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Quest Means Business
A Second Huawei Executive Has Been Arrested, And This Time In Poland; Today's Losses On Wall Street Will Be The First In Six Sessions; U.S. Begins Withdrawing Military Equipment from Syria; Canada Grants Asylum for Saudi Teen Fleeing Family; Missing U.S. Girl Found Alive Months After Parents Killed; Trump Says He Won't Declare National Emergency Right Now; U.K. Police Suggest Retailers Prepare for Panic Buying; U.K. Parliament to Resume Brexit Debate Monday; Protesters Demand Justice for Alleged Abuse Survivors of R. Kelly; U.S. Stocks Pause After Strong Start to 2019
Aired January 11, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST, QUEST MEANS BUSINESS: It is a Friday. We sort of gasped our way to the end of the week, but we have an hour left of trade on
Wall Street. Look at this, the gains have gone. But there weren't any. It was down all day, but we nearly went positive once or twice and now off
79 points and a relatively small move when you think of how the day has gone.
Off a quarter percent, off - less than that, less than that. The markets are literally treading water, testing levels and as they test those levels,
we need to understand what is moving the market. U.S. inflation is cooling off for the first time in months. Stocks are snapping their winning streak
after five days taking a breather.
GM is bucking the trend and sees strong sales ahead, including China. This is a bit of relief for the market and the U.S. government shutdown, by
tonight, the longest in history. The economic costs could end up greater than the cost of the wall. We'll explain.
We are live in the world's financial capital, New York City on a cold, Friday, the 11th of January. I'm Richard Quest. I mean business.
Good evening. A second Huawei executive has been arrested, and this time in Poland. The charges are spying for China. Weijing Wang has pleaded not
guilty this morning in Warsaw. He is Huawei's sales director in Poland. A court-ordered Wang to be held for three months and then if convicted, he
will face up to ten years in prison.
Now, this on its own is an interesting side note, but put it together with everything else that's happening between the United States, China, and
Huawei, the company, you start to see just how interesting it is as we try to understand the importance and relationship of Huawei in the commercial
world.
It is the latest in a string of arrests, detentions and threats rippling through the world of international diplomacy and high finance. So, let's
see if we can explain it. First, you have the arrest of Huawei's CFO who was arrested in Canada last month.
Now, the Americans say quite clearly, she helped dodge Iranian sanctions. Then, you get the tit for tat, China detaining these two - they are two
detained - they are Canadians. They are Michael Kovrig, a former diplomat and Michael Spavor, a businessman.
At the same time - and look closely on this, Huawei has been scrutinized around the world. First, of all, you have the relationship down in the
South Pacific as it has been banned in New Zealand and Australia. There are reviews of Huawei and its business relationships and how much it will
be allowed to take part in 5G taking place in the United Kingdom.
They are also taking place in France. You get the idea, and they are taking place in Germany and Japan. Getting a bit crowded as you look at
the European picture.
Japan, as well, we will add in just one more for good measure. And then you have Poland and the arrest of the senior executive. The arrest of
Huawei's sales director. That, in and of itself, is an extraordinary development.
Look at the picture and if you understand where we are going with all of this, you'll see there is one connection. It all leads back to the
relationship between the United States and China. Everything groups around it.
The United States says Huawei is a security threat. If it was a spy novel, would it be a good one? The man to ask is Bob Baer in Washington. He is a
former CIA agent and CNN intelligence and security analyst.
As you listen to the string and mystery of all of this, this is spy espionage and politics at the highest level.
ROBERT BAER, INTELLIGENCE AND SECURITY ANALYST: Oh, absolutely, Richard. You have to understand what Huawei is. It's effectively an arm of the
Chinese military, the PLA- the People's Liberation Army. It answers to their National Security agency. It's called 3PLA.
So what we're afraid in the west is if they get into 5G, if the Chinese get into it, they're going to be able listen to every single phone call using
5G. So this is big-time spying and everybody is catching on.
The Chinese have been at this for years and finally we're starting to put our foot down.
[15:05:02]
QUEST: So the difference here is the arrests and the civilian arrests, the executives from Huawei and Canadians being arrested. Do you imagine back
in the offices of spy masters, they you know how this game is played?
BAER: They do know now, but the Chinese have been using these commercial platforms for years whether they're students or interns or people in
companies to collect intelligence on the west and they're finally coming around understanding that Huawei is effectively an arm of the government.
And it is a matter of getting the evidence on these people, most of it is from intercepts and e-mails and the rest of it and once you figure out
they're acting as agents of Chinese intelligence, you arrest them. And it's not - go ahead.
QUEST: Right, if we look at the string of how everything is put together, how did they unwind all these arrests in that sense? Because if there are
people being caught up in the politics of espionage in this way, does anybody ever go on trial?
BAER: Well, I think the Chinese are going to come back at us and just as they arrested Canadians. You know, they're going to start arresting Polish
and rest of it and it's going to be a hostage situation, like we have with Russia with Whelan. Now, an American being held there.
So it is big politics. You've got the Chinese are expanding very quickly. They're a super power now. And they're going to play hardball with us and
it's not the end of the story. I guarantee you.
QUEST: Bob, thank you very much indeed. Fascinating. So we'll need your expertise to help us understand all of this in the future. Thank you, sir.
Appreciate it.
Now, the showdown between the U.S. and China is number two on the list of risks that the Eurasia Group is worried about. Now, of course, you're
familiar Eurasia is a political consultancy. It says that geopolitical environment is more dangerous than it has been in decades. The erosion of
global leadership, the coalition of the unwilling, the risks of future crises, the bad seeds that are being sewn and the regional issues - cyber
gloves off, European populism. I am surprised to see that at number four.
We will be examining many of these close up in the next few weeks. Look at these because these are the events that are moving the global economy at
the moment.
The events that we'll need to talk about. For example, European populism, coalition of the unwilling, Brexit. We will show you as we go next week.
For example, in London next week. We will be in the United Kingdom. The world, everybody is watching to see how the British Parliament is going to
take on Theresa May's Brexit plan. We will be in London when that happens - you and me. I'll be talking about that.
Then we go to Davos in Switzerland for the World Economic Forum, which is all about global leadership and concerns about populism. And then in
February, Hong Kong - special administrative region. We need to understand what is going on in Hong Kong. And then, finally, we'll be back in
Washington pulling the strands together of all of it as this trade war continues.
The goal here, here on "Quest Means Business," we're going to bring all the world into your doorstep. So we showed you Eurasia Group's top four risks
for 2019. We'll speak to Ian Bremmer in a second, I want to get your iPhones, Samsungs, Huaweis out and go to cnn.com/join.
We picked four of the risks for you, and we want to know which you find most worrying in 2019. Is it U.S.-China tensions? The European Populism,
the gloves coming off cyberwarfare or Nigeria? Which of those risks do you find most telling and most worrying? cnn.com/join.
Ian Bremmer is the President of the Eurasia Group. Good to see you, Ian.
IAN BREMMER, PRESIDENT, EURASIA GROUP: Good to see you, Richard.
QUEST: How are you, sir?
BREMMER: Very well. Happy New Year.
QUEST: You're going to be going to Davos?
BREMMER: I am not going this year.
QUEST: You're not going. Why not?
BREMMER: I am not. Apparently, we are somewhat competitive. I did not know that. Not you and I, I mean.
QUEST: No, no. I apologize. I didn't realize. I wouldn't have put you on the spot.
BREMMER: It's quite all right. No, it's okay. I think it's known.
QUEST: We'll talk about your risks.
BREMMER: Sure.
QUEST: This risks - how would you describe the change in the risk group since last year?
BREMMER: Well, 2019 in and of itself not enormously risky, political risk year because the economy is doing comparatively well and because we're
putting a lot of sticking plaster on top of big structural things.
So, U.S.-China. You're not going to see 25% tariffs on March 1. Trump and Xi Jinping is going to say everything is fine, but you and I know, you just
reported on it with Huawei, the big strategic issues between U.S. and China on technology, on IP, on security, they are getting worse.
And Iran, they're going to try to hold out for the end of the first Frump administration on the Iranian nuclear deal. It's not going to blow up this
year. We're not fixing anything.
[15:10:07]
BREMMER: North Korea, they are not going to denuclearize. They're going to have a second summit. We're not fixing anything. So it feels fine --
QUEST: Do we ever fix anything?
BREMMER: Yes, of course we fix things.
QUEST: Don't we fix things by incremental moves rather than except maybe the Good Friday Agreement or isolated incidents like that. I mean, Brexit,
for example, are we still worried about Brexit?
BREMMER; A little - well, yes, but let me answer your question. We fix things incrementally and we also break things incrementally and right now,
if you look around the world, the trends are towards breaking lots of things incrementally.
Every major international relationship that you and I follow right now is being broken incrementally. U.S.-China, U.S.-Russia, transatlantic, inside
Europe including with the U.K., of course, inside the Middle East.
How about relations with our governments in the U.S., inside those individual European economies. They're eroding incrementally. Not a
crisis, not a disaster, but not the direction we want to go.
QUEST: All right, I love discussing this because how much of all of that, those deficiencies, breakups, breakings, stretching, erosions is because
the elites and probably you and I would consider - would be shoved into that barrel.
BREMMER: Sure, given what we're doing right now.
QUEST: Given what we're doing right now and also, government, particularly, just didn't listen. Just didn't listen, spouted about
globalization, spouted that it was all going to be better and for most people it was not.
BREMMER: That is one of two very big pieces. The first piece is that lots of folks in the rich countries feel like the system is rigged against them
by the elites and a lot of them have a point. The other point that is not really related to that is the rise of a much more powerful China that is
both authoritarian and state capitalist and they're not aligning with the west. They are actually building an alternative, a competitive structure
in technology, in trade and infrastructure. You name it. Those two things are dangerous.
QUEST: And we just pause now and get your immediate reaction. President Trump said he has decided not to do a national emergency on the southern
border right now. He said in a cabinet room round table. "The easy solution is for me to call a national emergency but I am not going to do it
so fast. We want Congress to do its job."
BREMMER: Smarter move for Trump. He's already lost over ten members of the Republicans in the House and four senators saying that they want to
just get the government going again. Most people in the United States are blaming Trump for this shutdown. National emergency - he potentially
erodes most of that GOP support.
Lindsey Graham says go do it. Most Republicans are actually saying, don't. I think this is a smart move on Trump's part.
QUEST: Hang on, if it's a smart move, then the shutdown continues until one side or the other gives in.
BREMMER: Yes, they're going to blame him on a national emergency.
QUEST: Right, but what I mean is, I mean, if he'd done an emergency, then you sort of get the government open without worrying about the wall because
the wall now becomes a different issue on a different column.
BREMMER: Yes, but then it's going to be blamed by a lot of Republicans for the national - it wasn't a popular thing.
QUEST: So why is it a smart move?
BREMMER: It's a smart move because he's actually maintaining support of the people that really matter to him, which are the GOP in the House and
Senate. He needs them. He needs them when the investigations are moving against him and his family and his organization. He doesn't want to lose
those Republicans. They do actually matter to him.
QUEST: This, who ultimately is suffering besides the 800,000 - million people, those Federal workers who didn't get paid today. Who is actually
suffering about this?
BREMMER: No, those are the ones that are suffering. I mean, the unemployment is low as you know in the United States right now, in fact, it
has picked up a little bit because more people that were not employed structurally are coming back on to the rows looking for jobs. A lot of
them over 50 years old, and they're getting trained. That's a good story.
So the economic story in the U.S. is pretty good and the fact that we are scoring an own goal on the longest shutdown is unfortunate, but with the
exception of those several hundred thousand patriotic men and women that work in the government, it's largely a blip. Big exception.
QUEST: Yes, big exception. Good to see you. Look, I want you to ask the question that we've asked, which of Eurasia's group of top risks worries
you most, U.S.-China tension, European populism, cyber gloves off or Nigeria -- the viewer is absolutely split between U.S.-China tension and --
BREMMER: And cyber ...
QUEST: No. Cyber is only 7%.
BREMMER: Stunning, that's disturbing to me.
QUEST: Why?
BREMMER: Because cyber for --
QUEST: State to the viewer.
BREMMER: For 2019, cyber is the one you have to most worry about. When the Russians hit the Ukrainians a couple of years ago, it took 1% off their
GDP, it cost over $5 billion of damage to American and European multinationals. That worries me a lot.
QUEST: Good to see you, sir.
BREMMER: Happy New Year, my friend.
QUEST: And to you, Happy New Year. As we continue, the risks are already hedging businesses where it hurts. There are worrying signs from China as
earnings season begins. This is "Quest Means Business." We are live in New York.
(COMMERCIAL BREAK)
[15:15:00]
QUEST: You are most welcome in to "Quest Means Business" trading post where we are considering whether the winning streak - we had good weeks so
far, five straight sessions and now out and the markets are, well, the Dow is off a quarter. The S&P is slightly less and the NASDAQ slightly more.
So, Josh, the lightning boss. Where are we going with the light today? Are we a red or - yes there we go, it's a straight forward red with all
three markets are down. And it's all about worries on the shutdown. Donald Trump has just said he won't declare a national emergency right now,
but he wants Congress to do the job.
That's not as if he's saying I'm taking it off the table. He's just simply saying I'm not going to do it at the moment. The slowdown in China remains
to be a big issue and we're going to see that in the earning season as it approaches it and we'll be tracking it, of course, as always, with the
earnings share case - the spiral share case.
China is quickly becoming a theme. For example, GM, today Mary Barra, the Chief Executive, she said that GM have had a good year and things are
looking better when it comes to China. They raise outlook, sales are holding up, but contrast that to what we've heard about Starbucks where the
viewers, it was downgraded by Goldman Sachs, I do beg your pardon, I seem to have them in the wrong order. Easily done.
And finally, it's Apple and the Chinese - the story with Apple is the Chinese retailers are cutting the price of iPhones. Apple itself on the
website is not. It's a bellwether for what we've been seeing and we're going to see whether weak sales continue in May.
Linda Yueh is with me, the author of "What Would The Great Economist Do?" She's an economist herself and joins me now. Good to see you, as always,
Linda. The issue here is how much of a role China is going to play as every company reports, we will be demanding to see the China effect.
LINDA YUEH, ECONOMIST AND AUTHOR: Absolutely, Richard. Great to be on with you. I think, certainly, you're absolutely right. Apple is a
bellwether. We've also seen it hit carmakers like Jaguar Land Rover, Starbucks, and what is really picking up is that of course, China's economy
is slowing. So that means that people feel less wealthy.
And so, even though in absolute terms, the economy is still growing at over 6%. The latest retail sales figures were 8.1%. That looks impressive
except that is the slowest since 2003.
[15:20:03]
YUEH: So, as you know, consumption is about how people feel about their income and that's why I think a lot of these big companies, especially
Apple, significant shares of their sales are in China are going to have to transition to a slower growth China and you know that kind of transition is
not easy to do especially when you've got trade tensions with the U.S. further dampening the cyclical slowdown you see in China.
QUEST: How far is China along the road of the soft landing or, if you like, the leverage restructuring. Taking the debt out of the system that
it needs to do. How far along would you say it is in this process?
YUEH: It's really hard to say. We know the Chinese government has, of course, begun to tighten their watch on what's happening with debt, but
because we are, as I mentioned, in a kind of both a cyclical slowdown and a transition where China is trying to get a more balanced set of growth
drivers, growing via its own consumers, it doesn't want to clamp down too much.
So, what you see is a very strange sort of slight loosening of credit, cutting of reserve requirements in certain areas to get lending going.
That doesn't help debt, but, Richard, the biggest thing, of course, is China has a fiscal stimulus equal to 1% of GDP national output this year
and that is mostly geared at tax cuts for consumers and for businesses who are - whose production is being hit by higher tariffs coming from the
United States, not just in terms of sales, but also imports.
QUEST: Bob Baer at the beginning of this program, we were talking about the arrests of the Huawei executives in Poland and then we looked at all of
the others, Bob Baer essentially says Huawei is an arm of the Chinese government. Well, that might be his view, but on the wider issue of the
importance for the Chinese government of protecting companies - its own companies, how significant?
YUEH: It's significant. I think there have been, of course, a lot of - Huawei has been under scrutiny for quite some time. As you know, the U.S.
and Australia neither of them have allowed Huawei to bid for government contracts even though it is the world's biggest telecom company.
So I think the ratcheting of pressure on Huawei has led to of course, attention of a couple of Canadians and potentially really heightening
pressure. So, I think what we really see is a heightened sense of distrust.
As you know, Huawei denies that they engage in espionage and we should probably mention the daughter of Ren Zhengfei, who is detained in Canada.
That was because of Iranian sanctions. So there are different things going on here.
But I think, the overall corporate picture is that China is keen towards multinationals to access global markets. One element of the trade war that
doesn't get discussed a lot is this restricting investment and retaliation on both sides. That's not going to help resolve that.
QUEST: Good to see you, Linda.
YUEH: Likewise.
QUEST: Thank you, as always. Today's losses on Wall Street will be the first in six sessions. Before that, U.S. stocks have made their best start
in more than a decade. I'm joined by Luke Tilley, he is the chief economist at the Wilmington Trust. And it is very good to see you, sir.
Thank you. A warm welcome.
LUKE TILLEY, CHIEF ECONOMIST, WILMINGTON TRUST: Thank you for having me.
QUEST: Looking at the year as it started, how different it is two weeks and ten days in than as we left for our Christmas lunch?
TILLEY: Right, it was quite different from the quarter that we finished with at the end of 2018.
QUEST: Yes, what changed? Nothing.
TILLEY: Well, a lot has changed in terms of the news and we think the market was oversold. So heading into the fourth quarter, everything seemed
fine and then we were essentially hit with three big uncertainties.
One, we started to see the slowdown in the U.S. economy, which for some of us was not all that expected. But we started seeing it in company earnings
reports. We were also, I say, the market got a little bit concerned about Fed hikes and how far the Fed was going to go in 2019 with rate hikes and
then the third one, of course is the trade and tariff situation with China.
QUEST: So on that issue, what, the environment, if I understand you right, has changed. The facts. I always remember that famous J.K. Galbraith
line, what do you do when you the facts change, sir? And what do you make now of whether this is a buying opportunity? Are we heading to the next
leg up or is the risk still outweighing the rewards?
TILLEY: Look, risks are still present, but in our mind, it was a buying opportunity and in Wilmington Trust, we actually moved a bit more of our
allocations in the U.S. large cap in the month of December. Because if you take those three risks in turn, one, we thought that the slowdown of the
U.S. economy was expected. We don't expect it to keep up the same rate as it did in 2018.
Over the course of the fourth quarter and actually yesterday, Chairman Powell seemed to cut back on the expectations of Fed rate hikes. Really,
the China trade dispute is really the last big one out there and our baseline expectation is that it will turn out okay.
[15:25:00]
QUEST: So, at lower growth rates in 2019, can existing -- and we're going into an earnings season -- can existing earnings per shares and price
earnings ratios be justified? Does the market still look expensive?
TILLEY: It looked a little bit oversold when we got to about Christmas week and there was so much of a down draft. So the market probably got
overpriced and a little too excited near the end of September, but then the selloff was a little bit extreme, which explains our decision in December.
QUEST: Right, but does that mean we have now moved back into a better position for a more solid, strong growth forward?
TILLEY: Right, as we started this year and equity markets have recovered a little bit, it looks much more reasonable than it did just a couple of
weeks ago. So we expect about 2.25% growth in GDP this year - that is supportive of revenue. It is supportive of earnings growth, just not
nearly to the extent that we had last year.
QUEST: Finally, bonds which is always sort of - it's always there, and no one really likes talking about it too much. But as the rotation, you know,
the flight to bonds and flight to quality and safety, is it time to sort of put bonds back on the shelf?
TILLEY: Well, they probably got a little bit too much of a bit of course, in this risk off move. But really the question going forward in 2019 is
how high is inflation going to go and how strong is the growth going to be? We don't expect inflation to run up very high.
QUEST: Two.
TILLEY: Two to two and a half percent, something like that. So that should be supportive of a little bit higher yields from where they are now,
but we are pretty close to the top of the range that they will end up in this cycle, we think.
QUEST: Fascinating. Thank you.
TILLEY: Thank you.
QUEST: Thank you for coming to talk to us. Thank you very much, indeed. As we continue, we need to understand the U.S. government shutdown. Let me
put it to you this way. Think of it this way.
If you didn't get paid today or whenever your pay day is, how long would it be before you would be seriously thinking, what next and how am I going to
pay the bills? Think about it in your terms. After the break.
(COMMERCIAL BREAK)
[15:30:00] QUEST: Hello, I'm Richard Quest, we have so much more QUEST MEANS BUSINESS in just a moment. Sony is facing protests over its record
deal with R. Kelly. I'll speak to the producers of the explosive new documentary on his life.
And Brexit is on the way and the police in London send an unusual warning to British shopkeepers to be on their guard. As you and I continue, before
any of that, this is Cnn and here on this network the facts always come first.
U.S. administration official tells Cnn the first U.S. military equipment is being withdrawn from Syria, marking the beginning of President Trump's
plan. Back in December, Mr. Trump announced he was pulling all troops out of the country. The decision drew sharp criticism from U.S. allies.
The Canadian Prime Minister Justin Trudeau has announced that Canada has accepted the asylum request for the Saudi teen Rahaf Mohammed al-Qunun.
The 18-year-old says she flew to Thailand to escape her family who were threatening to kill her. She has now left Bangkok already after a stop-
over in search for a start of a new life in Canada.
Missing 13-year-old Jayme Closs was found alive after disappearing three months ago. She vanished the day her parents were found fatally shot in
her home in the U.S. state of Wisconsin. Authorities have now arrested the man suspected in her kidnapping and her parents murder.
Moments ago at the White House, President Trump said he will not declare a national emergency over the border with Mexico. At least not right now.
Instead, he's calling on Congress to act. The U.S. government shutdown will make history tonight as it becomes the longest ever.
The two sides don't even appear to be on speaking terms at the moment. Tomorrow will become the U.S. government's longest shutdown. According to
S&P, it will only take two more weeks for the economic costs to pass the $5.7 billion that the president says he wants for the border wall.
And think about this, all the while, the impacts of the shutdown continue to pile up, and it's fascinating because you can't necessarily see them.
Well, just look at them. They're coming up on the screen next to me. Seventy or more consequences. Investigations of fatal accidents being put
on hold by the NTSB.
Training for firefighters is being halted. Miami International Airport closing one of its terminals early for three days, and the list goes on and
on and on. Eleni Giokos is here. We don't see it, the lights --
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Yes --
QUEST: Stay on, the costs keep going, the planes keep taking off. But you're telling me, there are parts of the economy where it's the most
affected.
GIOKOS: Exactly. I mean, what we're seeing right now is something that people haven't really been talking about is economic data. And I know that
we perhaps take it for granted because we see these releases week on week. But the Federal Reserve Chairman Jerome Powell is talking about economic
data not being released and affecting the way that the Federal Reserve going to be making its assumptions on interest rates.
And remember when inflation comes out or jobless claims out or GDP is out, then we receive dramatic market movements depending if it's negative or
positive. And if we don't get these numbers out right, it means that it would create uncertainty in an already market that has so many problems and
we just don't know where we're going, right --
QUEST: That's on --
GIOKOS: Is the issue --
QUEST: That's on the very big level of the Fed and the --
GIOKOS: Exactly --
QUEST: U.S. economy.
GIOKOS: Yes --
QUEST: What about individual areas, sectors, agriculture --
GIOKOS: Yes --
QUEST: For instance.
GIOKOS: Agriculture is really important. So the U.S. Department of Agriculture releases this world agricultural supply and demand estimate
report. And what's really important there is the word "world", right? This is for the entire globe.
We're talking about assumptions and, of course, data coming through on corn, soybeans, rice, wheat and all sorts of commodities that you could
possibly imagine. It's the world report. In terms of supply and demand dynamics.
QUEST: Right, but, surely, there are many private companies --
GIOKOS: Yes --
QUEST: Trading commodity companies that are producing similar data. In the same way economically, I mean, they may not be exactly right, but there
are plenty --
GIOKOS: Yes --
QUEST: Every bank has an entire raft of them.
GIOKOS: It's such an important question. But let me tell you, a lot of these banks -- yes, I'm actually looking at some of the price movements on
some of these commodities, and they're all sitting in positive territory they've been rallying on the back of all of this.
But Richard, yes, private companies are trying to get data and they're all scrambling right now. And the reasons that these numbers are important.
QUEST: Very important, but not before we've heard President Trump.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Sign in Congress, making sure that everybody is going to be paid immediately upon when this is over.
But I just really appreciate the fact that they have handled it so incredibly well. And many of them agree with what we're doing. We have no
choice -- Steve, go ahead.
UNIDENTIFIED MALE: Twenty four hours ago, you were saying you probably wanted to declare a national emergency.
[15:35:00] TRUMP: No, I said I could do it. But it's -- well, I'll tell you what? It's the easy way out. But Congress should do this. This is too
simple. It's too basic. And Congress should do this. If they can't do it, if at some point they just can't do it, this is a 15-minute meeting.
If they can't do it, I will declare a national emergency.
I have the absolute right to do it. It says as clear as you can. Now, what will happen? I'll be sued. It will be brought to the Ninth Circuit,
and maybe even though the wording is unambiguous, just like with the travel ban, it will be appealed to the Ninth Circuit and we'll probably lose
there, too.
And then hopefully, we'll win in the Supreme Court. But, that's what happened. You can take the most perfectly worded document as we have in
this case and they'll always bring it to the Ninth Circuit. And then you never know what's going to come out of the Ninth Circuit, and you never
know what's going to come out on appeal.
But fortunately, we have the Supreme Court that's treated us very fairly. So, I'd rather not do it because this is something that Congress should
easily do. This is something that the Democrats should do.
And I don't want to give an easy way out of something as simple as this. Not only simple, it's easy, and it's going to -- you know, we have a
country that is under siege. You could actually -- you know, a lot of people don't like the word "invasion".
We have a country that's being invaded by criminals and by drugs, and we're going to stop it. So, I want the Democrats to come back to Washington and
vote. Thank you very much. Thank you, everybody.
(CROSSTALK)
UNIDENTIFIED MALE: Thank you --
TRUMP: Thank you --
UNIDENTIFIED MALE: For such a --
(CROSSTALK)
QUEST: All right, that's the president, Ninth Circuit he is referring to there, of course, is the California Circuit. The Ninth where many of these
cases go. But back to the data that is the sort of data that has not been produced that could cause economic effect of farmers for example.
GIOKOS: Absolutely, so if you're a farmer and you don't have supply and demand numbers, you don't know how much to plant, you don't know how many
seeds to buy as a start. If you're trading in futures and you know we've got a lot of traders that focus only on soft commodities and grants.
They don't know what to do. They just don't know what the environment is going to look like in the month of January, and January is particularly
important because it actually sets the tone for the rest of the year.
QUEST: Good to see you, thank you very much, you're heading back to --
GIOKOS: Finally, tomorrow.
QUEST: Johannesburg, it's been lovely having you here.
GIOKOS: It's been good, Richard.
QUEST: And you, thank you. Safe travels and get back to work reporting what's the business of --
GIOKOS: I've been working really hard here.
QUEST: Yes, the business of Africa.
GIOKOS: I'll see you back in Jo'burg.
QUEST: You get one.
(BELL RINGING)
When we return, Theresa May's cabinet makes a last-minute push, yes, Brexit deal over the finish line. The foreign secretary says if MPs rejected
Brexit itself, it could unravel.
[15:40:00] (COMMERCIAL BREAK)
QUEST: It would be interesting if it wasn't so serious. It would be a movie, a horror movie if it wasn't so desperate. Panic buying, stockpiling
of food shortages, and this is from the British police who say retailers may need to hire extra security if there's no deal on Brexit and the
shelves start to empty.
The British retail consortium says its members are working with police to keep shops running smoothly after Brexit. The British Foreign Secretary
Jeremy Hunt is warning the Brexiteers that rejecting Theresa May's deal next week could lead to no Brexit at all. Bianca Nobilo is in London.
Explain the logistics for how rejecting Theresa May's deal leads to a no Brexit?
BIANCA NOBILO, CNN CORRESPONDENT: Well, the concern is that if there's no majority for her deal and it can't get through with any amendments, then
parliament will be staring down the barrel of a no deal Brexit. Now, we know one thing, and that's the fact that there's a majority in parliament
against a no deal.
As it stands, the default option is Britain will just crash out at the end of March. But that could change. We are living in unprecedented times,
parliamentary convention is being broken. So there is a concern that the Prime Minister might have to extend article 50, if there was enough
political pressure on her.
If perhaps there was a series of votes in parliament which indicated that there was a majority in parliament against no deal. Again, and to extend
article 50, she might be pushed into doing that. Now, if she starts to kick the can down the road, the only likely option then is a softening of
Brexit because that's the only way she can get more MPs on side for her deal.
The opposition party, the Labor Party will be more likely to get on side if for example --
QUEST: Right --
NOBILO: The prime minister committed to remaining in a Customs Union. So it's only going to get watered down --
QUEST: She is going to lose --
(CROSSTALK)
NOBILO: For the Brexiteers says it's nothing.
QUEST: She's going to lose on Tuesday. Well, the point that --
NOBILO: Only a miracle, yes --
QUEST: Yes, right. So let our discussion move forward on that basis. There we go. She loses on Tuesday, she then only has until Friday to bring
plan B forward. Europe must be aghast of what it sees is about to happen next week.
NOBILO: Yes, you can only imagine what the Europeans are thinking. They've been singing off the hymn sheet -- the same hymn sheet this entire
time, and the British parliament still can't come to any form of consensus. The Prime Minister would be expected to return to Brussels to see if she
could get any more re-assurances from them in the event that her deal fails.
But realistically, she'll have to try and heavily amend it, and listen to parliament and take some of their suggestions on board. Otherwise, we are
looking at a no deal or an inevitable extension of article --
QUEST: Right --
NOBILO: Fifty which could potentially be for a second referendum.
QUEST: Bianca, see you in London next week. A lot of times ahead, thank you.
NOBILO: See you then.
QUEST: Marjorie Chorlins is the executive director of the U.K.-U.S. Business Council or U.S.-U.K. Business Council. She joins me now live from
Washington. This is a mess, and let us assume, let us assume that Brexit is going to happen. So, saying you wish it would be reversed or not happen
is not an option. What do you now want out of this?
MARJORIE CHORLINS, EXECUTIVE DIRECTOR, U.S.-U.K. BUSINESS COUNCIL: Well, Richard, first, I thank you for having me. What business is looking for in
this instance and has been since the June 16 referendum is certainty and clarity about the way forward.
Business prefers to operate in that kind of environment, and we're looking for that here. We think that a vote on the withdrawal agreement, whatever
the form of the withdrawal agreement is critically important as long as it includes the transition period so that business only needs to adjust once.
QUEST: Do you agree with the president who basically says Britain just needs to get out, have as little to do on this Customs Union in the single
market -- I'm paraphrasing here, but basically that will enable the U.S. to do big trade deals with the U.K..
[15:45:00] CHORLINS: Well, I think it's important to remember that this was a decision that was taken by the British people. So, it's really up to
the British government to decide in its negotiations with Europe what the form of their future relationship will look like.
Depending on that relationship, obviously, we'll be able to negotiate a deal between the U.S. and U.K. But until we know the form of that future
relationship, there's a limited amount we can say about what we would expect going forward --
QUEST: Right, I understand with the trickiness, if you like, of all of this. But for your members of the U.S.-U.K. business council --
CHORLINS: Yes --
QUEST: And the prospect of a free trade agreement between or some form of preferential trade agreement between the U.K. and the U.S., which does not
exist at the moment would be important because as everybody keeps saying, the U.K. trades with the U.S. on the moment on WTO terms.
CHORLINS: Well, that's absolutely right. We would need to negotiate a new trade agreement between the U.S. and U.K. But again, until we know what
the relationship looks like between the U.K. and EU, it's really hard to say what the structure or breadth of the U.S.-U.K. would look like. But
yes, of course, we would have to negotiate a trade agreement.
QUEST: How important is it to you and your members, particularly on the U.S. side that the U.K. maintains single -- not single market access,
that's never going to happen in their terms, but Customs Union so that goods coming in can be transferred freely with other EU members?
CHORLINS: Look, for business, the most important thing is that data and goods and services and people are able to flow seamlessly as possible
across borders. If that means staying in a Customs Union, that would certainly allow for free-fall of goods.
We would like to see whatever the arrangement is allow for that as seamlessly as possible.
QUEST: Marjorie, you will be joining the rest of us watching with bated breath next week, and indeed, we are just much away nine weeks away -- only
10 weeks away from Brexit day itself, thank you, we'll talk again --
CHORLINS: Thank you.
QUEST: Thank you. As we continue, an award-winning singer on allegations of abuse and protest. The details on the latest controversy surrounding R.
Kelly after the break.
(COMMERCIAL BREAK)
[15:50:00] QUEST: Protesters are urging Sony Music to drop R. Kelly after an explosive documentary series which brings to light multiple allegations
of sexual abuse. People chanted outside Kelly's studio in Chicago earlier this week, and on Friday, a women's group planned to fly an airplane towing
a banner over Sony Music's office in California, urging the company to drop the artist.
Now, the series, which was a six-hour documentary "Surviving R. Kelly" details two decades of allegations against the singer. Prosecutors in
Illinois and Georgia are now looking into the allegations that were outlined in the documentary. To give you an idea, here's a clip.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I felt like my silence allowed it to continue.
UNIDENTIFIED FEMALE: I worked up the courage to come forward and tell my story.
UNIDENTIFIED FEMALE: A part of me always felt like maybe I did something for him to treat me that way.
UNIDENTIFIED FEMALE: I want my story to be heard so people could take this situation seriously.
UNIDENTIFIED FEMALE: But when I found out it wasn't just me.
UNIDENTIFIED FEMALE: I just don't want it to get any worse.
UNIDENTIFIED FEMALE: And it was -- it just kept going and going and going.
UNIDENTIFIED FEMALE: I just wanted to know that it's not -- you know, you're not alone.
(END VIDEO CLIP)
QUEST: Kelly has consistently denied all the allegations. His lawyer has called the lawsuit, quote, "a collection of -- on the program, quote, "a
collection of half truths, distortions and outright lies." Joining me now are two of the documentary executive producers Tamra Simmons and Jesse
Daniels. Both of you, thank you for joining us.
Tamra Simmons, this documentary, the reaction has been quite extraordinary as a result of it. What is it you want to happen next?
TAMRA SIMMONS, EXECUTIVE PRODUCER, SURVIVING R. KELLY: Well, you know, we're just thankful that the women's voices are being heard. The survivors
and the families. What we want to see next is basically these families reunited with their daughters that they haven't seen in years, and they
haven't heard from in years.
And they missed birthdays and they missed, you know, Christmases and holidays --
QUEST: Yes --
SIMMONS: And things like that.
QUEST: Jesse Daniels, I mean, the allegations are serious, they are strong, but so far, Kelly has not -- he's been acquitted once in the past
of pedophilic charges, but he's not been charged with anything else so far.
JESSE DANIELS, EXECUTIVE PRODUCER, SURVIVING R. KELLY: That's right. So there certainly have been allegations that have lasted, you know, somewhat
around 30 years now. But we hear of investigations happening now, and we're not a part of those investigations, so it's hard for us to comment on
what's happening now.
All we can hope for is that people continue to talk about the documentary, the people continue to support our survivors and we'll see what happens
from there.
QUEST: I guess the -- what I'm hinting at here is how much of this -- to either of you. How much of this is trial by television when the proper
place to be looking at these matters is a court of law?
DANIELS: Well, it's a good question. I mean, we're here now talking about it, and there's so much, so much -- so many conversations happening because
of the documentary. And, you know, I'd have to ask myself, would this be happening now without it?
So we're just proud that people right now are talking about it. That people are taking action and we'll see what happens from there.
QUEST: Right, tomorrow, to the point about from your point of view, as television executive producers, and on this program we have done an
enormous amount, obviously, on the business side of this. How companies have looked the other way for so many years on the whole question of sexual
harassment, abuse.
This is a far greater case than that. But Tamra, do you think Sony Music has a responsibility here that they have not lived up to?
SIMMONS: Well, I believe that, you know, it doesn't matter what industry it is. These women, you know, especially like black women, they don't come
forward, they don't speak out. And it's not looked upon in our community to do that. You know, and you receive a lot of backlash and you're trying
to take a black man down and things like that.
But it's not that. It's giving these survivors a voice --
QUEST: Right, so --
SIMMONS: And allowing them to be able to come out.
QUEST: Right, so, finally, Jesse, this point, what is it you want? Do you want Sony to fire and to take the backlog down as Lady Gaga has done
denying or at least recanting on her previous comments and taking it off Spotify, their joint production.
Do you want that from Sony? Do you want to see Kelly in a court facing charges?
DANIELS: It's not our job to demand these things. All that we want is people to continue to talk about it. We would love to see responses from
everybody who has been involved from the industry and across the board. However, from our point of view, we just -- we just want to take a neutral
position at this point and let all other parties start up their conversations.
[15:55:00] QUEST: To both of you, extraordinary television investigative work. Thank you for joining us on the program. We turn our attention
finally to our usual digest. Talking about from one thing to the next. We do need to update you to how things are going, and I think if you look, if
you -- very interesting undercurrents of the market that doesn't quite know which way to go.
Today, yes, we're off 24 points. So you have the usual defense adviser, you have Verizon, P&G, even Cisco, you've got Cola all gaining. But you
don't really want to lose too much. And so you're now seeing Apple, it's just off 1 percent, considering what we've seen over the last few weeks.
You've got Walgreens down 1 percent. Well, Walgreens arguably should be up, so, and my guess is today, a very thin market, Friday feeling,
whichever way we look at it. They are trading on individual factors, awaiting earning season, which starts next week.
And we're going to close the day just down 25 points, but all things considered is a pretty good way after such good, strong gains over the
week. Have a look at the market where we would take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, I am packing my bags and my thermals this weekend as we look forward to two weeks of travel. First of all, next
week, Brexit, we'll be in London for that, please, come along for that ride. We'll get the vote on Tuesday on the so-called meaningful vote that
will decide the future of Theresa May's Brexit plan and everything that goes with it.
And then heads on to Davos, now, Donald Trump may not be going, but his entire economic team is still going to Davos and that raises huge questions
which all need to be looked at and asked because when you think of Ian Bremmer who is not going to Davos, but when you think of their global
risks, anybody and everybody to discuss it will be there.
Which is why we're delighted that you'll be coming along too for the ride and enjoying it. First stop is London, that is next week. The vote is on
Tuesday and then we'll see what happens after that. And that is QUEST MEANS BUSINESS with a good week on the markets, I am Richard Quest in New
York.
Whatever you're up to in the hours ahead, as always, I hope it is profitable. So, the market is down just 10 points, and the best of the
day, in fact, the bell is ringing, the day is done.
(BELL RINGING)
END
