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Quest Means Business
Brexit Party Celebrates U.K. Election Victory; Huawei Founder Defends Apple Amid Tensions Over Trade; Death Toll this Season on Mount Everest Rises to 11. Aired 3-4p ET
Aired May 27, 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 INTERNATIONAL HOST, QUEST MEANS BUSINESS: No trading on Wall Street today, Memorial Day holiday, but Europe was open and doing
business. All three major markets were higher in Europe and London also.
Look at these two stocks. We'll get into great details. Renault at 12 percent; Fiat-Chrysler, up about 8 percent. Those are the markets and the
stocks. And these are the reasons why. Renault and Fiat-Chrysler planning a merger that could change the car industry forever. Europe has voted.
Now the horse trading begins for the biggest jobs in E.U. politics, and not ready yet. Donald Trump says that China trade deal is still some way off.
For the first time from Hudson Yards, we are live from the walls financial capital, New York City. It is Monday, the 27th of May. I'm Richard Quest,
and of course, I mean business.
Good evening. Tonight, power is shifting in Europe as a result of the European parliamentary elections and those results are still coming in. On
the positive side, turnout was a 25-year high. It is becoming clear what the voters want.
The centrist parties are losing their dominance, far right and nationalist parties are making that presence felt, but it wasn't the total route that
everybody had feared.
If look at the markets, the major indices ended the session with small gains. No trading in the U.K. or in the U.S. The markets are closed today
-- in the U.S. case, it's for our Memorial Day holiday and the U.K., it is of course the summer bank holiday.
Investors are channeling the sentiments of Europe's political establishment. Although parties like the greens made gains at the expense
of the centrist, the far right didn't get the votes that some had feared.
(BEGIN VIDEO CLIP)
MARGARITAS SCHINAS, E.U. COMMISSION SPOKESMAN: If you are asking me whether the populist will win the day, which I think you have in mind, I
would say no, that the populist didn't win this election.
Contrary to doomsayers' prophecies, it is the pro-E.U. political forces across the political spectrum that won the day. Those who won the
elections are the ones who want to work in and for Europe, not those who want to destroy Europe.
(END VIDEO CLIP)
QUEST: Here's how the results stand tonight. The grand coalition of European peoples parties and the Progressive Alliance of Socialist
Democrats. That's the red and the dark blue. They have lost their majority.
Most of their losses translated not only the right, obviously, but to the liberal parties and the greens. The far right made only modest gains.
Let's understand it. The French President Emmanuel Macron sees an opportunity in these results to reshape the whole of the European political
structure. Let's look at the centers of power.
The Parliament represents the voters, although Macron's party got fewer votes than Marine Le Pen, it still holds one of the keys to building a
majority coalition.
Second, the European Council -- that's of course, is the member state governments, the heads of government. It's responsible for proposing the
Board of the ECB and the President of the European Commission, and that's where Macron is really flexing his muscles.
The Commission sets the agenda, and Macron has opposed the leading candidates for the Commission President Manfred Weber so far.
Hala Gorani is following the developments in Brussels. There's two things we need to understand, surely, Hala, tonight. First of all, bearing in
mind centrists lost, but liberals gained and far right didn't, how does that actually shape the landscape? And who is best to actually take full
advantage?
HALA GORANI, CNN INTERNATIONAL ANCHOR: Well, yes, as you mentioned, the grand coalition lost its majority. So the center left in the center right,
we've seen quite a clear erosion there. There is a message being sent to them of discontent from voters across the region.
But you're quite right. The far right parties did gain in percentage term in some countries. Let's not forget that. The Brexit party over 30
percent. Salvini in Italy over 30 percent. Marine Le Pen beat out the French President, but they have not gained. It's not a sweeping of the
board in terms of seats.
There are to the left, the more marginal groups like the greens that have done quite well. So what you have there is you have disenchanted voters,
perhaps more engaged voters among the younger ones in Germany and other countries that have voted for the greens that did very well in Germany,
saying to the established parties, you are not necessarily representing my concerns, especially when it comes to things like the environment.
[15:05:22] GORANI: In the U.K., the Brexit Party did well. The established parties experienced pretty much a complete collapse. I mean,
the Conservative Party came in fifth in some cases, the Labour Party that has not taken a clear position on supporting a second referendum as well.
So I spoke to Margaritis Schinas, you ran some sound from him. He is the chief spokesperson for the Commission a little bit earlier. And I told
him, the voters are telling you they are dissatisfied. Are you concerned? This is what he told me.
(BEGIN VIDEO CLIP)
SCHINAS: I think there is a message of hope that European politics is no longer something that people see is a process, aloof, far away from them
that does not concern their lives. You see that we have a number of national elections and national political events that are being triggered
as a result of the European election. So there is more interdependence.
GORANI: Including in Greece?
SCHINAS: Absolutely. There is an interdependence between European and national politics. And then as I was saying earlier, this is a Parliament.
In Parliament majorities shift, and there's nothing wrong with this.
GORANI: But I guess what I'm not hearing from you, and pardon me for pressing you on this is any soul searching as a result of these results
where you really saw some disenchanted voters moving away from the traditional parties? You don't see any of that as a worrying sign?
SCHINAS: Well, let's see. If you see voters' movement, it is true that you had marginal voters movement out of the European People's Party and the
Socialist Party more towards the liberals and the greens, but these --
GORANI: And the far right.
SCHINAS: Well, not that much, if I may say so. The main trend of electoral movement was to the greens and the liberals which is probably a
sign that people want us to do more on the green agenda. We did already a lot in the last five years. They want to do more on opening up the economy
on boosting growth and jobs where lots have been done.
So frankly, I don't see this as a warning sign. I see it as an incentive to do better, to do more and to do better.
(END VIDEO CLIP)
QUEST: Hala, the Parliament is part of the equation and parliamentary elections, particularly European elections. But the real big banana is the
Commission. Manfred Weber was -- everybody thought was going to be a shoo- in. But is that now likely? Will there be another rival coming from France to try and become President of the Commission?
GORANI: Well, there are these reports that Michelle Barnier, the E.U. negotiator on Brexit is being pushed by the French President. He said some
nice things about him. Unclear whether or not he is willing to throws hat in the ring.
And then you have because -- you have to remember Manfred Weber is from you know, the EPP, which was part of the grand coalition. They lost their
majority. There are going to be other candidates. And whoever becomes -- he or she -- although in this case, it doesn't appear as there, there are
many women that are seen as front runners will be the one to negotiate very, very thorny issues like Brexit and lead the Parliament and these
institutions into the next five years.
QUEST: Let's take aside, let's put aside Britain and the way Britain voted with the Brexit Party. If you look at the rest of Europe -- Italy, France,
Spain -- can we say, Hala, that the far right, the more extreme right parties, those parties did not make -- did not make the ground that they
had expected?
GORANI: In some cases, they didn't. In other cases, they did. In Italy, Salvini he did very well. He is over 30 percent. That was the goal. The
initial projection was under. He is in fact over that. He is calling his party, the first party in Europe and this is not Hungary, or a more
peripheral country. This is a founding member of the E.U. It is a big deal.
But in the more -- in the countries like Hungary, for instance, you have the Fidesz Party of Viktor Oban, the Prime Minister scoring an outright
majority. This is pretty much unheard of, 52 percent.
So, you know, I think you can say yes, in terms of seats. We're not too concerned. We're hearing that from the established politicians here. But
Richard, this is important. You have to look at the trend as well.
Now the work starts for the next five years for these politicians that have been -- that have received a very clear message from their voters. We'll
see if they heed it.
QUEST: Hala, good to see you in in Brussels tonight. Thank you. Losses for the centrist parties translated into gains for the greens. Joining me
now, Jonathan Bartley, he is the co-leader of the British Green Party. Congratulations, your party did have a good night tonight. And in fact,
greens and liberal parties across Europe did have a good night, but it wasn't a slam dunk. And as Hala was saying, the right wing did well, too.
What do we make of it?
[15:10:13] JONATHAN BARTLEY, CO-LEADER, BRITISH GREEN PARTY (via Skype): Yes, I think we're seeing a bit of a polarization in the U.K. in the same
way, across Europe with those traditional parties in the middle really losing ground, primarily because they haven't had clear positions. They
have no clear messages.
So we did see a rise slightly in the popularity of the Brexit party. But clearly on the night, it was the pro-European parties that wanted you out
of their collective vote, they scored about 5 percent higher than the Brexit parties.
QUEST: The thing about these sort of elections, which are messy at best, in terms of parsing results from so many different parties, I mean, anybody
can boil a kettle and come up with anything out of these results tonight.
But at the end of the day, you've still got an October 31st Brexit deadline date, and you've got a British government in disarray. And a new British
Parliament, a new British Prime Minister on the way. What can your party do about that?
BARTLEY: Well, with the other parties, we're calling for people's vote to put the deal that's been negotiated with the European Union back to the
British people.
I think many British people feel that a hard Brexit was not what they voted for. In fact, it was very clear out of these election results is that
there is no mandate for a kind of hard Brexit, a Brexit onto World Trade Organization rules.
So there needs to be a way out of log jam. There's an impasse in Parliament, changing the Prime Minister as it is going to happen, changing
leader of the Conservative Party, who of course, as you said, came fifth in this election. It is unprecedented for a governing party to come fifth.
That isn't going to change anything. The only way really out of it that sees pragmatic is to take this back to the people and let them vote.
QUEST: Except, Jonathan, the Prime Minister, the British Prime Minister Theresa May's last deal that she offered just two weeks ago, last week had
most of what everybody wants in it. All right, it didn't have your direct vote, but it did offer the opportunity for Parliament to vote for a second
referendum.
So I'm not sure I ever fully understood except for domestic British political reasons why everybody rejected her final offer.
BARTLEY: They rejected her final offer, I think simply -- well, it's the hard right really who are blocking in her own party, those that want a
very, very hard Brexit crashing out of the European Union. Those are the ones that have really been calling the shots holding to ransom and
primarily, it is the political problem for the Conservative Party that goes back 20 years with a very, very divided party, two parties in one, if you
like, held together only really by the first pass of the post-electoral system. That's why it hasn't fragmented before now.
And there just isn't the arithmetic, there isn't the support to get any one of these options through Parliament. Parliament just can't deliver Brexit,
and even if you change the deal, if you go back and negotiate with Brussels and get another deal, there is no guarantee that that will get through
either.
QUEST: And finally, though, your big problem now, having had a good night is to make sure it's not a flash in the pan. Look, I'm old enough as
indeed, I suspect you are to have seen many bi-elections, parliamentary one-offs, liberals do well and evaporate at the next.
In Australia, it's happening. Canada, it's happened. And to some extent, how do you build on this so that it isn't just a flash in the pan?
BARTLEY: For the Green Party, we've been building for many years, and just three weeks ago, we had a phenomenal set of council election results on
first past the post, where we doubled the number of our councilors and right across Europe, you're seeing this green wave.
It's partly because there's an increasing awareness of the climate emergency. We've had some very powerful reports warning that we've just
got 11 years to turn around the direction that we're in, in order to meet our climate change commitments and avoid potential disaster.
And that is really ramping up the political agenda and focusing many people's minds and people are starting also to make the links between the
economic system and the climate crisis, recognizing that we've generated all this wealth over the last 30 years. But that wealth generation has
just gone to a very rich 1 percent. It hasn't been shared out equally, and simply creating more -- more wealth is not going to deal with the planet
crisis or tackle the inequality.
QUEST: Thank you, sir. Good to see you. Thank you. Now developing the cars of the future. It's an expensive operation and proposition. We talk
about it often on this program.
Fiat-Chrysler wants to team up with Renault and save some cash, but there's more to it than that. You see the stock prices move. We'll talk about it.
And a bitter pill to swallow for one of the biggest makers of generic drugs. Teva Pharmaceuticals, the Israeli generic settles a lawsuit, $85
million. The issue is what's next? And we are live tonight in our absolutely splendid, stunning, wonderful, magnificent new studio. Just
look at it. What does it all do?
(COMMERCIAL BREAK)
QUEST: The race to develop electric cars and/or autonomous vehicles in full swing. And now Fiat-Chrysler is proposing a merger with Renault to
combine their efforts. Look at the share prices.
Renault shares were up 12 percent, but what's interesting, Fiat shares also at 8 percent. That tells us the market liked it. Because I mean,
arguably, in a situation where the market has doubts, one does suffer versus the other.
Now that tie up would create the third largest car maker in the world, larger than GM -- General Motors. Renault says it's studying the deal with
interest.
Joining me Rebecca Lindland, the founder of rebeccadrives.com. Tell me why -- I was reading your note. You like this deal, you say make sense, why?
REBECCA LINDLAND, FOUNDER, REBECCADRIVES.COM: It does make sense, Richard, because one of the things I like about it, is that they serve a very
similar customer. They design vehicles for that mainstream buyer, who just wants a really good, reliable, durable, valuable, value-oriented vehicle.
And so when you're sitting in these discussions, and you look and think you know, we're serving the same type of people. This is one of the issues
that went wrong with Daimler-Chrysler, was that they weren't serving the same type of person.
And so that's one of the things that I like about this is that they've got that buyer in mind.
QUEST: Right. But Renault-France, Fiat-Italy, Chrysler, the United States. Is this not going to turn into a multi-headed national mess, when you have
these three nationalities trying to vie within the company?
LINDLAND: Well, it definitely could become a mess, but it depends upon the leadership. And you know, in fact, unfortunately, of course, some of the
best leaders in these kinds of negotiations have passed away in Sergio and have other issues and Mr. Ghosn, so they're going to have to go ahead with
a different type of management in mind.
[15:20:10] LINDLAND: But I think that Mike Manley who is head of FCA, I think that he'll do a good job in negotiating these waters, so, you know, I
have confidence in him.
QUEST: Listen to Mario Monti, we spoke to the former Italian Prime Minister who once sat on the Board of the companies. Have a listen to him.
He says it's -- the type is also a good idea.
(BEGIN VIDEO CLIP)
MARIO MONTI, FORMER ITALIAN PRIME MINISTER: Size matters, complementarities, and synergies matter a lot. And after the rather
successful Fiat-Chrysler combination and FCA. Now, the approach to Renault and through Renault to Nissan and Mitsubishi seems to be rather promising.
And I must say that there is also a symbolic meaning here, because this is certainly -- well, FCA, certainly no longer exclusively Italian. But
nevertheless, it has a link with Italy. And this is a sign that the Italian corporate sector does have the vision, the willingness and the
capability, at least at the level of FCA, of being an active player in globalization, leading rather than suffering, consolidation driven by
others.
(END VIDEO CLIP)
QUEST: The interesting thing there, of course, is the Nissan-Mitsubishi bit. Now, Renault is already thought to be having problems with that
following on from Carlos Ghosn. So do you believe -- I mean, isn't it -- is it just too difficult at the moment for this deal with the Nissan issue?
LINDLAND: No, because they've already put a barrier in place. So they've already said that Nissan is not part of this conversation. It might be
eventually, but it's not right now. And that was a very important distinction to make, because of the issues that the Renault-Nissan-
Mitsubishi alliance is having.
So I think that was a smart move. Let's keep this separate. Let's just talk about this relationship with Renault and FCA.
QUEST: Is that realistic, Rebecca, to talk about the merger between these two, when one of the merger partners has -- I was going to say mistress on
the other side of the world, but they can't decide what to do about it. I think it could be -- I mean, what will the Japanese say if the partner of
Renault marries off to FCA?
LINDLAND: It definitely complicates the situation. But keep in mind that this is all friendly as well, as they said in the release. This is not an
antagonistic approach.
So you know, think of it more along the lines of "Sister Wives," if you will, from it. So you know, they, they have the opportunity to all come to
the table together. They're not doing that right now.
QUEST: You seem like the sort of woman who might have a bet every now and again, if you were a betting woman, if you were a betting woman, would you
say this deal goes ahead?
LINDLAND: Yes.
QUEST: Right. There we go. Lovely to see you. Thank you very much, as always. Rebecca Lindland, who always helps us understand what goes on in
the automobile industry.
A trial against Johnson & Johnson, J&J is set to begin on Tuesday. The company is accused of helping fuel the U.S. opioid crisis. J&J, the latest
defendant, in the case brought by the state of Oklahoma, after one of the biggest makers of generic drugs Teva agreed to settle for $85 million.
Now, Clare Sebastian has our story. Now, why did the -- the other maker of course --
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Purdue.
QUEST: Purdue of OxyContin has already settled so much. Largest sum -- was the settlement with Teva somewhat sort of inevitable? What's the
significance of this bit?
SEBASTIAN: Well, $85 million is a significant sum. And I think certainly the state of Oklahoma is looking for the money. I think one thing that
this does reveal again, which is that this isn't just about, you know, a symbolic victory against Big Pharma for the state of Oklahoma. They
actually need the money to pay for the healthcare costs associated with this crisis.
They're going to funnel it into research and into addiction treatment. But I think the key here is that J&J is the only defendant left now and they
are a significant defendant, because up until now, we really haven't spoken about the crisis in the context of J&J. The poster child, as you say, had
been Purdue.
QUEST: Right, but does -- now there's a settlement with Oklahoma. Does this -- do you start the process as -- has a benchmark been set? So
Oklahoma settled for this. Now we go on to Illinois. Now we're going to California. Now, we're going to collective action of all states.
SEBASTIAN: Part of the key -- part of the reason why this is getting so much attention, this case is because it's the first of many. There's a
great big Federal case that's coming to trial in Ohio in October. That groups together about 1,800 complaints from state and local governments and
lot of there -- I just got off the phone actually with the lawyer for the plaintiffs in that case, and he says he's watching this very closely.
[15:25:14] SEBASTIAN: I said to him, is this a tobacco moment for Big Pharma, he said not Oklahoma, but October 21st, in Ohio, that could be the
tobacco moment for Big Pharma.
I think this will really help to define just how much and whether these big pharmaceutical companies can be held to account for their alleged role in
fueling this crisis.
QUEST: Just remind us what they're alleged to have done with OxyContin and those other opioids that are involved.
SEBASTIAN: So it rests really on the marketing of these drugs. The allegations are that they marketed them as something that was safe for
extended use, whereas we actually we now know they are highly addictive and that's what's brought on this crisis.
When it comes to J&J though, there's a secondary kind of allegation. There are documents recently that showed that they are seen essentially as what's
been called a kingpin. Not only did they market their own opioid drugs, but they imported the raw materials for opioids, and they sold them to
other drug companies.
QUEST: But Teva of course, is a generic.
SEBASTIAN: Yes.
QUEST: Isn't it? And that's what expands the remit? Because Teva wouldn't necessarily have been marketing their own or would they? Would
they be marketing their own?
SEBASTIAN: So their argument is exactly what you said that they were providing generic drug, so they weren't marketing in the first place. They
are a very small proportion of the drugs that we've used in this, but of course, you know, their settlement doesn't actually admit wrongdoing.
They managed to settle for $85 million without actually admitting any wrongdoing. And I think there's a secondary issue for these companies,
Richard, when you see the reputational damage that's possible here.
Do they want to spend all this money on these legal costs to fight these cases? Or do they want to do Teva and Purdue have done and say, "Look, you
know, we may not be admitting wrongdoing, but we really want to help and we want to use this money to fund addiction research and treatment."
QUEST: Good to see you. Thank you. As we continue tonight, Donald Trump has some choice words for China, and is also talking up a trade deal with
Japan by the end of the summer. We're in Tokyo after the break. This is QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:30:00]
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment when I'll speak
to the Vice President of Britain's CBI as the Brexit Party sweeps the victory in the EU elections. This all begs the question of what happens
next.
And the head of Huawei is sticking up for Apple as the companies get caught in a U.S.-China trade war. As you and I continue, this is CNN and here
on this network, the facts always come first. Searchers are combing a lake in the Democratic Republic of Congo. They're looking for more than a
hundred passengers from a boat that capsized on Saturday in choppy waters. More than 180 people were rescued, at least 30 people are so far confirmed
to be dead.
The Austrian Chancellor Sebastian Kurz and his government have lost a no- confidence vote in parliament. The move came after a scandal involving his coalition partner, the far-right Freedom Party. A caretaker cabinet will
run the country until elections can take place in September.
The Greek Prime Minister Alexis Tsipras has called snap elections in Greece. It follows the Syriza Party suffering big losses in the European
parliamentary elections on Sunday. Syriza finished nearly 10 points behind the conservative new Democratic Party.
Two more climbers have died on Mount Everest, and that takes the death toll number this season to 11. The latest victims are an American and an
Austrian man both in their 60s. Experts say long lines are contributing to the fatalities as more climbers get stuck in the so-called death zone where
there is less oxygen.
At least, three people have been taken into custody in connection with Friday's explosion in Lyon, in France, where police carried out raids on
Monday just south of the city. One of those apprehended is an Algerian man believed to be the bomber. Thirteen people were injured in the Friday
incident when a package bomb exploded on a busy street.
Donald Trump wrapped up a state visit to Japan after a weekend of personal activities with the Prime Minister Shinzo Abe. They met on Monday to talk
trade. The president suggested a deal with Japan would come later this Summer, and he had some choice words for China.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They would like to make a deal, we're not ready to make a deal. And we're taking in tens of billions
of dollars of tariffs and that number could go up very substantially, very easily. But I think sometime in the future, China and the United States
will absolutely have a great trade deal.
(END VIDEO CLIP)
QUEST: Kaitlan Collins is with us from Tokyo. Good grief, Kaitlan, by my reckoning, it must be about 3:30 or 4:30 in the morning for you. So thank
you for staying up late and doing --
KAITLAN COLLINS, CNN CORRESPONDENT: Four-thirty.
QUEST: Four-thirty, staying up late and doing duty, grateful. Look, give us an assessment. What came out of this trip?
COLLINS: Well, this was a trip that White House officials have been telling us on the way here was going to be about ceremony, not substance.
But when the president and Japanese Prime Minister Shinzo Abe held that press conference and the reporters, you saw a lot of the divide that still
exists between them over what is the substance, that's North Korea and trade.
Now, on North Korea, the president flatly rejected what his national security adviser has said and what the Japanese government has said which
is that, those recent missile tests from North Korea did in fact violate those UN resolutions. The president instead brushed them off and said he
wasn't personally worried about them.
But of course, we know the Japanese are worried about them since they are a lot closer to North Korea than the United States. But then when the
president was asked about a potential timeline for it, not only a Chinese trade deal, but also a Japanese trade deal.
The president said the likelihood of a Japanese trade deal happening with the U.S. would come after those elections here. Now, that is welcome news
for the Prime Minister who's got upcoming elections, and the president said look for something to happen around then in August, Richard.
But for China, the president sounded hopeful as you just heard him, that a deal will come. The thing is, he didn't say when he thinks one will come.
And our latest reporting out of Washington has really shown that in fact those talks have largely broken down since the Chinese delegation last
visited Washington, and right now things are not looking optimistic and essentially, both sides are waiting to see what happens when the president
meets with Chinese President Xi Jinping when they're both back here in Japan at the G-20 Summit at the end of next month.
[15:35:00] QUEST: I read that fascinating article you co-authored on Air Force One and what happens on board the plane on these long trips. It was
fascinating. Was this another case as you flew out to Asia where from what you understand, the president stayed awake most of the time or just kept
his aides busy?
COLLINS: Yes, the president does not sleep much when he's back in Washington. He certainly doesn't when he's on Air Force One. That doesn't
always make their lives easier. But of course, these are grueling trips. You're not only on a 13-hour time difference, but you're working all day
and you never really have a break from work.
So, typically, in past administrations, staffers have used those long flights over to catch up on their sleep. But that is not the case when
President Trump is on board because he makes little use of the presidential bed. And instead, he stays up, he wants to talk to staffers, he wants to
go over the news of the day, and he watches television play out.
So, if it's a bad headline, the president wants to talk about it with the staff who are on board. And of course, as you saw just days before the
president was here, he was in a pretty big fight with Democrats over the multiple investigations that they're conducting into him and his
administration.
And that is something that the president was talking about a lot. And Richard, you've really seen the president still focus on domestic issues
even though he's overseas dealing with North Korea and trade, he's still talking about people like his potential 2020 rival Joe Biden.
QUEST: And that's weird! I mean, that is the opposite, isn't it? You know, the old rule used to be, you don't criticize when you're overseas. People
at home don't criticize the president overseas and vice versa. Of course, there are no rules in this presidency of protocol in that sense. But it
must be a bit weird, you're meeting the emperor of Japan, you're talking North Korea and you're talking Japanese trade, but the president is
obsessed by a Democratic candidate who hasn't even gotten the nomination.
COLLINS: And that's right. You saw people were a little taken aback when the president first sent that tweet about Joe Biden, saying he smiled when
he heard the North Korean criticism of him. And then later on in that press conference, the president doubled down on that sentiment.
And when a reporter gave him the chance, saying, are you worried about the appearance? Said that it looks like you're siding with this brutal dictator
over a former American vice president. Trump said he wasn't concerned about that, and then he agreed with the dictator's assessment of Joe Biden.
Now, that is striking and it is unusual to hear the president criticize someone, much less the former vice president while he's overseas and
especially when that's a criticism coming from a brutal dictator who recently murdered an American citizen, but that is what we saw from
President Trump, and he did not seem to be too concerned about that appearance that he --
QUEST: So --
COLLINS: Was siding with a dictator.
QUEST: Thank you, have a -- get some sleep on the way back and thank you for staying up late, thank you. Huawei's CEO and founder says China should
not punish Apple in retaliation for the U.S. government's treatment of China's biggest tech firm.
Huawei's chief was talking to "Bloomberg", now, the company he leads has been effectively banned from doing business with U.S. companies after the
Department of Commerce placed Huawei on a trade blacklist earlier this month. CNN's Anna Stewart joins me. But the beauty of this, Anna, is the
sort of sardonic way in which the CEO basically said, all right, come back in three or four years and tell me if we've gone.
ANNA STEWART, CNN REPORTER: Exactly. And this is a CEO, Richard, that we never used to hear from ever. In fact, he used to be called reclusive. He
is very at home in front of the camera, he was very relaxed. He did not hold back, he did not shy away from criticizing the U.S. president.
He said President Trump's tweets are laughable, that they're self- contradictory. He says he would ignore any calls from the president that are unlikely to get through to him, he doesn't have his phone number. And
then as you said, he went on to actually defend Apple. He doesn't want politics to play any part in his business, and he sees Apple as a company
he's always respected. A teacher, he called it, Richard?
QUEST: OK, he called it a teacher, he -- they are the students, but let's be clear. You know, if you look at the numbers in China in terms of phones
sold, Huawei is up, Apple is down. But Huawei can't -- I guess I don't really understand how Huawei thrives if it can't get U.S. technology for
certain key attributes.
STEWART: Well, it was interesting, obviously, that was a key question that was put to him and he was pretty upbeat. He says half of their chips they
make themselves, that they are developing their own software. But of course, half the chips do currently come from the United States.
Now they will look to ramp up their own production, they will look to rivals, analysts are very concerned that they won't be able to make up that
difference. And also rivals like Ericsson and Nokia could fill the void in the next few months or years.
[15:40:00] So a big concern from them. But as you said, there was a lovely moment where he said to the "Bloomberg" reporter, Tom Mackenzie, he
said, well, you know, come back in two to three years, see if we still exist, if we don't, do bring a flower, put it on our grave.
But you know, Richard, he had a real twinkle in his eye. I don't think he thinks for a second that Huawei won't be existing in two to three years
time.
QUEST: No, but if -- I can see why, you know -- it's one of those situations where the U.S. threatens those who do business with -- it's the
same as the sanctions -- no, I'm not drawing a direct comparison with the sanctions with Iran. But you do business with a company that does business
with a company that sells to the final entity, then eventually, Anna Stewart, it does weaken the market for that company or not?
STEWART: Well, I think it will, and I think you have to assume that, and he does say that he expects that it's possible that they will miss some of
their targets. I think analysts will say it's probable if this goes through, that they will miss some of their targets.
And you know, for the share prices of some of their supplies, you can see the expectation for --
QUEST: Right --
STEWART: What will happen next to Huawei. But his point is that they faced problems before, this is another problem and they will just work
their way through it.
QUEST: Anna, Anna Stewart is in London, thank you. Now, as we continue and still to come, a new humiliation for Theresa May. The Brexit party
wins big in Britain's EU elections. Nigel Farage gets a seat, the Tories get pushed out into fifth place -- after the break.
(COMMERCIAL BREAK)
QUEST: The outgoing British Prime Minister Theresa May says the results of the European parliamentary elections are in her words disappointing. Nigel
Farage's Brexit party captured the larger share of the vote, nearly 32 percent. The Conservatives and Labor Party both suffered heavy losses.
The liberal Democrats secured 18 percent and they're calling for a second referendum on Brexit. Mrs. May says these results show the importance of
finding a Brexit deal. Joining me from London, Paul Drechsler; the Vice President of the CBI.
Paul, you know, the results show to a large extent that the U.K. is -- the electorate there still wants Brexit. And with that in mind, surely it is
now up to parliament to find a way to make it happen.
[15:45:00] PAUL DRECHSLER, VICE PRESIDENT, CONFEDERATION OF BRITISH INDUSTRY: Well, look, Richard, first of all, congratulations on your new
studio, it looks fantastic from London. I mean, never has there been a more important time to find a solution. Business has lived with
uncertainty for over a thousand days. We now look set for a longer period of uncertainty.
And the reality is all of the polls, all of the election results basically show that we still have a fine line putting those who want to leave and
those who want to remain. In fact, in the European elections, we've just completed, of those people who voted, 40 percent, 40 percent wanted to
remain and 35 percent were with the Brexit and other leave parties.
So we're still finding balance, we need a solution and most of all, we need a Prime Minister who can lead a seriously divided nation.
QUEST: Yes, but let's look at those numbers again. I think you can probably see on your screen if you look at the breakdown of the party, the
results. Yes, if you total all the others up, then you do get to a number -- you know, you get to the numbers that you rightly -- we've got the lib
Dems and the Greens, and those parties.
But the -- you can't -- the British -- the parliament cannot ignore the fact that when push came to shove, 31.7 percent of the people voted for the
single party that wants the hardest Brexit and wants out of the union.
DRECHSLER: So, Richard, if we look at the facts here, the facts are the liberal Democrats and the Green Party were unambiguous that their position
was to remain. The combination of both of those basically says all the people who voted for those two parties voted for either remain or indeed a
second referendum which I think is inevitably where this country needs to get to if it's ever to be reunited.
QUEST: You've got to agree, though, whether -- whatever one's personal views, it is impressive of the Brexit party to be able from nowhere to
capture such a large slice of the vote. And the reason -- the reason I harp on about this is because the next Prime Minister is going to have to
take that on board, that there is -- I mean, there's a popular misconception in the rest of the world that somehow if the vote was taken
tomorrow, Britain would certainly vote to remain and it will be all over by the shouting.
DRECHSLER: Well, I mean, I think two things, Richard. First of all, the Brexit party is just UKIP renamed, it was already the leading party in the
last EU election. So, it's not from nowhere, it's just a re-branding of an old party. That will be the first thing. The second is, without question,
whoever comes in to lead this country has got the most monumental and vital challenge to ensure this economy does not collapse in the face of intense
competition from all around the world.
QUEST: But isn't --
DRECHSLER: Even the played for and a lot to lose --
QUEST: Paul, awful question for me to ask, isn't the reality now that the economy is -- and I'm talking about the real politics, not the
desirability, but the economy is going to take second place to a person who can somehow get one thing done or the other, bearing in mind the political
arithmetic in parliament?
DRECHSLER: Well, I think every ounce of energy from the world of business will be to do whatever we can to minimize the negative impact on the
economy and jobs and the future prosperity of people across the country. So we need a way forward, but we need a way forward that does the minimum
possible damage to this U.K. economy and at the time where there's great opportunities globally and more intense competition than we have ever seen.
QUEST: Paul, it would be lovely to see you, but I regret that we will be talking much more about this in the future. And thank you for the
congratulations, lovely new studio, and when I find a way around it, I'll let you know. Thank you, sir. TransferWise is taking on the world's
biggest money and making money doing it.
We'll hear from the CEOs who says your money should flow freely around the globe.
[15:50:00] (COMMERCIAL BREAK)
QUEST: TransferWise says it's continuing its mission to make moving money cheaper and easier. And that might be the mission, it's also proven
extremely profitable after a new round of funding. TransferWise is now Europe's most valuable Fintech start-up.
Traditional banks have lots of ways to stick their hand into mine and your cash when we move money. There are commissioned fees, essentially, a
charge for sending the money. Then you have the exchange spread which is the difference between the buy and the sell rates within the market.
You then add in something called the foreign transaction fees, a charge for purchases in different currencies. It's arguably since that was the
purpose, you do beg the question, why are you charging me more? And then our old favorite, foreign ATM fees, they hit you when you withdraw cash.
Well, look, Kristo Kaarmann is the TransferWise chief executive. Speaking to Isa Soares, he explained how the company has dramatically cut down on
fees and made money.
(BEGIN VIDEO CLIP)
KRISTO KAARMANN, CO-FOUNDER & CEO, TRANSFERWISE: We started not to build a company, we started to solve a problem, and we realized it's not a problem
of Estonians living in London or New Yorkers living in Frankfurt, it's everyone who's either trading with other countries or has personal reasons
on -- across borders, it's always that the bank takes a cut whenever you do that.
And we really have focused over the last eight years just solving this problem and always putting the -- putting the customer first. But at the
same time, doing it sustainably. So that has gone to us to the place where about two and a half years ago, we started being profitable, which I think
now puts us in a very interesting category that we're not just a --
ISA SOARES, CNN: Yes --
KAARMANN: Successful tech company, but we're one of the few who is also profitable.
SOARES: You said you've been doing it, you've done it sustainably, what does that mean?
KAARMANN: It really means that we're not relying on BCs or capital markets to fund our growth. But it's actually our customers who fund our mission.
So they fund the service that we're offering, but they also fund the company to improve the service, to build new products and so on. So this
is -- this is an amazing place to be for a tech company.
SOARES: Well, you've also said, and I think you tapped on this slightly, you changed the way that you dealt with banks. Talk to us about that
relationship and how it's charged, how you forged, perhaps, a stronger one.
KAARMANN: We're really solving a problem or we're building a better service that often used to be offered by banks and still is. But
international wires or international money transfers are really a very small part of what banks do.
[15:55:00] And what has turned out to be the case is, it's not a -- it's not a great money-making machine. For them, it's super expensive for
customers to use, but at the same time, it's actually, really expensive for banks to offer as well. So Mackenzie has done a bit of research into this
and they figured that, on average, it costs about 25 to 35 bucks for an average bank to make an international transfer, just for them.
The same cost for us now running on a tech platform is more --
SOARES: Yes --
KAARMANN: Around $4 or $5.
SOARES: Wow, that's a huge difference. And this will explain your success, of course, so you've become just for our viewers so they
understand. You've become Europe's most valuable financial technology start-up, valued around I think $3.5 billion, and correct me if I'm wrong,
are you thinking of going public?
KAARMANN: We're not.
SOARES: Why not?
KAARMANN: Not at least soon. We're really in the very beginning or a very important mission. We're very proud that we calculated -- we put about $1
billion back in customers pockets that they would have otherwise paid in bank fees. But we also know that the whole size of the market is about
$200 billion.
So, if you look at this, we're like 0.5 percent on the way. So we're really very early in our admission, and we'd really like to choose the best
time to go public that has the biggest impact for our users and on our mission.
(END VIDEO CLIP)
QUEST: And we will have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. For three decades, I have been a victim of the chicanery and trickery of banks, removing money from my
wallet in attempts for foreign exchange fees. So TransferWise and everybody else, I celebrate the fact that somebody is doing what is really
simple and doing it cheaper.
There has been no excuse. These things, five-day value, three-day value, now eventually, you get same-day value if you're lucky. The truth is that
big banks have been removing money unnecessarily for years on this foreign exchange business. It's been a nice little earner, while thankfully their
time is up.
There are plenty of alternatives that will do the job just as well. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest, whatever
you're up to in the hours ahead, I hope it is profitable. I'll see you tomorrow.
END
