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Quest Means Business
Officials: U.S. Could Pull Out of NAFTA Soon; Trump Team Outlines Massive Tax Cuts; Nigeria at a Crossroads; Entire U.S. Senate Briefed on North Korea; More Fox News Controversy. Aired 4-5p ET
Aired April 26, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] ZAIN ASHER, CNN ANCHOR: And that sound marked the end of yet another trading day on Wall Street. We started the day mostly positive.
We ended down ever so slightly. The big focus today was on Donald Trump's plans for tax reform. It is Wednesday, April 26th.
The Trump administration takes scissors to the tax code. Deficit experts say the plan to pay for the cut is a fantasy.
The president has waged a war of words on NAFTA. Now his officials say those words could actually turn into deeds.
And my country, Nigeria, is certainly, at a crossroads right now, faced with recession and falling oil prices. We will hear from one of the
country's top energy CEOs.
Hello, my friends, I'm Zain Asher and this is QUEST MEANS BUSINESS.
Tonight, let's talk about the moment investors have been waiting for. Certainly, the talk today on Wall Street, the Trump administration reveals
what it calls one of the biggest tax cuts in American history for individuals and businesses as well.
National Economic Council director Gary Cohn and Treasury Secretary Steve Mnuchin outlined the plan. They say it's about simplifying the tax system,
making it much easier to digest. I want to begin with the personal taxes. I'll walk you through what they discussed. The top rate would be cut to 35
percent from 39.6 percent. Tax brackets made a lot less complicated, cut to three from seven. They proposed repealing the estate tax and
alternative minimum tax, which is a special tax on the wealthy, on high earners.
On the business side, the tax rates will be splashed from 15 percent from 35 percent. That's what's in this proposal. A one-time tax on
repatriations, or money that stashed overseas by companies. The Trump administration says, the tax cuts will be funded through economic growth.
A lot of people have talking about the fact that it's going to be difficult to pay for that's tax cuts. Gary Cohn calls it a once in a generation
opportunity for tax reform and the most significant tax cuts in 30 years. Cohn urged all sides to sign off on the effort.
(BEGIN VIDEO CLIP)
GARY COHN, NATIONAL ECONOMIC COUNCIL DIRECTOR: This isn't going to be easy. Doing big things never is. We will be attacked from the left and we
will be attacked from the right. But one thing is certain. I would never, ever bet against this president. He will get this done for the American
people.
(END VIDEO CLIP)
ASHER: That's all well and good. As I mentioned, how will the tax plan pay for itself? I spoke to Stephen Moore a short time ago, he was an
economic adviser to the Trump campaign. He's now a CNN senior economic analyst. Take a listen.
(BEGIN VIDEOTAPE)
STEVEN MOORE, FORMER ECONOMIC VISOR TO TRUMP CAMPAIGN: It is going to be one of the biggest tax reductions we've seen since potentially the Reagan
years. It's a big deal. It's going to reduce those business tax rates, try to make America more competitive in a very globally competitive
environment right now. It simplifies the tax system. A lot of things that Donald Trump talked about in the campaign he's fulfilling a lot of promises
with this plan.
Asher: But you have to balance the books.
MOORE: Pardon me?
ASHER: You have to balance the books though.
MOORE: Yes, well, you do. But we believe a couple of things. First of all, if you make the economy grow faster, that's the best way to balance
the budget. I mean, John F. Kennedy used to say that all the time. Growth causes a balanced budget. It causes more revenue. So, we are going
to grow the economy faster. We're going to have to cut some spending, no question about it. Then there will be deductions lost and loop holes and
special interest provisions we are really aiming to close. And by the way, it's going to be hard to get rid of those because the special interest
groups are going to fight that every inch of the way.
ASHER: But a lot of people say, you know, listen, there isn't any concrete evidence to show that if you lower corporate taxes to that level, 15
percent, that you are going to have economic growth, especially economic growth at 3 percent a year.
MOORE: I think we can get to 3 percent, and not just through tax reform but also through pro-American policies and regulatory rollbacks. But you
know, I would answer that by just saying look around the world. Look at what every country in the world has been doing. Sweden, France, Italy,
Spain, Russia, Germany. Every country that the United States competes with over the last 20 years has cut their corporate tax rate. They're doing
that so they can steal jobs and businesses from the United States. So, if low corporate tax rates don't work, why is every other country in the world
doing it, including, by the way, both of the two French presidential candidates want to cut their corporate rate much lower than the United
States. We're not in the game anymore, we have to get that rate down. But we're also going to cut tax rates for our 27 million small businesses as
well. That's got to help struggling small businesses.
[16:05:00] ASHER: At the moment, it is just a plan. The big question is you have to make this an easy pill to swallow for both Democrats and also
deficit hawks as well. How do you do that?
MOORE: I would love to see Democrats be brought aboard. Maybe you can offer them infrastructure spending or other things the Democrats want. I
would love to see a bipartisan deal here because I think it's so important that America get out of this rut that we been in economically. But when
you talk about how it's going to be paid for, I think it's growth. And I think that over time, if we get that faster growth, you'll get a lot more
jobs and a lot more income into the country. I think that's the answer to the question. This is an opening bid, by the way. Trump opened with 15
percent. Maybe it's going to end up at 20. But that's still a lot lower than 40 in my book.
ASHER: So, it's just a starting point, then? Everything is negotiable?
MOORE: Remember, what is Donald Trump's book called? "The Art of The Deal." This is a guy who knows how to negotiate, knows how to compromise,
knows how to get to yes. So, I do view this as the opening bid. My only thing is, I think we've got to get this done quickly. I think the U.S.
economy needs the shot in the arm as soon as possible. I think the stock market really wants it, by the way. When Trump talked about this bill
today and yesterday, the stock market really, really reacted very positively.
(END VIDEOTAPE)
ASHER: That was Stephen Moore speaking to me earlier. Let's talk about Wall Street reaction. Wall Street actually took it mostly in its stride.
Let's take a look at how the markets did. As you can see, pretty much all day it was in the green, and then at the very end of the day, it went into
the red ever so slightly, ending the day down 21 points. Let's talk more about this now with Tim Anderson, managing director at TJM Investments.
He's joining us live from the Stock Exchange. So, Tim, just explain that to us. Because it's sort of contrary to what you would expect. The Trump
administration comes out, they announce corporate tax reduction to 15 percent. And then the market actually ends the day down 21 points. Which
was that?
TIM ANDERSON, MANAGING DIRECTOR, TJM INVESTMENTS: You know, I think you have to put it in perspective, because we had had a very, very strong rally
for two days coming into today, where the NASDAQ traded above 6,000 for the first time. The Russell traded at only its second highest level of the
year. And the S&P got very close to 2400. Contrast that with eight or nine days ago. All those averages were on the verge of breaking down. The
markets staged a tremendous 180 from where we were 89 days ago. I think it's not unusual to see a little profit-taking after the strong move we've
seen.
ASHER: TIM, isn't this about tapering expectations as well though? Of course, if the president overpromises and underdelivers, that could be a
risk for the market too.
ANDERSON: Well, that could be a risk. And clearly the tax proposal that he's going to come out with is going to be unsettling for a lot of people
just because of the dramatic change that will be involved in the whole tax structure. I think most people would say that if he could pull it off, it
would be good, but clearly the process of getting there is going to be challenging at best.
ASHER: So then you're expecting what, then? The proposal starts off with 15 percent, that's obviously just a starting point. You've got to get the
deficit hawks on board and the Democrats on board as well. Where do you see actually ending up, 20 percent, maybe? What you think?
ANDERSON: Possibly, somewhere between 15 and 20. Maybe at 20. Maybe he gives in on the estate tax being eliminated. Maybe there's some other
items that he's got in his pocket that he feels he can throw in to sweeten the pot a little bit. But you also notice that the House Freedom Caucus
came out and said about an hour before treasury secretary and Gary Cohn gave the tax proposal, the House Freedom Caucus came out and said they're
now in agreement with the revised new and improved health care plan. And that's a key part of this whole equation.
ASHER: All right, Tim Anderson, good to see you. Have to leave it there. Thank you so much.
ANDERSON: Great talking to you.
ASHER: Up the head, of the Alliance for American Manufacturing, tells me that tax reform has to be a bipartisan effort, as I mentioned you need to
get the Democrats on board and you need to get the deficit hawks on board as well. I spoke to Scott Paul and I asked him what the exclusion of the
border adjustment tax means for his sector.
(BEGIN VIDEOTAPE)
SCOTT PAUL, PRESIDENT, ALLIANCE FOR AMERICAN MANUFACTURING: The U.S. corporate tax system is wildly out of whack with the rest of our
international trading partners that mostly have a value-added tax. The BAT. would move us a step towards that, to harmonize the types of
structures that our companies have. I thought it was helpful in that respect. I think it's helpful in terms of balancing imports and exports,
potentially. It also provided about $1 trillion worth of revenue to offset the cost of a rate cut.
[16:10:00] Again, the details mattered. We never saw legislative language on the BAT. I think that both Speaker Ryan and Secretary Mnuchin left the
door open, saying that they knew there both had to be changes to the BAT from the speaker's perspective and also from Secretary Mnuchin's
perspective that they didn't not support it in its current form. Which I think left a little bit of space, but I think having that kind of a fiscal
offset is going to be important to getting the plan through the Congress. And I'd like to see it done in a bipartisan way as well. History tells us
that's the way to get tax reform done. That it can't simply be a partisan exercise, otherwise it's pretty much doomed to failure.
ASHER: Yes, you've got to make it easier for Democrats to swallow. One thing I want to talk to you about is jobs. Obviously, a lot of people who
voted for Trump did so because of the prospect of jobs. A lot of people are saying, listen, with this corporate tax reform plan, that it would mean
that corporate profits that have been parked overseas then get repatriated, and that would help potentially boost job creation. What do you make of
that?
PAUL: I think it's a good thing to try to get those earnings back into the United States. I think there also have to be some checks and balances.
The last time the United States tried a repatriation scheme, money came back, but it didn't end up producing jobs, it mostly went to pay off
corporate loans. It mostly went to shareholder value, and not much was invested into plant equipment and into workers.
If we're going to try it this time, and it may be worth it, I think there do have to be some strings attached to put that money to good use and get
it to the folks who need it the most. And those are manufacturing workers, invest in your factory, investment in the training of your works. And
perhaps even use some of the revenues to invest in infrastructure. We all know that those are things that are going to create jobs and also make life
easier for corporations in our nation as well.
(END VIDEOTAPE)
ASHER: And President Trump's favorite form of communication wins again. Twitter. Out of 9 million monthly active users in the first quarter,
shattering, really beating Wall Street's expectations here. The stock price surged. Take a look here. Up 8 percent, that's where it closed.
Let's talk about this with Paul La Monica, who joins me live now. So, it added significantly monthly average active users, 9 million in fact. What
was the winning strategy here, Paul? What was the special sauce?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, I think Twitter does in some respects owe a debt of gratitude to Donald Trump. He loves to tweet,
we see that he does it as a bully pulpit, often.
ASHER: And that's actually inviting more users to join the platform.
LA MONICA: It is. There was skepticism whether or not that was going to be the case. Because let's be honest, you don't have to be on Twitter to
find out what Trump is tweeting, because every time he tweets something, the mainstream media, including CNN, reports about it immediately. But I
think Twitter, also to its credit, has made bets on live programming. Streaming sports, streaming market events often, streaming award shows and
things like that. And that is helping.
ASHER: Does it have an issue with spam bots, with a lot of these active users who aren't necessarily being real?
LA MONICA: There are concerns about the bots. There are concerns about people being really attacked in vicious ways on Twitter as well. I think
it is a more significant problem for Twitter than any other social media platform, unfortunately. So that is something that Jack Dorsey and other
executives still need to deal with in order to try and make Twitter a really mainstream service. It's not Facebook. We're talking about
hundreds of millions, which is significant of users, not billions of users the way Facebook has.
ASHER: So, let's talk about money. Let's talk about the green stuff. Because Twitter really needs to become a bigger player in the advertising
space, especially perhaps with video advertising. What arts plans to do that?
LA MONICA: They are hoping to focus even more on live streaming sports, political events, pop culture event. The one problem is that Twitter
seemed to indicate that ad revenues might be starting to already peter off in terms of just how much people are willing to pay to be associated with a
live stream. So, the growth is there. The question is going to be how much are advertisers really going to pay for some of these ads,
particularly when they have Google and Facebook as their main digital ad buys.
ASHER: What about guidance for the rest of the year? Are there any fears, I mean, of course, yes, Donald Trump being on Twitter, that certainly helps
boost the monthly active users. But, you know, is there any sort of fears that when the novelty fades, that will go down again?
LA MONICA: Yes, I think that because Twitter has had problems really keeping users engaged, there's going to be a healthy dose of skepticism
surrounding this country for the foreseeable future. You've had some executives leaving in the past year, that doesn't help.
[16:15:00] Let's be honest also, Jack Dorsey has a somewhat unique problem in that he is running Twitter as a CEO, he's also the CEO of Square, the
mobile payments company that's actually doing quite well right now. There are lots of people who wish he would just make a choice and say, hey --
ASHER: Focus on one thing.
LA MONICA: -- I'm going to be the CEO of one of these companies and not the other one, they just have to find someone else.
ASHER: Paul, I could talk to you all day. But we have to leave it there. Thank you so much for coming on.
LA MONICA: Thank you.
ASHER: Let's take a look at European markets. They finished modestly higher today as investors awaited President Trump's tax plan. Shares in
Credit Suisse finished higher as well. The company announced plans to raise $4 billion to help rebuild its finances two years after -- two years
of layoffs and losses. The Swiss Bank will raise fresh capital by issuing 380 million new shares.
Still to come on the program, Nigeria, my home country, is at a crossroads. Limitless potential, genetic challenges. Does it have what it takes to be
Africa's undisputed economic leader? Our in-depth series on Nigeria continues after the break.
(COMMERCIAL BREAK)
ASHER: Wall Street get somewhat nervous when the Trump administration talks tough lunch trade. And today there are new reports that the U.S. is
ready to escalate its war of words on NAFTA. In fact, to senior administration officials confirmed to CNN, the White House is actually
considering pulling out of the treaty in the next few days. The officials say that President Trump has not decided how exactly he's going to proceed.
They say the White House could issue an executive order with the objective of renegotiating the pact with Canada and Mexico on a later date. I want
to go straight now to Michael Froman, who served as U.S. trade representative during the Obama administration. He joins us live from
Washington. Michael, thank you so much for being with us. Obviously renegotiating NAFTA or pulling out of NAFTA was potentially a big reason
why Donald Trump was elected. A lot of people potentially saw this day coming. Your reaction, though.
MICHAEL FROMAN, FORMER U.S. TRADE REPRESENTATIVE: Of course, NAFTA is more than 20 years old. That's why we did -- we renegotiated it in the context
of something called the Trans-Pacific Partnership, where Mexico agreed to have binding and enforceable labor and environmental standards, where we
got greater access to the markets, the dairy market, the poultry market in Canada, for example. We raised standards across the board.
The Trump administration has made clear that it too wants to renegotiate NAFTA. It hasn't made it clear what it is it's going to seek in the
renegotiations beyond what we got in TPP. Of course, this latest news, we don't know what the details are yet, but it could be that they're going to
start the process of giving notice, withdrawing from NAFTA. I assume that's a means of concentrating the minds and attention of the Canadians
and the Mexicans about what needs to be done at the table to renegotiating it. It all remains to be seen.
[16:20:00] ASHER: In terms of jobs, you know, obviously, Donald Trump talked about renegotiating NAFTA in the context of bringing back jobs. No
matter what happens, no matter how much NAFTA is renegotiated or modernized, are these jobs ever really coming back?
FROMAN: Well, I think there's a lot that we can do to help promote economic activity in the U.S., including in the manufacturing sector. Over
the last five or six years we've added more than 800,000 jobs in the manufacturing sector. We're producing more manufacturing output now in the
United States than ever before, at the end of the Obama administration. Of course, we're doing so with fewer workers. And that's largely because of
automation and technology. But certainly, it's been the goal of every administration, I think, to try and drive more jobs to the United States,
including in the very important manufacturing sector. And we had a fair degree of success with that in the Obama administration.
Having said that, we have a tremendous number of jobs. Millions of jobs in the United States that are tied into NAFTA being part of a supply chain
with Canada and with Mexico, exporting agricultural products to these two countries. Those are very important trading partners to us. If this
administration were to threaten or to pull out -- or to actually pull out of NAFTA, it would have a significant effect on millions of jobs in the
United States.
ASHER: An effect on millions of jobs and also an effect on the American consumer. What do you think the impact Will be of more protectionist
policies on the average American shopper?
FROMAN: Well, as trade barriers have come down over the last several decades, it's added about $13,000 to the income of the average American
family in terms of being as a consumer able to support their family. This is particularly important for low income Americans. Because low income
Americans spend a disproportionate amount of their income on tradeable goods, clothing, footwear, and food. And if we were to start imposing
trade barriers on the import of those goods, whether it's sneakers, or back-to-school supplies, you're going to see the average American family
paying a lot more at the checkout stand.
ASHER: Michael Froman, live for us, thank you so much for being with us.
FROMAN: Thanks for having me.
ASHER: I want to tell you a little more about my home country, Nigeria. It is firstly, Africa's most populous country, roughly around 170 million
people. But it is a country that is clearly at a crossroads. A lot of signs, show positive signs of growth. Other signs though do point to
economic uncertainty. Growth signs, as I mentioned, the positive -- in fact, the central bank governor of Nigeria says that Nigeria could actually
emerge from its deep recession as soon as a this summer, as soon as a couple of months from now.
Nigeria was hit hard by last year's sharp drop in energy prices. But the crisis did have an upside. There was certainly a silver lining to the
crisis, and that is that it forced the country to increase efforts to diversify away from oil and gas, which it has been dependent on for many,
many years. In the meantime, the made in Nigeria brand is taking off. And the country has a tech savvy workforce eager to join the growing middle-
class.
Nigeria still has a lot of problems, a lot of challenges. The continued threats, of course, from Boko Haram, in the northeastern part of the
country, weighs on business sentiment. Corruption remains a serious problem, and a lot of questions about the health of President Buhari remain
front and center.
All this week, QUEST MEANS BUSINESS, we are going to be taking an in-depth look at Nigeria. Joining me now with his thoughts on our country's future
is Tonye Cole, the CEO of the energy conglomerate the Sahara Group. So Tonye, thank you so much for being with us. This idea that Nigeria will be
out of deep recession by this summer, by June, what are your thoughts on that? Are you optimistic?
TONYE COLE, CEO, THE SAHARA GROUP: Actually I am. I believe that Nigeria has been heading out of recession since the last quarter of last year.
This year has seen us moving forward in that direction. The best thing to happen to Nigeria was the oil prices crashing, commodity prices crashing.
Because we're now able to focus on other things that is helping us get out of it. I believe we're now on that path out. And by the end of this year,
we should be out.
ASHER: Do you think the country has really learned from the lessons of the oil crisis?
COLE: Yes, we have. Because oil has been something that we've been so dependent on for a long time. And Lagos is a very good example. Where ten
years ago, it began to move out of oil as a dependency and began generating other things. So, Lagos has proven you can actually do that, and other
parts of the country have begun to do so.
ASHER: What about the ease of doing business in Nigeria? Yes, it's important to diversify away from oil. Yes, you say that we've learned the
lessons from the oil crisis. But has the ease of doing business as a way to attract direct foreign investment, has that actually improved?
[16:25:00] COLE: So, what's happening now is that the vice president's office under the presidency has taken that as a major item that we've been
driving. And they want to move up 20 points in the ease of doing business, which is a big thing. If you're going to move up 20 steps in one year, you
have to do a lot. You have to work on immigration. You have to work on customs. You have to work on the ease with which businesses are
registered. And the NIPC, which is a Nigerian investment Promotion Council, has been doing a lot to drive this. I believe we're on the right
track and moving ahead to do this.
ASHER: Tonye, I'm Nigerian, both my mother and father were born in Nigeria. I was born in London, and my country has a huge reputation for
extreme corruption. Is that still fair, do you think?
COLE: I think we've been castigated the world over for this. And it's something that from a businessman's perspective, I have suffered greatly
across the world. And one of the things we've done at the Sahara Group, we work at the World Economic Forum with a group called the PACI, Paths
against corruption Initiative. Where we show that businesses understand exactly where the hurdles are for corruption. You can begin to design
corruption out of systems. Technology is helping to do this. Transparency is helping to do this. And one of the things the Buhari has come to do is
work on the corruption. And he has done quite a bit in this direction. We still have a lot more to do but we're working in the right direction.
Nigeria cannot continue to be the poster child for corruption. We have so many things we are good at. One of those being entrepreneurs. One of
those being leading in terms of doing business across Africa and the world over.
ASHER: I couldn't agree more, so much potential in our country. Hopefully the reputation will get better. OK, Tonye Cole, live for us. Thank you so
much for being with us, sir.
And this week on Thursday and Friday, "QUEST EXPRESS" and QUEST MEANS BUSINESS willing live from Lagos, Nigeria, I'm so jealous because Richard
Quest will be there. He going to be speaking with business leaders in Nigeria, and to here what's next for a country in the race to be Africa's
most dynamic economy.
Skyscrapers, construction, and lots of money. No, I'm not talking about Dubai or Hong Kong. It's a new economic powerhouse of Malaysia. Iskandar,
three times the size of Singapore and growing at twice the national average. Richard Quest has our report on today's made in Malaysia.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN ANCHOR: Drive three hours south from Kuala Lumpur and I'm in Johor Bahru state, where I discover Iskandar, Malaysia. A vast
special economic development zone. Iskandar is on a scale rarely seen in this part of the world. And is unique not only for the sheer amount of
construction, but also, it's at the tip of Malaysia, and just from the other side of the Singapore causeway.
REZAL RAHMAN, CEO ISKANDAR MALAYSIA STUDIOS: The whole point is really about creating a region that will support the nation's vision of wanting to
become a developed nation.
QUEST (voice-over): The area alone is three times that of Singapore. This is a plan that so far has been a decade in the making, backed by billions
of dollars. At what point does this whole project start to become self- generating? Clearly, the question for the man that's been overseeing Iskandar from the very beginning.
RAHMAN: It's going to be a 20-year journey. We have actually achieved its half growth now.
QUEST (on camera): Who is going to buy all this property?
RAHMAN: You see, at this moment we have about 1.8 million of population. We forecast over the next ten years, the population will reach 3 million.
QUEST (voice-over): There are some unexpected industries that have chosen to make their home here.
(on camera): Look, let me be polite. Actually, why bother being polite? We're in the middle of nowhere. And we've got this vast film and
television studio. What gives?
RAHMAN: Well, I think first of all nowhere is relative. Because we are ten minutes from the Singapore border.
QUEST (voice-over): Pinewood, the British film studio, home to characters such as James Bond and Harry Potter. And now Pinewood has the largest film
and TV production franchise and Southeast Asia. Here, yes, in Iskandar.
(on camera): Where are we, sir?
RAHMAN: We're supposed to be in China.
QUEST: Really?
RAHMAN: That's what the story says.
QUEST (voice-over): On the old set of a Netflix original series, "Marco Polo." it was the first international scale production to use the
facilities here.
[16:30:00] And to enjoy the 30 percent rebate on expenses that Malaysia offers for all film production. This studio project is either a stroke of
genius or a $100 million indulgence.
RAHMAN: No one knew about the Chinese films. If you look today, the latest great wall, it's $150 million U.S. that is a Hollywood budget. If
he bring in a Chinese production here, they'll be much more comfortable shooting in Malaysia than they would in New York.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. There's more QUEST MEANS BUSINESS in just a moment. Deficit experts cast doubts on President Trump's plans
to pay for a tax cut. And tensions running high between the U.S. and North Korea. We'll go live to the White House and Pyongyang. First, the
headlines at this hour.
Donald Trump's administration has just outlined its new tax proposal which includes reduction in individual income tax rates. The U.S. president also
wants to slash the top tax rate for businesses to 15 percent, far, far below the current rates. The treasury secretary says the cuts will boost
economic growth. And that will pay for the plan itself.
Turkey says it's detained more than 1,000 people in 72 cities across the country. The interior minister said those taken into custody were
protecting the cleric which it accuses of fomenting a failed coup attempt last year.
Three new polls show about twice as many people plan to vote Conservative than Labour in Britain's snap election. Earlier the prime minister
explains to parliament why she is the better candidate.
(BEGIN VIDEO CLIP)
THERESA MAY, U.K. PRIME MINISTER: In something over six weeks, we will be back at these dispatch boxes again. And the only question is where will we
be standing, who will be prime minister of this great country. And the choice is here. And the choice is clear. Every vote for him is a vote for
a chaotic Brexit. Every vote for me is a vote to strengthen our hand in negotiating the best deal for Britain.
(END VIDEO CLIP)
[16:35:00] Tennis star Maria Sharapova marked her return after a 15-month doping ban with a victory. She defeated Roberta Vinci in straight sets.
The former number one was temporarily banned from the sport after testing positive for a banned substance at last year's Australian open.
It is a closed door briefing about a very closed-off country. Right now, every single American senator, all 100 of them in fact, have been summoned
to the White House for a rare meeting on North Korea, this as the reclusive nation releases new video touting what it calls its largest artillery drill
ever. Jeremy Diamond joins us live at the White House. Jeremy, this is quite rare, to have all 100 senators headed to the White House for a closed
door briefing on North Korea. Why do they have to go to the White House?
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: You know, it is very much so. Now this was a briefing that was initially organized by the senate, senate
majority leader Mitch McConnell was speaking to president Trump about it, and president Trump said why don't you before I ring it over here to the
White House. A senior White House official told a group of reporters here that part of this was really to communicate the seriousness of the threat
from North Korea. So, there were a lot of questions of course about why this briefing was happening here. And this White House official confirming
that it was really in part about optics, about seeing this bipartisan group of senators at the White House delivering a message to the world,
essentially, that they are taking this threat seriously by getting a serious briefing about it from top officials in the Trump administration,
but also gathering together here at this very significant location, of course.
And we just heard from Senator Chris Coons, he called the briefing sobering and a thorough briefing where they really went over the range of issues on
North Korea. All of this happening as there are rising tensions in the Korean peninsula both between South Korea and North Korea but also between
the increasing actions that we've seen, the shows of force that we've seen from both the United States and from North Korea. So, a lot to keep an eye
on today. Certainly, today at the White House, a way for senators to get more apprised on how the White House is taking this threat seriously and
what they're doing to counter it.
ASHER: Jeremy Diamond there, thank you so much.
Will Ripley joins us live from Pyongyang. A 100-senator closed door meeting at the White House, but at the same time Donald Trump came out and
said, listen, he does not believe that Kim Jong Un is as strong as people think he is. What has been the reaction to that in Pyongyang?
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Yes, I asked a government official about that yesterday here, Zain. We had the rare opportunity to
speak on the record with North Korea's top official on human rights. But he was given permission to speak on a variety of topics. I asked
specifically about that comment by president Trump. His response, president Trump is underestimating the strength of North Korea's supreme
leader Kim Jong Un, they believe he does have the strength to lead this country into battle if necessary. It's just after 5:00 a.m. here, there
is no official reaction yet to that senate meeting that just wrapped up. But this official also did tell me they are closely monitoring the outcome
not only of that senate meeting but also of the U.N. security council meetings that are ongoing. They're watching all of it. They're watching
president Trump's Twitter account.
And to show force, they are also holding a very large scale military demonstration. In fact, they say it's the Korean people's army's largest
ever military drill, held to mark the nation's army day. 300 pieces of long range artillery fired simultaneously. The leader Kim Jong Un
overseeing all of it. There were submarines and bombers. At the same time or actually within 24 hours of the images of that military drill, South
Korea also holding a military drill with the United States. 2,000 soldiers, fighter jets, tanks, very dramatic pictures. You see these
dueling displays the force. And the fact that South Korea, they say they don't have any particular enemy in mind, but obviously, it's intended to
send a message to the north that they have the full backing in the south of the very heavily equipped and well-armed U.S. military.
And clearly, if you're talking about conventional weapons back and forth, the United States' firepower is superior to what they have here in North
Korea. To develop that viable nuclear weapon, an ICBM with a nuclear warhead to reach the U.S., North Korea feels once they have that nuclear
weapon, it will be their ace in the hole, so to speak, to prevent a possible invasion by South Korea and the United States.
[16:40:00] Every spring when they have these military exercises, there's always a lot of tension. Of course, they haven't gone to war since the
Korean War of 1950, and everybody believes that the possibility of a military confrontation is highly unlikely. But, Zain, tensions are at
their highest level here on the peninsula in a number of years.
ASHER: Will Ripley live for us there, thank you so much, appreciate that.
The Trump tax plan calls for sweeping cuts. Treasury Secretary Mnuchin says the plan will pay for itself. Critics say that's wishful thinking.
We'll speak to the president of the committee for a responsible federal budget, next.
(COMMERCIAL BREAK)
ASHER: Welcome back, everybody. The Trump administration has just unveiled its tax cut proposal. It wants to slash the tax rate on companies
and pass through businesses' profits to 15 percent, likely to result in a big drop in terms of revenue for the government. The tax policy center
says a loss of $400 billion a year will occur. Treasury Secretary Steve Mnuchin says the tax plan will pay for itself.
(BEGIN VIDEO CLIP)
STEVE MNUCHIN, TREASURY SECRETARY: We're working on lots of details. We have over a hundred people in the treasury that have been working on tax
and scoring different scenarios. This will pay for itself with growth and with reduced -- reduction of different deductions and closing loopholes.
(END VIDEO CLIP)
ASHER: Let's talk more about this with the president of the Committee for a Responsible Federal Budget. She joins us live from Washington. Maya,
thank you for being with us. When you listen to the press conference with Steve Mnuchin and Gary Cohn, did you hear anything concrete about how
they're going to pay for this?
MAYA MACGUINEAS, PRESIDENT, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: Well, there was one bit of encouraging news. Because I think tax reform
that simplifies tax code and helps us be more competitive, grows the economy is a terrific idea.
ASHER: There is a "but" coming.
MACGUINEAS: Tax cuts would add to our level of national debt. That would undermine the growth we would otherwise have and it's a terrible idea. I
listened closely to that press conference. I heard some things that are encouraging. I think the structure of this tax reform is what we should be
looking for in terms of helping with competitiveness and incentives. They did talk about broadening the base on the individual side of the tax code.
That's one of the best way to pay for tax reforms and offset costs. But this is the political environment, people like to give away things, they
don't like to talk about hard choices.
[16:45:00] When they said, we'll get rid of a lot of deductions, what they said was, except for x, y, and z. They didn't name a single thing they
were going to do in terms of deductions to get rid of them. My concern is they're still focused on the, this is so easy, we don't have to make any
tough choices, we'll all magically fix this through growth, mentality. Instead of saying, there are a lot of things we can do to improve our tax
code but we have to do the hard work of getting rid of tax breaks, people like them, companies like them, in we don't do a good job, we would do
better to lower tax rates instead of having those tax breaks.
ASHER: Obviously, Steve Mnuchin has talked about growth, growth rising to 3 percent. Just explain to our audience, what is the link between lower
corporate tax rates and economic growth?
MACGUINEAS: So, if we lower tax rates and do the best job we can in terms of improving the incentives, the efficiencies of our tax code, we will grow
the economy. And we will grow it in a way that's very important, because we are struggling with low growth levels. We'll be growing by about 2
percent, that's what's projected right now. And the reason primarily is our labor force. More and more people are moving into retirement. Our
labor force isn't growing as quickly. So, focused on growth makes a ton of sense. But when you have tax reform, it grows the economy by a couple of
tenths of a percentage point. It doesn't grow the economy by a full percentage point. And I worry when I see the numbers they're floating
around, they're saying we can get from 2 percent to 3 percent, that's not going to happen from any credible tax plan. A couple of tenths of a
percentage point we care about, but tax cuts won't pay for themselves. That's a myth that needs to be put out of its misery.
ASHER: Thanks for being with us.
More controversy at Fox News. Just a week after firing their star anchor, Bill O'Reilly, for alleged sexual harassment, fox news is facing yet
another lawsuit. We'll explain the details after the break.
(COMMERCIAL BREAK)
ASHER: A week after firing its top anchor, Bill O'Reilly, for alleged sexual harassment, troubles at Fox News appear to be escalating. The
network is seeing a racial discrimination lawsuit from Fox News employees, anchor Kelly Wright along with several other current and former employees
say they were demeaned, passed over for promotions and paid less than their white co-workers. Let's talk with Laura Coates, CNN's senior legal analyst
joining us live from warrant. Thank you for being with us.
LAURA COATES, CNN'S SENIOR LEGAL ANALYST: Of course.
[16:50:00] ASHER: You have here the plaintiffs' lawyers saying that when it comes to discrimination, 21st century fox has been operating as if it
should be called 18th Century Fox. What do you make of that?
COATES: According to the allegations in the sexual harassment scandals alone, it certainly appears that way. When it comes to racial
discrimination lawsuits, it's very similar, in terms of the atmosphere or the work environment that people are working under. Did the management,
did the executives know about the treatment and turn a blind eye? Or were they actually complicit or active in the discrimination? That's a question
they have to answer. Of course, one helps the other. When you have this gender-based sexual harassment, you already have Fox News saying we take
responsibility, it will be helpful to the race-based claim as well.
ASHER: It's interesting, the fact that you have Kelly Wright, a high-level employee, a news anchor, joining this lawsuit, how damning is that for the
company?
COATES: It's very damning. Remember, Fox News has had this reputation, according to this lawsuit, of having this for decades and decades, but not
until Gretchen Carlson said this is happening to me, it raised eyebrows and made you believe this must be happening at lower, quote unquote, levels as
well. For this person to join this suit, it adds a lot of credibility and buttresses the argument. This is a very toxic environment, that it goes up
and down the chain, and that nobody is able to escape the wrath of discrimination. So, the picture there, he's very, very emotional about
having to join it. And very, very confident about what has happened to him as an example of what's happened to people who are not as visible, who may
not get the same level of preferential treatment he's gotten as a visible part of it. The lawsuit is based in part on people who were in payroll
positions, who were on the same floor at Roger Ailes.
ASHER: I want to give the audience some context on what is in this lawsuit. Apparently, you had executives at Fox News mocking at how black
employees pronounced words like "ask" and "mother" and asking employees, who is going back to Africa after President Trump's travel ban. It's not
just about discrimination and alleged racism, it's also about whether they turned a blind eye to it as well.
COATES: Exactly. And these are the types of statements being alleged as being made that obviously on their face are discriminatory, derogatory,
intended to humiliate and demean people based on cultural experiences and based on their experience. One of the interesting attributes of this
particular lawsuit, they also blame it on the skin tone of those involved as well. One of the people who was fired following the initial lawsuit,
when this person is joined into an overall basically class action lawsuit with somebody who was pivotal in HR in saying, listen, we had no idea about
this, and now that we know this person has been fired, the class action takes issue with that firing, saying, no, you're not going to escape this
by saying you just had an epiphany about this. As you said, this has been going on, to the extent they now consider it the 18th century fox.
ASHER: What could these employees get? I know you can't look into a crystal ball, what are we looking for damages for a corporation like 21st
Century Fox?
COATES: The damages will be monetary, we're not talking about criminal liability or exposure. We're talking about penalties. One of the people
who was there as a part of the lawsuit is actually a former employee who says she was forced to quit when HR failed to respond to her repeated
requests for assistance in these discriminatory practices. For the current versus former employees, there may be an amount of salary compensation that
is given, it may be about putting them to the level they should be promoted to in the first place. It could take a lot of different turns.
Ultimately, we're talking about a money-based sanction.
ASHER: All right, Laura Coates, live for us there, thank you so much.
Streaming giant Netflix may have finally found a way to tap into the world's most populous nation. It's signed a licensing deal with a popular
Chinese streaming company. This is a year after Netflix was blocked from operating in China as a stand-alone service. Baidu is working to attract
international talent. Co-founder Robin Li tells Matt Rivers why the country needs to change its culture.
(BEGIN VIDEOTAPE)
[16:16:55] ROBIN LI, CO-FOUNDER, BAIDU: I've been saying this for quite a few years even President Xi Jinping I said this, China needs to attract
global talents, not just Chinese talents. We need to open up more, we need to reform our visa policy. We need to nurture a culture that can
accommodate more foreigners, especially high end talents. And 2017 is special in the sense that at least from a perception point of view, U.S. is
more, you know, anti-immigrant. And this is a good time that China stands up and say, hey, come to us, we like you, we welcome immigrants.
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Donald Trump, now the president of the United States, good thing for U.S.-China relations, or not
so much?
LI: I don't know. Because, you know, he's only been in office a couple of months. But I think one thing for sure, everybody knows that the U.S.-
China relationship is very, very important. It's too important to, you know, take any kind of significant risk. And fortunately, I think the
communication channel between U.S. and China is quite open both on the private sector and on the public sector.
(END VIDEOTAPE)
ASHER: Let's get a final check of the markets, U.S. markets retreated from highs on president Trump's proposed tax plan, seen as light on detail, not
much in terms of specifics. After a two-day rally, the Dow, NASDAQ and S&P 500 all ended the day flat or fractionally lower. A programming
announcement, join us tomorrow and Friday for a special "QUEST EXPRESS" and QUEST MEANS BUSINESS. Richard, my colleague, will be live in Lagos,
Nigeria, speaking to business leaders to hear what's next for Nigeria in the race to be Africa's most dynamic economy.
That, my friends, is QUEST MEANS BUSINESS. I'm Zain Asher in New York. The news continues right here on CNN.
END
