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Quest Means Business

Navarro Talks Trade; Tech Stocks Face Fresh Pressure after Selloff; Amazon Shares Drop on Reports that Trump is "Obsessed." Aired 4-5p ET

Aired March 28, 2018 - 16:00   ET




RICHARD QUEST, CNN HOST: Closing bell ringing on Wall Street, goodness, eking out a small loss or a small gain. That will be an achievement today

when you see the graph -- yes. Oh, that's what we want, a strong, robust gavel.

A market that was simply all over the place up 100, down 70. You will see the graph later in the program. It is a sign of the volatility. It is

now over on Wednesday, it's March the 28th.

Tonight, on this program, Donald Trump's top trade adviser, Peter Navarro, talks about tariffs, China and steel and defense. The administration's

policy that he doesn't want a trade war.

Amazon stock is falling on fears the president is obsessed with clipping its wings (INAUDIBLE).

And Facebook tries to win back trust with new privacy settings. Some say it's too little too late.

I'm Richard Quest, live in the world's financial capital, New York City, where, of course, I mean business.


QUEST: Good evening. Before we get to Peter Navarro, I do need to bring you some breaking news concerning the attack on a former Russian spy in the

U.K. The London Metropolitan Police say Sergei Skripal and his daughter likely first came into contact with a nerve agent at their front door, not

at the Italian restaurant in Salisbury, which was also contaminated but apparently the actual point of contamination or initial contamination was

at their home early on. We will have more on the story in just a moment.

First, though, it's been one of the most defining controversies of the Trump administration, the issue of trade, whether it's impromptu tariffs,

torn up trade deals, the 45th president has upended the global economic order in a matter of months.

In a moment you're going to hear from the president's top trade adviser, Peter Navarro, who joins us on this program from the White House.

It all comes as the administration has sealed a new agreement, the first major agreement of the Trump administration with South Korea. It's a trade

deal that as talks continue with China, Canada and Mexico.

And whilst all the countries continue to lobby for exemptions from the U.S. steel tariffs. It gives me great pleasure now to say good evening and a

warm welcome to Peter Navarro, the director of the White House National Trade Council.

Director, thank you for joining us. We have much to --


PETER NAVARRO, DIRECTOR, WHITE HOUSE NATIONAL TRADE COUNCIL: I do remember fondly during the campaign, being your wonderful, beautiful studio way back

when, so it's good to talk with you again.

QUEST: It is and we have much to talk about. I think we need to start with an overarching view, the view is that this administration is hell bent

on rewriting international trade rules in a way that is causing vast disruption and market turmoil.

NAVARRO: So if you look at the international trading system, we have essentially a system characterized by massive trade imbalances driven by

unfair and nonreciprocal trade practices.

And all the president wants to do, President Trump, all he wants to do is have fair and reciprocal trade. And with respect to those massive

imbalances they're mostly the deficits are with the United States. We were on a trade deficit in goods with Europe of about $151 billion a year, 6,000

jobs per billion of deficit. That means we're sending over a million jobs to Europe.

And with China, it is 370 billion so point is, Richard, that this is unacceptable during the campaign, dating back to the June jobs plan speech

and far before that. The president said he was going to come in and get fair and reciprocal trade.

So why is anybody surprised that he is actually doing it?

What a concept.

QUEST: I think it's arguably the method by which it done. Let's take the steel and aluminum tariffs. They were announced in a somewhat haphazard

way. The argument is that they were not necessarily targeted at the worst offenders.

Some say it is Swiss cheese, because of the exemptions that have since been put in place and finally --


NAVARRO: I'm rejecting this narrative totally. What's haphazard about the fact that we went back and the president initially ordered the Secretary of

Commerce back I think it was in April to conduct an investigation of the impact of steel and aluminum imports on national security in the United



NAVARRO: We went through a lengthy monthly -- many month-long process. Interagency process, came out with -- hang on -- we came out with very

detailed reports of the problems and which included the aluminum sector was under siege by about 15 different countries. The steel industry was under

siege about 20 different countries.

And the Secretary of Commerce recommended 25 percent tariffs on steel and 10 percent on aluminum roughly.

So what is what is haphazard about this? We went through a six-month process and came to a deliberative solution that is in the interest of

national security to protect two pillar industries of this economy.

As President Trump has said correctly, you do not have an aluminum steel industry in this country, we do not have a country.

QUEST: Well, you could arguably say the way in which the president casually mentioned it in the White House before anybody --


NAVARRO: -- be specific here. I mean, again, this is a six-month long process nobody didn't see this coming. I mean, come on. We had the

reports come out that it was like hundred-page reports that said here is what we are going to do, went to the president and he did it. What's

haphazard about that?

QUEST: So let us talk about the exemptions of the idea that you have exempted -- with the exception of China -- many of the countries that are

within the target.

NAVARRO: Not many and the exemption goes, it's not an exemption like to get out of tariff free card. Basically, they have until May 1st to come

back with an alternative plan to ensure we have national security interests - steel and aluminum protected with some kind of alternative.

Guess what? Korea came back with that and instead of a tariff, we have a 70 percent in lieu quote on steel and we keep the 10 percent tariff on

aluminum. And the best part of the quota with respect to the Korean situation is that it maintains the integrity of the national security

defense by defending our industry.

So there is nothing haphazard and nothing about letting countries off Scot free, we're just proceeding in a firm but flexible way.

QUEST: There was a disagreement within the upper echelons of the administration, as you will accept there has been in economics generally

over the introduction not only of these tariffs --


NAVARRO: Well, separate that and where you are talking about disagreements within --

QUEST: Gary Cohn, Gary Cohn, for example --


NAVARRO: So here is here is the situation here, we have a very healthy atmosphere inside the White House where we have differing points of view

but at the end of the day once the president hears those points of view, makes a decision then everybody gets in line and that is what we do.

And that is a very healthy process so that that is what we did. Now in terms of the rest of the country looking at this, I can tell you that the

rest of this country wants an aluminum steel industry so we can defend ourselves. And that's what we're trying to do.

QUEST: The tariffs that were announced on China's, same process, I accept. It was a full process, full investigation and then the report but --


QUEST: -- but there is a feeling or a perception that this administration in some shape or form is spoiling for a fight. Some would say a trade war.

I would say just a -- I'll be more neutral and say just a fight.

NAVARRO: So today, Richard, today was historic. A lot of news went on today but 10-20 years from now in the history books this day will be marked

as historic because this was one of the first times an American president has ever successfully renegotiated a horrible trade deal.

And the president did that and what it does is it symbolizes how trade peace can come about and bring about fair and reciprocal trade. This was

the poster child for trade peace through good negotiations with our allies and partners.

What do you not like about this result, today, Richard?

We've strengthened the economic relationship. We've strengthened the national security relationship. We've defended the workers that work in

our factories here in America. And it is all good.

QUEST: Well, I don't want to get too much into the South Korea --


QUEST: -- some people suggest that that deal is effectively most of the -- most of the deal is what was agreed with TPP anyway, that the --


NAVARRO: Are you kidding me?

It has got nothing to do with --


NAVARRO: Are you kidding me?

It is an empty set when you compare that to TPP. What did we do in this agreement today?

Well, first of all, we extended the protection for our light truck industry out to 2041. We were about to get hammered by that, score one for Detroit.

We are able now to sell more cars to Korea. We sell one car --


NAVARRO: -- for every 20 they send us.

And why?

Is because Korea has these huge nontariff barriers to score one for free trade, we were able to get very innovative -- hang on. This is important.

We put in a subagreement on currency undervaluation. As you know, Richard, if you have a country that is undervaluing the currency, that gives them an

edge in their exports, penalizes our exports and results in a higher trade deficit.

These are all innovative, visionary things by the man behind me in that house, who has done just a wonderful job here, since he is gotten here.

We've had the first year of this administration have the most successful year in economics of any modern president you can remember.

QUEST: I want to push forward, if I may, Peter, and talk about NAFTA.

Are you confident that a deal can be reached on the remaining issues, like, for example, national origin, the amount of (INAUDIBLE).

Do you think a deal can be done on NAFTA?

NAVARRO: So I stay in my lane. The man who is going to negotiate this is Ambassador Robert Leitheiser, the United States trade rep. He's going to

do that in close consultation with president Donald J. Trump.

Those two are the toughest negotiators in this country. They can get a good deal. We're going to get a good deal and the people of this country

should be very comfortable with the idea that finally somebody in the White House is looking after their interests.

QUEST: The conversation that the president had yesterday with Chancellor Merkel, this idea now that Germany and France with the United States might

provide a united front against China, against unfair trade practices. This is an interesting development.

NAVARRO: Let me say this, I think it is generally understood that we have a situation where China is not only stealing the intellectual property of

the world from Europe to the United States and Japan. They're also engaged in this pernicious practice called forced technology transfer, whereby a

German company or American company wants to go and get access to the Chinese market has to be a joint venture partner in a minority stake and

surrender their technology.

If you look at some of the best studies of that, they actually come out of things like European Union Chamber of Commerce, the scathing (ph) study of

that, there is a thing called a Mercator institute in Berlin.

So everybody agrees that China really is getting away with murder on intellectual property and, yes, we're working really hard with our allies

and partners to have a united front on this issue.

And this is, again, an example of how President Trump shows leadership not just here in the U.S. but in the international environment.

QUEST: Peter, we have to leave it there. You have other commitments. I could go on much longer so I merely ask for an understanding between us

that you will come back again in the future.

NAVARRO: You know, I loved talking to you during the campaign. This has been a very pleasurable experience and hopefully someday I can get back up

at the studio. Although this isn't a bad digs here, either.

QUEST: Maybe I'll come down to your digs and you can --

NAVARRO: Hey, that would be great.

QUEST: Good to see you, Peter, thank you very much indeed.

Now Donald Trump is reportedly obsessed with Amazon and not in a good way. The shares of Amazon are down very sharply. We'll talk about that after

the break.





QUEST: Breaking news: I talked to you at the top of the program about this. Now let me give you more details about the attack on a former

Russian spy in London. The Metropolitan Police now say Sergei Skripal and his daughter likely first came into contact with a nerve agent at their

front door.

It is where specialists have identified the highest concentrations of the nerve agent to date. CNN's Phil Black is in Moscow to talk tell us a

little bit about this.

But also, Phil, that the international pressure -- I was looking at how many diplomats have now been -- Russian diplomats expelled. I've

forgotten the exact number but it's over 150.

And so, Phil, is the pressure on in the Kremlin?

PHIL BLACK, CNN CORRESPONDENT: It is, no doubt, Richard, that is true. But the (INAUDIBLE) the Kremlin (INAUDIBLE) that have been still very

consistent and sticking to their lines that they had nothing to do with this, accusing them of accusing, deploying this nerve agent is unjust,

there's no evidence. There's been supplied with Britain has (INAUDIBLE) justice department.

But now on top of that, they've dragged all their friends and allies into it as well. We're expected a Russian retaliation to those diplomatic

expulsions but we're not precisely sure when that will happen.

We're told it will at least be equal to what happened to them -- Richard.

QUEST: Now, Phil, the British government have said they shared information with international partners at an unprecedented level, intelligence.

Obviously within the Five Eyes, there was a huge amount of intelligence. But even to other countries they shared unprecedented amounts of

intelligence that proves, they say or at least leads to the logical conclusions that the Russians were behind it.

If this is right, then surely it becomes -- the denials by Moscow become almost laughable.

BLACK: I think that's very much the sense that you get from Britain's allies when they're talking about this. They say on one hand, you've got

a trusted friend in Britain, who's done a thorough investigation and has shared intelligence with us and whose view on most things we tend to go

hand-in-hand with.

And the on the other hand, you have Russia, who has denied, who has shown contempt and sarcasm and who has once again come up with a wide variety of

alternative theories from various levels of officialdom from, Britain did it themselves to America product the nerve agent responsible, to

(INAUDIBLE) in other European countries.

The Russian media was even heard that the Ukrainians may be responsible. SO in light of all of that, that sort of behavior, if you like, it does

seem to have been the total loss of patience among Britain's allies for Russia playing the game this way because it happened before.

They point to the downing of MH17, the Malaysia Airlines flight over Ukraine, where, again, Russian officials put up all sorts of alternative

theories but the West, their allies, they firmly believe that it was a Russian (INAUDIBLE) that was responsible for bringing down that aircraft.

QUEST: Phil Black, who's in Moscow, thank you.

As we continue tonight, they dominate both our lives and the stock market. And when you think about it, the world's most valuable, powerful tech

companies are facing pressures like never seen before.

So here we have the companies. You're well familiar with them, Amazon, Uber, Facebook. Well, its fear of government regulation, safety

investigations or good old-fashioned cash flow concerns, we're watching a sustained selloff in Wall Street's most important sectors.

So you have Amazon, for example, reportedly in President Trump's crosshairs at the moment. Questioning about whether or not they are unfair

competitors against shopping malls, small companies and the like and whether are paying the correct amount of tax.

Facebook, which is trying to satisfy its critics with new privacy settings. Some say too little and too late.

Tesla, of course, sinking once again of fears over its business model and the whole issue of autonomous vehicles and, indeed, relating to that,

Uber, autonomous vehicles and pulling out of various international markets and the question of regulation of the company.

They are household names and they are suddenly taking a serious beating in the markets. Now we begin with Amazon, where the shares fell as much as -



QUEST: -- 7 percent after reports that President Trump wants to go after the company. Now bear in mind this happened. So it was down as much as 7

percent; it rebounded up after -- when the White House denied it was going after Amazon, it went up to about 9 percent, finishes down 9 percent, still

an extremely high value price.

Axios says the president's obsessed with Amazon and is considering new taxes or anti-trust measures. If that is the case and bearing in mind the

significance, well, Clare Sebastian is here to tell us.

So do we know about what the president is allegedly rumored to think about Amazon?

CLARE SEBASTIAN, CNN CORRESPONDENT: According to the Axios report, he is obsessed with Amazon, much more so than Facebook, which has been in the

news much more recently. You never hear Trump talk about Facebook and it's possibly to do with taxes, possibly to do with anti-trust, he thinks

perhaps they're too big. He's called them a monopoly in the past.

But this was up, the mere whiff, Richard, that he might actually do something was enough to sink the stocks.

How much of this is animus against Bezos because of "The Washington Post?"

SEBASTIAN: I would say it's significant part of it. We've actually been looking back at this complicated relationship, Richard. The idea that he's

worried about Amazon is really nothing new. Take a look.


SEBASTIAN (voice-over): Donald Trump's animus for Amazon was a staple on the campaign trail.

TRUMP: I have respect for Jeff Bezos but he bought "The Washington Post" to have political influence and, believe me, if I become president, oh, do

they have problems.

SEBASTIAN (voice-over): He regularly attacked "The Washington Post," owned by Amazon CEO, Jeff Bezos, even claiming Amazon was using the newspaper to

avoid taxes.

TRUMP: "The Washington Post," which is just a ploy for Amazon so that Amazon does not pay taxes.

SEBASTIAN (voice-over): After the election, he added a new grievance, tweeting in December last year that the fees charged by the U.S. Postal

Service were, quote, "making Amazon richer."

Some of this is true, according to Citigroup, the U.S. Postal Service undercharges by $1.41 per parcel. Amazon only started paying sales taxes

in all applicable U.S. states last spring.

TRUMP: Frankly they're putting all the retailers out of business, OK, you want to know the truth.

SEBASTIAN (voice-over): And he's right about that, too, store closings hit a record last year, hurt in part by Amazon's dominance. And that dominance

hasn't gone unnoticed by the president.

This was last June, a meeting of tech CEOs, including Jeff Bezos at the White House.

TRUMP: We have approximately $3.5 trillion of market value in this room. But that is almost the exact number that we have created since my election.

In fact, I think we have you beat by a little bit.

SEBASTIAN (voice-over): And yet if Trump is looking to limit Amazon's power so far that hasn't happened. The company's stock is up more than 90

percent since Trump's election even with Wednesday's losses, helping make Jeff Bezos the richest person in history.

It also acquired Whole Foods last year with no antitrust hurdles. And U.S. cities are fighting to win the company's second headquarters, three bids on

the short list are inside the Washington, D.C., beltway. Amazon had no comment Wednesday on the report from Axios that the president wants to,

quote, "go after Amazon" with antitrust or competition law. And the White House played it down.

SARAH HUCKABEE SANDERS, DEPUTY WHITE HOUSE PRESS SECRETARY: If we're going to talk about it privately and publicly I know it's something that he wants

to see happen. Beyond that I do not have anything for you.


QUEST: All right, $50-odd billion wiped off with more to come possibly.

SEBASTIAN: I think this is the market situation we're in at the moment but if you heard Sarah Sanders, she splayed it out. She didn't deny it.

QUEST: OK, thank you.

Now just Amazon to Facebook, which is trying to win back users' trust with some revamped privacy settings. Dylan Byers in on the West Coast.

Too little too late?

What have they done?

Is this the first in a series of measures they're going to take?

DYLAN BYERS, CNN CORRESPONDENT: I do think it is too little too late. I mean, look, what they are saying to users now is we are going to introduce

new privacy measures so that you have more control over your data and what parts of your data go to third party users.

I think the big problem for Facebook users is they do not, they are not exactly sure why they should trust Facebook this time around, nor is it

entirely clear why it took Facebook so long.

You look at what is up on the screen right there, a lot of what Facebook is doing here is just streamlining privacy policies that are already in place,

trying to make it easier for users to understand what is happening with their data.

And that is one of the key demands that we're seeing from European lawmakers, especially. They want this to be an easier experience for the


QUEST: Dylan Byers in Los Angeles, as we look at these tech companies, thank you.

We turn now to two cutting-edge car companies both in trouble, Tesla and Uber. Both have had deadly crashes in the past weeks and investors are

fearing their futures.

Paul La Monica is here.

Is it just about this?

Because -- or are there other issues about these two tech companies?

PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Well, Uber, as we know, not yet a public company. They have faced many, many --


LA MONICA: -- issues and this is just the latest potential hurdle for them as they look to possibly go public.

With regards to Tesla, I think it is a legitimate worry that we had this fatal car crash in a Model X. The NTSB is investigating. There is no

evidence at all to suggest it has, as of yet, it has to do with the autopilot feature but I think that is something that people are worried

about in the case of both Uber and Tesla as there are more autonomous cars being tested.

QUEST: Paul, thank you.

As we continue, we'll talk more on the trade deal with South Korea and we will discuss exactly where this administration is going. From what we

heard from Peter Navarro, what can we make of a trade policy that clearly puts America first but leaves everybody else wondering where they stand.




QUEST: Hello, I'm Richard Quest. There is a great deal more QUEST MEANS BUSINESS in just a moment. But the chief executive of CNN's parent company

takes the stand in the U.S. biggest antitrust trial, arguably, for decades and biggest trial.

And the stock market malfunction continues. It's been another bad day for some of the big names in tech. And as we continue, this is CNN and of

course, on this network, the news always comes first.


[16:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: At least 41 children -- those victims of Sunday's horrific shopping center fire in Siberia were

buried. A security guard who investigators say failed to turn on the fire alarms is now amongst five people who have been arrested.

At least 41 children are among the 64 people killed and they've been trapped inside the burning building. The White House trade adviser Peter

Navarro says it's a historic day for the United States. The Trump administration has a new agreement with South Korea, at the same time,

China has been given 60 days before Trump's tariffs take effect.

A few moments ago, Navarro told me it's not a get-out-of tariff free card.


PETER NAVARRO, DIRECTOR, TRADE & INDUSTRIAL POLICY: It's not an exemption like that to get out of tariff free card. Basically, they have until May

1st to come back with an alternative plan to ensure we have national security interest in steel and aluminium protected with some kind of


And guess what? Guess what, Richard? Korea came back with that, and instead of a tariff, we have a 70 percent in-alum quota on steel and we keep to 10

percent tariff on aluminium. And the best part of the quota with respect to the Korean situation is that it maintains the integrity of the national

security defense by defending in our industry.

So it is nothing haphazard, nothing about letting countries off scot-free. We're just proceeding in a --

QUEST: Right --

NAVARRO: Firmer flexible way.

QUEST: The tariffs that were announced on China, same process, I accept, it was a full process following investigation, and then the report. But --

NAVARRO: Commence --

QUEST: But there's a feeling -- there's a feeling going -- a perception that this administration in some shape or form is boiling for a fight.

Some would say a trade war. I would say just -- let's -- I will be more neutral and say --


QUEST: Just a fight.

NAVARRO: So today -- look, Richard, today was historic. A lot of news went on today, but 10, 20 years from now in the history books, this day

will be marked as historic because this was one of the first times an American president has ever successfully renegotiated a horrible trade

deal, and the president did that.

And what it does is it symbolizes how trade peace can come about and bring about fair and reciprocal trade. This was supposed to China(ph) -- for

trade peace through good negotiations with our allies --

QUEST: Right --

NAVARRO: And partners. What do you not like about this result today, Richard, we've strengthened the economic relationship, we strengthened the

national security relationship, we've defended the workers that work in our factories here in America and it's all good.


QUEST: Joining me with that source with me, senior fellow at the Atlantic Council. What do you not like about this trade deal? Or this we've

strengthened the workers, we've strengthened this, we've strengthened that.

JAMIE METZL, WRITER, PARTNER IN CRANEMERE LLC & SENIOR FELLOW AT ATLANTIC COUNCIL: It's not a terrible deal. It's an endorsement of the Korea-U.S.

free trade agreement that was negotiated under past presidents.

But President Trump was the one who is saying this is the worst deal ever, he was going to throw it out. And now basically, we have an endorsement of

the very same deal. We have an extension of tariffs on like trucks.

But South Korea isn't exporting any liked trucks to the United States anyway. So we --

QUEST: But they would say and what Navarro did say, it --

METZL: Yes --

QUEST: Proves a point that this administration and specifically on the steel tariffs, he says, look, the prospect of the greater tariffs

encouraged the South Koreans to come back with an offer, an acceptable offer to reduce their exports and still accept tariffs on aluminium.

METZL: So what exports did they reduce? The only export that was actually reduced was steel because they aren't exporting any liked trucks to the

United States any way. And so with steel, yes, there's a reduction, but we have all these exemptions for Canada, for Mexico and for others.

So even with South Korea, exports less --

QUEST: No, he says though, those are not exemptions that are permanent. Those are exemptions temporary to me that are justifiable exemptions,

providing they come back with trade and proposals to reduce the deficits in the future.

METZL: For sure, there's additional leverage because of this focus on steel tariffs. But that's not what the United States is, we are not in the

business of steel, we're in the business of growing our economy.

If everything was about steel and you work in the steel industry, yes, this is great for you. If you're about growing the economy, about the future of

our economy, not the past, about AI and robotics and biotech and nanotech.

What is this administration doing to build that future? Nothing. They're heading backwards. And yes, it's great that they have endorsed the Korea-

U.S. free trade agreement, and that is certainly positive --

QUEST: So --

METZL: But we need a lot more.

[16:35:00] QUEST: OK, but the administration's position is -- and it's an argument that seems to have strong validity. If you don't have a steel

industry, and you're a country the size of the United States, with a manufacturing base the size of the U.S., and you don't have a viable steel

industry, you're not a country.

METZL: Maybe that's true, but I can guarantee you it's true that if you don't have a leading artificial intelligence industry, you are not a

country, you don't have the economy --

QUEST: This wasn't either or --

METZL: Well --

QUEST: It's not an either or --

METZL: It's not an either or necessarily, but what is this administration doing to build those economies of the future. And for our economy, we have

benefitted from the low-cost steel we are getting from other places.

Sure, we need to protect some parts of our industry, but it needs to be done within a comprehensive framework for where we are going as a society

and as an economy. And that's the vision is what's really lacking here.

QUEST: At the end of the day, is it not a philosophical difference between arguably the globalist like Gary Cohn, Tillersons, man, H.R. McMaster who

are now out versus -- I don't want to say, the protectionists because they were denied that.

They would say, no, nationalists for fair trade.

METZL: It's not just globalists versus protectionists. Because if you say that our mission is to support every industry in the United States and to

maximize the benefits to our industry overall.

That doesn't necessarily lead you to say we need to defend just our steel and aluminium industries. What we need to do is to say as a whole, where

does our economy grow? And we are beneficiaries of the free trade system that we ourselves invented and that we have led for all of these years.

And yes, it's great that we stand up for our interest and it's actually very positive that Trump is taking a harder line on China. But it has to

be done within a comprehensive strategy and a framework that to benefit the economy as a whole.

QUEST: All right, so we've now got the steel -- the tariffs, et cetera which all -- you've got the exemptions that we're waiting until May.

You've got with China --

METZL: Yes --

QUEST: Sanctions or tariffs which are on a 60-day consultation period. You've got the South Korea -- I mean, there's a view out there that's

growing, that actually maybe this policy is working. And --

METZL: Yes --

QUEST: People like you don't like that.

METZL: Well, there are parts of it that aren't terrible, absolutely. The hard part of this -- I think I have been calling with you and with others

for years for the United States to be far tougher on China.

But if we're going to be far tougher on China, we need to build an alliance of everybody else --

QUEST: That's exactly what he's done though with Germany and France, with their calls in the last couple of days, isn't it?

METZL: It is potentially, and that's why it's positive. Trump does a lot of bad things or he does something good, I'm happy to say, but we need --

we have a lot more work to do.

QUEST: And we need to ensure that you come back again --

METZL: Look forward to --

QUEST: Good to talk to you, thank you very much indeed. Lawyers for AT&T and "Time Warner" are making a curious argument about their own content.

Now, the latest, the landmark trial has taken place -- after the break.


[16:40:00] QUEST: And all, welcome back, it's QUEST MEANS BUSINESS live from New York tonight, and delighted you're with us. Well, Donald Trump is

reportedly looking at clipping Amazon's wings.

Lawyers for AT&T and "Time Warner", they're in court arguing against the Justice Department which is trying to block the two companies from merging.

Of course, "Time Warner"; owners of Cnn, you got the idea. CnnMoney's Hadas Gold is covering the trial in Washington. Hadas, has it got exciting

yet? Have we got to the good bit?

HADAS GOLD, CNNMONEY REPORTER, EUROPEAN POLITICS, MEDIA & GLOBAL BUSINESS: It is getting a little bit exciting, one of our bosses, Turner CEO John

Martin is actually on the stand right now behind me in court.

And AT&T has made an interesting argument in the last couple of days. They're trying to say, the "Time Warner" content while very important, very

valuable is not as valuable and as important as the government is trying to make it out to seem.

The government is trying to argue that "Time Warner" content is so viable, is what they're calling a must have content, that's things like live news,

what we're doing now and also live sports like NCAA Basketball.

That if AT&T gets some hold of it, they will somehow be able to leverage it in an unfair way that can raise prices, that can prevent competition, that

can prevent innovation.

And AT&T is trying to argue that's not necessarily the case, that also the landscape is changing. But now they're just not convening with other cable

and satellite providers, now competing with Amazon and Hulu, and that this is necessary for them to compete.

And that their content is not so violent, there's so many choices out there. So it's a little bit ironic to hear an AT&T lawyer saying, yes,

content is not as great as the government is trying to make it out to be.

QUEST: When do we get to top CEOs, AT&T CEO and Jeff Bewkes, when are they due to make an appearance?

GOLD: It's actually interesting, we have not received witness schedules quite yet. And part of the reason is that, the two sides are very fearful

of honestly speaking to the media because Judge Richard Leon in this case has been so hard about keeping this tried in the court and not in the court

of public opinion.

He doesn't want any information to really get out. But we do expect those -- the big CEOs to come out in a few weeks, not necessarily any time soon

where both sides are going to start really building their case as one where --

QUEST: Of course --

GOLD: But they will definitely be taking the stance and "Time Warner" and AT&T executives have already been watching the trial, they've been here --

QUEST: Right --

GOLD: Nearly every day.

QUEST: Isn't it really -- I mean, it's not -- you know, if you like, the sexy pictures, the CEO is being grilled on the stand. But I assume the

nuts and bolts of this trial will be the experts.

Those people who have --

GOLD: Yes --

QUEST: Analyzed the voting patterns and the research that shows how things are changing. I mean, the nuts and bolts of it, will be what this is

really all about.

GOLD: Definitely, and both sides have their own expert economists that they plan to call up. We've already heard AT&T trying to pull coals and

the government experts witness, what he is going to say, the surveys that he's viewing, the numbers that he is using.

We're going to see a lot of back and forth about what data is the right data, how was it collected? How does it translate --

QUEST: Right --

GOLD: In terms of what the marketplace looks like. And it all comes down really to the data, because what we really question here is the future.

And as the judge jokes, he wishes he had a crystal ball, but he doesn't. So what he has to --


GOLD: Go off is the data that's presented in court.

QUEST: Another question. And has -- have they agreed the two parties to extend the deal? Because I know there had been some questions over the

expiration of the deal which of course made -- actually happened as result of this, the length of this trial.

GOLD: So the deal has already been extended once, and the current date is in mid to late June. Now if a decision is not reached and a merger is not

complete before then, "Time Warner" has the option to walk away.

Which at this time they're not saying that they would, but that's a possibility that's opened to them. So the timing is very important here.

I do have to tell you, this trial is moving excruciatingly slowly.

Initially, the judge said they were thinking it's going to be about three weeks for a trial, then he said six to eight weeks, we've barely gotten

through a witness a day, and there are 30 witnesses expected for each side.

So this is going to be --

QUEST: Right --

GOLD: A long trial.

QUEST: Well, assume we didn't have any plans for the Summer, so you've got your work cut out for you for the foreseeable future. Good to see you,

thank you --

GOLD: There we go --

QUEST: Thank you. We know where Hadas Gold will be for the next few months. AT&T argues it needs this merger to compete with the giants of the

internet. The web has been a curse for some gift traders.

One company in England has taken advantage of the newest technology and it's doing so to sell old items. Jacob Khokhlov and this Sharon Guster(ph)

have turned their company, it's called Lavish Shoestring into the world's largest online antique store.

As we consider how traders are shaping global commerce.


UNIDENTIFIED MALE: This is the story of how one couple in Oxfordshire, England, began trading antiques to over 60 countries around the world.

They say one man's trash is another man's treasure.

And that's been the foundation on which Jacob Khokhlov and Sharon Guster's(ph) business has been built.

[16:45:00] They say their company Lavish Shoestring is the world's largest online shop for vintage and antique home-ware.

JACOB KHOKHLOV, CO-FOUNDER, LAVISH SHOESTRING: The antiques market has been on decline for the past 20 years because the old fashioned collectors,

they aged, so this is what we wanted to change.

We decided to target younger audience and people who never bought antiques and vintage items.

UNIDENTIFIED MALE: The company stocks items of products, from the decanters and tea pots to plates and vases. The volume and uniqueness of

the individual items can make cataloguing an arduous process.

UNIDENTIFIED FEMALE: Customers want variety of style, so you need a lot of stock, and that's the problem with most antiquers. They would not have the

time to catalogue and put all of that online.

UNIDENTIFIED MALE: That's where Jacob's innovation comes in.

KHOKHLOV: Lavish Shoestring has developed an artificial intelligence base tool that allows us to catalogue antique and vintage items on a massive

scale in real time. We're at the stage now where cataloguing actually is the least time consuming processing allows one to take.

UNIDENTIFIED MALE: This is how they do it. Each object is photographed and processed through image recognition software, which instantly records

the shape, pattern and trademark of the item and fills out the massive data online.

KHOKHLOV: Most of our trade is international. Our biggest market is North America, our second market is Europe, mainly three countries, Germany,

France and the Netherlands.

UNIDENTIFIED FEMALE: And we're working on developing the tool so that we're able to catalogue things and people can read them in China in


UNIDENTIFIED MALE: Europe is the world's largest exporter of arts and antiques. The annual (INAUDIBLE) in the Netherlands is considered the

world's top art industry firm with close to 300 exhibitors.

Top on the table for price increases among collectibles are rare musical instruments who rose in value by 16 percent in 2016. But the most popular

new investment area among collectibles is photography.

The couple hopes to one day sell Jacob's software to e-commerce giants such as Amazon.

UNIDENTIFIED FEMALE: We know that people all over the world want to buy the item because it's come from England. We hope to be -- say like a

liberty to something like that.

We still want to be in business in a 100 years' time.


QUEST: As we continue tonight, it was a largely unchallenged rally for tech shares, now it's come to a screeching halt. The challenges and they

are coming from all sides, it's QUEST MEANS BUSINESS.


[16:50:00] QUEST: Alleged tax threat from the president, data privacy scandal and concerns about safety in driverless cars are confluence events

to wreak havoc on tech stocks.

The video and Tesla down sharply 7,8,9 percent. Look at those prices -- they're down 1 percent today, but yesterday was a senseless off 7, Amazon

down even after the White House denied that tax changes are in month(ph), Facebook rebounded slightly -- let's not get too excited, it's down 17

percent over the last month.

Put it together, let's analyze, the chief strategy officer and head of technology research at GBH Insights. Sir, simple question, is there -- is

-- are the FANG over? Are the FANG finished in the sense of a collective group of companies that are going to have monster growth rates?

DANIEL IVES, CHIEF STRATEGY OFFICER & HEAD OF TECHNOLOGY RESEARCH, GBH INSIGHTS: And for you, this is a defining period for FANG names. I mean,

this is really a FANG train meeting a regulatory train with a collision course.

And obviously Trump in the beltway, you've seen the noise continue to sort of get louder. I think fundamentally, investors have not factored in

regulation into these multiples.

QUEST: Right, but let's go through the individuals. Because there's no common thread in a sense. Well, except maybe I'll give you last

regulation. Facebook privacy now facing an existential crisis.

Amazon is with a story today that the president might want to actually break it up or clip its wings. What do you make of that?

IVES: I mean, look, Trump has sort of had Bezos with a bull's eye in terms of over the last six months. You could say whether it's that Washington

Postings or others -- and this is really what started to happen here now is that Trump, the rhetoric increasing.

But what really caught investors off guard was the tax implications, thinking that they might really try to -- not just from an anti-trust

perspective, but go after Amazon from a tax perspective. We still believe that that's a woo likelihood.

But ultimately, you now have Trump really dead-focused on Amazon, that business model which is obviously a black cloud over shares.

QUEST: But it's extraordinary we have a U.S. president targeting an individual company like our own Cnn in such a way, but that's one thing.

But in such a way as this is extraordinary.

IVES: It's extraordinary and that's why as an investor, and in terms of the streets, these streets never seen anything like it to have someone with

such authority specifically focus on a company, I think that's what caught investors by the surprise today.

QUEST: Right, but if we take for example, all these exogenous events about these tech stocks have happened. But at the end of the day, you and I may

still get an Uber tonight or you call an Uber on our phones, we may still go on Facebook and update our status.

So we're not suddenly going to abandon these companies that have become core to the way we live our lives in the 21st century.

IVES: They've become internet staples --

QUEST: That's utility some would say.

IVES: They're internet, you see all these are staples --

QUEST: Yes --

IVES: And that's why fundamentally, if you look at a Facebook, we will get a worst case, 5 billion of advertising in revenue, about 10 percent could

go away in a heightened regulatory environment that's factored into the stock right here.

When you look at an Amazon, and you know, regards to what comes out in the beltway, fundamentally, we think that's a trillion dollar mark cap in a

year. So that's why as an investor right now, it's a hand-holding period, you have to separate the rhetoric and the regulation from the fundamental


QUEST: Called north-south(ph).

IVES: In our opinion, it's a golden-buying opportunity --

QUEST: And this is not just by on the dips, I mean, this is an opportunity.

IVES: We view these FANG names fundamentally as internet staples. And we view this as just an exogenous event that you -- we're going to get through

and navigate. It's going to be choppy waters navigating through the regulation, but ultimately, we think on the other sides, 6,9,12 months from

now, you look back that this is a buying opportunity.

QUEST: Good to see you, sir.

IVES: Great to be here.

QUEST: Thank you, really sort of put it -- thank you. Now after several days of triple digit moves, the Dow ultimately finished flat, going to show

you the numbers -- we do need to leave you with the numbers because before we take a profitable moment down 9 points from the Dow.

But it just -- look at the way in which it did move. A trophy session, a narrow range, the Nasdaq is up, but its worst losses of the day, tech

stocks was still under pressure, and European stocks more positive.

But that might just be more to do with the fact that they've seen the opening of New York only just after that was often -- that was just by a

quarter of a percent. Zurich on a (INAUDIBLE) but down one and a third percent.

We will have a profitable moment after the break.


QUEST: Tonight's profitable moment, the story of the day of course is trade and the Trump administration's tariffs on steel, aluminium, washing

machines, solar panels and most recently against China.

Well, tonight, on this program, you heard the top trade adviser at the White House, Peter Navarro defend that. All of them would claim to be free

traders provided the trade is fair.

And what Peter Navarro basically told us is that this administration is following through on the policies and promises it made, and nobody should

be surprised. And so far, so good, that seems to be true if you look at the South Korea deal that was announced is the first major trade deal of

the administration.

And one can pick holes in it, certainly pressure was brought to bear through the steel tariffs as against the South Koreans. But the real test

will be against China. And whether an alliance with Germany and France against China to get better terms of trade can succeed.

The reality is though, each time they do this, the markets fall out of bed. And you have to ask, is that a sensible policy that riles the markets every

time you talk about tariffs. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York.

Whatever you're up to in the hours ahead --


Hope it's profitable. We will do it tomorrow.