believe?
SEBASTIAN: Well, certainly to invest in Bitcoin, I think it is very clear from the moves of the past weeks and months that you have to have a pretty
strong stomach. You have to be willing to either trade very frequently or to stick in it for the long haul if it is something you believe in.
And you know, while Goldman says this, we heard from JPMorgan last week saying that sort of the institutional investors are rotating out of crypto
and back into gold.
Unlike -- you know, it is not like everyone is doing a Tesla and saying suddenly we're sort of reversing. We're still seeing a lot of institutional
interest in this. But I think while we see the markets in a situation that they are in, people are looking at their risk assets very carefully and
certainly, Bitcoin counts as one of those risk assets.
KOSIK: It certainly does. Clare Sebastian, great talking with you, thanks.
Japan has just opened two large-scale vaccination centers as it battles a surge of COVID cases. Less than two percent of the population is fully
vaccinated, but the government is hoping to swiftly change that with the Olympics just weeks away. Selina Wang has more from Tokyo.
SELINA WANG, CNN CORRESPONDENT: I'm standing outside of Japan's first large-scale vaccination center here in Tokyo with the Olympics now just two
months away and Japan struggling with another surge in COVID-19 cases. The stakes are high for Japan to speed up its very sluggish vaccination
rollout.
Now, at this center, combined with another one that just opened in Osaka, the government is aiming to vaccinate as many as 15,000 people per day.
Now, these centers only make a small dent in what is a very big problem. Japan so far has only fully vaccinated less than two percent of its 126
million people. Less than half a percent of the elderly population has been fully vaccinated, but the majority of the healthcare workers in this
country are still unvaccinated.
Now, only the elderly population, those 65 and older are eligible to be vaccinated. I spoke to several of them who just received their first dose.
They say while they are relieved, they are also frustrated by just how long this rollout has taken.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE (through translator): I feel frustrated by Japan's vaccine rollout strategy. It's been so slow for a developed country, so, I
feel a bit disappointed. I definitely don't think Japan should go ahead with the Olympics.
(END VIDEO CLIP)
WANG: Japan's vaccine rollout has been held back by bureaucracy, poor planning and a lack of doctors and nurses to administer the vaccine. Now,
the Prime Minister has said that the country aims to finish vaccination of the elderly population by the end of July, after the Olympics has already
started, but even that target public health experts tell me is an extremely optimistic one.
Meanwhile, a growing chorus of voices are coming out in opposition of the games including from the medical community here who say that it is
impossible to hold these Olympics safely.
Selina Wang, CNN, Tokyo.
KOSIK: And these are the stories making headlines around the world. India is now the third country to report more than 300,000 COVID-19 deaths after
the U.S. and Brazil. That's according to Johns Hopkins University.
Indian health officials say more than 4,400 people died of the virus in the latest 24-hour period.
Meanwhile, the Delhi government is halting certain vaccinations because it has run out of vaccines. CNN reporter, Vedika Sud has more from New Delhi.
VEDIKA SUD, CNN REPORTER: India has reported over 222,000 new cases of COVID-19 in the last 24 hours taking its total caseload to over 26.75
million. While there has been a consistent drop in cases over the last four days, India's death toll has largely stayed over 4,000 since May 8. India
is now the third country after the U.S. and Brazil to report more than 300,000 fatalities.
The Delhi government claims it is running short on vaccines. It has temporarily suspended its vaccination drive for the 18 to 44 age group. The
unavailability of COVAXIN vaccines, an indigenous vaccine has also impacted those 45 and above. Many of whom are due for their second dose.
The Indian government says almost 9,000 cases of mucormycosis also known as black fungus have been reported from states and union territories across
India. Black fungus is a rare and potentially fatal infection that is increasingly being detected in COVID-19 patients according to the Health
Ministry. If not detected and treated in time, this infection could be life threatening.
India has the second highest total confirmed cases of COVID-19 after the U.S. according to data from Johns Hopkins University.
Vedika Sud, CNN, New Delhi.
KOSIK: Authorities have launched an investigation into a deadly cable car accident in Northern Italy. Officials say the car crashed near the top of a
mountain on Sunday after one of its cables snapped. At least 14 people died. A child who was also traveling in the cable car was seriously
injured, but survived.
In China, 21 runners died after extremely cold weather hit an ultramarathon. The event started amid overcast skies, but it was called off
after freezing rain and hail fell and the wind turned gale force. At least eight people were hospitalized, some of them reported to be suffering from
hypothermia.
Still to come on FIRST MOVE, a U.S. Intelligence report reopens the debate on the origins of COVID-19 by suggesting Wuhan lab workers were
hospitalized before the pandemic began.
And the U.S. economy is poised for takeoff, but American manufacturers warn that higher corporate taxes and labor shortages threaten the recovery.
(COMMERCIAL BREAK)
[09:21:03]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik live from New York where U.S. stocks remain on track for a higher open. The S&P 500 is coming
off its second straight week of losses as investors debate the global inflationary threat and how it will impact Central Bank stimulus and
borrowing costs.
ECB Chair, Christine Lagarde, saying Friday that now is not the time to consider cutting back on bond purchases, but the minutes of the most recent
Fed meeting show some policymakers open to beginning taper talk. All this, as new numbers show the U.S. manufacturing and services sectors growing at
record rates this month.
Meantime, lots of uncertainty in the U.S. over the future of President Biden's infrastructure spending bill. Mr. Biden has offered to reduce the
price tag by some $500 billion, but Republican lawmakers are still not onboard.
Lots to talk to about. Let's bring in Mark Zandi. He is joining me now live. He is the Chief Economist at Moody's Analytics. Great to see you
again.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Thanks, Alison. Good to be with you.
KOSIK: And you are talking a lot about inflation as we all are, and you know, we're seeing signs of maybe there is some chatter that there could be
some movement with the Fed. Do you think that they should act sooner rather than later about the timetable that they have already kind of put out
there?
ZANDI: Well, I think they're going to act sooner than they're letting on at this point. I mean, they have indicated that they won't begin
normalizing short-term interest rates, raising interest rates off the zero lower bound until 2024. That is a long time from now and it doesn't feel
consistent with the strength of the economy. All of the jobs are getting -- quickly, unemployment is going to decline and of course, the inflation
statistics.
And my sense is, they're going to have to adjust their forecast and begin raising short-term rates much sooner than what they are currently
suggesting that they will.
KOSIK: Is it a risk that inflation could be uncontrollably high, and if so, what would be the risks to the economy overall?
ZANDI: Yes, that's clearly a threat -- a risk. I mean, it has come to the fore most recently because the economy is now reopening, demand is picking
up and the supply side of the economy, producers and workers are having a bit of difficulty getting back online, really engaging and meeting that
increase in demand.
So, it is almost Econ 101, right, demand and supply. You've got a lot of demand and supply can't keep up, prices are jumping. So that is an issue;
and then, of course, as you look out further and given the strength of the economy and prospects for a very tight labor market, which is great, but
also, it probably means that wage growth is starting to pick up and put pressure on businesses to raise prices.
So you can construct a scenario where inflation gets higher than I think anyone would feel comfortable with and that's not a great place because at
some point, it means higher interest rates, but we will have to respond.
It is kind of a classic business cycle. It means at the end of all of that, you might end up in recession. So we don't know -- nobody of course wants
that, so yes, it is a scenario and hopefully the Fed can be aggressive enough to have that scenario off at the pass and it doesn't happen.
KOSIK: Yes, there has to be a fine line here when it comes to inflation. I mean, for workers, inflation is good. If you're working at Bank of America,
Amazon and McDonald's where you're getting a pay raise, that's a good thing. But if you see it overall, what does that mean for what the Fed is
going to do? Do you think it is going to cut deeper than originally thought?
ZANDI: You want wage growth. You know, hopefully driven by productivity growth. I mean, people get more productive and they should get paid for
that. And that means people have more incomes and better standard of living.
Preferably, you don't want inflation to pick up, at least not to a point where it becomes -- you know, it cuts into people's purchasing power and
income. So, it is a fine line and it is a delicate balance. And the Fed, that's their job. That's exactly what they need to do so they need to gauge
all of these parameters and variables and try to raise interest rates in a way that you just -- you get it just right, you know, not too hot, not too
much inflation; not too cold which would mean, high unemployment.
So, it is a difficult job. They've done a pretty good job so far. I think they'll be able to figure it out, but they are going to have some adjusting
to do.
[09:25:24]
KOSIK: Speaking of adjustment, looking to take your crystal ball out here for a second, it is getting back to business after the pandemic. How do you
see the lay of the land as far as working from home really catching on? What does that mean whether it is commercial real estate or business
travel?
ZANDI: I think it's a big deal, Alison. I think it is a fundamental shift in the way we live and work. IO mean, there will be some swinging back of
the pendulum as you know, everything reopens. New York is opening this week. Office buildings are opening, so people will start going back to
work.
So, we'll see less work from home than was the case six months ago, certainly a year ago. But I think longer run, as Human Resource departments
and businesses figure out how to empower the work from anywhere phenomenon, we'll see people working from home, working from anywhere.
And I think that's a good thing. I think it is good for the worker, and I think it is good for businesses. It's not for everybody. And you know, I
think there has got to be some balance there as well, but at the end of the day, I think a lot more people are going to be working from home than was
the case before, and has all kinds of economic implications.
I mean, we could have a whole show on that. I mean, where growth is going to be stronger, where it is going to be weaker. What it means for the real
estate markets, what it means for tax revenue. I mean, you know, we can go on and on and on. It's a big deal.
KOSIK: It's a big deal because we could see many office buildings empty and that could affect the economy as well.
ZANDI: Yes, particularly in large urban areas like a New York or Chicago or San Francisco, L.A. I mean, these are places where it is very expensive
to live. Housing is unaffordable. Commute times are long, taxes are high. So, you can imagine that people would -- in places where that's not the
case, so I think those big cities are the most vulnerable to this dynamic.
KOSIK: Okay, Mark Zandi, always great talking with you, the Chief Economist at Moody's Analytics.
And you're watching FIRST MOVE. The market open is next.
(COMMERCIAL BREAK)
[09:30:17]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik and we just had the opening bell on Wall Street.
Lightning eMotors that was ringing the opening bell as the final trading week of May gets underway. We have a higher open across the board amid
ongoing optimism over U.S. growth and reopenings. Stable bond yields helping the stock picture, too with the U.S. 10-year bond yield easing
again last week. German bond yields are pulling back from two-year highs as well.
Bitcoin is bouncing after a weekend of stunning volatility as China continues its efforts to curb crypto activity. The CEO of HSBC also
delivering a blow to crypto today. He says the European banking giant has no plans to offer crypto products to investors due to volatility and
transparency issues.
Virgin Galactic, one of the big winners in the session so far. It is rallying after a successful spaceship test flight over the weekend. Virgin
hopes to begin taking customers into space within the next year.
A startling discovery by U.S. Intelligence. According to CNN sources, they've learned that several researchers at the Institute of Virology in
Wuhan, in China, fell ill in November 2019 and had to be hospitalized. It is raising fresh concerns about the origins of the epidemic. China refutes
the claims.
Let's bring in David Culver. He is live for us in Shanghai. David, good to see you. Do you know yet what these researchers were hospitalized with?
What were they sick from?
DAVID CULVER, CNN CORRESPONDENT: Hey there, Alison. Good to see you as well. That remains a mystery as of now, and part of that is potentially
because at that time, if you go back to November 2019, there was no specific test for COVID-19 and it is possible that it could have been a
series of other illnesses.
That said, it raises a lot of new questions here. And the difference between what we knew in January of this year under the Trump
administration, the State Department factsheet saying that there were individuals, researchers from the lab, who were sickened versus what we're
hearing today is that how severe their illnesses were.
They were hospitalized, that tells you just what situation they were in. But it does bring up a really concerning moment for a lot of the
investigators, too, because they're trying to figure out where the origins of this virus lie. And for China, it is likewise a mystery as they put it
because they say it belongs to science to determine it, and they've allowed the W.H.O. team to come in, in China to evaluate and to investigate but
that came about a year after the outbreak and that received a lot of criticism for that delay.
Likewise, the team itself has also received criticism, Alison, because folks are concerned of it potentially having too much influence from China.
In fact, one of the researchers who was part of that W.H.O. team even did work at the Wuhan Institute of Virology prior to the outbreak.
It does not lead us anywhere closer to figuring out where the origin of this virus is; however, it does for China bring up a new defense mechanism
here where they are continuing to push back against this and state media today, they came out with a quote from the lab director saying that this is
a complete lie. And the Foreign Ministry took to the podium, considering this to be hype on part of the U.S. and they consider this the U.S. trying
to deflect blame for its mishandling of the virus.
However, what we do know, Alison, is going back to when this outbreak took place, we were in Wuhan. We know that there was cover up, that there was
mishandling, that there was a silencing of whistleblowers. What remains a mystery, though, is where exactly this virus is sourced to and where the
origins are and that investigation is not likely to be taken -- undertaken here in China by Chinese investigators. It's going to remain likely a
mystery for some time. I mean, that's how it's portrayed here -- Alison.
KOSIK: Yes. But then what are the implications of this? You know, that it's, hey, it's great to have this new information. You know, we've got
W.H.O. with questionable credibility doing the investigations. I mean, where do we go from here?
CULVER: I think the immediate next step is going to be geopolitical, because that's where this seems to fall. It doesn't really have major
impact on the science if at all. As you see, people are moving forward with vaccines. In the U.S., the handling is seeming to be in a very successful
manner as of now. So it's going to be in this geopolitical realm. And what we've seen is even the use of vaccines on the part of China while they
portrayed as good will, it's been seen as vaccine diplomacy, if you will.
And that is, some of these countries that may have initially blamed China for the outbreak, mostly developing countries, not necessarily Western
nations, they are likewise receiving these vaccines from China.
[09:35:13]
CULVER: So some are considering this China's way of making sure that they stay happy and they stick intent and that they perhaps get something
beneficial from the People's Republic of China versus turning to blame them because of the outbreak that really caused this whole pandemic.
KOSIK: All right, David Culver, thanks for your great reporting on this.
The lava has stopped, but the disaster has not after a volcanic eruption in the Democratic Republic of Congo. Thousands had to flee Saturday as molten
rock swallowed their homes. CNN's Saskya Vandoorne is tracking the story from Kenya.
SASKYA VANDOORNE, CNN SENIOR PRODUCER: The lava stopped flowing Sunday just on the outskirts of the dense City of Goma, but the damage had been
done. Eleven people were killed as a result of the eruption, five in a car accident, four prisoners who attempted to escape and two who were engulfed
by the lava according to local officials.
Now many residents who had fled on foot to Rwanda when the Nyiragongo Volcano erupted, returned to find their homes destroyed, covered in black,
molten rock.
(BEGIN VIDEO CLIP)
FURAHA GRACE, LOST HOME TO VOLCANO (through translator): We were in the market and then we had to run without any belongings. When we returned to
the city, the houses were burned, and some people were left destitute. I got into an accident and got hurt.
So we're appealing for assistance, and especially for food. We need food because we don't know where we're going to get it from.
(END VIDEO CLIP)
VAN DORN: One NGO said roughly 600 homes were lost and five schools were flattened. They say it'll take months to restore the area that was impacted
by the lava. Now, their priority now is to build shelters for the thousands of people who lost everything.
Some experts said that volcanic activity in the past five years at Nyiragongo mirrored that of 1977 and 2002 when it previously erupted and
devastated surrounding neighborhoods. It remains one of the world's most active volcanoes and is considered among one of the most dangerous.
Authorities will continue to monitor the situation.
Saskya Vandoorne, CNN, Amboseli Park.
KOSIK: Coming up after the break. Here in the U.S., more than 12 million people are paid to make things. There could be more, but headwinds are
slowing growth. Find out why, next.
(COMMERCIAL BREAK)
[09:40:13]
KOSIK: U.S. manufacturing is bracing for a boom driven by massive fiscal stimulus and consumers fresh out of lockdown and looking to spend, but some
employers say they are worried about tax hikes.
The National Association of Manufacturers says a corporate tax increase could put a million jobs at risk over two years. Add to that a critical
shortage of skilled labor and supply chain issues, and the specter of inflation picking up.
Jay Timmons is President and CEO of the National Association of Manufacturers and he joins me live. Great to see you.
JAY TIMMONS, PRESIDENT AND CEO, NATIONAL ASSOCIATION OF MANUFACTURERS: Good to see you, Alison.
KOSIK: Now, I know that you and the members of your group have a very positive outlook moving forward, but there are still headwinds. In fact,
the same headwind that was there before the pandemic is still there, finding people to fill jobs in your industry. Can you talk to me about
what's going on there? Why you can't fill jobs?
TIMMONS: Yes, that headwind is even stronger now than it was before the pandemic, which is just hard to believe. In fact, we have 700,000 jobs in
manufacturing in the United States that we can't fill. That number was 500,000 before the pandemic.
So obviously, that's a big concern for us. The other concerns are the cost of materials because of issues in the supply chain. And, so we are facing
those headwinds. But to your point, Alison, we are extraordinarily optimistic about the future because we see an end in sight to this global
pandemic.
KOSIK: But why do you think the industry is having such difficulty? Is it wages? Are the jobs just not paying enough?
TIMMONS: Well, you know, I get that question a lot. But the fact of the matter is manufacturing in the United States is one of the highest paying
sectors in the economy. So our average wages are over $82,000.00, wages and benefits. So it's clearly an issue of perception. Is manufacturing an area
that I want to go into? And so let's say I'm in high school or in trade school or community college, do I want to go into manufacturing or do I
want to do something else?
Manufacturing is an incredible career choice. It's a lifelong career, unlike jobs in other sectors. My grandfather was in manufacturing. It's how
I became so passionate about the industry because manufacturers are the heartbeat of any economy and we make sure that we can continue to progress
and raise standards of living everywhere.
That message though, Alison, isn't getting out as much as we would like. The Manufacturing Institute, the workforce and education partner of the NAM
has a program called "Creators Wanted" that we launched just right before the pandemic, so it was virtual most of the time. It's going to go on the
road and we're going to be in communities all over this country, spreading the message about what great jobs are available in the sector.
KOSIK: Okay, switching gears, let's talk about infrastructure. Now your members support the Biden plan to invest heavily in infrastructure, but you
disagree how to pay for it with the National Association of Manufacturers saying it won't support 25 percent tax rate on businesses.
Talk to me about why and what other options, most importantly, that you are giving to pay for it.
TIMMONS: The President, President Biden has shown tremendous leadership in focusing on infrastructure investment and we are greatly appreciative of
that leadership. We're also greatly appreciative that Republicans and Democrats in the Congress appear at this point to be working together to
craft and create a bipartisan solution, something that has been missing on so many pieces of legislation over the course of the last several years, if
not decades.
The issue that is before us is, how do we pay for that? And the President has proposed a plan that would raise taxes.
We did a study, and you referenced it in the introduction -- we did a study on the President's tax plans that were outlined during the campaign. And to
your point, they would cost about a million jobs over the course of two years, or six million jobs over the course of 10 years; 600,000 jobs a
year. So we clearly know that we're going to take several steps forward if we make this massive and significant investment in infrastructure in terms
of growing the economy and growing jobs here in the United States.
At the same time, we don't want to take steps backwards when we have proven after 2017, when we got those tax cuts in place that we had record
investment, record job creation, and record wage growth in this country in manufacturing, so we don't want to take steps back.
We want the President to be successful. We want the economy to be successful. We can do that through public-private partnerships, user fees
and bonds. We don't have to tax the job creators in this country to get it done.
KOSIK: Is there a percentage that you would agree on for a corporate tax rate? If not 25 percent, what would you agree with? And by the way,
Republicans and Democrats, they aren't really working together anymore.
[09:45:10]
KOSIK: An administration official over the weekend, kind of hinted that there may be a point where we're going to see President Biden say, you know
what, no more bipartisan. Let's just go for Democratic support.
At some point for negotiation's sake, can you come to the table and say, listen, here's a percentage in the Corporate Tax rate that we can stand by?
TIMMONS: That doesn't seem to be the thing that is holding up the negotiations. Right now, the big division seems to be the amount of the
infrastructure investment. And I understand how these things are played in Washington. I understand that sometimes you speak positively and sometimes
you say, this isn't working. I think that's where the administration is right now. They're sending a signal that it's time to get back to the
table.
I don't think Republicans want to be in a situation where the negotiations break down and the Democrats go it alone through reconciliation and raise
taxes on job creators and businesses. That would not do well for them, quite frankly. I don't think Democrats want to be in a position to do this
alone without bipartisan support.
So both sides have an incentive to come to the table and get this thing done just as they are doing with the traditional surface transportation
bill.
Senator Capito, Senator Carper are doing yeoman's work in bringing that together. Now, we're talking about additional infrastructure investment.
You ask about a specific percentage, Alison. Now, the President's plan is 28 percent, some have mentioned 25 percent. Our study shows that the job
loss is about the same for both of those. And manufacturers argued during the last administration for 15 percent rate; we ended up with 21 percent.
Ironically, the Biden administration is now talking about a 15 percent global minimum tax. I don't know why we would say it would be okay for
other countries to have 15 percent and then somehow add on 10 to 13 percent on top of that to our own tax rate that makes us less competitive. That
makes an environment ripe for less investment, less job creation, and less wage growth. We don't want that in this country.
We want to be on top. We want to be growing and we want to be providing great opportunities for our manufacturing workers. Higher taxes do not lead
to that.
KOSIK: All right, Jay Timmons, President and CEO of the National Association of Manufacturers, great to have you on the show. Thanks for
your time.
TIMMONS: Nice to see you, Alison. Thank you.
KOSIK: Sure. Next, from zero to 60, all the way to $160 million. The new "Fast and Furious" film finds itself in pole position at the worldwide box
office.
(COMMERCIAL BREAK)
KOSIK: In Hong Kong, art is increasingly falling prey to politics and to China's sweeping national security law especially protest art which has
virtually disappeared.
CNN's Kristie Lu Stout shows us how Hong Kong's art community is having to maneuver this new political reality.
[09:50:10]
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): She is known as Hong Kong's Lady Liberty, a white statue of a pro-democracy protester with
goggles and a gas mask, a symbol of defiance on display, not in the gallery, but in a children's clothing store that's been searched by
National Security Police Service.
A number of artists have their creations on display. Artist Kacey Wong is here where owner, Herbert Chow to unbox his latest work.
KACEY WONG, POLITICAL ARTIST: I think having a place like this to feature resistance art, as well as art that represents freedom and democracy is
very important. I mean, the platform is getting smaller and smaller in Hong Kong.
LU STOUT (voice over): So far, the National Security Law has targeted opposition activists and pro-democracy figures, but art has also fallen
prey to politics.
LU STOUT (on camera): Since the law was imposed last year, there's been the virtual disappearance of protest or the cancellation of a film
screening about the 2019 pro-democracy protests and a very public debate about the upcoming M+ Museum touted as Asia's answer to the Tate Modern.
LU STOUT (voice over): The museum's 8,000 item collection includes work by Chinese distant artist, Ai Weiwei, including a 1997 photograph of him
holding up a middle finger to Tiananmen Square.
When asked about the collection, Hong Kong Leader, Carrie Lam told officials to be extra cautious in making sure exhibits don't breach the new
law.
CARRIE LAM, HONG KONG CHIEF EXECUTIVE (through translator): I'm sure staff are able to tell what is freedom of artistic expression, and whether
certain pieces are really meant to incite hatred, or to destroy relations between two places and undermine national security.
LU STOUT (voice over): Hong Kong has been a vibrant international arts hub, Each year, it hosts the Asian edition of Art Basel, the world's
largest art fair. Despite the new political climate, organizers are confident that the fair will stay.
UNIDENTIFIED FEMALE: Oh, absolutely. I mean, after this, I mean, especially with a pandemic and the fact that we can do a show, everyone is
really putting in an effort to make Hong Kong shine this week.
LU STOUT (voice over): As the more formal art will navigate to new reality, grassroots artists continue to do their work.
And while the law does not explicitly address political art, many local artists wonder: what are the red lines?
WONG: Hong Kong right now is the most dangerous place, more dangerous than Beijing. It is because the flexible red line. In Beijing everybody knows
what can be talked about, what cannot be mentioned. But in Hong Kong, nobody knows what that dangerous topic really is.
LU STOUT (voice over): Throughout his career, Wong has consistently created political artworks. In the studio, we see props of his covert art,
a performance series of Wong in provocative disguises at Hong Kong protests, artistic pushback to political pressure before the National
Security Law.
Today, Wong installs work about COVID-19 in a children's store, tokens of the pandemic cast in resin all made inside these new red lines.
Kristie Lu Stout, CNN, Hong Kong.
(END VIDEOTAPE)
KOSIK: And from fine art to life in the fast lane.
[VIDEO CLIP PLAYS]
KOSIK: The latest "Fast and Furious" film doesn't open in the U.S. until next month, but it is already off to a hot start at the global box office.
"F9" brought in more than $135 million in China alone over the weekend making it the biggest opening for a Hollywood film during the pandemic so
far.
Frank Pallotta is here with us with more. Frank, you know, great to see you. I just have to give a little comparison though. This is the biggest
opening for a Hollywood film during the pandemic so far. But is that because this is a great film and everybody wanted to go see it or there's
just not much else to see and there's not much else to compare it to? You know, not much is out there to see.
FRANK PALLOTTA, CNN MEDIA WRITER: That's true. And it's a bunch of different things and we're also talking about a bunch of different markets.
But if you're a Hollywood studio or a movie theater owner, either in the United States or international, you are very happy to see these numbers,
$162 million overseas for "F9," which is the latest "Fast and Furious" film, a huge franchise from Universal.
It is just really good news for a theater industry that is trying to get back after a year that just completely got -- completely rocked them
because of the pandemic.
So, as we head into the very lucrative summer season, this is really good news.
KOSIK: Yes, and as the U.S. summer movie season kicks off, it actually kicks off next weekend. Talk to me about what the expectations are from the
industry. Are we even seeing people in the U.S. come back to theaters -- actually sit in the theater and watch movies? But I don't see anything out
yet.
PALLOTTA: That's true. So let's go back a couple of months ago and we'll talk about "Godzilla vs. Kong," another fine art film just like "F9," you
know, two monsters fighting each other. That comes from our sister studio, Warner Brothers who is also owned by WarnerMedia, just like CNN, and that
was the biggest pandemic -- biggest opening during the pandemic before this was.
[09:55:18]
PALLOTTA: And the "Mortal Kombat" came out. That was a video game series. That did pretty well. So, these movies are doing well, but like you said,
there is not a lot of competition, but at the same time, even though there is not a lot of completion, it's happening during an ongoing pandemic.
So we have to weigh those out. These numbers for "F9" are pretty close to the pre-pandemic numbers, at least internationally. But we are really going
to see the true test come next month on June 25th when it opens in the States.
KOSIK: Quickly, what do you want to see? What's top on your list?
PALLOTTA: "F9." I am seeing it tonight in a press screening. It is the first movie I have seen in 475 days, and I cannot think of a better movie
to come back. It is -- it is cinema with a capital C.
KOSIK: It sounds good. Well, I hope you enjoy it and eat some popcorn.
That's it for the show. We've got to wrap it up.
I'm Alison Kosik.
Stay safe out there.
"Connect the World" with Becky Anderson, that's next.
I'll see you next time.
(COMMERCIAL BREAK)
[10:00:00]
END
