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Quest Means Business
Trump Disbands Business Councils; Trump Administrations Renegotiates NAFTA; San Francisco Fed President; U.S. Has Momentum, Solid Fundamentals; Kenneth Cole Launches Coalition to fight AIDS. Aired 4-5p ET
Aired August 16, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:11:00] RICHARD QUEST, CNN HOST: The bell ringing on Wall Street, Rogers Corporation ringing the bell. The Dow Jones industrial average up
26 points, very quiet, midsummer sort of trading day. No huge events in terms of the market movements to refer to. Let's see how you do. One,
two, three -- a strong gavel from Rogers Corporation. That brings trading to a close. It's Wednesday, it's August 16.
The CEO President loses his CEOs. President Trump disbands his business councils as a parade of chiefs walk away. With the White House in apparent
chaos, negotiations begin on NAFTA. We will have views from Mexico, Canada and Washington.
And from infrastructure to interest rates, the President of the San Francisco Fed speaks exclusively to us our program about what the U.S.
economy really needs. Put it all together, I'm Richard Quest. Live in the world's financial capital, New York. Where I mean business.
Good evening. Tonight, corporate America is abandoning the first ever CEO President. Donald Trump has been forced to dissolve his own business
councils, as he watched outraged executives desert them. The two White House forums were set up with great fanfare. They gave the president face-
to-face meetings with the country's biggest companies. They were televised live when the meetings took place. Now those same companies are starting
and have cut ties with Mr. Trump after his response to the deadly far right violence and Charlottesville last weekend.
Eight leaders had already quit the Manufacturing Council. And the pace of departures grew quicker after Mr. Trump repeated his belief yesterday that
both sides were to blame for the unrest. You'll remember of course, that was in the news conference that we brought you at this time yesterday. And
look at the range of companies. From Merck at the first to 3M and Campbell Soup this morning. Ultimately, it all forced President Trump's hand. And
he tweeted he was ending the forum to avoid putting pressure on its members. Thank you all he said.
A statement from the flagships Strategic Policy Council said it was a joint decision, Donald Trump may say I'm ending it, but the strategic forum said,
we believe the debate over foreign participation has become a distraction from a well-intended and sincere desire to aid vital policy discussions.
Our Cristina Alesci is here. What a mess.
CRISTINA ALESCI, CNN MONEY CORRESPONDENT: What a mess indeed. It's a missed opportunity really for Donald Trump. His whole agenda, his economic
agenda rested on creating jobs. And working with the business community and the business community felt like they were being heard for the first
time in a long time at the White House. On things ranging from tax policy to creating jobs here. And now that opportunity has gone away. And this
is a very sharp reaction to Charlottesville. But CEOs were expressing concern, concerns weeks ago about a number of other issues as well.
QUEST: On this question, I mean -- this morning people like Jeffrey Immelt and other CEOs, said they had notified the council that they were leaving.
Hadn't announced it publicly. But explain this process. You been talking to the people, the PR people, the spin people about this. Look --
ALESCI: There's a lot of spin around this just put it out there right now.
QUEST: This happened over the weekend. And the first resignation took place on Monday, Ken Frazier of Merck. By the time you get to Wednesday, I
suppose you can justify it on the back of yesterday's news conference.
ALESCI: Let's just make the distinction between the two groups. The group that you're talking about the Frazier group, for lack of a better term, was
a Manufacturing Council. And it was a slow trickle from that group very publicly to your point. But this other council, the Strategic and Policy
Forum, those guys decided to essentially make the decision to gather. That was the joint statement thought read. So, it seems like one group --
QUEST: But why did they do it? This rather weak idea of --
[16:05:00] ALESCI: Why did they do it now? Or why did they do it in general?
QUEST: Why did they decide to disband? The reason they say it's been a distraction from their work. But come on, these are big, grown-up men and
women who run multibillion dollar companies.
ALESCI: I think look, I think it comes down to this is a business decision, right? What the companies will say and what the spin machine
around this will say, is it comes down to what the right and the wrong thing to do is. But the reality is that these CEOs have a responsibility
to their shareholders. And they have to keep consumers happy in order to deliver value for shareholders. So, once the situation turned and put that
equation into jeopardy, that's when you saw the CEOs you know, head for the exits. And that's what happened here.
QUEST: Good to see you, thank you. Keep watching us, please.
ALESCI: Of course.
QUEST: U.S. stocks took a dip as news of the council's disbandment filtered out to the markets. Look at the closing numbers on Wall Street.
The Dow Jones industrials up 25 points, 2588. Businesses are apparently taking the lead in denouncing hate groups and cutting them off from money
and information. So, PayPal has toughened its policies. It will not accept payments or donations for organizations such as the KKK, white
supremacists or Nazi groups. The domain provider, Go Daddy, revoked the registration at the "Daily Stormer." A neo-Nazi website which helped
organize the rally in Charlottesville and Google did the same when the "Daily Stormer" tried to sign up there.
Twilio's CEO announced its updating its policy to prohibit hate speech. It's company services enables groups to send and receive text messages.
Now the PayPal decision was apparently influenced by the campaign group Color of Change. Were lucky that we have the Executive Director of Color
of Change with me now. Good to see you, Sir. Rashad Robinson is with me. All right, so your organization puts pressure on various companies to
restrict, to shut out, to abandon what you say is hate organizations. Is that correct?
RASHAD ROBINSON, EXECUTIVE DIRECTOR, COLOR OF CHANGE: Absolutely. And organizations that are not just promoting what we consider to be hate. But
violence and terrorism so we identify a list of groups and back in February, started going to not just PayPal, but the four major credit card
companies as well, Visa, MasterCard, American Express and Discover. And started to have conversations with them behind the scenes while building a
public campaign.
QUEST: But you started a hashtag #quitthecouncil.
ROBINSON: We also started the hashtag #quitthecouncil. Yes, sort of right as the Council launched hand put initial pressure on Uber and Disney.
Showed up to Disney's, their shareholders meeting. Put deep pressure on Uber and got them to divest and lost a little traction as Russia because
the views of the day. But reengaged that over the last several days.
QUEST: Until this, why quit the council? I mean why not join the council, you see, haven't you set yourself up to a certain extent as judge and jury?
ROBINSON: Here is the thing. When people tell you who they are, you should believe them and Donald Trump didn't start as day one. He's a 70-
year-old man who started his --
QUEST: Who was elected by the American people.
ROBINSON: Absolutely.
QUEST: Under the system in this country.
ROBINSON: Absolutely. And every day, consumers have the opportunity to make their voices heard, to corporations where they do business. And if
businesses want to come into our community and say buy our products, or use our services, we have an absolute right, a free-speech right, to push back
at those corporations and to say --
QUEST: Where is your line drawn? Where is your line drawn with somebody that doesn't come up to your standards? As you see it?
ROBINSON: See, this was not a plan that we ran during the last Republican administration. Color of Change was around then. This was not something -
- we ran a campaign specifically about Donald Trump, who is a very unique candidate. Who started not only his sort of entry into politics at the
national scale with his racist rants against the president. But also, his campaign against Mexicans. And Muslims and other folks and so we have
every right to tell corporations, hey, you can serve on the business council. We have a right to speak out, and you have a choice to make about
those two things and that's the beauty of democracy.
[16:10:00] QUEST: At what point do you, take the PayPal example and the credit card examples. At what point do you go from negotiating with the
companies like PayPal to actually taking a more activist approach where you will have petitions, lobbying and investor calls against him?
ROBINSON: It generally comes to the point where the corporation decides they're going to make a decision, whether or not to do something we are
asking them to do or they are going to say, here's where were going to land and we're not going to do what you're asking. And then, at that point we
give every day people the ability to engage and make their voices heard. If people didn't stand with us, the corporations would be able to like
decide to walk away.
QUEST: But let's be clear about this. You were against any company being on Donald Trump's advisory councils. Simply by virtue of the fact he's
Donald Trump. With his views that he holds.
ROBINSON: Yes, with his views and his actions. His policies and his practices.
QUEST: How do you balance that? How do you balance a corporation, a CEO who has for example, if he's in the steel industry or she's in the steel
industry, they have to deal with macroeconomic issues of Japan and trade? They've got to deal with jobs, which frankly you don't have to deal with in
terms of employing tens of thousands of people or indeed with the national accounts. How do you balance that with a CEO who has those
responsibilities?
ROBINSON: These CEOs make millions upon millions --
QUEST: That's irrelevant. That's irrelevant.
ROBINSON: No, no, no, no, it's actually relevant. It's totally relevant. Because it's relevant to the point that they get paid a lot of money to
deal with complex problems. And we're presenting a complex problem to someone who has taken on -- no, no, no, it's not my job to do their job for
them. It's my job just like a lot of problems cross their desk. We are presenting a problem that they have made a decision to join a council.
We're now pushing back. They accepted a high-profile job with a great salary.
No one is crying for big CEOs in this country. Now they will have a decision. Do I listen to this civil rights group? Or do I not. And many
of them at first didn't listen to us. And some of them wish they had. Because as time passed on, we proved ourselves to have been doing them a
favor by reaching out to them and given them an opportunity --
QUEST: You've had some notable successes. Bill O'Reilly at Fox was one of yours.
Good to see you, Sir. I really appreciate you coming in.
ROBINSON: Absolutely.
QUEST: Really appreciate it.
Later in the program will be joined by the fashion designer and activist, Kenneth Cole who has used his own company to campaign against some of the
administration's policies.
While the White House is in crises let's put it into perspective. Here you have a White House in crisis with CEOs fleeing the various councils and the
councils being disbanded. But to make it real, the Trump administration today also started renegotiating one of the world's most important trade
deals. NAFTA. During the election campaign, Donald Trump called it the worst trade deal in history. Today in Washington talks got underway to
either modernize it or revitalize it or at least renew it.
U.S. trade representative did not mince words, Robert Lighthizer said NAFTA has failed Americans and it needs an overhaul.
(BEGIN VIDEO CLIP)
ROBERT LIGHTHIZER, U.S. TRADE REPRESENTATIVE: I know we all agree that NAFTA needs updating. It's a 23-year-old agreement. And our economies are
very different than they were in the 1990s. We need to modernize or create provisions which protect digital trade and services trades, e-commerce,
update customs procedures, protect intellectual property, improve energy provisions and enhance transparency rules and promote science-based
agricultural trade.
(END VIDEO CLIP)
QUEST: Now, NAFTA. The three countries and bear in mind this was negotiated in 1993 and came to force in 1994. NAFTA is large in size, and
scale. I'll show you exactly, the three countries, Canada, the U.S. and Mexico. It reshaped trade in North America, so total trade is now $1.2
trillion in today's value. Which has quadrupled since 1993 when NAFTA was first coming into force or was signed. But the scale and breadth of the
goods, major goods are traded from cars, machinery, food products, agricultural products, going up and down between these three countries in
an almost seamless to use the Brexit word -- frictionless trade.
So, the trades themselves have been controversial. The bilateral deficit of goods between the U.S. and Mexico is $63 billion. There is no bilateral
deficit with Canada.
[16:15:00] The U.S. has a trade surplus in terms of things going north to the border. The United States trade representative says NAFTA has
fundamentally failed. Clare Sebastian looks at how all this can actually be made to work.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT: For President Donald Trump, NAFTA all 393 pages of it is pretty black-and-white.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The worst trade deal ever made.
The total and complete disaster.
SEBASTIAN: And fixing it, he says, boils down to just one letter.
TRUMP: Will put an extra F in the term NAFTA. You know what the F is for, right, free and fair trade.
SEBASTIAN: The challenge of course is making it fair for everyone.
GEORGE H. W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: NAFTA, the North American Free Trade Agreement is an achievement of three strong and proud
nations.
SEBASTIAN: NAFTA, which came into force in 1994, tripled regional trade and led to deep integration between the three signatories. The U.S. trade
representative who negotiated the trio was Carla Hills.
Are there parts of NAFTA that have been unfair to the U.S.
CARLA HILLS, U.S. TRADE REPRESENTATIVE, 1989-1993: The North American Free Trade Agreement has been enormously positive for the United States. If you
want to tell me that imports are bad, I will tell you that 60 percent of what we import are intermediate products that make our exports competitive.
SEBASTIAN: Intermediate products like auto parts. A recent report estimates that car parts can cross the NAFTA countries borders, up to eight
times before final assembly. Because many carmakers have relocated factories to save money.
CELESTE DRAKE, TRADE AND GLOBALIZATION POLICY SPECIALIST, AFL-CIO: It's failed the working people of North America.
SEBASTIAN: That's part of the problem so Celeste Drake who represents the largest Federation of trade unionist in the U.S., the AFL-CIO.
DRAKE: The AFL-CIO was heavily involved in the fight against NAFTA ratification. We predicted it would be bad for jobs, bad for wages, bad
for the environment. And we have to make sure that what a new North American economic deal can do, is incentivize the creation of jobs across
all three countries.
TRUMP: We are renegotiating trade deals.
SEBASTIAN: Most agree this may actually be a good opportunity to rewrite at least some of these hundred and fifty thousand words.
HILLS: We certainly need to modernize it. Because when we negotiated the agreement in the early 1990s, you didn't have a cell phone. We didn't talk
about digital trade flows.
SEBASTIAN: They just don't agree on how many.
DRAKE: Start from scratch, there's very little that salvageable that really says this is the way we build a progressive economy.
HILL: My motto would be due no harm. Don't lose what we have.
SEBASTIAN: Clare Sebastian, CNN Money, New York.
(END VIDEOTAPE)
QUEST: If you want to have an idea of just what we're talking about with NAFTA, this is NAFTA. Over 1000 pages of it. It took months, if not years
to negotiate that they are now going to have to go through and modify. Later in the program, I'm joined live by the chief executive of Canada's
Chamber of Commerce to see what they want out of a renegotiation. Also, the president's press conference was supposed to be all about
infrastructure. The president of the San Francisco Fed says the U.S. needs major investment, but not necessarily a stimulus package. He speaks
exclusively to CNN and gives us his outlook into minutes. It's QUEST MEANS BUSINESS.
[16:20:00] (COMMERCIAL BREAK)
QUEST: A split is emerging deep within the Federal Reserve. It was revealed in the minutes of July's meeting when they discussed the right
path to raise interest rates. And how to rebalance the fed's balance sheet. Some were worried about low inflation. It's remain below the
central bank's 2 percent target more than five years now. By the way, they're not alone with that. Other central banks have the same issue.
Others are concerned about the risk of delaying raising interest rates. Especially when the labor market is almost 4.3 percent within expectation
it may go even lower.
The fear that overshooting inflation will be harder to correct balancing between the fed's dual mandate, which you will be familiar with which is
full employment and price stability or low inflation. The president of the San Francisco Fed spoke exclusively to us. John Williams is predicting the
Fed will continue raising rates gradually over the next two years. He tells me what will help the economy along from trade policy to tax reform
to infrastructure.
These are the things U.S. economy needs. With the economy stabilizing, he says now is the time to get fiscal policy on a sustainable path. The fed's
policy of tightening is well underway. Now it needs to stick to what it's calling the soft landing.
(BEGIN VIDEO CLIP)
JOHN WILLIAMS, PRESIDENT, SAN FRANCISCO FEDERAL RESERVE: The soft landing is the hardest things to pull off in monetary policy. I've been in the Fed
over 20 years and seen that. I think we're in good shape for this though. We've already started to normalize policy. I think were preparing for our
next step in terms of starting the normalization of the balance sheet. I think there is going to go smoothly.
(END VIDEO CLIP)
QUEST: Let's just talk about the U.S. Federal Reserve System and the different branches of it. It was set up just after the second world war.
The tech sector is outpacing, you can see the difference in Boston, New York, these are all regional feds where they have offices that monitor the
health of the U.S. economy. Importantly, only a certain number of these presidents ever vote on interest rates at any one given time. The San
Francisco Fed of course, is at the heart of the largest, most populous district on the West Coast. It spans nine states. Based out of here. You
see the area that it covers, 22 percent of all U.S. exports go out through California.
And obviously the Pacific Northwest states. John Williams isn't a voting member, he will join the voting membership, next year. He is expected to
stay close to Janet Yellen, she also led the San Francisco fed just before Williams. Janet Yellen is fond of saying that the fed's decisions are data
dependent. So, John Williams, I asked him what he sees in the numbers.
(BEGIN VIDEOTAPE)
WILLIAMS: Well, the U.S. economy I think is doing quite well. Unemployment is in the low 4 percent range I expect it to stay there. Job
growth has been really very good. The economy continues to expand. And you know from the perspective I think we've got a lot of momentum, good
fundamentals for good, solid continued economic expansion. Now where I live, out in the West Coast, things are booming. The Bay Area, the West
Coast economy is really being propelled by the new technology companies that you all know like Google, Facebook and all the others. It's a red-hot
economy out West.
QUEST: The Fed has started to tighten, or move back to a more neutral stance of monetary policy. How much more do you expect needs to be done?
WILLIAMS: This is, the biggest question. We've been raising rates gradually over the last couple of years. What we call normalizing monetary
policy. We lowered interest rates to all-time lows during the recession. My view is we're about half the way there in terms of raising short-term
interest rates. My view is a normal short-term interest rate should be 2.5 percent and interest rates are a little below half of that. So, I think we
need to see more rate increases over the next couple of years to get this to our normal level. But I think it will be done in a gradual way that
will keep this economy expanding. I think again this Goldilocks economy.
[16:25:00] QUEST: When rates have reached the height if you like, you still expect and the FOMC expects that to be considerably lower for a
longer period then we might have ever seen before. When we might have gone to four, five, six percent.
WILLIAMS: Absolutely. This is one of the biggest sea changes in terms of the thinking about monetary policy. The new normal for interest rates is
much lower than what we are used to be in the past. This is because of global development, slower growth, demographics, some other things that
basically just telling us that interest rates on average are going to be lower than they were in previous decades.
QUEST: The latest statements from the FOMC, talk about the uncertainty, the difficulties of knowing, of what's going to come. Is there going to be
an infrastructure, is there going to be tax reform, or just tax tinkering? Is there going to be any form of health care reform? It looks unlikely.
In this scenario, how concerned are you that fiscal policy is, my word, confused?
WILLIAMS: Right now, the decisions we're making don't really depend on there being a fiscal package next year, or the year after. I think it
makes sense for us to be normalizing monetary policy given where the economy already is. My own expectation is that the fiscal policy isn't
going to fundamentally shift the direction of the U.S. economy over the next couple of years. Obviously, depending on what happens we have to
adjust course, the decisions we are making now, I don't think it depends that much on what fiscal policy may or may not be.
QUEST: Would you like to see a full-fledged tax reform package?
WILLIAMS: I think that most economists or many economists would agree with this and I would agree that our tax system is very antiquated and not up to
the task of raising revenue that we need in an efficient way. I definitely think tax reform is an important priority. But again, you use the word
reform and I think that's important. We have to make sure we also take care of the long-term fiscal health of the U.S. government. And right now,
as years, we are on in unsustainable path in terms of fiscal policy.
QUEST: You have been on an unsustainable path of fiscal policy. We've been on that path as long as I can remember.
WILLIAMS: That's right. But eventually you cannot be unsustainable forever.
QUEST: At what point do those chickens come home to roost, Mr. President.
WILLIAMS: They get worse as the time goes on. It makes sense with an economy in a good situation like today for us to be seriously thinking how
do we get our country on a sustainable fiscal path for the long-run health of the economy?
QUEST: What about a nice $1 trillion infrastructure package?
WILLIAMS: I'll say a couple of things about infrastructure. We've under invested in the infrastructure for decades. I think this is a priority
from the economy's point of view. We know infrastructure can help economic growth. I think that is a positive. I will say that $1 trillion is not as
much as you may think. In an economy that's closing in on $20 trillion, $1 trillion may not actually be enough for the long run kind of investments
that we need. But definitely I think it's in the right direction.
QUEST: The issue of trade, again very important in your part of the country. Particularly transpacific trade. The TPP is gone. Some version
is coming through with NAFTA renegotiation, whatever. How concerned are you that trade is about to suffer? From what could be worsening of trade
relations with major partners such as China?
WILLIAMS: I think that trade is a huge part of the West Coast economy. It is a huge part of the U.S. economy. All of our industries, are highly
connected around the rest of the world, this is something that I don't think you can back off that. It's an important part of our productivity,
important part of our high living standards. Personally, I think moving away from free trade would be a negative for the economy. I hope that
doesn't happen.
(END VIDEOTAPE)
QUEST: The president of the San Francisco Fed talking to me. Chief executives have been walking out on President Trump. When we come back,
will have more chief executives, Kenneth Cole is with me, good to see you, Sir. Come in and join me in the C suite. We're going to be talking about
diversity.
(COMMERCIAL BREAK)
[16:31:29] QUEST: Hello, I'm Richard Quest. They'll be more QUEST MEANS BUSINESS in a moment. When I'll be speaking to Canada's Chamber of
Commerce on day one of the NAFTA renegotiations. And the designer Kenneth Cole is here and we'll discuss his new coalition to fight AIDS.
As we continue tonight, this is CNN and on this network, the news always comes first.
An emotional memorial service has taken place and Charlottesville, Virginia, for 32-year-old Heather Heyer, who was killed on Saturday when a
car plowed into counter protesters opposing a rally by white nationalists. Her father said his daughter wanted equality and wanted to put down hate.
Hear how the strong words from her mother during the service.
(BEGIN VIDEO CLIP)
SUSAN BRO, HEATHER HEYER'S MOTHER: And I think the reason that what happened to Heather has struck a chord, is because we know that what she
did is achievable. We don't all have to die. We don't all have to sacrifice our lives. They tried to kill my child to shut her up. Well
guess what, you just magnified her.
(END VIDEO CLIP)
QUEST: Criticism is coming in from around the world of President Trump's comments blaming both sides for the violence in Virginia. The British
Prime Minister, Theresa May said there is no equivalence between those who propound fascist views and those who oppose them. An Israeli politician
Tzipi Livni says, in Nazism, anti-Semitism and racism, there are never two equal sides.
The U.S. city of Baltimore took down four Confederate monuments overnight. The mayor says the removal process had been in the works for a while. And
the decision wasn't in any way a response to the President's remarks. She says the statues will be moved elsewhere. They won't be destroyed.
Leaders from U.S., Canada and Mexico are renegotiating the North American Free-Trade Agreement. President Trump has threatened to withdraw from
NAFTA if the U.S. cannot get a better deal. Mexico and Canada leaders say they want to modernize NAFTA to better reflect global economy but not a
wholesale renegotiation.
Ireland is welcoming Britain's proposal to keep open borders between it and Northern Ireland. The United Kingdom's opposing border and immigration
checks after Brexit in an effort to maintain the Good Friday Peace Agreements. The Irish Foreign Minister said there are no deals yet
regarding how the plan would work in practice.
It's been 3 1/2 years after flight MH 370 vanished and potential clues. These satellite photos appear to show 70 objects drifting in the southern
Indian ocean. Where taken by the French military weeks after the plane disappeared. They were from the area that was not covered as part of the
initial underwater search.
Turning to our top story, corporate America breaking ranks with the President over his views on the violence in Charlottesville. The fashion
designer Kenneth Cole has used his company's billboard two target subjects like the travel ban. Kenneth also chairs the foundation for AIDS research.
He joins me now. Good to see you, sir.
KENNETH COLE, EXECUTIVE CHAIRMAN, KENNETH COLE PRODUCTIONS: Thank you, Richard.
QUEST: In the course of the time we've plenty of time to talk about all the issues on the table.
[16:35:00] We do need to start with this issue of diversity that's currently taking place in the United States. And the controversy with CEOs
at the moment. How do you view what's been taken place?
COLE: You know it's hard for me to sit in judgment of what people do and how they run their businesses. I have always been committed personally and
professionally through my entire career to tolerance, acceptance and inclusion. The brand has celebrated differences. It hasn't ever attracted
them. So, so that's what we have stood for. That's what we have done. I probably would not have engaged myself personally or professionally, in a
task that would take me in a different direction.
QUEST: Right, but your company has had as we see here, what we stand for is more important than what we stand in Kenneth Cole. Two years ago, three
years ago you had some very, very controversial -- I mean very hard-hitting campaigns. That I assume you personally signed off on.
COLE: I do. And I write many of them and they are reflective of my personal thoughts on these very subjects. I've always believed that if I
can speak to the whole person, if I can speak to the person, who they are on the inside not just what they are wearing on the outside. And not just
what they stand in, but what they stand for, then I have built a much more sustainable and more meaningful relationship with our customers.
QUEST: OK, but how do you balance that? What we've seen, and this is not necessarily just about Donald Trump or not just about any particular issue,
what we have seen -- let's take for example in Charlotte, where you know the bathroom ban came in. What we've seen is pressure being put on
companies are now the -- companies are now the mode by which pressure is put on to bear on government officials in some cases. On decisions on
laws.
COLE: Which is an interesting turn of events. But I've always felt that, you know, people say well is your business -- we're public for many years -
- is there a divide between the role of a company and the community? And I've always believed, not only are we connected, but there interconnected.
I think they are the proverbial hand that feeds each other. That's a relationship, and there is a responsibility that we have inherent. They
are our principal stakeholders as business people. How do you provide for their needs? Which in turn should on some level address your own.
QUEST: Without, without blowing yourself up in the process. There's no great satisfaction in pissing off a large number of people, particularly
your customers in process, is there?
COLE: Look. This is not an easy road to go down. But I do think it's one that we're all there. And I do believe every CEO, every company finds
themselves here. And I think either your heart gets you there or your balance sheet gets you there. But invariably hopefully it's the former.
And you got do the right thing. And the right thing often is clear, what is the right thing.
And in my case, it hasn't been hard. Because I think most of our customers think the way we do. They're a little more are progressive in
their thinking. They're a little more progressive in their lifestyles, in their choices, fashion choices, wardrobe choices. And it sometimes I've
been very comfortable staying true to.
QUEST: Kenneth Cole, is good to staying with us. When we come back in just a moment, we're going to be talking about why you believe we are at
the tipping point in the AIDS crisis. A crisis which many people arguably would say is over. We'll have your views after the break.
(COMMERCIAL BREAK)
[16:40:44] Welcome back, QUEST MEANS BUSINESS. Joining me here in the C suite, the designer and activist Kenneth Cole, chief executive. Designer,
activist, chief executive? What's the best name for you?
COLE: All of them. I'm Kenneth. They're all interchangeable. What I do is I connect everything I do with everything else I do I find.
QUEST: Your seriously concerned with one of the biggest, of course is concerning the AIDS crisis. And you are now leading a new campaign that
basically is saying that we are at a tipping point in terms of AIDS. I thought this was a chronic disease that was under control.
COLE: So, it's not. But the first context, I'm the chairman of amfAR, the largest AIDS organization, private AIDS research organization I think, one
of the largest in the world. And I'm also a global ambassador UN, to UN AIDS. So, and putting both of those hats together, one looks at and says,
when I was asked to do one that we are -- amfAR is committed to finding a cure by 2020. I'm better take you to your answer in a second. The UN is
committed a declaration to end AIDS as a public health crisis by 2030. And it becomes clear, the UN can't accomplish its goal unless amfAR
accomplishes its goal. We need a cure because it could take 10 years to produce and distribute it. And then one realizes that in light of all of
that, we're at the significant tipping point.
QUEST: Why? Where is this tipping point taken place?
COLE: We've made progress, people have been healthier. If they have access to the drugs that now exist, which only about half of those of the
37 million people do. Then they can live longer, healthier lives in all likelihood. But what's happening now, we're at this critical moment where
in the next few years, there is a new generation of that's become significantly larger of younger people. And that -- so, the current rate
of putting people on treatment is going to be really hard to put this many new young people --
QUEST: Who is most at risk at the moment? You know, is it for example the gay community in the developed world? Is it in the developing world? Is
it young girls and women in developing world? Which section of society is most at risk?
COLE: Believe it or not, AIDS is still a serious global problem. That is the biggest perception, I'm certain that we all have. And it's a big
problem here in this country. There are areas of this country, pockets of this country where the rate of infection is as high as there is in areas of
Africa. But it is more Third World than it is first world. But it is a global concern. And were at this tipping point. Because as much progress
as we've made, if we don't sustain, sustain the rate of commitment, resources, financial, creative, professional resources, we don't continue
to apply them to this cause, and it answer in any way, shape or form. We may lose control of the virus forever and never again be able to get it
back.
QUEST: I come back to this point, I think it's worth hammering it home. That you know, we have thought with anti-retro viral and the increasing
anti-retro virals in developing countries, that this was under control. You're now telling me that if we don't do more, it's going to get out of
control.
COLE: Yes. And we also have to figure out to do more with less. That's also the problem. More people about to become of vulnerable and at risk.
And then you have people who are -- who are being treated, who are at -- who are lite right now becoming potentially resistant to the existing
drugs. The new drugs cost much more and harder to become available. And there's these young women now who are becoming infected. Nobody ever
anticipated this happening. So, that all happening, that all said, it is believed prevailing option is that if you don't find a cure and/or a
vaccine in three to five years, we will likely lose control of this virus and never again be able to get it back.
QUEST: We're grateful, sir, that you came in today to talk about this. Thank you very much, indeed.
[16:45:00] COLE: Thank you. Appreciate it.
QUEST: When we come back in just a moment, sources tell CNN that President Donald Trump is defiant. He is without regret over the remarks made 24
hours ago, blaming both sides for the violence. It's a developing story. We'll have details after the break.
(COMMERCIAL BREAK)
QUEST: Now sources are telling CNN that President Trump is without regret, their words, over his comments on Tuesday. It's less clear if his closest
allies feel the same way.
John Kelly, who is the new chief of staff pretty much says it all. Sources tell us that the Chief of Staff was very frustrated by Tuesday's event.
But it wasn't that they were at the side. Look at the people standing next to him as he's talking. You've got the Transportation Secretary, Elaine
Chao, one of the few nonwhite members of the cabinet. And his Economic Chief, Gary Cohn and Steve Mnuchin, both leading members of the Jewish
community, listening to him talking about the white supremacist march.
Cohen is reportedly upset with what happened. And it's hard to know what the rest of the White House thinks. Two of his most trusted advisors,
Ivanka Trump and Jared Kushner, they are on holiday. Steve Bannon's future is uncertain by Mr. Trump's own admission. We'll wait and see, is how he
put it. And all of this is the new interim communications director, who's only 28 years old. It's Hope Hicks, a longtime Trump loyalist.
So, put all this together, and you start to ask yourself with these people, and these people, and these people -- a CNN source says the president is
without regret over the remarks that he made over Charlottesville. Mark Preston is our senior political analyst and joins me from Washington.
Without regret, even though the level of a program that's landed on his head is just extraordinary.
MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Yes, but we shouldn't be too surprised, Richard. You've known Donald Trump in his business dealings and
the business world for many, many years. I've known him from the political side. I've never seen him ever back down or really ever offer an apology
or shown regret. So, I'm not too surprised that President Trump is digging in right now. But what he doesn't realize is that he's digging a very big
hole. In each day that goes by, it's going to be harder and harder for him to climb out of that.
QUEST: Mark, I want to take you to this quite quickly. Because I want to cover quite a lot of ground. Firstly, is the White House paralyzed or in
crisis?
PRESTON: It is paralyzed and it has been in crisis. Basically, from day one, Richard. And what we've seen right now is that it has only been
exacerbated by Donald Trump's comments yesterday.
[16:50:03] QUEST: How does this play to the next stage when there seems to be a no legislative agenda. Tax reform doesn't exist. Healthcare has
collapsed in shambles. And all that he has, the President, are these presidential orders getting rid of bureaucratic regulations.
PRESTON: So, let me answer that in the voices of three separate people that I heard from last night. When I was literally on television and they
were texting me. First person, Republican, a friend of Donald Trump's says he can barely watch TV any more. Why? The news is always bad.
The second person, a very prominent social conservative -- this is a group, a voting block that helped Donald Trump win the presidency. Make him stop
was the text that was sent to me.
And then a Democratic lobbyist here in the town in Washington, who is very friendly with the business side, sent me a text that said, Richard, no way
will we get tax reform. No way will we get any infrastructure bill. Nothing will happen this year.
QUEST: Finally, briefly, there is no way -- we can talk about impeachment as much as we like. We can talk about the 25th amendment as much as we
like. We can talk about resignation as much as we like. But Donald Trump is president for the foreseeable future.
PRESTON: He's president for the foreseeable future. The only thing I think that would get him out at this point, is that if Robert Moeller were
to come up -- the independent counsel, investigating any ties to Russia -- was able to unearth something that showed that in fact Donald Trump was
party to the collusion with the Russian government. Having said that, if Democrats take back the House of Representatives in 2018. Come January
2019 guaranteed, they will be issuing subpoenas to the White House requesting information and documents that Donald Trump so far would be
unwilling to give up. But he would be compelled to then produce. That's when things get very ugly.
QUEST: More ugly, all right, Mark Preston, appreciate it. Thank you, sir.
President Trump's top trade official was very blunt on day one of the trade talks with Canada and Mexico. He said for countless Americans, NAFTA has
failed. The U.S. wants a new deal done and wants it fast. I talked to the former Mexican commerce minister, Jorge Castaneda, who said the
unpredictability of the current U.S. president is very likely to threaten the outcome of the talks.
(BEGIN VIDEO CLIP)
JORGE CASTANEDA, FORMER MEXICAN FOREIGN MINISTER: This is a very tough negotiation, which besides has to be viewed in the context of Donald
Trump's unpredictability. His technical negotiators can reach any agreement they want. And he can throw it out the next morning or change it
three days later. As he has already done with many agreements or commitments he has made since he took office in January.
(END VIDEO CLIP)
QUEST: Canada is the other player in NAFTA. America's northern neighbor has drawn up a list of the 10 demands, which is much shorter than the
United States. Perrin Beatty is president and chief executive of the Canadian Chamber of Commerce. He joins me now live from the capital in
Ottawa. So, the talks are now underway. How realistic is it that any meaningful change can be made to a thousand-page treaty before the middle
of next year when the Mexican presidential elections will interfere?
PERRIN BEATTY, PRESIDENT AND CEO, CANADIAN CHAMBER OF COMMERCE: Richard, it depends on what you mean by meaningful. If you mean can we modernize
the agreement, make improvements to it? Sure, we can. But if the intention is to go back and do a root and branch approach to changing the
whole agreement, it's not realistic. That would be a matter of years.
QUEST: One assumes that over the last few months, ever since Donald Trump was president. The sort of modernization you're all talking about, e-
commerce, all that sort of stuff, that's been in the works for some time. And indeed, it was part of the TPP, wasn't it? So, there's a lot that can
just be lifted from TPP, the Trans-pacific and put it into the modernization of NAFTA.
BEATTY: It's already agreed. It's already intended that the TPP would be dropped on top of NAFTA.
QUEST: What's the one thing that Canadian Chamber of Commerce, what's the one thing you want out of this deal?
BEATTY: The most important thing is to do no harm. That our goal should be to not only preserve NAFTA, but to enhance it. To take the most
successful trading relationship anywhere in the world and to make it stronger. It should be when win-win-win. We must not enter these
negotiations on the basis of if you're going to win. I'm going to lose or vice versa. It has to be how do we build something together that stronger
and better.
QUEST: Do you believe that is possible to get a deal?
BEATTY: I do. I was a part of the government in Canada that negotiated the first free-trade agreement with the United States, back in 1988. Was
there as NAFTA came into effect as well.
[16:55:01] And I think it's eminently possible. The question is, what is the attitude that we bring to it. If the attitude is we can only -- one
party can only win if the others lose. That's a pretty bad basis for negotiations. If it's how do we take a good agreement and make it better.
Then we can certainly do that.
QUEST: Do you fear that the poisoned well of trade relations between Mexico and the United States could ultimately doom this effort?
BEATTY: You worry about politics, there's no question about that. When I talked to my colleagues in the business community, for example, the U.S.
Chamber in the United States, they recognize the importance of the trilateral relationship that all of us benefit. Let's take a look at the
automotive sector. Which was plants in all three countries. If we stranded assets in one of the countries and cut it off, everybody would
lose as a result. What we need to do is look at what are the strengths that each of the countries brings to the table. And how can we build a
North American powerhouse that enables North American industry to take on the world?
QUEST: Thank you for joining us from Ottawa, we wish you a good night. Thank you, sir.
We will have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Goodbye dear business councils. It was nice to know you. Be it ever so briefly. But now you're gone, what a
mess is left behind. What is happening in corporate America is that it is slowly, but surely, becoming the moral compass that is forcing the
political agenda. How this plays out is most uncertain for the future. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New
York. Whatever you're up to in the hours ahead I hope it's profitable. I'll see you tomorrow.
END
