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Quest Means Business
Trump Hits Back After Romney Attach; E.U. Council President Warns Economic Migrants; Syria Hit By Nationwide Power Failure; South Korea: North Korea Fires Short-Range Projectiles; Brazil's Economy Shrank 3.8 Percent in 2015; MH370 Families Speak Out; MH370 Families Urge Search To Go On; ATSB: Good Prospect Debris is From MH370; Adidas Expects Two-Digit Sales Growth in 2016; Adidas CEO Denies Terminating IAAF Deal; Adidas CEO: More Reforms Needed at FIFA
Aired March 03, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
RICHARD QUEST, HOST: Not a terribly exciting day on Wall Street, the Dow was up just 40 points. That's our positive close to the day. It had been
much sharply lower as trading went through the morning and lunchtime part of the session. Time to bring it all to a close. Oh, dear. A very wimpy
gavel at the end of Thursday. It's March the 3rd.
(BEGIN VIDEO CLIP)
QUEST: Tonight, the Republicans battle royal. Mitt Romney and Donald Trump on trade, temperament and everything in between, but who do we think won?
Europe says its doors are closed to migrants, seeking only a better economic future.
And the man leading the search for MH 370 tonight tells me the plane can still be found and he is optimistic.
(END VIDEO CLIP)
QUEST: I'm Richard Quest, we have an hour together and of course I mean business.
Good evening. The Republican Party brought out the big guns today in the battle to prevent Donald Trump from getting the nomination with a stark
warning from the last nominee, Mitt Romney.
He said if Donald Trump becomes president, United States could face a recession and a trade war.
(BEGIN VIDEO CLIP)
QUEST: In another unprecedented twist in this electoral race, the former candidate asked American voters to choose wisely whilst attacking Trump's
character, political record and economic policy.
MITT ROMNEY, FORMER U.S. PRESIDENTIAL CANDIDATE: Here's what I know. Donald Trump is a phony, a fraud. His promises are as worthless as a degree from
Trump University. His domestic policies would lead to recession. His foreign policies would make America and the world less safe. He has neither
the temperament nor the judgment to be President. And his personal qualities would mean that America would cease to be a shining city on a
hill.
(END VIDEO CLIP)
QUEST: Donald Trump hit back as soon as he arrived at the rally in Portland, Maine, and said "Mitt Romney pleaded for his endorsement when he
ran a failed campaign for President four years ago."
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I backed Mitt Romney, I backed him, you can see how loyal he is. He was begging for my
endorsement. I could have said, Mitt, drop to your knees, he would have dropped to his knees. He was begging.
(END VIDEO CLIP)
QUEST: Mark Preston, Mark, oh, Mark. I mean listen, Mitt Romney said earlier today, see how Donald Trump responds. Does he respond with policy
or does he respond with low abuse? How do you think that Trump response was?
MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: Typical, right, expected. He telegraphed it this morning. He was on morning shows here in the United
States doing his telephone interview and he said that when someone takes a swing at me, I will swing back harder and that's exactly what we saw in
Donald Trump.
You know there was a lot of things that were said in that speech today by Mitt Romney.
(BEGIN VIDEO CLIP)
PRESTON: But a couple things, economic things, which you touched upon at the top there Richard, is that Mitt Romney suggested that Donald Trump's
economic policies while scant on details would send the American economy into a prolonged recession. Right. He also said that it's not good for
American workers, what he's talking about, and he also said you don't punish businesses by threatening them which of course has a lot to do with
companies leaving the U.S. for better tax advantages in Mexico and elsewhere.
So not only was he attacking him when it comes to the economy, as you noted as well, he questioned his temperament and whether basically he has the
ability to be the commander in chief, code language, Richard, for should he have the nuclear codes.
(END VIDEO CLIP)
QUEST: OK, all fair enough, Mark, except we're six months into this process the American electorate has seen Donald Trump. They heard his offensive
abusive comments. They've heard him be rude about John McCain, arguably make sexual comments about Megyn Kelly. They've heard all these things.
Those comments haven't mattered a jot.
(BEGIN VIDEO CLIP)
QUEST: So tell me, and to prove to viewers, I have no dog in this game, why should they listen to a failed presidential candidate who ran a poor race,
who everybody regarded as a shambles?
(END VIDEO CLIP)
PRESTON: Well, and that's what a lot of people are asking themselves here in the U.S. In fact I have got a lot of emails today from Republicans who
are not necessarily pro-Trump who said Mitt Romney was the wrong person to deliver that message, all he's going to do is embolden those Trump
supporters as you have noted.
(BEGIN VIDEO CLIP)
[16:05:00]
PRESTON: Each time Donald Trump goes out and says something egregious, or awful, or vulgar, he seems to only become stronger. Well a lot of folks
think today that Mitt Romney will have made Donald Trump stronger.
But, not necessarily in Romney's defense, but I do have to say this, there hasn't been any kind of unifying voice to date that has been able to go out
to take on Donald Trump.
(END VIDEO CLIP)
PRESTON: We've heard it from his rivals in the presidential campaign but they've all failed as well.
QUEST: But Romney also says something, I'm just looking for the actual quote, he says something particularly interesting. First time we've
actually heard the phrase, I mean, I'm using the phrase tactical voting. Which he's calling for. He says vote for Rubio if Rubio can win. Kasich, if
Kasich can win. Trump -- Cruz, if Cruz can win. He's basically saying anybody but Trump.
PRESTON: And there's a strategy to that. Because what - and just to explain to everybody all around the world here.
(BEGIN VIDEO CLIP)
PRESTON: When you're looking at Marco Rubio in this contest, he's from Florida. There are 99 delegates at stake. So whoever wins on March 15th in
Florida will collect basically 100 delegates. Up in Ohio, there are 66 delegates at stake. John Kasich who's still in the race, the Governor of
Ohio, if he wins, he would take those delegates.
(END VIDEO CLIP)
PRESTON: Basically what some Republicans are trying to do is to try to deny Donald Trump from collecting the requisite number of delegates to become
the nominee. To try to you know deprive him of any more wins or any more significant wins, and then fight this out in Cleveland, Ohio, when the
Republicans meet for the convention.
QUEST: Right. Thank you, Mark. Bit of homework for you for the next time we speak. If you'll be so kind as to take your assignment. We need to know a
little more about brokered conventions, and a little more about the last brokered convention. It should keep you busy.
PRESTON: Professor Quest, I take that challenge.
QUEST: Excellent, sir, excellent sir. I feel an "A" grade already. Thank you, sir.
Brokered conventions, we'll explain all what that means in the days ahead. Now, at that speech in Salt Lake City, Mitt Romney warned Donald Trump's
economic policies would be dangerous for the United States.
(BEGIN VIDEO CLIP)
ROMNEY: If Donald Trump's plans were ever implemented, the country would sink into prolonged recession. A few examples; his proposed 35% tariff-like
penalties would instigate a trade war and that would raise prices for consumers, kill our export jobs, and lead entrepreneurs and businesses of
all stripes to flee America.
(END VIDEO CLIP)
QUEST: It's a sober warning and one that Matt Rivers put to an American businessmen who could himself find himself on the receiving end of Trump's
plans.
(BEGIN VIDEO CLIP)
MATT RIVERS, CNN CORRESPONDENT: This lighting factory in South China feels a long way from American politics. Loud busy and zero talk of primaries or
delegates. But when U.S. Presidential candidate says things like this.
TRUMP: We're being killed on trade, absolutely destroyed. China is just taking advantage of us.
RIVERS: This is what he's talking about. This is the Pearl River Delta, China's longtime manufacturing heartland. Lots of cheap labor, massive
subsidies and a favorable exchange rate fueled China's rise. America imports more products made in China than anywhere else. Donald Trump says
that's undercut U.S. businesses and stolen American jobs. A big part of his plan to correct that.
UNIDENTIFIED MALE: You're open to a tariff?
TRUMP: I'm totally open to a tariff. If they don't treat us fairly, hey, their whole trade thing is tariff. You can't deal in China without tariff.
They do it do us, we don't do it. It's not fair trade.
RIVERS: He says tariffs or taxes on products made in China will make Chinese exports less competitive. That gives U.S. firms a chance to pick up
the slack, assuming congress approves the measure. Not everyone agrees.
BEN SCHWALL, AMERICAN BUSINESS: When people first hear it they say oh yes, that sounds great but when you really think about it and understand what it
means, it's not such a great thing.
RIVERS: Ben Schwall runs a company that helps U.S. firms buy Chinese goods like lighting fixtures at this Chinese factory. He says with tariffs in
place, American companies would have to pay more to import Chinese products. In turn, that means higher prices for average consumers.
SCHWALL: When it's all said and done, the only person who can afford a light fixture will be Donald Trump.
RIVERS: U.S. tariffs on Chinese goods could also lead to mass layoffs here. People like that worker there could be let go. But experts say just because
he loses his job does not mean that that job will appear back in the United States. Instead, think places where costs are cheaper.
SCHWALL: I guarantee you it'll be made in India or Vietnam or some other place but it's not going to be made in the U.S.
RIVERS: Trump may disagree.
TRUMP: I love China. I love the Chinese people. But they laugh themselves, they can't believe how stupid the American leadership is.
[16:10:10]
RIVERS: But while tariffs make a good campaign talking point, American businessmen in China say they make for bad economic policy.
Matt Rivers, CNN, Guangdong Province, China.
(END VIDEO CLIP)
QUEST: We're very lucky now. Joining us is CNN's political commentator Jeffrey Lord, who supports Donald Trump, and Austan Goolsbee, Professor of
University of Chicago Booth School, and the former chairman of the White House Council of Economic Advisors. Gentlemen, we will have a decorous
debate on this question of economic policies, but I start with you, Jeffrey Lord.
JEFFREY LORD, CNN POLITICAL COMMENTATOR: Uh-oh.
QUEST: Look, you heard, you heard Mitt Romney, you've heard other criticisms. You can't just suddenly impose 30, 45% tariffs on trading
partners, Jeffrey.
LORD: Well, I don't - you know if you listen very carefully to what Donald Trump is saying, there's a negotiation phase between this. What he's saying
here is we're getting a bad deal. It doesn't necessarily mean it's going to wind up with that amount you know as a tariff. What he's seeking is a
better deal. And this of course is the guy who wrote the book "The Art of the Deal." And he feels very strongly that we're not sending the right
negotiators and we're not getting the right kind of deals that we need.
(BEGIN VIDEO CLIP)
LORD: I suspect that he would be going down that road first and that whatever else he's talking about is sort of a last resort. Which of course
would have to be passed by congress. I might add one other thing, I live here in Pennsylvania and one of my former bosses in life was the late
Senator John Heinz.
(END VIDEO CLIP)
LORD: Pennsylvania is always sort of interested in the kind of talk that Trump is talking. Senator Heinz who was a free trader but he was also very
skeptical along the lines of Donald Trump on these issues, and that has a long history in a state like this one.
QUEST: All right, Austan Goolsbee, you've been at the center of politics and economics. Donald Trump says the deals have been shocking, the U.S. has
been losing out and frankly it needs a deal maker.
AUSTAN GOOLSBEE, FORMER CHAIRMAN, U.S. COUNCIL OF ECONOMIC ADVISORS: Well, you know, I would say on most of the policy outlines that Donald Trump has
put out so far, charitably, you'd say he hasn't given a lot of thought to his policy platforms. I mean he's been all over the map, he's often
contradicted himself. He went to "The New York Times" and said they put a 45% tariff on China. Then when they criticized him for that in the
Republican debate, he said, I never said anything of the sort, I wouldn't do that.
So I don't think we really know what he would want to do. He has contemplated starting a trade war with three of our five biggest trading
partners in the United States and has said that he would force Mexico to pay for the wall he wants to build. And when asked how would he do that, he
says because they have a big trade deficit, which makes me think he doesn't actually know what a trade deficit is because it has no -- that doesn't
give you any leverage whatsoever.
(BEGIN VIDEO CLIP)
GOOLSBEE: So I don't see how this saying first that China's eating our lunch, and then when China's economy slows down to say see, I told you
China was going to be a big problem for the United States. All of those are contradictory.
QUEST: Jeffrey, we could go back and forth, you know, with Austan saying one thing and you saying the other but the reality is the preponderates of
traditional economic debate and view is his tax plan -- that Donald Trump's tax plan simply doesn't add up and will add billions, if not trillions, to
the deficit over time.
LORD: Well you know this is the kind of thing that you know, Larry Kudlow, a former colleague of mine who is an economist in the Reagan administration
has given Donald Trump's fairly traditional Republican plan a thumbs up.
So I would suggest that, you know, what he's proposing economically is very much standard now. I know Austan would certainly disagree. I mean therein
lies the Reagan/Obama disagreement but certainly that's something worth campaigning on.
QUEST: Austan?
GOOLSBEE: Well, all I would say to that is it's not just Democrats saying it doesn't add up, it's Republicans and completely objective observers. Now
Larry Kudlow was a friend of mine. He believes tax cuts pay for themselves and that is the centerpiece I guess of Donald Trump's tax plan which the
objective observers have said will add $12 trillion to the deficit over the next ten years. There's never been any proposal like that. Nothing even
resembling that magnitude. But I don't think that he's committed to it. I just think that -- like I say, I just don't think he's thought it through
that much.
]16:15:02]
QUEST: It's a pretty sobering allegation Jeffrey Lord. I mean it's got a populism to it; build a wall, get the other side to pay for it, have a
trade war with China, except, except, Jeffrey, there's something called NAFTA, which means that you'd have problems with tariffs with Mexico, and
there's something called a W.T.O., which means you're going to have problems with tariffs with China. How do you square that, or do you rip
those treaties up?
LORD: Well you know one of the things I think people like about Donald Trump is his willingness to sort of start from scratch and look at all the
agreements we have. He feels they've been badly negotiated, that our negotiators have failed us. So I think that his willingness to do that is a
political plus for it.
(BEGIN VIDEO CLIP)
QUEST: OK, finally gentlemen both -- to both of you, whichever way this goes, first to you, Austan Goolsbee, whichever way this goes, the issues,
and I credit Donald Trump with this Austan that issues have been put on the table that are in a way that they have never been put before. But how
dangerous is that, Austan Goolsbee?
(END VIDEO CLIP)
GOOLSBEE: Some of them I think are pretty dangerous, you know, on the foreign policy side, calling for things that are undeniably war crimes and
saying we're going to institute that as policy for the U.S. military, saying we're going to ban Muslims, we're going to basically start religious
wars around the world. I think it's a credit to him that he has brought out some new voters. I think - I guess I fear that he's kind of unleashing some
darker forces that even he will not be able to control when we get further along this line.
QUEST: And isn't that really the point, Jeffrey Lord; whether it's economics, whether it's social policy, whether it's cultural, immigration.
Hasn't Austan really summed it up? There are dark forces that may be unleashed which ultimately he can't control?
LORD: You know I would totally disagree. I mean you know let's just take the Muslim issue here. I looked into this, in terms of World War II, the
day after Pearl Harbor, Franklin Roosevelt restricted immigrants waiting to be nationalized in this country who were Japanese, Germans and Italians.
They couldn't go more than five miles from their home, if they had a job 6 miles from home, they were out of a job. They had to register with the
government. They couldn't buy flashlights. They couldn't buy short wave radios. I mean things were pretty dire there. And Franklin Roosevelt is
your basic liberal hero.
(BEGIN VIDEO CLIP)
LORD: So I don't really fear this as much as Austan does.
(END VIDEO CLIP)
QUEST: Gentleman, thank you. We look forward to you joining us again.
LORD: Thank you Richard, thank you Austan.
GOOLSBEE: Thank you.
QUEST; We look forward to you joining us again as we wend our merry way through this process and we head towards - well we've still got a
convention to go through in the summer and then an election in November.
The European Union has a warning to economic migrants which is another issue of course.
(BEGIN VIDEO CLIP)
QUEST: Don't risk your lives on the Mediterranean, there will nobody passage north into -- further the union from Greece.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: The President of the European Council has a warning to economic migrants; don't bother coming to Europe.
(BEGIN VIDEO CLIP)
[16:20:00]
QUEST: Donald Tusk is in Turkey after a visit to Athens where the President is trying to nail down an agreement to reduce the flow of non-asylum
seekers, economic migrants if you like, traveling west.
(END VIDEO CLIP)
QUEST: President Tusk is telling them not to risk their lives making the sea crossings from Turkey to Greece. They'll no longer be allowed to travel
any further north. They come up from this way, up from Syria, and up from other places, even from Afghanistan. They come into Turkey, out through
Turkey and then this is where they're making their crossings to (inaudible) and to Kos, and of course to Lesbos and to even as far as Rhodes. From
there up into Athens, on to Greece, (inaudible) and out into the rest of Europe. That's the sort of main route besides the land route at the top.
Now most of the arrivals are from Syria. And the changes that Tusk was talking about won't apply to those fleeing the refugees of war. That's 52%.
E.U. officials believe Afghans, though, which are coming over here, 25% of the numbers, they're coming for economic reasons. That might also be true,
say, for example, from Pakistan and from way over here in Morocco where maybe not via Greece but up through Spain and taking another route.
At the moment, there's no letup in the stream of migrants making their way from Greece in the hope of reaching Western Europe. The Macedonian border
is also relevant too. CNN's Erin McLaughlin has more.
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ERIN MCLAUGHLIN, CNN CORRESPONDENT: On the Greece/Macedonia border, an act of desperation. Migrants, men women and children, block a rail line out of
Greece. It's to protest border restrictions. In recent days, the flow of migrants into Macedonia has flowed to a trickle. Only a limited number of
Iraqis and Syrians have been allowed to cross. For now, everyone else is stranded.
On Thursday, the European Council President visited Greece. He came with a stark warning.
DONALD TUSK, PRESIDENT, EUROPEAN COUNCIL: I want to appeal to all potential illegal economic migrants wherever you are from, do not come to Europe. Do
not believe the smugglers. Do not risk your lives and your money. It is all for nothing. Greece or any other European country will no longer be a
transit country.
MCLAUGHLIN: For Greece, the fact that migrants aren't able to freely translate into Macedonia is a big part of the problem. Austria and other
countries imposed strict caps on the number of migrants allowed in. Meaning tens of thousands are stuck in Greece.
UNIDENTIFIED MALE: Well we arrived from this to find another kind of this.
MCLAUGHLIN: They're camping out in Athens main port. The city's public squares are overrun. And over 10,000 wait at the northern border. They say
they have no other choice.
UNIDENTIFIED MALE: We know it's closed but what we will happen? There isn't another way.
MCLAUGHLIN: The U.N. warns Greece is on the verge of a humanitarian disaster. On Thursday, the European Commission pledged over $700 million in
relief to be spread over three years.
UNIDENTIFIED FEMALE: We are calling European governments to find a solution now.
MCLAUGHLIN: A political solution continues to evade European leaders. They're expected to address the crisis at a summit on March 7th.
CHRISTOPHER PISSARIDES, LONDON SCHOOL OF BUSINES: The only way that European Nations have been moving the last few months in their policy
statements, you know it makes very pessimistic that we will get to a common European policy.
MCLAUGHLIN: Absent a political solution, NGOs estimate that within the next two weeks there could be up to 70,000 migrants trapped in Greece. Every
day, more arrive on its shores. A tidal wave fueled by hope soon meant with disappointment.
Erin McLaughlin, CNN.
(END VIDEO CLIP)
QUEST: So the various companies and the various positions are well known now in the battle between Apple and the FBI. And now various tech
companies, more of them have come out in supporting the Apple position in fighting against the FBI's request.
(BEGIN VIDEO CLIP)
QUEST: We'll talk about that after the break. It's "Quest Means Business" and it is a Thursday.
(END VIDEO CLIP)
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[16:25:55]
QUEST: There are 17 tech companies and they include the big names like Twitter, they've got Ebay, LinkedIn, Airbnb. They all filed a brief
supporting Apple in its row over the - the FBI over privacy and security. Apple and the FBI you are aware are locked in this dispute over access to a
mobile phone.
Paul La Monica is with me. Any surprises in the list?
PAUL LA MONICA, CNN MONEY CORRESPONDENT: Not really as of yet. And we are seeing many tech companies not just that group. AT&T has filed an Amicus
Brief in support of Apple. Intel, also there's a software trade association that includes Microsoft and Oracle. We're expecting one from Facebook and
Google, possibly as a joint brief as well. So it will be surprising if any major tech companies don't support Apple.
QUEST: And what are the - I mean the arguments are pretty much the ones we've known all along. It's a back door. It risks hacking, there'll be
multiple applications by government in the future. Has anybody suggested anything new?
LA MONICA: The most interesting thing that I saw was that AT&T didn't go so far to really support Apple per se. In their blog post about their brief,
they basically just said it should be up to congress to decide this issue not the courts using The All Writs Act. So they weren't necessarily saying
that Apple definitely is in the right here. Some other companies have been more strong. Intel definitely saying that we need to have safety, security
and privacy and that, you know, this is definitely not something that the courts should be forced to --
QUEST: So just remind us where we stand because we've had the various court case. And we've also had the Court of Public Opinion in congress for the
legislature. But what's the next stage?
LA MONICA: Yes, the next stage is you know, we're going to see you know Apple probably comment yet again following the --
QUEST: When's the hearing? When do we get to an -
LA MONICA: I'm not sure when we're going to get to a hearing. And this is - I mean this is not going to be resolved for a while because regardless of
what the decision is - the initial decision is from a court is likely to be appealed. And there's already talk that this could eventually go all the
way to the Supreme Court if the Supreme Court will hear it, assuming there's actually nine Supreme Court justices at that period of time.
QUEST: A quick look at the market, the Dow Jones. What a weird sort of day.
LA MONICA: It was.
QUEST: It was downright the way through to about 2:00 o'clock and it suddenly goes north and things look better. And as I can see it --
LA MONICA: There's no rhyme or reason.
QUEST: There's no rhyme or reason, yes.
LA MONICA: Things definitely have a tendency of getting a little wacky at the end of the day and despite how voluble that looks, it was a relatively
calm quiet day. The fireworks are tomorrow --
QUEST: 17,000 is around the corner.
LA MONICA: A good jobs report might push that above that. And what a good jobs report means I'm not sure. A bad jobs report, bad numbers might mean,
yes, the Fed isn't going to raise rates so who knows.
QUEST: Cnnmoney.com is where Paul as part of our investing team and myself, cnnmoney.com, is where you will sign at will, we ask you too - we ask you
too. We plead. We beg.
LA MONICA: We will not use the All Writs Act to force you to sign up.
QUEST: We will not force you to no. Well, maybe we might, it's not a bad idea. Anyway, we will -- the newsletter, the Quest Means Business
newsletter, CNNmoney.com.
It's the worst growth figure since 1990 and Brazil's faltering economy seems to get ever worse.
(BEGIN VIDEO CLIP)
QUEST: The necessity for new policies seems to be obvious. And now the government has to come up with them. In a moment.
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