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First Move with Julia Chatterley

Biden Hails "Monumental Alliance" With Japan; U.S. And Japan Announce New Security Initiatives; U.S-Japan Summit; IDF Says It Killed Hamas Leader's Sons; Hamas Unable To Find 40 Hostages For Ceasefire Deal; War Overshadows Eid; Zelenskyy Will Listen To Trump's Ideas Should He Win U.S. Election; U.S. Inflation Accelerates; Inflation Manifestation; White House State Dinner For Japanese PM; Kishida Open For Talks With North Korea; Suntory's New Secret Ingredient; Barcelona And Atletico Madrid Take The Lead In Champions League Quarterfinals; Champion League Action. Aired 6-7p ET

Aired April 10, 2024 - 18:00   ET

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

[18:00:00]

JAKE TAPPER, CNN INTERNATIONAL HOST: Hey Josh, honoring the Japanese prime minister. The guest list includes some notable names such as Bill and

Hillary Clinton, Apple CEO Tim Cook, Amazon founder Jeff Bezos, actor Robert De Niro, Olympic skating champion Kristi Yamaguchi. Let's see, do we

know who these people are? I'm afraid I don't.

The news continues on CNN with Wolf Blitzer in "The Situation Room." I'll see you tomorrow.

JULIA CHATTERLEY, CNN INTERNATIONAL HOST: It's 6:00 a.m. in Beijing, 7:00 a.m. in Tokyo and 6:00 p.m. here in New York. I'm Julia Chatterley. And

wherever you are in the world, this is your "First Move."

And a warm welcome once again to "First Move." And here's your need to know. President Biden hailing a monumental "U.S.-Japan alliance" on day one

of the Washington Summit.

Israel says it killed three sons of Hamas leader Ismail Haniyeh. Haniyeh calls them martyrs and says it's hardened his resolve.

U.S. inflation hotter for a third straight month, torching hopes for a June rate cut from the Federal Reserve.

And Spanish success, Barcelona and Atletico Madrid take the lead in their Champions League quarterfinals. All that and more coming up.

But we begin with a historic day for U.S.-Japan relations with both nations declaring a strengthening of their already close economic partnership and a

new era of military cooperation as they face worsening security threats around the world.

U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida. announcing a wide range of new defense initiatives to counter the growing

Chinese military threat, including a new joint air defense network with Australia.

President Biden calling the U.S. partnership with Japan "a beacon" to the entire world that will only get stronger.

(BEGIN VIDEO CLIP)

JOE BIDEN, U.S. PRESIDENT: Together our countries are taking significant steps to strengthen defense security cooperation. We're modernizing command

and control structures and we're increasing the interoperability and planning of our militaries so they can work together in a seamless and

effective way.

(END VIDEO CLIP)

CHATTERLEY: Prime Minister Kishida also reconfirming his nation's decision to raise defense spending in its largest military buildup since World War

II.

(BEGIN VIDEO CLIP)

FUMIO KISHIA, JAPANESE PRIME MINISTER (through translator): I explained that based on our national security strategy, Japan is determined to

strengthen our defense force through possession of counterstrike capabilities, increase our defense budget and other initiatives.

(END VIDEO CLIP)

CHATTERLEY: The two leaders, meanwhile, stress that their alliance reboot is purely defensive in nature and that they're not looking for a conflict

with China. The prime minister also is saying he's open to meeting North Korean leader Kim Jong-Un, believing "a window of discussion is open."

And day one of the big summit, far from over, Kayla Tausche is at the White House, where guests will soon be arriving for a state dinner honoring Prime

Minister Kashida. Kayla, great to have you with us.

And I'm sure people are already arriving ahead of that. You could tell us what happened today. But first and foremost, who's going to be there

tonight and what's on the menu?

KAYLA TAUSCHE, CNN CORRESPONDENT: Well, Julia, the A list from the business community has begun rolling in, as well as governors in key swing states

like North Carolina, Pennsylvania, and Wisconsin.

We're expecting to see J.P. Morgan Chief Jamie Dimon, Apple CEO Tim Cook and Amazon Founder Jeff Bezos, among others. They're all here to fit the

U.S.'s relationship with Japan, which is the biggest foreign investor in the other country. And they're only going to become more inextricably

linked through billions upon billions of dollars of new commercial deals inked this week, as well as a fortified military partnership that will see

the two allies collaborate at a level that has not been seen before and that has led White House officials to herald a new era for the alliance

between the two countries.

You mentioned the increase in military spending by Japan, it will now become the third largest defense spender in the entire world. And it's also

going to be collaborating to co-produce weapons with allies like the United States for the first time in the country's history and also will be part of

a consultation with Australia and the U.K. and the U.S., that so-called AUKUS partnership, to develop weaponry of its own.

So, it's all aimed, according to these leaders, at deterrence. They say that they want to continue cooperating and communicating with China. That

is at least what the public message is, urging stability and peace in the Taiwan Strait and the South China Sea.

[18:05:00]

But behind the scenes, Julia, administration officials acknowledge that this is meant to send a message to China, which has been increasingly

hostile in the Indo-Pacific. Julia.

CHATTERLEY: Yes, certainly. And they can continue to reiterate that this is purely defensive in stance, but it's hard to see when you're talking about

the military buildup, the anticipated greater spending, even just in terms of logistically how they can work out how and where to produce collectively

when we're talking about weaponry. It's hard to see nations like North Korea and China not seeing this as a more offensive stance.

What about on the economics as well, Kayla, in terms of potential deal making there? I know one of the things that was going to be a perhaps more

touchy subject was the hopes for Nippon Steel to acquire U.S. steel, and then President Biden's made no bones about it. He's certainly not keen.

TAUSCHE: Well, that was one of the questions that came up at the joint press conference today, Julia. A reporter asked Prime Minister Kashida for

his views on the president's comments, where he has previously weighed in and weighed in against that merger, saying that he would side with the

American workers. And he took an opportunity to reiterate that message today. But Prime Minister Kashida would say only that he believed that the

laws in each country would prevail.

Certainly, here in the U.S., there are agencies and there's a court system that deals with anti-trust matters. So, Kishida choosing to instead rest on

those authorities to make a decision rather than a political one. And neither leader acknowledging with certainty whether it did come up in the

discussions behind closed doors.

But there was enough business that was already being done where the ink was just drawing billions of dollars and deals on artificial intelligence and

digital diplomacy with Google, Microsoft, and Amazon in Japan, as well as Honda and Toyota committing to new investments in manufacturing in the

United States. Julia.

CHATTERLEY: Yes, a strong few days of announcements, so expected and we're already seeing it clearly in your -- and we'll continue to watch those

arrivals there as people get ready for the feast later on. Kayla, we'll leave it there for now at the White House. Thank you.

TAUSCHE: Sure.

CHATTERLEY: Now, Israel says it's killed three sons of Hamas leader Ismail Haniyeh. Three of his grandchildren were also apparently killed in the

airstrike. Haniyeh responded by saying the attack had only hardened his resolve.

Meanwhile, Hamas has indicated it can't find the 40 hostages needed to meet conditions for a potential ceasefire. All this coming on the last day of

Ramadan, normally a holiday marking the end of fasting. But this year, of course, Gazans continue to struggle to find food. Jeremy Diamond joins us

now from Jerusalem.

Jeremy, what more can you tell us about the killing of family members of the Hamas leader? He'd suggested perhaps that this was some kind of

intimidation effort with regards those potential ceasefire negotiations. The Israelis, at great pains, it seems, to separate the two things.

JEREMY DIAMOND, CNN CORRESPONDENT: Yes, regardless of the intention of this strike and whether or not it was related to those negotiations, it is clear

that this could potentially impact those negotiations, just purely because of how symbolic it is to have three of Ismail Haniyeh's sons as well as

three of his grandchildren killed in an Israeli airstrike in Gaza.

Now, in terms of the details of this strike, the Israeli military says that it targeted those three sons of Ismail Haniyeh saying that they are

military operatives, one of whom they claim is a commander. We cannot independently verify that information. But from people on the ground, we

can also tell you that three of Haniyeh's grandchildren were also in the vehicle when it was struck by an Israeli missile, as well as the driver of

that vehicle.

Now, Haniyeh, for his part, saying -- suggesting that this was an attempt by the Israeli government to try and influence Hamas' hand -- Hamas'

position at the negotiating table, saying that whoever thinks it will force Hamas to back down off its positions is "delusional."

But the Israeli government tonight, Julia, taking great pains to try and separate out this Israeli military strike on this vehicle that killed

Haniyeh's sons with those ongoing negotiations to try and reach a potential ceasefire agreement and the release of hostages.

We are at a very, very delicate moment in those negotiations. And an Israeli government official telling me tonight that these are two separate

matters. And furthermore, two other Israeli officials telling me that neither Prime Minister Netanyahu nor Defense Minister Yoav Gallant were

informed of the plans to carry out this strike beforehand, suggesting that this was not something that was premeditated with the intention of

impacting those negotiations.

[18:10:00]

But as we know, beyond the killing of Haniyeh's sons, there are, of course, so many other sticking points in these negotiations, the return of

Palestinians to Northern Gaza, the withdrawal of Israeli troops, and now we're also learning, of course, of this issue as well, of those 40 hostages

who are set to be released.

It was supposed to be women, elderly men, sick and wounded men as well, but now Hamas has told the mediators, according to two sources, that it does

not have 40 hostages that match that category, raising questions about how many of the hostages are still alive and who could potentially be released

if indeed an agreement is struck. Julia.

CHATTERLEY: Yes. Enormous and critical questions. Jeremy Diamond in Jerusalem for us, thank you.

Now, as we've mentioned, Wednesday marks the end of the holy month of Ramadan, normally celebrated with family and food. But as Nic Robertson

tells us, this year in Gaza, it's marked by both sadness and by loss.

(BEGIN VIDEO CLIP)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice-over): Eid's joys are scarcer in Gaza this year. Celebration eeped (ph) amidst ruin. Farah

(ph) crying as she recounts finding her beloved Eid clothes in the rubble of her home, then realizing she won't get to wear them. Her family's

festivities for gone this year.

Thank God we're alive for Eid, her father explains, but we're exhausted and devastated. We should be in our home, comfortable eating, celebrating.

In the ravaged enclave, millions are clinging to what is unbreakable, tradition.

We insisted on praying inside Rafah's Ferut (ph) Mosque, so all the world knows that we are holding on to our mosques, to our land, to our country,

Mostafa Alhelou from Gaza City says.

Eid's spirit also being kept alive in makeshift kitchens, ingredients of everyone's Eid memories donated by charities outside of Gaza, lovingly

crafted, and, to date, sesame and caraway cookies.

We're trying to make our kids happy, remind them of the smell of Eid, Ahlam Saleh says. They didn't get the traditional new clothes. There was no joy

for Eid, no balloons, no sweets.

What is in abundance this year? Eid's custom of commemorating the dead. Silent clusters of sorrow surrounding fresh dog soil in other years, less

tragic than today.

Um Ahmad came with her children. My kids lost their father, she says. When I told them I was going to visit his grave, they told me, mom, we want to

come visit Baba. This little one was banging on the stone, saying, I want to see Baba. He said, who's going to celebrate Eid with me?

There is no going back, a generation here growing up with new memories of Eid, of suffering and loss a long time before the joys shared by about 1.9

billion other Muslims around the world become universal in Gaza again.

Nic Roberson, CNN, Jerusalem.

(END VIDEO CLIP)

CHATTERLEY: Ukrainian President Volodymyr Zelenskyy says he will listen to Donald Trump's suggestions on ending the war with Russia if Trump returns

to the White House. There's been reports the former president would pressure Ukraine into ceding territory as part of a broader peace deal.

Zelenskyy addressed those reports and his country's need for more support in a talk with Fred Pleitgen at the Delphi Economic Forum in Greece.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): I understand that it is not easy and everyone thinks about themselves. Our partners are

helping. I'm grateful to them. They help as much as they can. But as much as they can is not enough if we really want to defeat Putin, if no one

wants Putin to drag the world into World War III.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Thank you, Mr. President. As you know, there was a report out this week that allegedly if,

and still very big if, Donald Trump is elected president of the United States in November, that he would essentially force Ukraine into a call it

a peace deal with Russia that would force Ukraine to cede territory like, for instance, giving up on getting back Crimea and also ceding the Donbass

region.

Would you ever be willing to give up Ukrainian territory for peace?

[18:15:00]

ZELENSKYY (through translator): First of all, these signals were on the appropriate media, on appropriate platforms, in the mass media. I did not

hear it directly from Trump. His ideas in detail. I did not have the opportunity to talk to him about this topic and his idea of how to end the

war.

If there was such an opportunity, I would be happy to hear and I will listen, and we will talk about this topic.

(END VIDEO CLIP)

CHATTERLEY: And thanks to Fred Pleitgen there.

Now, straight ahead, the U.S. Federal Reserve's inflation fight just got tougher, with another month of rising prices. We'll discuss what they can

and perhaps what should do.

Plus, sobering up. The second part of my interview with the CEO of Japanese consumer giant Suntory Holdings. How they're catering to younger drinkers

and those who prefer perhaps quality over quantity, next.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to "First Move." And to all our viewers in the U.S., U.K., Latin America, we hope you're having a wonderful Wednesday

evening. And a terrific Thursday morning if you are waking up with us across Asia.

In today's "Money Move," no Wall Street elation after new inflation acceleration. U.S. stocks falling around 1 percent. Treasury yields hit

2024 highs on Wednesday after U.S. consumer prices came in stronger than expected yet again.

Headline inflation rising to 3.5 percent year-over-year in March due in part to higher energy prices. Investors are now further pairing back their

expectations for Fed rate cuts this year. But never fear, President Biden saying at Wednesday's news conference that he still expects the Federal

Reserve to ease interest rates. Listen in.

(BEGIN VIDEO CLIP)

JOE BIDEN, U.S. PRESIDENT: Well, I do stand by my prediction that before the year is out to be a rate cut. This may delay it a month or so. I'm not

sure of that. I don't -- we don't know what the Fed is going to do for certain. But look, we have dramatically reduced inflation from 9 percent

down to close to 3 percent. We're in a situation where we're better situated than we were when we took office.

(END VIDEO CLIP)

CHATTERLEY: And Asia stocks finishing Wednesday's session pretty mixed, as you can see there, but they could also come under pressure when trading

begins soon after Wall Street's Wednesday weakness

Richard Quest is here with us. Famous last words, Richard, I don't think it's a question of whether or not the Federal Reserve can cut in June now.

The question is, are they going to be able to cut at all this year at this rate?

[18:20:00]

RICHARD QUEST, CNN INTERNATIONAL HOST: What the economy -- look, we can pass the numbers up and down inside out, but what the inflation numbers

show, you've got to touch them, you've got to feel them. And what they're feeling is that the economy is running too fast. And it's running too hot

to bring inflation down to 2 percent.

Now, if you accept that that's no longer the number you want to hit, fair enough. But if you really are committed to hitting a 2 percent inflation

target, then you can't even think about cutting interest rates at the moment, because the trajectory, whilst it is still going down, is no longer

nearly as steep as it was, and arguably you won't get to 2 percent for a long time to come. This is not about the underlying numbers per se, it's

what does it look, feel and smell like.

CHATTERLEY: Yes, and for consumers, higher prices are painful and not cutting rates is painful too. So, it's a huge problem for a president in an

election year, and it's a huge problem for the Federal Reserve.

But also, Richard, you raised a great point, very quickly, which I think is important, is that it's not necessarily about a 2 percent inflation target

now being the right thing. The problem is whether it is right or wrong. The Fed's not going to tell you if they want to target a higher number. So, the

question is, how do they handle this and how do they communicate what the game plan is?

QUEST: You do it with phrases like asymmetric, we were so far below 2 percent, now we're so far above it, asymmetric. You talk about 2 percent

over the longer-term, the systemic risks.

You basically massage the markets so that they no longer expect you to pertinaciously push down to 2 percent, which if you did would cause the

recession that they're trying to avoid. You do it with guidance, you do it with clever language, you do it with force. You do all the tricks in the

book that basically tell the market, we are still committed to cutting inflation, but we'll just fudge the final number.

CHATTERLEY: You use you use words like pertinaciously that very few people actually understand.

QUEST: I love that word. I love it.

CHATTERLEY: I love that word too. I love that word.

QUEST: It was dictionary of the day -- word of the day, a few months ago, and I just wrote it down, I thought that's a very good word.

CHATTERLEY: I'm going to use it now as well. I love it. Which you had a Mohamed El-Erian on your show and I was given permission to butt in, which

I do love you for it. You asked the killer question though, which was the closer we get to the November 2024 elections this year, the Fed is

independent. It'll do what it takes the problem, of course, is the politics. Let's just listen in to his answer to your question about how to

handle that effectively.

(BEGIN VIDEO CLIP)

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: So, I think, like what you said earlier, I agree. The Fed will do what the Fed thinks is right.

However, whatever they do, Richard, they're going to be blamed. If they cut, they'll be blamed by President Trump for favoring President Biden, and

if they don't cut, it's going to be the other way around. So, they will be blamed whatever they do. But I truly believe they will do what they think

they need to do.

(END VIDEO CLIP)

CHATTERLEY: Richard, this was such an important question and the response, I think, was so potent too. It's not an ordinary election year. And right

now, President Biden's not getting any credit for any improvement or strengthen the resilience in the economy.

QUEST: And if you look historically, the Fed has moved many times during the election years in both directions, but I think this year is different.

I think that if they do move very close to the election, they will be so roundly condemned by one side or the other.

It's a question of how much political nous the governors on the FOMC have, or do they pertinaciously stick to their independence and sort of trumpet

it for all to see?

My guess, all right, nail it to the mast. I'm nailing (INAUDIBLE). My guess is that once they've done the first cut, maybe, or whatever it is, in

summer, they hold off because it's just -- it's too flammable to actually start doing it later towards in the September cut or something like that.

CHATTERLEY: Or do they pertinaciously have to decide what hurts most, higher prices, if they do or don't do something versus the pain of not

cutting interest rates and how that's perceived by consumers?

QUEST: True, true. But they're already -- as I said earlier, their credibility is already in the toilet. You know, you could flush it down by

not doing what you should do. I guess that J. Powell's really, really canny. He knows exactly how to stay on the right side of this politically.

CHATTERLEY: And that puts the toilet seat down on that conversation. We're done here. Richard, thank you so much.

[18:25:00]

All right. It's yet another severe storm for the Southern United States. New Orleans is under a flash flood warning, while other parts of the south

have now been hit by tornadoes. Chad Myers joins us now. Chad, are you ever going to come on and talk to us about good news?

CHAD MYERS, CNN METEOROLOGIST: No.

CHATTERLEY: This is more distressing reporting, yes.

MYERS: I never get to say sunny and 72 in San Diego. You will never hear me able to be able to say that. No.

CHATTERLEY: Because then the hit gets canceled. I'll always get you back to talk about the good news.

MYERS: We always have to talk about something that's going on that's really affecting people. And today, we had flash flooding across the deep south.

And yes, a few tornadoes were on the ground as well. But some spots picked up 300 millimeters, eight to 10 inches of rain in 48 hours. And it's still

raining in places here.

Moving toward Panama City, some very heavy rainfall. And some of these cells, as they come off the Gulf of Mexico, are still rotating. And we've

had some small spin up tornadoes today. Even one here in Slidell, Louisiana, there is the back edge of it right there, rated in EF1 right

now, between maybe 90 and 105 miles per hour. They're still looking for bigger damage with this. So, that could go up from that number one category

all the way up possibly to number two. As we're looking at some of the damage, a lot of roofs off the areas there.

So, here's what we're looking at now, live shot here. This little purple box right there, the last tornado warning so far today. And we hope it is

the last forever for today, because it has been a busy afternoon.

The tornado watch means that it's potentially there. The tornado warning means it is there. So, west of Panama City there. Laguna Beach really had a

little bit of rotation a little bit ago.

But here goes the storm later on today. We pick up some rain in Atlanta and all the way up through the East Coast. This will be a storm to remember by

how fast the rain came down. 150 millimeters of rainfall just came down in about four hours in places. Now, there's no place on earth that can take

two to three inches of rain per hour and be able to not have a flood. We have more rain coming up for today and for tonight, but we'll finally wind

this thing down tomorrow. Julia.

CHATTERLEY: Wow. That's a lot of rain.

MYERS: It really is.

CHATTERLEY: Chad Myers, thank you so much for that.

MYERS: You're welcome.

CHATTERLEY: All right. Stay with "First Move." We'll be right back.

(COMMERCIAL BREAK)

[18:30:29]

CHATTERLEY: Welcome back to "First Move." And a reminder of our top story today. Japanese Prime Minister Fumio Kishida arriving any moment at the

White House for a state dinner hosted by President Joe Biden.

You're looking at live pictures there. There's the military and guests, I think, there and the press, of course, at the top of your screen await that

arrival. There's plenty of pomp and circumstance. But let's not forget it's first and foremost a diplomatic visit.

The U.S. has been looking to give a much-needed boost to its allies in Asia while sending a strong message to a resurgent China too. There you can see

Jim Bezos and his fiancee of course arriving there. This is not like, this was moments ago, sashaying, we'll call it that, into that White House State

Dinner there as we await Prime Minister Fumio Kishida. And of course, there the Apple CEO also arriving ahead of that dinner too.

William Grimes joins us now. He's professor of international relations and political science at Boston University. Professor Grimes, great to have you

with us. This is, first and foremost, a strong message, I think, in the Indo-Pacific region but also to the world about the strength of this

relationship at this moment. Your assessment of what we've seen today and what we will see?

WILLIAM GRIMES, PROFESSOR, BOSTON UNIVERSITY: Well, I think it's really, really important this is a historic moment but it's not a break point, I

think. What we've been seeing in Japan for the last 20 years has been growing concern about China, about the potential for Chinese aggression in

the region, and a growing agreement among the leads that really there needs to be a more forceful defensive posture.

And so, that's always involved shoring up the U.S.-Japan alliance. But what we've been seeing more recently is a whole host of issues that are related

to Japanese security, including improving security capabilities, but also talking about economic security as well.

CHATTERLEY: And what we're seeing now is live pictures of President Biden and Dr. Jill Biden there as they're awaiting the arrival of the Japanese

prime minister. So, that's what you're seeing on your screen there.

We'll obviously let you see those images as we see. This could be the moment, actually. President Biden there encouraging the Japanese prime

minister into the shop there, I believe. I think that's what we were seeing. We'll get a better view there. Yes, and there you go. Beautiful

blue dress from the Japanese prime minister's wife there, Yuko. And now, you get to see the -- four of them big smiles as they take that photo

before they head into that state banquet.

It is a very important moment, as you were saying Professor Grimes, marking a moment. And both leaders, I think, now as they walk into that dinner a

handhold there for President Biden of course and his wife as they move into dinner.

It's the first time that we've had a Japanese prime minister attending a state dinner, visiting the White House in, what, just under 10 years. And

much has happened whether it's an increase in security priority from the Japanese, a shift in defense priority. We've now got, what, their promise

to raise defense spending to 2 percent of GDP by 2030.

What message, to your earlier point, does this send to those in the region that are flexing military muscle, whether it's the North Koreans or the

Chinese as you mentioned?

GRIMES: Well, I think that one of the things that's always characterized you the U.S. alliances in the Pacific has been what we call a hub-and-spoke

system so that there's a series of bilateral agreements with many economies and countries in the region, but they're not connected amongst themselves.

And so, unlike NATO, which is a an all-for-one sort of group.

And now, they're talking about shifting to more of a what they're calling a lattice. So, with a series of bilateral agreements and trilateral

agreements that will be crossing against each other and reinforcing each other. We'll see that tomorrow night when these two leaders of this of

state end up meeting with President Marcos of the Philippines as well.

And so, what it's saying is that there's an increasing concern about aggressive action, but that there's also a willingness of the United States

and of its allies to step up and potentially put themselves in harm's way.

[18:35:00]

And that's always been a really big question with Japan, because the U.S.- Japan alliance is really set up only to defend Japan, or as the treaty says, in the area around Japan. Well, now, the area around Japan might well

include doing rear area support for a contingency around Taiwan or the South China Sea or North Korea as well.

And so, there's much more need to reach out to partners and to build out capabilities so that there's more interoperability, more capability of rear

area support, even if it'll still be the U.S. that ends up doing most of the fighting if there is fighting to be had. So, it's a real attempt to up

deterrence.

CHATTERLEY: Can -- and both leaders have emphasized the point today that this is about defensive capabilities and not offensive capabilities. Can

the United States balance what it seems to be trying to achieve? And we saw that with the U.S. Treasury Secretary Janet Yellen in China just a few days

ago trying to manage the economic relationships. We know trade tensions, technology tensions exist.

Can they manage to even stabilize that part of the relationship while fostering stronger relationships with the likes of, as you mentioned, the

president of the Philippines is going to be there? This relationship with Japan, we know they've fostered better relations with South Korea, too.

It's a very delicate diplomatic dance that President Biden and this administration is trying to achieve.

GRIMES: I think that's true, but I think it's a delicate diplomatic dance for everybody. And I think we shouldn't underestimate how delicate the

dance is for China as well. If you look at where China exports, a lot of its products, where China obtains a lot of its technology, it's very highly

reliant on the developed countries of the West, the U.S. foremost, but also Japan, Europe, South Korea, if we think of the West as a -- you know, not

as a locational story.

So, China has to maintain for its own economic benefit. It has to maintain these relationships. And meanwhile, Japan and Korea can't go too far in

identifying China as a problem. So, all of them are involved in a certain amount of give and take. And the question is how to accommodate the

legitimate concerns of all the parties.

But I don't think the U.S. job is any harder than that of Japan or of China. And so, having -- if you have Japan, China -- excuse me, Japan,

Korea, Philippines, United States, Australia, Singapore, Thailand, mostly on board, and India maybe more or less cooperative over on the west flank,

that will make China probably a lot more cautious.

It runs the risk of aggravating relations, and certainly that's a concern. But without it, there's very little opportunity for having any of these

countries really resist Chinese aggression, if China were to choose to be aggressive.

CHATTERLEY: I was about to say, where the aggression is concerned, be it in the South China Sea or be it over Taiwan, that is a choice, ultimately,

that the Chinese will make.

We've had comments from the North Korean leader, Kim Jong-Un, saying, "Now is the time to be more prepared for war than ever before," according to the

Korean Central News Agency.

Does that surprise you? Because he's someone who's looking at what he's seeing here in terms of the strengthening relations in the Indo-Pacific

region, and that's his response.

GRIMES: No, I think it's not really surprising at all. We've seen that kind of rhetoric off and on for decades. We've tended to see in the last --

since Kim Jong-Un came into power, and particularly over the last 10, 12 years or so, kind of a general rise in that sort of rhetoric. But it also

varies based on the situation.

I think it is not extremely meaningful. I think things that are more meaningful are when they develop new weapons or when they shoot things into

Japanese airspace or across the LLC and other places.

CHATTERLEY: Very quickly, how sustainable are all of these relationships, if we see a switch in the administration, a return to President Trump?

GRIMES: I think there's an enormous amount of consensus among American policy elites, but I think Donald Trump does not hold that.

And so, an election of Trump would certainly threaten a lot of these agreements. And so, I think that's one of the reasons why Prime Minister

Kishida, President Yoon have been -- President Marcos have been visiting and trying to lock into place the structures so that the United States

can't change.

[18:40:00]

CHATTERLEY: William Grimes, Professor of International Relations and Political Science at Boston University, thank you for your time, sir.

GRIMES: Thank you.

CHATTERLEY: Now, coming up on "First Move," Suntory's new secret ingredient from the ready-to-drink market all the way to the Japanese labor market. My

conversation with the CEO, Takeshi Niinami, next.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to "First Move." Now, one of the guests attending the White House's state dinner for Japan's prime minister is one of his

economic advisers, the CEO of Suntory, Takeshi Niinami, the Suntory Group, which was founded back in 1899. Now, it has more than 270 firms all over

the world, 40,000 employees. It's known best for its premium Japanese whiskey, but their empire is diversified across non-alcoholic beverages,

health food, restaurants and more. Just to give you a sense, its revenue last year reached $20 billion.

Now, before he flew to Washington, I sat down with him at the firm's beautiful U.S. headquarters here in New York. And we began by discussing

the launch of their new ready-to-drink, the RTD brand, Minus 196, and the potential growth of the RTD market. Listen in.

(COMMERCIAL BREAK)

TAKESHI NIINAMI, CEO, SUNTORY: Why we are so interested in RTD?

CHATTERLEY: Yes.

NIINAMI: That is because Gen Zs, they are not drinking alcohol, just like their daddies. So, which means less alcohol drink, which is RTD, is so

important for us to expand our footprint in the world. And the U.S. is the most important for us, because it's growing and the market size will be

enormous for us.

CHATTERLEY: Gen Z drinking 20 percent less than millennials. At this rate, you have to be investing in non-alcoholic alternatives. I guess some kind

of drug that gives you the alcoholic high without the hangover would be the ideal in this moment. Where do you see that business going?

NIINAMI: We believe two things. One, premium spirits will be surviving, but it's not, you know, growing very fast, which we saw in the past. Second,

RTD, both malt-based and spirits-based, both will be growing capturing even not only Gen Z, but also millennials. So that's what we think.

[18:45:00]

So, we have to go both using our unique competitive age, which means we have soft drink and the spirits divisions.

CHATTERLEY: The definitions have been far more stringently applied now legally in Japan over what constitutes Japanese whiskey to sort of filter

out some of the imitations that say, hey, we're Japanese whiskey without following the same processes. What's that going to mean for your business?

NIINAMI: Japanese whiskey authenticity means quality and craftsmanship. So, I assume that five -- I mean, one out of five is genuine Japanese whiskey,

including others.

CHATTERLEY: Just one in five?

NIINAMI: Right. That's my hunch, but that must be right. So, there is a stricter definition. It's not by law. It's a standard decided by the most

key players of the market in Japan. So, I'm so afraid if, you know, those four out of five will receive so much of the criticism, because I would say

our whiskey, including our competitors, but they produce good quality Japanese whiskey, we work together not to bring those who are not Japanese

whiskey players into the market, because we care about the repetition of Japanese whiskey.

CHATTERLEY: We've got a stock market that's trading pretty close to record highs. But when I look at the stock market and I look at the real economy,

I see a disconnect. Agree or disagree?

NIINAMI: Agree.

CHATTERLEY: Right.

NIINAMI: I think this connect is happening between real economy and stock prices. And -- but one thing I have to address is the huge difference

between bubble times and now. PR of this time is very close to 20. Around that time, 60, 70. So, Japanese corporates nowadays are much more than that

time of bubbles, some -- which is a kind of meaningful analysis.

But having said that, take a look at the growth of the Japanese economy, which is 1.5 at maximum. And the people say, we don't want to spend a lot

of money because we feel so much stressed about the future. So, still, the consumption is very, very soft in Japan. So, that creates a disconnect

between the two, I mean, stock price and the real economy.

CHATTERLEY: Just because you're not a bubble doesn't mean you can't get a reality check as an investor. Do you think there's a risk of some kind of

reality check? And in order to prevent that, what do Japanese businesses have to do?

NIINAMI: The key factor is the consolidation of the industry and the metabolism of the industry. Now, is the time to show the world that we will

be more effective and efficient, we mean business in Japan. So, because people can find jobs anyway, but before, we business leaders were worried

about employment. So, we kept the people. But now, people can move around. So, that is a good reason for us to consolidate the industry. Then they can

find jobs anyway.

CHATTERLEY: I mean, this would be a tough message perhaps in many other countries where you're saying, look, actually, we need businesses to go out

of business and the inefficient ones to be lost. But what you're saying is, the demand for labor is that tight in Japan that actually those workers

would be more efficient at a better company, perhaps.

NIINAMI: That's right. So, those who can offer more wages and more purposeful life for them, they can change jobs. So, that is the first

phenomena in Japan since maybe bubble times.

CHATTERLEY: Do the CEOs need to be more generous with wages on a sustained basis? I mean, you sort of flew the flag in the beverages business with

your 7 percent rise.

NIINAMI: I don't use the word generous.

CHATTERLEY: Fair.

NIINAMI: Yes, fair.

CHATTERLEY: Fair.

NIINAMI: To attract good talent and keep good talent. And we have to wipe out the older way of thinking about the people. People do not get them

mobilized, but people can choose jobs nowadays. So, to retain good people, you know, we have to provide a fair offer to people working with us.

CHATTERLEY: And the unions?

NIINAMI: Unions. They are now soft, but they have to be more stringent to management so that they can, you know, have the kind of harsher relation

with us.

[18:50:00]

But a key thing, unless we hire good talent, our business will not flourish. So, that means so much tight labor in Japan.

(END VIDEO CLIP)

CHATTERLEY: A message to business leaders and to the unions there, I think, from Suntory's CEO.

Now, up next, advantage Barcelona, after a topsy-turvy Champions League night in Paris, we've got the detail, next.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back. It's been a great night for Spanish sides in Europe as quarterfinals of the UEFA Champions League continue to produce

some pulsating football. Barcelona and Paris Saint-Germain exchanged the lead three times. But ultimately, it was the Spanish giants coming away

with a 3-2 win in the first leg. Elsewhere, Atletico Madrid defeated Borussia Dortmund 2-1.

World Sports Patrick Snell has been keeping an eye on all the action for us. Patrick, great to have you with us. It's my kind of sport when it goes

galore this week.

PATRICK SNELL, CNN WORLD SPORTS: Julia, use that word pulsating. Absolutely perfect, so apt for what we have seen across the last two nights. Wonderful

entertainment, the goals flying in. You know, we had 10 goals in Tuesday night's quarterfinals, first leg ties.

Just important to remember, these are only first legs ties. So, we were wondering how it all play out on Wednesday night. Well, we needn't too

worried at all because the goals were flying in at the Parc des Princes in the French capital.

Barcelona's Brazilian star Raphinha giving the Catalans the lead just a few minutes before halftime there. Second half, PSG team revitalized, and it

would be the former Barce player Ousmane Dembele scores with a stunning strike shortly after the restart. Two minutes later, it's 2-1 to the Ligon

Champs as the Portuguese Vitinha makes no mistake to put the hose ahead.

Just past the hour mark, it's a ball clearance from the Paris keeper Donnarumma, and the visitors get it to Raphinha for his second goal of the

night. Really well taken from South American 2-2. And then, just two minutes after coming on as a sub, it passes Danish international Andreas

Christensen who powers home the header 3-2 Barcelona, they win a thriller and take a first leg lead back to Catalonia.

Now, I do want to show a bit of respect to a wonderful performance from the 17-year-old Barcelona player who kept Kylian Mbappe very well shackled

indeed. 17 years and 79 days his name, Pau Cubarsi. What a performance from a teenager. He will remember that performance keeping Mbappe quiet for a

long, long time to coming back. Made just three shots on goal, Julia, none on target.

A really compelling match in the Spanish capital Wednesday night, Atletico and Borussia Dortmund going head-to-head just four minutes in at the

Metropolitano. And it will be the hosts who go ahead through Rodrigo de Paul, the German team, giving up possession. And it's the Argentine who

takes full advantage for the opening goal of the night. Very well taken goal indeed.

[18:55:00]

Samuel Dias-Lino doubling his team's advantage just past the 30-minute mark. A wonderful pass from Antoine Griezmann. At this point, it's all like

plain sailing for Diego Simeone's team. But wait, Dortmund back in it.

And this goal, Julia, could be absolutely priceless. It comes from the Ivorian star Sebastien Allaire. And in stoppage time, look at this,

Dortmund almost leveling for 2-2. It's a Julian Brandt header against the woodwork there. How close can you get to an Atletico on the night?

18 goals across two nights, Julia. Are we not entertained? Back to you there in New York.

CHATTERLEY: I'm exhausted. That crossbar.

SNELL: Incredible.

CHATTERLEY: What a miss.

SNELL: Yes, the woodwork was just shaking, wasn't it, for like a few seconds afterwards.

CHATTERLEY: Wow. Great. I love Champions League football. And it's great to listen to you too, because you get almost as excited as watching it live.

SNELL: Incredible.

CHATTERLEY: Patrick, you're right, incredible. Pulsating, that was the word. Thank you.

And that just about wraps up the show. Thank you for joining us. We'll see you tomorrow.

(COMMERCIAL BREAK)

END