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Quest Means Business
Heavyweights Belgium Has Scored A Last Second Win Against Underdog's Japan In The Last Few Minutes, Booking Their Place In The Last Eight With A 3-2 Win Tonight; Thailand Youth Football Team Found Alive in Cave After Nine Days; Mexico's New President Has His First Trade Talks With Donald Trump, President Trump Says He Is Not Planning To Take Any Action Against The World Trade Organization For Now; Trump Predicts Good Relationship With New Mexican President; Philippine Mayor Shot Dead By Sniper; German Interior Minister Agrees Border Control Deal with Angela Merkel; E.U. Markets Fall as Merkel Tries to Save Coalition; Carrefour and Tesco Agree Supply Alliance; Indian Shopkeepers Protest Wal-Mart-Flipkart Deal; LeBron James Joins Lakers for $154 Million for Four Years; Roger Federer Ditches Nike for Uniqlo; Tesla Hits Production Target for Model 3; Brent Crude Price Falls After Trump Tweet. Aired: 4-5p ET
Aired July 02, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BIANNA GOLODRYGA, CNN CORRESPONDENT: And the day is over on Wall Street where even the traders at the stock exchange are glued to work cup. It is
Monday, the 2nd of July. Tonight, Mexico's new President has his first trade talks with Donald Trump. I'll speak to the country's ambassador to
Washington. The U.S. President threatens to take on the World Trade Organization, and shocks just keep coming. Belgium beat Japan in a World
Cup thriller. I'm Bianna Golodryga and this QUEST MEANS BUSINESS.
We'll get to our business agenda in just a moment, but first, it was nearly another incredible story of giant killing from the World Cup in Russia.
Instead, heavyweights Belgium has scored a last second win against underdog's Japan in the last few minutes, booking their place in the last
eight with a 3-2 win tonight.
Amanda Davies is in Moscow. Amanda, quite a game indeed. I was prepping for the show, so I missed all of those last few minute goals, but it looked
close there for a minute, and it actually looked like it would be Japan taking home the victory.
AMANDA DAVIES, CNN CORRESPONDENT: Yes, I can tell you, another absolute cracker of a day in term of the action here. As you said, Japan - the team
ranked 61st in the world to really nobody gave a chance against Belgium that's seen as one of the golden generation of Belgium players, very much
many people's favorite, particularly as this tournament had gone on.
Japan's two nil up from the 54th minute and people thought that that would be it, but no, Belgium - a team, whose mentality is being questioned over
the years, they fought back in quite spectacular style and in the end, it was a 94th-minute goal from Nacer Chadli in the fourth minute of time added
on that has made the difference to absolutely break Japanese hearts, but put Belgium through to the quarter finals, and you sow all on the pitch at
full-time just how much respect both of these two sets of players have for each other. It really, really was not expected to be a game that went as
it did. The way Japan dug deep and really gave Belgium a run for their money.
They were not giving up that lead without a fight. Belgium had to make a couple of late substitutions and really pull everything out of the bag.
Absolute agony for Japan ,but massive, massive celebrations for Belgium into the quarter finals of the World Cup. Actually, only for the third
time, and now, they get to face Brazil, but certainly a huge, huge results for them. Particularly, when people have been questioning whether this is
the year they will finally step up and perform at a major tournament.
GOLODRYGA: Amanda, you know, it's a big deal when we lead the show with soccer. Well-deserved win though for Belgium, quite a day for soccer
indeed in the World Cup. Thanks so much for joining us.
Well, another breaking story tonight, the Land of Smiles lives up to its name. Twelve boys and their soccer coach have been lost in a cave in
Thailand for nine days have been found alive. These are the dramatic first images captured as the international rescue efforts finally found the team
in a last ditch effort.
Medical experts will now be sent in to examine the condition of the boys before they attempt to move them. The boys might have to dive alongside
rescuers to get out. The boys became trapped when they entered the cave - the cave system for a team outing, then a sudden and unrelenting downpour
flooded the team in. The local governor of Chiang Rai says that there is still a difficult road ahead to bring them to safety.
(START VIDEO CLIP)
NARONGSAK OSOTTHANAKORN, GOVERNOR, CHAING RAI: (Through an interpreter). There's still a lot of risks. If they go in without enough air to breathe
and the tunnel closes down, there is still a risk. They need to do more preparation. We will go in there if there's 90 percent confidence.
(END VIDEO CLIP)
GOLODRYGA: Still a risk, but the good news is that they are still alive. CNN photojournalist, Mark Phillips is in Chiang Rai, Thailand where I'm
sure there is jubilation all around that country.
MARK PHILLIPS, CNN PHOTOJOURNALIST: There was. It was an amazing story. There's a feeling that if it went beyond 10 days, then maybe it wasn't
going to have this outcome, but when the authorities told the families that they have found the boys and they've released that video that you're just
showing, the families were overjoyed. This place here, basically, the center where all the rescue workers are, they're all cheering and racing
around.
[16:05:08]
PHILLIPS: It is the Land of Smiles once again. They were smiling from ear to ear. Now, the big problem is, how to get the boys out and what state of
health are they in at the moment. They've been in the cave for almost 10 days. They are sending in a doctor and a nurse that can dive to ascertain
what their wellbeing is, what their health is and then the journey of getting them out.
You've got to remember that these boys have gone in about five kilometers into this cave, it's a long way in and it's going to be a treacherous way
to come out as well. The Thai authorities have been pumping out water. At one stage, they're pumping out 1.6 million liters of water an hour, which
is an incredible amount of water with the hope of lowering the water in the caves so that they could actually can carry the boys out, walk them out.
But at the moment, as we know, the water is still up high and they'd have to dive in there.
GOLODRYGA: They were quite thin and emaciated though. Everyone is cheering that this was the best case outcome that all 12 are still alive.
Is there any sort of indication as to how they got lost and what happened in the first place?
PHILLIPS: Well, the thing is that these local boys, with the local report saying, they played football and it was just - I think there was an outing.
One of the stories we heard was one of the boys had turned 15 or was turning 15 the following day, and they were going for an outing. They went
into the cave system. They've been in many times before. They knew the cave system. The problem was that, they went beyond the third chamber,
which is the main cave and it's that three kilometers in, and they went beyond a point where it's not allowed for tourists to go, but I think being
local boys, they kept on going.
And then, they turned left, there is a T-section, they turned left and they went to a place called Pattaya Beach where they actually got stuck when
there was a tide of water in that the monsoon season heat and the flash flood went through the caves.
GOLODRYGA: Now, they will probably think twice when they see signs like this in the future, but what a wonderful end result here for what has been
a tumultuous few weeks for them and their families. Thank you.
Well, turning back to our business agenda tonight. It's been a nervy start to the third quarter as trade fears come back to haunt investors. The Dow
was off triple digits before paring its losses, and this comes as all size and the global trade war are gearing up for a new phase in the fight. The
White House is drawing up plans that would give Donald Trump more power to rip up the global rule book on trade.
The European Union is threatening hundreds of billions of dollars in new tariffs if the U.S. goes ahead with the plans to target its cars. A new
round of tariffs from Canada just took effect Sunday, and in Mexico, there is a new President about to join the negotiating table. Mexico's next
President has secured a sweeping mandate for political change, Andres Manuel Lopez-Obrador known as AMLO has pledged to break the grip of the so-
called power elite. That starts with rooting out corruption, violence and poverty in Mexico. The President called on his countrymen to get behind
his populist agenda.
(START VIDEO CLIP)
ANDRES MANUEL LOPEZ-OBRADOR PRESIDENT OF MEXICO: (Through an interpreter). I call on all Mexicans to reconcile and put aside their personal interests.
No matter how legitimate they may be, the vested interests, the general interests, as Vicente Guerrero said in the past, "The nation comes first."
(END VIDEO CLIP)
GOLODRYGA: We've heard that before. Mexican voters responded to Obrador's criticism of President Trump. As President-elect, Obrador is pledging a
new era of cooperation with his neighbor to the north. He says, he will try to keep Mexico in NAFTA. He and President Trump have also discussed
the possibility of a trade deal just between the U.S. and Mexico.
He has pushed back against President Trump's plans for a border wall, and he says migration should be driven by choice, not necessity. That means
creating opportunity for Mexican workers in Mexico. Joining me now from Washington Geronimo Gutierrez is Mexico's Ambassador to the U.S.. Mr.
Ambassador, thank you so much for joining us, obviously a blow to your Party, the PRI Party. This was Mr. Obrador's third bid for President of
Mexico. Why was the third time the charm for him in your opinion?
GERONIMO GUTIERREZ, MEXICO'S AMBASSADOR TO THE U.S.: Well, first of all, I would say thank you very much for the opportunity. I would say first of
all that last evening results reflect above all that Mexico is a mature democracy and that we have strong democratic institutions. There has
clearly been a vote overwhelmingly in favor of Mr. Lopez-Obrador that has been recognized by everybody and I think that's very positive.
There is - we respected the result. I think that the Mexican people have expressed obviously their interest, their willingness to move forward in
development and I think that's what explains the results.
[16:10:10]
GOLODRYGA: And yet, it seems to be a clear rejection of centrism and possibly even globalism going forward. We've seen this type of reaction
and move in politics in multiple countries including the U.S. as well. What does this mean for Mexico as a global market?
GUTIERREZ: Well, Mexico is a very open economy with our country with 46 trade agreements worldwide. Over the last 20 years, we have undertaken
very profound economic reforms and I would just point out to the fact that Mr. Lopez-Obrador has already expressed that he believes that NAFTA has
been beneficial to the trade partners and he has clearly stated his interest in making sure that there is a successful renegotiation of NAFTA
and I guess we can expect that very soon, we will be having contacts and there will be contacts with his transition team.
GOLODRYGA: What mistakes do you see now looking back and clearly, the election results - what mistakes do you see that your government may have
made with regards to the Mexican people?
GUTIERREZ: Well, I think there's simply a lot of challenges in terms of first of all, security. There have been certainly issues with corruption
that raise the attention of the overwhelming majority of Mexicans. I think that we have tried to do a very good effort. President Pena-Nieto in my
view conducted very important and transcendental reforms during his first few years in administration. I happen to share the policy orientation of
those reforms, and I think that those reforms will change Mexico to the better.
But again, there is a very lively debate about what are the best economic policies for Mexico. There's a very strong and demanding civil society in
Mexico which is good. There is an open press and this just how it is in democracy.
GOLODRYGA: And we know President Trump today had said that he spoke for 30 minutes with President-elect Obrador and said that they had a very pleasant
constructive conversation. In many ways, President Obrador, he didn't run an election as an anti-Trump campaign, yet, the two of them could
potentially come to head in many issues. There was a contentious relationship between President Trump and President Pena Nieto. What can
you expect to see between these two Presidents?
GUTIERREZ: Well, I think that the fact that Mr. Lopez-Obrador and President Trump has already spoken is very positive. I think there's a
willingness on both sides to try to have a constructive and respectful relationship. Again, I think that has been clearly expressed and stated by
both sides. I think that both countries can have a lot of stake in the bilateral relationship and to the effect that that is recognized by both
sides, I think we will find common ground even on the most complicated issues.
I think that during the campaign, all of the candidates including Mr. Lopez-Obrador were careful. I think he understands very clearly the
importance of the relationship with the United States. He has also expressed very clearly, Mr. Lopez-Obrador that he will do everything that
is available to him, all the tools needed to protect the rights of Mexicans here in the United States and I expect that very soon, there will be
contacts with President Trump's administration and in the end, a successful Mexico is in the interest of the United States, as much as a successful
United States is in the interest of Mexico.
GOLODRGYA: No doubt.
GUTIERREZ: I think that again, if that idea gains traction, I think we are going to be okay.
GOLODRYGA: And does that future hold a NAFTA in its current form or in a revised form at all?
GUTIERREZ: I think that we believe that it is in the interest of everybody to wrap up a negotiation for a new NAFTA as soon as possible. Mr. Lopez-
Obrador has expressed that very clearly. Just this morning, he spoke about proposing to President Pena Nieto having some of his people as advisers to
the negotiating team, President Pena Nieto has clearly expressed his willingness and his conviction to work closely with his transition team in
the benefit of Mexico and I think that's needed and that's going to be very helpful.
GOLODRYGA: Does that include you as well?
GUTIERREZ: Yes, I hope so, at least for a while.
GOLODRYGA: And last question, curious as to whether or not - because I wasn't following it from the Mexican side, what the President-elect's
opinion and his thoughts were on the crisis at the border, in particular with migrants coning through Mexico and families being separated?
[16:15:10]
GUTIERREZ: Well, I think that Mr. Lopez-Obrador makes a very valid point. I think he has clearly expressed that migration should be a decision and
not a necessity. I think he's right in pointing out that we have to do everything we can. First of all, Mexico and then work with the United
States to make sure that conditions in Mexico are as best as possible, so people are not forcing to migration, and I believe that you can pretty much
apply the same principle to Central America.
It's managing migration everywhere on the world. It's certainly a challenge nowadays. I think that there is here, concerning the United
States and it's a legitimate concern about illegal immigration and border security. We understand that concern, but on the part of Mexico, there is
also a concern about making sure that the rights and the basic principles of due process are observed with respect to Mexicans here, irrespective of
their migration status and also, we expect and we want for people to recognize that by and large, Mexicans here make enormous contributions to
the economy and to the society here in the United States.
And I believe that that gives us sufficient common ground to move forward and to do a better job managing the migration phenomenon. I don't think
that the United States can be satisfied with the way we are handling. Mexico should not be satisfied either and I expect that as part of the
transition and the contact we're going to be working very diligently on immigration issues, security and trade.
GOLODRGYA: Mr. Ambassador, thank you so much for your time. We appreciate it.
GUTIERREZ: Thank you very much, it's a pleasure. Thank you very much.
GOLODRYGA: President Trump had friendly words for Mexico's President-elect floating the idea of a trade deal. For the WTO though, President Trump has
a threat. Change or else. And German Chancellor is back from the brink after the issue of immigration threatened to sink her government.
President Trump says he is not planning to take any action against the World Trade Organization for now. Speaking a short time ago in the Oval
Office, the President warned the WTO must change.
(START VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The WTO has treated the United States very badly and I hope they change their ways. They have been
treating us very badly for many, many years and that's why we were at a big disadvantage with the WTO and we're not planning anything now, but if they
don't treat us properly, we will be doing something.
GOLODRYGA: The President was responding to the leak of a draft bill that would expand his authority and apply tariffs as he sees fit, ignoring key
WTO rules. The draft proposal is titled, "The Fair and Reciprocal Tariff Act." Some of the President's own supporters say the acronym is just one
of its problems. Anthony Scaramucci tweeted, "The U.S. FART Act stinks."
[16:20:13]
GOLODRYGA: "American consumers pay for tariffs. Time to switch tactics." Jeremy Diamond is at the White House with more. Jeremy, the President
doubling down again saying that the WTO has treated the U.S. unfairly even though its past rulings suggest otherwise.
JEREMY DIAMOND, CNN CORRESPONDENT: Yes, absolutely. You know, we know that the President has long been obsessed in a way with the WTO and what he
perceives as some kind of bias against the United States. Really, it's not just the WTO that the President has railed against. It's the entire
international rules based commerce system between the United States and other countries.
The President seeing unfair trade deficits and imbalances between the United States and many countries around the world, and so, at his own
request, White House officials drafted this proposal which would give the President a lot more powers to impose tariffs on a unilateral basis and
circumvent many of the WTO's rules. So, essentially skirting the WTO without officially withdrawing from it.
But even as that bill would be dead on arrival in Congress and the President appears unlikely to actually push for that kind of legislation
right now, he is without even those additional powers already pushing the boundaries of the United States trade relations with other countries.
Later this week, he is set to impose $34 billion of tariffs on Chinese goods. China is expected to retaliate and of course, beyond that, we have
these bubbling trade wars between the United States and Canada, the United States and the European Union, so it seems that even without those
additional powers, the President is still able to go out there and go on a trade war footing.
GOLODRYGA: Yes, trade war footing with nearly all of our trading partners internationally. Things definitely are escalating and of course, you'll be
following it for us. Thank you so much.
Well, Donald Trump's fight to protect the U.S. steel industry is actually hurting many American businesses that buy steel to make their products.
Foreign steel now costs much more due to tariffs and the price of American made steel has risen 41 percent since the start of the year. CNN's Clare
Sebastian found out how the trade war is actually playing out on the ground.
(START VIDEO TAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT: Our technology as a manufacturer who manufactures ...
FRANK FATALYN, CEO, FALA TECHNOLOGIES: We don't make products to people, we help them make their products.
SEBASTIAN: The 40-person company about 90 miles north of New York City designs and builds equipments for high-tech industries - semiconductors,
transportation, aerospace.
FATALYN: We start with a raw piece of aluminum, this is actually going to be part of a semiconductor machine. This is our product that goes into
making robots.
SEBASTIAN: In the wake of Donald Trump's election, Fatalyn says that he watched demand double overnight. A surging business confidence sent
manufacturers plowing money to these projects. While, it's still at about 50 percent, it doesn't mean that there is uncertainty.
FATALYN: We were seeing a lot of price increases before tariffs, but the tariffs have made it more uncertain and we are able to talk to our
customers about pricing increases because of uncertainty about material cost, so we have taken our quotes to our customers. We used to hold our
prices for a month, we are now holding them for one week.
SEBASTIAN: Fala says it's already started passing on cost to customers. As Skyline Steel in Brooklyn which makes steel parts for high rise
buildings, that is much more difficult.
ARTHUR RUBINSTEIN, CEO, SKYLINE STEEL CORP.: We have multiyear, long term contracts at fixed prices, so we can't pass it along. The price increases
have been coming very steadily and have been shocking to us because they go up to as much as 40 percent on certain products. So, tubing has gone up
$310.00 a ton.
SEBASTIAN: He expects it at tens, if not hundreds of thousands of dollars this year before he can eventually raise prices. And will your customers
be able to sort out the high prices?
RUBINSTEIN: They will, but in some cases, the overall inflation in the industry with one significant factor could reach the tipping point where
some projects get shelved.
SEBASTIAN: So, overall, you think this could slow construction.
RUBINSTEIN: It has that potential, yes.
SEBASTIAN: After Rubinstein didn't vote for President Trump, but he says, he's done work for him.
RUBINSTEIN: Trump International Hotel, Trump Tower.
SEBASTIAN: And so what's your message for him about this?
RUBINSTEIN: The message is to think before acting. Really try.
SEBASTIAN: Back in upstate New York, Frank Falatyn did vote for Trump and he's still hopeful. Asia is a big market for some of his products, like
these robots used in the semiconductor industry, and he's seen prices falling there and even had product copies.
FALATYN: I hope that tariffs will help us get discussions started with our Asian customers about giving us better access and protecting our
intellectual property.
SEBASTIAN: So you're optimistic?
FALATYN: I'm always optimistic. You have to be in manufacturing because things always change.
SEBASTIAN: Clare Sebastian, CNNMoney, New York.
(END VIDEO CLIP)
GOLODRYGA: Ripple effects of a trade war. Thanks to Clare.
[16:25:14]
GOLODRYGA: Well, New York is just one of the many states whose biggest export partner is Canada. Now, they'll have to contend with new trade
barriers from their northern neighbor. Canada has hit more than 40 U.S. steel products with a 25 percent tariff and a tax of 10 percent has been
levied on over 80 other American items including maple syrup, coffee beans and strawberry jam.
Justin Trudeau says Canadians are polite and reasonable, but won't be pushed around. Joining me now is Sandip Lalli. She is the President and
CEO of the Calgary Chamber of Commerce. Mr. Lalli, thank you - Ms. Lalli, I'm sorry, thank you so much for joining us. Your reaction to what appears
to be an escalating trade war with Canada imposing additional tariffs just yesterday.
SANDIP LALLI, PRESIDENT AND CEO, CALGARY CHAMBER OF COMMERCE: Yes, so we are very much about policy over politics, so our reaction to the tariffs
was to focus in on policy, work through the conversations that we can have with the WTO, NAFTA, Chapter 20 and access to other markets. The fact that
Canada has imposed some tariffs back feels good as a Canadian, but for business, it's not good in any sense to have tariffs either way. We
believe in free trade, and I think it's going to impact the consumers in a way that we haven't seen yet before.
GOLODRYGA: Yes, in fact, you've said that you believe there are business friendly responses that could be used to encourage continued free trade.
It seems however that President Trump, anybody that doubted his policy or suggestion of tariffs as just a negotiating traction or negotiating tactic
for that, now are saying, maybe in fact he meant what he said, what is your response?
LALLI: Leveraging tariffs for a NAFTA negotiation or other negotiations is a political tactic. It just deters from the fact that everything that is
coming into these conversations is very short term thinking. This is what happens when businesses have short term thinking. We need long term
thinking with long term policy and that's exactly where we need to double in on these conversations through business friendly conversations with the
WTO back at the NAFTA table and specifically, for Canada, we need to make sure that our relationships, state to state remain intact.
GOLODRYGA: Canada in particular, Alberta, are there any contingency plans?
LALLI: Well, the Federal government has put in place a stop gap similar to what the United States has done with appeals on the Section 232 tariffs,
however, for Alberta and the Pacific region, we have a very strong and healthy economy here and we are looking at new markets, so we will be
taking our energy which is the world's best produced energy. It's ethical, it's safely delivered to new markets, and that's exactly where these
tariffs come into play, it's that if the United States has upped their investment into oil and gas, well, now China has proposed a 25 percent
tariff on U.S. petroleum goods.
It doesn't actually help the global economy and for Alberta, we are looking at our international trade partners to move our relationships forward, get
our goods to market.
GOLODRYGA: What in particular impact would this tariff have on Calgary?
LALLI: For Calgary, we are very much an international city. We are an economy that is focused on growth. We are strong in our intellectual
property and innovation that we have within our energy sector, our agriculture sector and our health sciences. We have a strong supply chain,
so we have many levers to come into the international marketplace that they are just going to propel us to do that quicker and that tariffs are
actually going to deter our friendliness, let's say, into import-export relationships where they're not wanted.
GOLODRYGA: Well, we hope you stay friendly. We appreciate you joining us. Thank you.
LALLI: Thank you.
GOLODRGYA: Well, coming up, a political lifeline for Angela Merkel as the German Chancellor reaches an agreement with one of her top ministers. We
will be in Berlin next.
[16:30:00] GOLODRYGA: Hello, I'm Bianna Golodryga. Coming up in the next half hour of QUEST MEANS BUSINESS, there's a breakthrough in Germany's
coalition crisis. We'll be live from Berlin in just a moment.
And L.A. has a new king. LeBron James has taken his talent to the West Coast. But first, these are the top news headlines on CNN this hour. The
junior football team missing in Thailand has finally been found alive. Twelve players and their coach have been trapped deep in a network of
flooded caves for almost 10 days.
These are the first images we're seeing of the boys who look emaciated. Rescue crews are trying to deliver some food and figure out how to evacuate
them in their weak condition. A doctor and nurse are also being sent into the cave to check on the group's health.
Journalist Tim Newton says the next step will be getting the team out, a challenge that will take time.
(BEGIN VIDEO CLIP)
TIM NEWTON, JOURNALIST: Now, they've got to try and figure out how to get these surging very weak footballers out of the cave, and that is going to
be an enormous task. Clearly, they had quite a lot of time to be able to find a way to be able to hit up systems and get some medical teams.
They've got some medical doctors who are also divers, who are ready to hit into the cave, they clearly want to stabilize the boys before they try and
bring them out. There's some thought that they may try and bring them out early as tomorrow.
But the most important thing is to try and stabilize them.
(END VIDEO CLIP)
GOLODRYGA: Miracle in Thailand. Also U.S. President Donald Trump says he thinks he'll have a good relationship with Mexico's new president-elect.
Mr. Trump said he spoke to Andres Manuel Lopez Obrador for about half an hour today where they discussed trade and border security.
A controversial mayor in the Philippines has been shot and killed by a sniper. Antonio Halili was referred to by some as the iron man of his
city, and was famous for parading people accused of drug offences. In fact, police say his anti-drug stance may be a motive in his killing.
And it was nearly another incredible story of giant-killing from the World Cup in Russia. Instead, Belgium scored a last-second winner against
underdogs Japan in the last few minutes, booking their place in the last eight with a 3-2 win.
They'll play Brazil who beat Mexico 2-0 in today's earlier game. And breaking news to bring you from Germany, Chancellor Angela Merkel has
avoided the possible disintegration of her coalition after crunch talks in Berlin.
Her Interior Minister who leads one of the key parties in that coalition was threatening to resign over Miss Merkel's policy on migrants. The
political uncertainty dragged stocks lower, and Frankfurt, the Dax has now lost more than 600 points this year.
[16:35:00] Let's get to Atika Shubert in Berlin. Nonetheless, this is quite a life line that Merkel -- that Angela Merkel received last minute.
ATIKA SHUBERT, CNN CORRESPONDENT: Yes, well, I mean, it's taken over 48 hours to get here. This was announcement that was supposed to be made last
night, it went late into early morning and then all day today.
Finally, we have the announcement from the Interior Minister Horst Seehofer that a compromise has been reached, he will stay on as Interior Minister
despite picking this battle with Merkel and threatening to resign, at one point, even saying he was going to resign.
Merkel has just made a statement, saying that they've come to an agreement about a renewed border control policy in Germany as well as a new policy of
transit centers for asylum seekers. So these are the sort of the nitty- gritty details that will come out later.
But for now, it seems that the coalition government is saved. But over the course of the day, the dispute between these two political leaders got
increasingly bitter and personal. At one point, Horst telling this Deutsch newspaper that I will not be dismissed by a chancellor who is only
chancellor because of me.
And I think that just goes to show you the level -- how personal this dispute was between these two leaders, you know, two leaders who have
worked together for the last 20 years as both adversaries and allies. So to finally come to the solution, it's been a while coming, but at least
there's a compromise and Merkel's government is saved for now.
GOLODRYGA: Saved for another day. I'm curious, you say that this has become rather personal. What impact if any have President Trump's comments
about the German chancellor and her stance on migration, and particular had on her as the president has been making them over the past few weeks and
months?
SHUBERT: I think that President Trump's statements have clearly emboldened her critics, especially her critics on migration policy. I mean, this has
always been her most vulnerable spot. The fact that in 2015, she's perceived as the European leader that opened the doors of Europe to tens
and thousands of asylum seekers.
Ever since then, her conservative critics have really tried to pin her down on this issue, and President Trump has clearly done so in tweets, in
statements, and now that kind -- those kinds of statements from President Trump may well have emboldened critics like Horst Seehofer.
So far, she's been able to repel that kind of criticism, but I think she can expect more challenges to her leadership in the future.
GOLODRYGA: It still is a weakened coalition, Atika, thank you so much. Well, the German political clash over immigration also weighed down the
major European markets. Investors also continue to worry about the escalating trade tensions between Washington and Brussels.
The London FTSE was the worst performer of the day down more than 1 percent. Meanwhile, Britain's biggest grocery and Europe's largest
retailer are teaming up. U.K.'s supermarket chain Tesco and France's Carrefour are forming an alliance to drive down supply cost.
The two companies could secure better deals from the likes of Nestle and Unilever. India's shopkeepers are telling Wal-Mart to go back. Thousands
protested Wal-Mart's $16 billion takeover of e-commerce company Flipkart.
The local traders are worried Wal-Mart and Flipkart will force down prices, driving small shops out of business. They want the government to stop the
deal. Mohanbir Sawhney leads the Center for Research in Technology and Innovation at the Kellogg School.
Thank you so much for joining us, and this is really a phenomenon that we're seeing around the world and not just in India, but talk about the
reverberation that this big deal from Wal-Mart has on local mom and pop shops.
MOHANBIR SAWHNEY, MCCORMICK TRIBUNE PROFESSOR OF TECHNOLOGY, KELLOGG SCHOOL OF MANAGEMENT: Well, this has been a pattern in India. The resistance
against organized retail and foreign entry. This is not the first time that Wal-Mart has tried to enter the Indian market and the accusation is
that they're using a back door which is online commerce to enter the market likewise in Flipkart.
But I think this is an overblown fear because 90 percent of the retail sales in India are still in the mom and pop sector and will continue to be,
and it's not just about price, it's also about local service. The real threat that I think people are ignoring is Amazon and that is why Wal-Mart
made the acquisition, this is really online sales as opposed to the mom and pop retailer who are still 90 percent of the retail sales in India.
GOLODRYGA: And in fact, Wal-Mart currently runs 21 cash and carry stores in India, and now says it's been supporting local manufacturing by sourcing
from small and medium suppliers. So as you mentioned, this goes beyond just Wal-Mart and speaks to even larger behemoth like an Amazon.
[16:40:00] What has the government's reaction been thus far to these clashes?
SAWHNEY: Well, the government has to play a balancing act because they cannot liberalize retail market brand retail, so they're going to stand
firm on the physical store firm policy, but I think on the online front, they have loosened the roles that allow these sorts of acquisitions to be
made.
So I continue to think that the physical store front will start soon not get liberalized to that extent, but it's e-commerce that's exploding in
India as well as domestic retail, I think another thing that's lost in this conversation is the fact that retailer like Reliance Retail operates 7,500
stores in India with over 17 million square feet of retail space.
So there's a growth in the organized sector that is coming in the physical retail from domestic players, not just Wal-Mart.
GOLODRYGA: Yes, we -- I think it lost some time in China's growth and continue to not focus as much as we should be on India's growth potential.
What does it say though that while thousands did turn out in protest, it's not nearly the number that had been anticipated.
SAWHNEY: Yes, I mean, the story was that a million retailers will turn out, but you actually saw a few hundred, so this is more of a sentiment
that's expressed with a trade association as well as the unions, but I think that the actual reality on the ground is that people are not as
enthusiastic about the protests that is made out to be.
GOLODRYGA: Mr. Sawhney, great to have you on, thanks for your insights, we appreciate it.
SAWHNEY: Thank you.
GOLODRYGA: And if you want to keep on top of the day's top business headlines in just 90 seconds, then try our daily briefing podcast, it's
updated twice a day before and after the bell rings on Wall Street. You could just ask Alexa or your Google home device for your CNNMoney flash
briefing every week day.
LeBron James has for years said it's his goal to become a billion-dollar athlete. Well, now, he's headed to Hollywood where that dream could come
true.
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GOLODRYGA: Well, the biggest basketball star on the planet is moving to the NBA's most storied franchise. LeBron James has agreed to a four-year
deal with the Los Angeles Lakers worth more than $150 million. The move puts the business-minded king James in the center of the glitz and glamour
of Hollywood.
He'll have more off the court earnings potential than ever before. World Sports' Don Riddell joins me now for the latest. So not quite a shocker.
We know Don, that Los Angeles had been one of the potential landing spots for LeBron James.
But what is it that was first and foremost on his mind, getting another championship or investing in where he could make even more money.
[16:45:00] DON RIDDELL, CNN WORLD SPORT CORRESPONDENT: Well, I think it's kind of all of the above. I mean, of course he is considered to be the
NBA's greatest player of this generation, and he would like to be considered the greatest NBA player of all time.
Going to a major franchise like the Lakers and winning another NBA championship would put him even further into that conversation. But it's
not just about sports, it's not just about titles, it's not just about the money, it's all of it.
You know, he's a big fan of Los Angeles as a city anyway, we shouldn't be surprised by that, he is a megastar in his own right, he already owns two
houses there, his business partners have moved there, housing to Los Angeles as well.
So it is now that this sort of final jigsaw piece has dropped into place, looking at it with a better hindsight, it's as if this was his plan all
along, and he's certainly -- he's hoping that he's going to be winning titles in Los Angeles, maybe not this season, but certainly from year two
onwards.
GOLODRYGA: All right --
RIDDELL: And it's going to be fascinating watching him play there, because with all due respect to Cleveland and Miami which are kind of small markets
when compared to Los Angeles, he will be under a microscope and he will be expected to deliver.
When you think of the other big names like Shaquille O'Neal, Kobe Bryant, Magic Johnson, when they went to L.A., they all won titles with the Lakers
and LeBron will be expecting and expected to do the same thing --
GOLODRYGA: Yes, no doubt, he is thinking about his career once he does retire off the court. But of course the man who many say single-handedly
brought the Cavaliers to the finals by himself. It was joked that it was the Golden State Warriors versus LeBron James.
Is there any potential downside to this move?
RIDDELL: Oh, it is hard to see what down sides there could be because as we are discussing, it's not just about the sport. You know, we know that
he has an interest in film production and of course starring in movies which he already has done successfully.
So you know, there's a very long tale for LeBron James here once he's finished with basketball. But I mean, I think this is going to be very
lucrative whichever way you look at it. And so much excitement in Los Angeles.
You may be aware that they already have another very famous sports star, the football players Zlatan Abrahimovic who certainly still has a very high
opinion of himself, he tweeted just when he heard the news. "Now Los Angeles has a god and a king".
Of course, LeBron James known as King James and well, is Zlatan Abrahimovic a god? He is to some --
GOLODRYGA: In his mind, I guess --
(CROSSTALK)
In his mind, I guess he is. So from one potential god of basketball to a greatest of all time contender to say the least in tennis, Roger Federer is
making some business news as well and his leading Uniqlo.
RIDDELL: That's right, so he has --
GOLODRYGA: Deleting Nike for Uniqlo I should say.
RIDDELL: That's right. He's been with Nike since 1994. He was in first round action of Wimbledon on Monday, Federer of course going for a ninth
title of the all England club. But the talking point wasn't really his win against Dusan Lajovic in the first round. It was the fact that he didn't
have that Nike swish on his shirt for the first time in 24 years -- extraordinary.
The numbers haven't been confirmed, but we understand that this is a ten- year deal worth $300 million, apparently, he's going to be paid that money even if he's not playing, and he's certainly not going to be playing for
another ten years.
Interestingly, he is still wearing Nike shoes, but the one thing he was missing was the RF logo, the Roger Federer logo which has actually become
really iconic in the world of tennis. And Nike apparently still own that.
But as was pointed out, they're my initials, they will be coming with me shortly. But at this point, the RF is not on the Uniqlo clothing. But it
will be interesting because this brand had Lajovic for a long time and they didn't really promote the relationship with him in a way where they could
have really sold a lot of tennis gears.
So it'd be interesting to see if they do something different there with --
(CROSSTALK)
GOLODRYGA: Will be scouting in the RF moniker --
RIDDELL: Yes --
GOLODRYGA: I'm sure, thank you so much Don --
RIDDELL: All right --
GOLODRYGA: We appreciate it. Well, coming up, Elon Musk has been sleeping on the floor at one of Tesla's factories literally. Now, he's celebrating
after the company finally hit its production target.
[16:50:00] (COMMERCIAL BREAK)
GOLODRYGA: It's been a tough road for Tesla, though it may have finally paid off as the company hit its production target, a 5,000 Model 3s per
week. CEO Elon Musk has been sleeping on the factory floor and many cars were built just outside the plant under a giant tent.
The company also had to deal with a small fire and an employee who allegedly sabotaged the factory. Now, the question becomes can they keep
it up? Pete Pachal is a tech editor at Mashable and that's the question, I guess, can they keep it up?
I mean, Elon Musk met the target by burning the midnight oil.
PETE PACHAL, TECH EDITOR, MASHABLE: Yes, totally, it's very good news except it's couched in a lot of bad news because even if you put aside the
scandalous stuff like the employee sabotage and what not, the way they got here, they had to do this whole sort of make-shift production line outside
the factory in a tent.
They had to have employees working, you know, double shift and six days a week, they had this sort of redo a lot of how they build the Model 3, they
reportedly changed sort of how many times they weld, how many spot (INAUDIBLE) they have and or just pushing the equipments to the limits.
So can they sustain it? Probably not in the short term, but I mean, generally, you would think this is -- they got to the 5,000 just by sort of
urging it up and urging it up and instead they really pushed everything to the limit and beyond, can they keep that up?
Probably not, but at some point, they will get there like for real. So you can see how the way the stock reacted today --
GOLODRYGA: Right --
PACHAL: People aren't quite sure what to make of that --
GOLODRYGA: Yes, that sustainability is really in question if you just look at the stock reaction -- oh, but that wasn't their only issue, one thing
that struck me is while so many companies are turning to automation, Tesla may have over relied on automation, right?
I mean, they had to bring in actually more employees.
PACHAL: Yes, totally --
GOLODRYGA: To figure out the problem.
PACHAL: As I understand, one of their conveyer belts just was -- turned out to be completely useless in terms of like speeding up the process so
they go rid of it, used it for something else and they got employees to actually buy it hand and take some equipments to the line that was supposed
to be automated.
So Elon Musk has been very vocal about this sort of with humans greater than robots on Twitter and what not. So really, I mean, what you're seeing
here, the growing pains of a company that is learning as it goes along.
And you kind of saw the counter example today on Twitter with -- actually, it was the CEO for Europe come in like, oh, 7,000 cars in four hours is
typical for Ford whereas you know, doing preferably the same amount in a week or in a -- you know, is what Tesla is capable of.
So you know, it's funny because Tesla's market cap now is probably 10 billion more than Ford, so you know, you figure that out --
GOLODRYGA: It's interesting to see how the company continues its growth cycle, right? Popular products with consumers, Wall Street and the industry
as a whole though still questioning a lot of their decision-making.
PACHAL: Yes, and you cannot overstate how much the company depends on the Model 3 being successful --
GOLODRYGA: Yes --
PACHAL: I mean, no doubt, the trucks, the self-driving stuff, all that's great, but Elon and Tesla need the Model 3 to be a hit and for them to come
through on their promises which is why you see him investing his own time so heavily in this --
GOLODRYGA: Yes --
PACHAL: Tesla is now completely dependent on their ability to deliver on the Model 3 and reach an important milestone in doing that, can they keep
it up as you said at the beginning, that is the question now.
[16:55:00] GOLODRYGA: Always getting higher and higher. Pete, thanks so much for coming in. Well, Donald Trump is hoping the price of gas comes
down soon. The price of Brent crude fell more than 2 percent, adding to the tumble prompted by a tweet from the U.S. president over the weekend.
Donald Trump says he asked the Saudi King to ramp up oil production up to by 2 million barrels a day because the prices are too high. John Defterios
has more from Dubai.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR & HOST OF MARKETPLACE MIDDLE EAST: Bianna, President Trump is rushing to fill a void of crude, he's
actually helping to create due in part to U.S. sanctions on Iran and Venezuela.
He's putting the burden to fill the shortfalls squarely on the shoulders of ally Saudi Arabia. By virtue of their recent OPEC deal, the kingdom is
adding 200,000 barrels a day this month to hit 11 million barrels for the first time.
That is 10 percent of what the U.S. president tweeted for. The two talked on the phone Saturday, raised the issue of oil production, but they seem to
hit a fork in the road and they had very divergent views afterwards.
The president said the king was ready to release up to 2 million extra barrels a day because the price was too high. He has agreed, declared
Trump, a White House statement later walked back the tweet by saying that the king talked about that amount of spared capacity but releasing it
prudently when needed.
Here's a look at who has what when it comes to additional production capacity. Saudi Arabia is the dominant force, followed by a big step-down
to Iraq, the UAE and Russia just under 3 million barrels from the big four players which is historically tight.
Meantime, consulting firm Fast (ph) Global Energy it's clear President Trump wants to wipe out all of Iran's exports, some 2 million barrels a day
by November. Not by accident, the same amount he's asking Saudi Arabia to provide. Bianna.
GOLODRYGA: Essential policy via tweet from the president, John, thank you. And that's QUEST MEANS BUSINESS, I am Bianna Golodryga in New York, the
news continues right here on CNN.
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