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First Move with Julia Chatterley
U.S. House Speaker Pelosi ends Controversial Visit; Ukrainian Grain Cargo is Destined for Tripoli, Lebanon; Maersk: Supply Chain Congestion Raising Freight Prices; Robinhood Revenue Fell 44 Percent in the Second Quarter; Pelosi Defies Threats from China to Visit Taiwan; NASA: "Cartwheel Galaxy" about 500M Light-Years from Earth. Aired 9-10a ET
Aired August 03, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN HOST: A warm welcome to "First Move", this Wednesday, where the spotlight remains on Taiwan following the just concluded visit by
U.S. House Speaker Nancy Pelosi and the fallout not only for U.S.-China relations, but China's relationship with the world.
Pelosi flying out of Taipei some three hours ago stressing the U.S. commitment to democracy in Taiwan after key political and economic
engagements, a historic meeting with Taiwan's President, as well as the Head of Chip Giant Taiwan Semiconductor Pelosi's engaged, leaving China
enraged and flexing military muscle announcing a series of missile tests and military drills over the next few days.
Taiwan is saying it's tantamount to a blockade of its territory. Later this hour, I'll be speaking to the President of the U.S. Taiwan Business
Council, to gauge how the business community views the trip and the resulting tensions as a result.
That despite tough talk from Beijing, a sigh of relief it seems across Asian stocks today, Chinese shares lower, but not losing as much as they
did on Tuesday's session where they sank 2 percent that was of course before Pelosi's arrival.
And now we have green arrows on Wall Street with the bulls on track to break a two day losing streak supported by news that OPEC Plus has agreed a
modest boost to oil output a minor. And I say minor reduction in pricing pressures perhaps but nothing to reverse. The inflationary surge that has
led central banks to raise rates aggressively with the Bank of England set for a further hike tomorrow to name just one.
In the meantime, U.S. Federal Reserve Board members yesterday saying they will see a sustained improvement in inflation before even thinking about
dialing back the pace and size of rate hikes. The hawkish tone sending U.S. boring costs soaring. The fourth biggest intraday rise for U.S. bond yields
over the past five years.
OK, let's get to "The Drivers", U.S. House Speaker Nancy Pelosi now heading to Seoul after a historic and controversial visit to Taiwan on Tuesday. Now
the world is waiting for whatever we precautions may come. Will Ripley, joins us now. Will, good to have you with us. Nancy Pelosi may have left
but a series I think of political shocks aftershocks left in her wake.
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it was a trip that has dominated the headlines here. I'll just kind of go through these
are the front pages of the newspapers. It's all about Nancy Pelosi, even the English language paper at the top is about Nancy Pelosi and then they
mentioned oh, yes, combat alertness, China posturing.
But that might change in the coming days. If China goes through with what they're saying that they're doing, which is these military drills six
different locations encircling the island of Taiwan, a provocation that some here say is tantamount to a blockade.
RIPLEY (voice over): A resounding show of American support for Taiwan in the face of escalating threats from China, U.S. House Speaker Nancy Pelosi
delivering a defiant message to lawmakers in Taipei.
REP. NANCY PELOSI (D-CA): Today our delegation, which I'm very proud came to Taiwan to make unequivocally clear we will not abandon our commitment to
Taiwan, and we're proud of our enduring friendship.
RIPLEY (voice over): Pelosi's plane took a three-hour detour on the way to Taiwan Tuesday appearing to avoid heavily militarized South China Sea.
Shortly after Pelosi's arrival, China announced six military drills near the island some just miles from the Taiwanese coast, a provocation
condemned by the Defense Ministry in Taipei, calling it an attempt to threaten key ports and urban areas.
As Pelosi's convoy arrived at her Taipei hotel, a heavy police presence two groups of protesters gathered outside some welcome Pelosi's support for
JERRY LIU, DIRECTOR OF INTERNATIONAL AFFAIRS, NEW POWER PARTY: To pick up house is Nancy Pelosi has been supporting Taiwan for decades. And it's very
important for me as a Taiwanese to be here tonight to welcome her.
RIPLEY (voice over): Others accuse her of escalating tensions.
MS. HUANG, DOES NOT SUPPOER PELOSI'S TAIWAN VISIT: Right now Pelosi and the United States are treating Taiwan as a chess piece. Once she lands in
Taiwan, Mainland, China will retaliate using their own methods.
RIPLEY (voice over): China's Foreign Ministry Spokesman calling Pelosi's stop in Taiwan a serious violation of the One China principle that will
have a severe impact on the political foundation of China-U.S. relations. Taiwan says cyberattacks knock some government websites offline. Beijing
calls Taiwan a breakaway province of China. They refuse to recognize Taiwan's democratically elected government.
RIPLEY (voice over): Taiwan says China has sent more than 20 warplanes into the islands air defense shown Tuesday, part of what Taiwan calls an ongoing
campaign of bullying by Beijing. Near Pelosi's hotel, the islands' tallest building, lit up with a message of gratitude for a defiant show of support
from one of America's most powerful politicians.
RIPLEY: You know, it's all about perspective, isn't it, Julia? Because you know, outside observers China, putting, you know, ships and planes around
the island of Taiwan is incredibly provocative. And yet, from the Chinese government perspective, at least, they were lashing out at Nancy Pelosi's
visit to the island that they consider a renegade province of China that will be retaken at some point.
They felt that Pelosi meeting with the government they see as illegitimate, even though it's democratically elected, and has been in place for more
than 70 years, you know, they think that that was brazen. And that again, they use that same line we've been hearing those who play with fire will
But they're also using economic warfare as well Julia, even suspending a growing list of Taiwanese imports. So we really do have to wait and see
what the fallout is going to be for Nancy Pelosi's historic visit.
CHATTERLEY: Will, thank you so much for joining us. And I think I may have won my bet. How much sleep did you get in the last 24 hours?
RIPLEY: I didn't even know what day it was until your lovely producers reminded me it's Wednesday. We talked to you the last few days. Three will
three yep; it's one of those news cycles, Julia.
CHATTERLEY: I know one of many. Thank you. Will, get some sleep, please. OK, China is responding to the visit with lifeline military drills in the
air and sea around Taiwan as well as describing. Taiwan's Defense Ministry says the exercises amount to a "Blockade and violate its territorial
waters" China warns Tuesday that it would respond firmly to what it sees as a breach of its sovereignty.
(BEGIN VIDEO CLIP)
QIN GANG, CHINESE AMBASSADOR TO U.S.: To achieve further reunification, as I said earlier, is the firm and strong view of the whole Chinese nation. So
China's sovereignty cannot be infringed. And Chinese people cannot be humiliated. So we will take whatever we can to respond and to protect, to
safeguard our sovereignty, territorial integrity. And our response will be very form strong and forceful.
(END VIDEO CLIP)
CHATTERLEY: Selina Wang joins us now. A very pointed response there I think the word that caught my attention most there was China will not be
humiliated and clearly flexing military muscle in response. What are they saying about what they're actually trying to achieve here and the use of
the term by Taiwan of blockade?
SELINA WANG, CNN CORRESPONDENT: Yes Julia, well, they're saying that this is justified. They're doing this to stop separatist forces. They're trying
to use this as a deterrent, because from Beijing's perspective, they're saying, look for days, we've been promising this powerful retaliation
they've been threatening that their military wouldn't sit idly by.
So now, they are delivering on that the moves we are seeing they are unprecedented, but also expected. They don't want to be seen as a paper
tiger, they want to live up to some of their threats. So there is what Taiwan is calling a blockade.
They in an unusual move announced an image of where they're going to hold that military drills. If we can just pull up the picture here, you'll see
that it's essentially surrounding Taiwan. So Taiwan's Defense Ministry is very concerned about this, it looks like a practice for a blockade.
And if you look at the image, some of it appears to be entering into what is considered Taiwan's territorial airspace and territorial waters, which
means that it is could potentially be getting as close to about 14 miles of the islands. So this is an extremely provocative move.
And China is not only using this military backlash, there's also the economic backlash, they've banned some of the imports, they've also banned
also the export of natural sand to Taiwan that is a key component for semiconductor chips.
However, Taiwan has said that they expect the impact of that to be limited. Another important impact of this is that the Taiwan Strait is a key
shipping lane, could this potentially have further snags for the global supply chain?
But look, it's not just about what we see in the coming days from these military drills. It's also about the long term impact. Are we talking weeks
or months and years and many experts believe that as a result of this visit, we are entering an era when Beijing is going to even further
increase that military political coercion of Taiwan they're really going to step that up even further.
CHATTERLEY: Yes, a brilliant separation there. I think of the short term potential consequences, but also the longer term to Selina, thank you for
that Selina Wang, there. And later in the show we'll talk more about the impact of the visit on trade with the President of the U.S.-Taiwan Business
Now let's move on OPEC plus nations agreeing to increase oil output by 100,000 barrels a day they've been holding their first meeting since
President Biden visited Saudi Arabia last month there's that memorable fist pump.
Clare Sebastian joins me now.
CHATTERLEY: The fist-pump actually means something at the pump this time around. There was the speculation that perhaps, given the uncertainty about
the outlook for demand in particular that they'd stand pattern keep with August's output quota, Clare, perhaps a political token here as much as an
CLARE SEBASTIAN, CNN CORRESPONDENT: I think a token is the right word, Julia, because this is an increase? Yes, but a very small increase. And in
fact, one analyst said to me, that it's so small it appears to disregard European and American concerns over high energy prices, especially in the
context that OPEC was by many accounts already undershooting its production increased targets for the last few months because of logistical, technical,
political pressures in several of its members.
So 100,000 barrels a day from September, perhaps a nod to the thought between the U.S. and Saudi Arabia, but also taking into account the other
political pressures that OPEC is facing the fact that many members perhaps don't want to wave goodbye to the price windfall they've been seeing as
prices have risen so much over the last few months.
Having said that, look, I think, obviously, we've seen prices come down in the last few days over fears of a growth in China recession, fears around
the world, generally, that may have provided an opening for OPEC to do a little less to do a smaller increase than many had expected.
And also because recession fears are actually real and they do have to be careful not to increase production too much if we're then going to go into
a recession and see demand crater. And obviously there is a big question for the second half of this year.
And that is what is going to happen to Russian supplies the EU embargo on Russian seaborne oil and some pipeline all kicks in December. The big
question for OPEC, then certainly under pressure from the United States is will they be able to fill some of that gap if that oil doesn't get
swallowed up by Asian countries?
So that is the question and we see this in the statement today that the meeting noted according to the statement, that the severely limited
available of excess capacity and necessitates utilizing it with great caution in response to severe supply disruptions. There are a lot of
competing forces out here, Julia. But a very small although noteworthy moved from OPEC.
CHATTERLEY: Yes and also a fascinating interview with the new OPEC Secretary General over the weekend as well, just saying more broadly about
your point on Russia that OPEC plus doesn't work without Russia. And we know that they are the key player but it's a complication given the
backdrop here, Clare, thank you great context. Thank you again.
OK, the war in Ukraine worsening not only the global energy crisis, of course, but also a life threatening global food crisis. The first shipment
of grain to leave Ukraine since the Russian invasion has reached Turkey. Its ultimate destination Lebanon, where the U.N. says food shortages are
impacting 90 percent of families, and deepening what was already a severe economic crisis. Nada Bashir joins us now from Istanbul.
Nada, great to have you with us! I believe you were actually there, when the ship arrived and got a sense of the search the verification process
that was happening as a result. Just talk us through what you saw and what next?
NADA BASHIR, CNN REPORTER: Well, Julia, this is really a moment that has been weeks in the making. We saw officials from that Joint Coordination
Center, which was established here in Istanbul and opened last week, including representatives Russia, Ukraine, Turkey and the United Nations,
with delegations from that team arriving at a port just north of where we are now in Taksim Square in Istanbul. Arriving to inspect the ship and this
was a crucial part of that framework agreed in the Black Sea grain initiative deal.
They were of course, inspecting the cargo of the - which arrived in Istanbul late last night to ensure that it is only carrying the
agricultural goods that have been agreed upon in that framework.
Now, according to officials that's carrying around 27,000 tons of corn. That is, of course, only a small fraction of the nearly 20 million metric
tons of grain still waiting in silos in Ukraine, Southern Black sea ports. But as you mentioned that it is now passing through Istanbul. It passed
those checks and is on its way through the Bosphorus to Tripoli in Lebanon where of course, they are in severe need of that grain. Ukraine was one of
the largest exporters of grain to Lebanon previously before the war.
Now, of course, this is a real moment of hope for countries that are in need. We've heard from the U.N. previously warning that some 47 million
people have been pushed into a state of acute hunger as a direct or indirect result of the war in Ukraine.
And this really is a significant moment of hope that we've heard just in the last few hours or so from the U.S. Secretary of State Antony Blinken,
describing this as a significant step but only a first step and that is the key here. This is a critical test to see whether or not this deal that was
brokered by Turkey in the United Nations with Russia and with Ukraine can actually work in practice.
And as we saw yesterday, there was that passage through the Black Sea through the carefully identified safe corridor that appears to have gone
through without a problem. It has passed these checks now in Istanbul as outlined in the framework.
BASHIR: The question now is whether this will give commercial shipping companies the confidence to send more ships to the ports of southern
Ukraine in order to get that grain out, Julia.
CHATTERLEY: Yes, once shipped down many more to go, fingers crossed. Nada Bashir, thank you. OK, let me bring you up to speed now with some of the
other stories that making headlines around the world. The U.S. Grand Jury has subpoenaed former White House Counsel Pat Cipollone, over Donald
Trump's effort to overturn the 2020 election.
As a source told he and his attorney so negotiating the terms of that testimony he previously testified to Congress that Trump should have
conceded the election. And U.S. state of Kansas a major win for abortion rights supporters, voters have rejected a measure that would have allowed
restrictive abortion laws to go forward.
It's the first state in the United States to put the question of abortion on the ballot since the Supreme Court overturned Roe versus Wade. And
straight ahead, hefty haul even by Maersk standards. The shipping giant CEO of Maersk to discuss what's behind its record profits. And losses in the
hood Trading App Robin Hood sharing users and workers, will discuss stay with CNN.
CHATTERLEY: Welcome back to "First Move", last month's Biden MBS fist pump might lead to more oil at the pump and that's helping Wall Street futures
jump. U.S. stocks on tap for solidly higher open reports that OPEC Plus has agreed to boost production by a modest 100,000 barrels a day next month
helping sentiment those reports of course now confirmed.
A bit of a relief rally too after U.S. House Speaker Nancy Pelosi wrapped up her historic trip to Taiwan without incident. Although China has
promised military drills in the waters and skies around Taiwan. And move that could impact shipping in the area and as you heard here earlier Taiwan
saying the drills are tantamount to a blockade.
Another company delivering robust results says Danish shipping company Maersk the world's second largest shipping firm by volume so revenues
increased by 52 percent. And its profits more than double in the second quarter in part fueled by ongoing supply chain challenges that have kept
transport costs high.
Maersk is also warning that the euro area may be in a period of stagflation, while in the U.S. demand remains strong in the second quarter.
The Fed does however warn we could see weaker demand going forward much to discuss. Soren Skou is the CEO of Maersk and he joins us now. Soren, always
fantastic to have you on the show!
CHATTERLEY: I have to say congratulations on another great quarter both for the company and for shareholders too. But it does point to the fact that
transportation costs, congestion has remained longer than I think even you and I were discussing, what two quarters three quarters ago?
SOREN SKOU, CEO, MAERSK: Yes, absolutely, we have seen, congestion, stay elevated actually come to all to a peak this year, as congestion moved from
the U.S. West Coast to the U.S. East Coast, and onwards to Europe. Europe has been hard hit by the Ukrainian, the war in Ukraine, from the fact that
many truck drivers in Europe are Ukrainian nationals, and they are now home fighting for their country.
So we see shortage of truck power. That means it's hard to get the containers off the terminals. And that means that the system clogs up and
the same in the U.S., even though things have improved in the U.S. West Coast. And we do not have so many ships lined up outside L.A. anymore; we
still have ships lined up outside L.A. And we are missing, you know, we sort of rail cars, and so on to get containers off the terminal. So it's
still a significant issue in the U.S. and in Europe with congestion.
CHATTERLEY: And you and I often discuss it's not just about shipping for you; we have to remember that you have a huge logistics business too. So
you see the inland part as well as the as the antsy part, what about operationally, in China, because much has been made of the growth slowdown
that we see there. And while they did try and protect trade, I just wonder what level of activity you're seeing there now?
SKOU: Well, in the closing down of Shanghai, they did keep the port open. And we saw activity levels that were you know, at 70 to 80 percent of, you
know, normal levels so, not a complete disaster. And a lot of dark cargo moved out of China through other ports as well during that period.
So we see China returning to normal, but clearly, the economy is not doing as well, in particularly in Europe, and that is putting a damper on demand.
But at least for now, the congestion has absorbed more capacity than the - if you will then the lower economy has reduced demand.
CHATTERLEY: Yes, it's interesting, broader measures of transport costs are lessening and one part of that could be an easing of some of the supply
chain chinks or clinks that we've seen. The other part of that could be less demand, as you've pointed out; we are seeing activity indicators all
around the world softening.
Can you can you sort of help us understand what part of that is some improvement, at least in some of those supply chain reactions versus
actually softening demand? Because it is something that you've warned about this quarter, you can see it already. And in what you're seeing, I guess in
terms of orders, and what you're moving already.
SKOU: Clearly there are certain categories of goods where demand has come down significantly, if you will, the longer durable consumer goods, you
know, they are we see demand have come down many of our customers have complained about too much inventory now but in other things like lifestyle
and sports goods and these kinds of things. The consumers still spending money and you know, the demand is healthy.
So, it is a bit of, you know, choose two stories, but overall, I would say particular to Europe, demand has come down imports to Europe are now more
or less at the level they were in 2019. Before the pandemic, the U.S. import levels are still elevated, even though we see many of our customers
complaining about too much inventory, but in some cases, it's simply the wrong inventory. And they still have to import other goods to continue to
sell to the consumer. So you have a couple of different stories going on at the same time.
CHATTERLEY: Is it too early to use the recession word? Because you're one of the best leading indicators I think in the world?
SKOU: Well, I mean, container volumes, globally, trade volumes, were down a couple of percentage points in the second quarter, maybe even more than
that. And they will also go up they were basically flat. I think we have a good chance of if you will avoid a recession in the U.S. in the short term.
But certainly in Europe, there's a high risk that we will soon have to declare a recession I will say.
CHATTERLEY: Add into the mix what we've seen over the last 24 hours with Nancy Pelosi visiting Taiwan and the resulting tensions. How closely are
you watching that clearly a crucial part of your business for both reasons?
SKOU: Well, clearly the chairman straight so the water, the body of water between Taiwan and China, you know, that's one of the busiest waterways in
the world. You know, all the ships that are going through Asia are transiting there.
SKOU: So clearly any kind of restrictions on a movement in the target time and straight for merchant vessels or even closure would mean a lot of
disruption for motion shipping, because the only way to handle it would be to go, you know, the other way around time. And that would add to avoid
distances; it would absorb capacity, because we need to spend more time at sea. So clearly, the potential for disruption is quite high.
With that being said, you know, at this point, there's no nothing that suggests that we will see restrictions on going through the Taiwan Strait.
And, but I guess the coming days, we'll see what kind of response the Chinese are planning to the visit of the speaker to Taiwan.
CHATTERLEY: Yes, you remain cautious and just wait and see, really, you know, every time I get you on, I'm determined to talk about your net zero
targets. And I always squeezed it into the conversation. So you have to come back and talk to us about this more broadly, but probably about a year
ago, we talked about biofuels and your excitement over what that could mean for your business and the ability not to have to switch ships and keep the
ones that you have and just use cleaner fuels. Where are we on progress? Can you give me a progress check just quickly, and we'll reconvene on this?
SKOU: Certainly, I think we're making good progress on this agenda. First of all, we now in the second quarter, almost 2 percent of our total
volumes, were moving on biofuel. So of course, 2 percent is not a lot, but it came from nothing and our customers actually paying a green premium for
shipping on biofuel, carbon neutral biofuel.
In 2024, we will start to take delivery of the first series of large container ships that can run on carbon neutral methanol or carbon neutral
methanol. And we're busy securing supply of that kind of green fuel so that we can fuel the ships in when we get them in 24 and 25.
It's a little easier said than done. Because today there are no quantities of green methanol produced to speak up. So we have to build a whole new
supply chain for the fuel but we are making good headway. And I'm very optimistic about being able to have the first real big container ships
running on green fuel by 2024.
CHATTERLEY: Wow! I mean, you could do more if more than the 2 percent, to your point if the supplies are available. So it's a work in progress,
exciting. Thank you, Soren, always a pleasure to chat to you sir, thank you, the CEO of Maersk there, congrats again on the quarter.
SKOU: Thank you.
CHATTERLEY: More "First Move" after the break stay with us.
CHATTERLEY: Welcome back to "First Move". Well, U.S. stocks are up and running this Wednesday and we can take a look at them it's a higher open
for the major averages stocks on track for the first gains of the week. And in fact, the month as the second quarter results from global firms continue
to come in that includes two well-known consumer brands, Starbucks and Airbnb.
Starbucks shares are on the rise of reporting record revenues, strong U.S. demand offsetting an 18 percent drop in international sales due to a sharp
fall in China amid those COVID lock downs.
In the meantime, Airbnb says it's on track for its highest ever quarter of revenue in the third quarter. But shares are lower as you can see there
after some of the firm's closely watched bookings metrics fell short of estimates.
Now the online brokerage firm Robinhood says it's lying off nearly a quarter of its staff as sales and user numbers decline. It's also facing a
$30 million fine for violating anti money laundering and cybersecurity regulations.
Rahel Solomon joins us now on this story Rahel, great to have you with us. Let's just explain what's going on there because I was looking through the
numbers, revenues down over 40 percent on the same period last year, they've got fewer assets under custody and less monthly active users.
RAHEL SOLOMON, CNN CORRESPONDENT: Yes, I mean, no matter which way you slice it, Julia, it was a rough quarter. So let's go through the metrics.
And then we can explain sort of what's happening.
So as you pointed out, revenue was down more than 44 percent compared to a year ago, monthly active users a very important metric for companies like
Robinhood that was off 34 percent and assets under custody dropped 31 percent.
Look, you don't have to look far Julia to figure out sort of what the challenges are for Robinhood. So one, Robinhood really boomed when folks
were at home, they were actively trading and stocks were up, crypto was up.
Both of those things have fallen right, both of those asset classes have fallen quite dramatically this year. Also folks, for the most part have
returned to work right. So we're seeing less trading. And so you're seeing that in the monthly active users.
In addition, of course, there is increased regulatory scrutiny. You already pointed out Julia, the New York State fine of $30 million that was up
handed down yesterday. But also we know the SEC has accused the company of misleading investors and so between the regulatory scrutiny between fewer
users on the platform, and of course, the broader trends.
The company, of course, is looking now to save some cash, their cost cutting. Their CEO saying in a blog post that they over hired, and that
this was on him that they expanded their headcount during 2020, 2021 when we were sort of in the height of COVID. But those trends did not continue.
And so now they're cross correcting. They're reducing staff 780 in this latest announcement, the question Julia is will that big enough?
CHATTERLEY: Yes, I mean, I couldn't agree more with you on all the points that you're making there. I will throw in there a crypto winter; a huge
chunk of the trading on the platform was of course, crypto as well.
And they were one of the first to democratize access to finance and then came in a whole load of other competition as well. So you can ramp up
hiring I have some sympathy because they had to ramp up hiring during the meme stock trading frenzy.
Because they have been criticized for not having enough and we're and then of course, when it slows down again and you no longer need those people.
What next Rahel, that they been rumors that someone could come in and buy them? What do we think?
SOLOMON: There have been rumors. There have been rumors for sure. Well, that's the big question, Julia. And I think you make a fantastic point
about the increased competition. It's not also just that the heavyweights like the Charles Schwab, like the Fidelity it's also newer entrants like
So there's also increased competition. All eyes are going to be looking toward can they remain a public company? Or is this bought by up a larger
player and there are rumors out there about who that could be? Important to note Julia the company's only been public a little bit more than a year but
take a look at it stock performance. I mean it has plummeted about 50 percent this year so the questions remain about whether it can remain
SOLOMON: I guess that depends on if it can prove to be profitable, right? I mean, if it can get more users if it can increase revenue at this point,
it's not really looking positive.
CHATTERLEY: No, but you might not get a cheaper price. But you might, if you're a buyer looking at this interesting. Rahel, great, thank you very
much Rahel Solomon there! Now speaking of memes, have you heard of AMTD Digital? Well, neither had I until today.
But the Financial Services startup is now worth more than Shell and Costco. Why? Well, it's the new darling of the popular Reddit forum Wall Street
Bets. The stock has soared 21,000 percent since its IPO less than a month ago. The Hong Kong based company seems flummoxed at the rise, saying to
their knowledge, there's no reason for the surge.
We like almost stay on this show. If they're watching, please come on and chat to us and tell us what you do. All right up next trouble for tech the
trade risk of a clash with China over Taiwan. We speak to the Head at the U.S. Taiwan Business Council next.
CHATTERLEY: Welcome back to "First Move". U.S. House Speaker Nancy Pelosi has arrived in South Korea following her trip to Taiwan. Korean media
reporting she arrived at the Osan Military Base about an hour ago before heading to the Capital Seoul. In Taiwan Pelosi said her visit made it clear
the U.S. stands in support of the self-governing Island China now responding with military drills in the skies and seas around Taiwan.
John Harwood joins us from the White House. John, the ripple effect here broad I read an article in "The New York Times" from Tom Friedman saying
that this trip was reckless. The problem is once it was rumored and the threat started, you could also argue the United States had no choice but to
follow through on this. Where the rewards are greater than the risks, John?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, it's difficult to assess that Julia. Nancy Pelosi has had a consistent record over decades in
standing up for human rights in China. She has a large Chinese constituency in her district in San Francisco.
In 1991 she went into Tiananmen Square and unfurled a pro-Democracy banner. She is a strong speaker and she was determined to make this as she
concludes her speakership. Nobody expects her to be in that job next year. She wanted to close with this strong statement at a time of heightened
competition and challenge between the United States and China.
HARWOOD: Much of the foreign policy establishment, including here at the White House, just like Tom Friedman thought that it was unwise for her to
do it. But she was determined to go ahead instead and now what the White House is doing is shifting to saying she had the right to go and counting
on China not to escalate.
I think there's an underlying belief that neither side wants open conflict at this point that some of what China's doing now is per formative. Xi
Jinping may have been embarrassed by her trip. He's got elections coming up. And so I think the question is, does this escalate to a point that it
makes a situation that was, has been fundamentally stable? Does it make it unstable in the near term? And that's what we don't know yet.
CHATTERLEY: Yes, we just have to wait and see. And John, thank you so much for battling with what sounds like a drone, but it's not that exciting. I
believe it's a lawn mower behind you.
CHATTERLEY: Yes. OK. Thank you so much John Harwood, great to chat to you as always. OK, a fight over Taiwan woods - huge trouble for the U.S. trade
and tech sector, Taiwan, high stakes tech hub, a high tech hub and makes 90 percent of the world's most advanced semiconductor chips.
U.S. companies on the island include Google, Microsoft, and IBM. Joining us now is Rupert Hammond Chambers, President of the U.S. Taiwan Business
Council, which represents businesses with ties to Taiwan. Rupert, fantastic to have you with us! What are members? What are your members saying about
this visit? And how concerned are they about the repercussions?
RUPERT HAMMOND CHAMBERS, PRESIDENT U.S. TAIWAN BUSINESS COUNCIL: Good morning, Julia! Thank you very much for having me on your show. There's a
great deal of anxiety within the C-suite level of our company members over tensions in the Taiwan Strait.
We would want to convey that at some level, the large tech companies that you mentioned and, you know, pretty much all technology companies at some
level are engaged with Taiwan, given its prowess in the technology supply chain, they are at some level conditioned to deal with the tension in the
Taiwan Strait and the differences between China and Taiwan politically.
And yet, they still have deployed billions and billions of dollars' worth of capital and money continues to flow in perhaps at a more volatile level
in respect to capital markets. But for cement and steel that is still pouring in commitments to R&D is still pouring in. So it can look
contradictory, given what's just happened or is happening around Mrs. Pelosi's trip. But overall, there's a great deal of concern amongst the
business community over heightened tensions in the strait.
CHATTERLEY: It's what businesses do. It's an assessment of the risk rewards, as I was just asking John Harwood before you. I guess it goes to
the question of how much protection Taiwan is afforded for those economic purposes if nothing else, for a nation that provides what 65 percent of the
world semiconductors, particularly in light of recent policy, pronouncements from the White House, even if some of them were reversed? Is
there a fundamental belief that actually Taiwan will be afforded more protection perhaps than on paper as suggested?
CHAMBERS: I think there is this - I liked the question a lot, Julia. Thank you. I think there is a space between the concerns of companies and the
direction they're taking their businesses. There's also a COVID piece to supply chain disruption and how companies are looking at supply chains that
run into China, that's also hugely important in the changes that companies are making.
So I would want to reference that it's the shifts that we're seeing in respect to how capital is deployed for businesses? And how they look at
Taiwan is partly tensions in the Taiwan Strait and it's partly a broader lessons learned or lessons being learned post COVID.
And what companies should do about putting too many eggs in one basket, the China basket, and how they might necessarily shift investment into South
Asia, Southeast Asia, perhaps Eastern Europe.
So this is what we're seeing anyway and actually capital returning to Taiwan, we've seen a significant expansion, particularly from Taiwan's
supply chain partners for the big tech guys back into Taiwan.
CHATTERLEY: Yes, I mean, it's so many fascinating observations in there. And you can understand why the Europeans have signed their equivalent of a
Chips Act? Why the United States plays here? We're so desperate to boost production here simply just to diversify the supply chains.
If we look at the broader policy, though, and I'd love to get your perspective on this on how the United States in particular handles the
relationship with China? I can't help but feel that we're, in many ways reverting back to the stance that existed prior to the Trump Administration
that enacted all sorts of tariffs and took a far more perhaps front foot approach to China.
CHATTERLEY: And some of the threats that China made or posed relative to this administration and perhaps previous administrations, how does it feel
to you and again, and to the business community? How they perceive the shifts?
CHAMBERS: Yes, I agree with you, Julia. I think the concern from our organization is the potential for regression, pre 2017, where we were in a
bipartisan accommodations approach to China, which had the U.S. and our policy interests on the back foot in China assertive, and assertive and
That was a significant problem for businesses, although it felt safe and secure that the notion that tensions in the strait were less than, but what
it really meant as a practical matter was that China was in the driver's seat. IP was being stolen trade secrets were being stolen.
We had real problems with the Chinese where there was - just wasn't significant push back from 2000 through to 2017. Mr. Trump comes in,
there's a shift. It is bipartisan. Democrats supported that shift. And in fairness to Mr. Biden, it continued through most of last year.
But now we're starting to see a worrying shift that we may be entertaining, the notion that China's considerations of its interests in the strait, are
going to be ascendance again in U.S. policy. And that worries U.S. businesses, because the U.S. business community wants to feel like the U.S.
government has its back in investing in Taiwan, investing in China when it's legal and reasonable. And when that isn't the case, it causes concern
all the way up and down the companies.
CHATTERLEY: It's a two sided coin, though, isn't it? Because the U.S. China tariffs that were imposed had a sort of negative impact on many of the
American businesses as well, depending on you know the consequences of who paid the tariffs where and when? In your mind, then it's the removal of the
tariffs have been mooted, at least under this administration, the wrong move to make at the wrong time?
CHAMBERS: Certainly from our standpoint, we - I mean, different companies are going to have different views parochially. But generally from the Trade
Association standpoint, we like the notion that there's a full court press on China.
And those companies will be given some breathing room, and as much time as potentially can be created to adjust supply chains. I think there is
recognition that both the geostrategic risk as well as the economic risks of putting too many eggs in the China basket has to be addressed.
But it takes time and that I think - big question to pose for your viewers is how much time do we have? What are we looking at, from a time
standpoint, in respect to the trajectory of U.S. China relations?
And what that means for deployed capital in Taiwan deployed capital in China, and any shifts in supply chains that might reasonably ensure that
U.S. citizens and global citizens outside of the China market specifically are able to access the goods and services they need? If God forbid, there's
any kind of contingency in the Taiwan Strait?
CHATTERLEY: It's exactly what I was going to ask you, Rupert, in terms of timing, particularly in light of what we've seen between Russia and
Ukraine. I think it's raised the question of China's ambitions with regards to Taiwan and they've been consistent. We just don't have a sense of
timing, and how they will choose to do it. Do you? How are you even talking to your members about this in terms of timeframe if indeed, something
CHAMBERS: Yes, what we discourage is any discussion sort of beyond, you know, five to seven years, because we - who can really tell in that regard,
I'm sure worth one could find people who could comment on that. But is it really practical? Is it really useful? I would argue no.
What we're looking at looking at is what's reasonable over the next three to five years? And what are the major benchmarks that Beijing would look at
DC would look at? And Taipei would look at, that could potentially represent a significant shift in the behavior of, let's say, let's call a
spade a China?
I mean, they are the aggressor. They're the hegemonic power. They're the ones who are disrupting the Taiwan Strait with their military actions and
their force modernization. So we want to look at potential actions. A good way to illustrate that potentially is elections of course.
We'll have elections in Taiwan in January of 2024. We'll have elections here in the states in November of 2024. What will those look like a
personalities and leadership matter? Of course, we all understand that Julia, and in this instance, it matters enormously.
Of course, we can see the difference between Mr. Obama, Mr. Trump, Mr. Biden, and of course the difference in Taiwan between Mr. Mao and President
Xi there are huge shifts in policy attitudes which have ramifications for China policy and consequently how the Chinese respond to those?
CHATTERLEY: Yes and President Xi of course too later this year with the party congress. Rupert great to get your insights thank you so much come
back to us and talk again soon.
CHAMBERS: Will always Julia thanks a lot--
CHATTERLEY: Rupert Hammond Chambers - likewise the President at the U.S. Taiwan Business Council there. OK, coming up, interstellar gymnastics will
explain what a cartwheel galaxy is and why it's unlocking secrets of the universe, next?
CHATTERLEY: Welcome back to "First Move". And time to get starry eyed. Just take a look at these new images from the James Webb Space Telescope. This
is a cartwheel Galaxy almost 500 million light years away. NASA says pictures like these reveal how the galaxy has changed over billions of
CNN's Space and Defense Correspondent Kristin Fisher joins us now. Wow is all I can say. I have a million questions a million light years' worth of
questions. I guess the first one is how a cartwheel galaxy formed is? And from that picture, I saw two others. So you're going have to explain how
we've been seeing these things because it's amazing, it's truly amazing?
KRISTIN FISHER, CNN SPACE AND DEFENSE CORRESPONDENT: Yes, so this is actually a very rare type of galaxy. It's called a "Ring Galaxy". And what
NASA believes is that galaxy actually started out as a spiral galaxy which is what our galaxy is the Milky Way galaxy, but then it collided with
And that collision is what caused the ring galaxy that you see there. And so what it's comprised of is this really hot core very young baby stardust
and then the outer ring, which is where you would see star formations and star deaths are supernovas. And so what scientists believe is happening
there is no Julia thinks of it as though you've just thrown a rock into a pond and those ripples that go out.
Well, that's what's happening to both that inner and outer core. And what really strikes me though Julia from this image is, what you're seeing there
is so similar to what the Hubble Space Telescope took a picture of this same galaxy, that image right there, back in around 2018.
And then you can see the color kind of fill in. And that's what the Webb Space Telescope is able to do. That's why it's so much more powerful,
because it sees in infrared light. The type of light that the human eyes cannot see, whereas the Webb - Hubble Telescope could only see optical
light, which is what we can see so Webb can just see things a whole lot differently.
CHATTERLEY: It's magical, isn't it?
FISHER: It really is.
CHATTERLEY: Mind blowing. And there are two other galaxies there that I can see at the top.
FISHER: Well, you see those two other galaxies off to the left of the screen, the bigger ones but all those other bright lights in the
background. Those are galaxies too. I mean, there's a hundred if not just we can see three big ones one large too small.
But all of those lights in the background they're not stars, they're galaxies. That's why it's so hard to wrap your mind around.
CHATTERLEY: Mind blown, Kristin, great to have you with us. Thank you so much.
CHATTERLEY: Kristen Fisher there. And an accolade for the first Mexican woman to travel into space Katya Echazarreta received honoree keys to
Mexico City on Tuesday. The 26-year-old NASA Engineer flew in Jeff Bezos's Blue Origin rocket back in June beating thousands of other applicants
because of her experience, and her leadership qualities.
(BEGIN VIDEO CLIP)
KATYA ECHAZARRETA, FIRST MEXICAN WOMEN IN SPACE: As women, we are very strong. We are very smart. We can do whatever we want to do. And I want
each and every one of you to know you can get to wherever you want to go.
If you want to go to space, you can do it. Of course you can. So please, before I finish, I'll repeat the words every time you think about something
you want to achieve. Do not say I want this instead say I'm going to do it.
(END VIDEO CLIP)
CHATTERLEY: Inspirational words from an inspirational woman. And that's it for the show. If you've missed any of our interviews today there'll be on
my Twitter and Instagram pages you can search for @jchatterleycnn as always. "Connect the World" is up next and I'll see you tomorrow.