Return to Transcripts main page
Quest Means Business
New York's Four Seasons Serves its Final Power Lunch; Beyond Meat Shares Tumble; Protesters in Hong Kong Protest Against Extradition Bill. Aired 3-4p ET
Aired June 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 INTERNATIONAL HOST, QUEST MEANS BUSINESS: An hour to the closing down on Wall Street, an interesting sort of day.
Look, you'll see, we have really nice gains at the beginning, 186 points. They evaporated. There are losses in the afternoon, and we are down at the
moment. Not any huge amount, but it does beg the question whether the five-day winning spree is going to come to an end and it certainly looks
like it. Small losses, but the market is not terribly happy, and those are the markets. And these are the reasons why.
Donald Trump says we'd have nothing without tariffs. I'll have an exclusive interview with his top trade adviser. Peter Navarro joins me
from the White House. A power struggle on Capitol Hill. The first hearings on big tech is underway and market downgrade beyond painful,
Beyond Meat off more than 20 percent.
We are live in the world's financial capital, New York City on a stunning day. It is Tuesday, the 11th of June. I am Richard Quest. I mean
Good evening. Tonight, Donald Trump is defending his use of tariffs as weapons. The U.S. President pulled his tariff threat on Mexico at the last
minute over immigration policy. Now his hour is back, this time pivoting towards China once again.
Speaking a short time ago on the South Lawn of the White House, he said tariffs are a great negotiating tool. And the saga with Mexico is proof he
can flex America's economic muscle to get what you want on the international stage.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Without the tariffs, we would have had nothing. We had nothing two weeks ago. Two weeks ago, I'll
tell you what we had. We had nothing. And the reason we had nothing is because Mexico felt they didn't have to give us anything. I don't blame
(END VIDEO CLIP)
QUEST: So I'm joined for an exclusive interview by the White House's foremost advocate on trade and tariffs, Peter Navarro, an assistant to
Donald Trump and the Director of Policy of the Office of the Fair Trade Policy at the White House.
Peter, good to see you, sir. Thank you for giving us time.
PETER NAVARRO, DIRECTOR OF POLICY, OFFICE OF THE FAIR TRADE POLICY: It's been too long, sir. I remember during the campaign, your wonderful studio
there, I don't know you paid, but that studio is the best in New York. Apologies to everybody else, but I loved that then.
QUEST: And our new one is even better, you have an open invitation to come and visit. Now, on the question of Mexico and the trade tariffs. The
decision to use tariffs has been widely criticized as taking tariffs from an economic tool to one for immigration and thereby other purposes.
NAVARRO: So what we have unquestionably at the border is a national security and an emergency. What we have is a situation where Congress has
refused to act and prior to last week, Mexico had refused to act.
It was totally appropriate to use the International Emergency Economic Powers Act in the way that President Trump did. And as President Trump has
correctly said, Mexico refused to do in 20 years what it only took about two days to get us to do with the prospect of tariffs.
We see it -- the tariffs, Richard have multi uses. In some cases, they are simply a defense of our national security, for example, in the case of
steel and aluminum tariffs, a similar use is in China where we're trying to defend ourselves against practices, like forced technology transfer,
intellectual property theft, the use of unfair subsidies in state-owned enterprises.
And in the Mexican case, clearly, this was an appropriate regulatory response to a terrible situation and we got a great outcome out of it.
QUEST: Okay, but it is what is being described as the weaponization of tariffs. You're taking them and essentially bullying another country on
the threat of a tariff.
NAVARRO: Those who are using that term are simply those who are opposed to our policy in general. It's the Chamber of Commerce, it's the
multinational corporations. It's the anti-tariff crowd who have seen our jobs go offshore and have American use as what President Trump has
correctly called the piggy bank for the rest of the world.
So that term -- look, throw that away. What I see today behind me is a beautiful weather and a lawn at the White House, a very bullish economy.
We've got seven million jobs out there available for Americans and only five million people seeking jobs.
We've got an epic low unemployment rate. We've got investment pouring into this country.
[15:05:10] NAVARRO: This is bullish and tariffs are an important part of the President's strategy to bring about the economic renewal and
manufacturing Renaissance were seen in this country.
QUEST: Some people suggest the President doesn't fully understand how tariffs work. Well, let me read you --
NAVARRO: Come on now.
QUEST: No, come on.
NAVARRO: He is smartest guy in the room. He is the smartest guy that is sitting in the Oval Office on the economy and business in a hundred years.
I can't think of anybody who is smarter than he is on this show. I'm not going down that road with you.
QUEST: Well, he says, we have so much money that is pouring into our Treasury right now.
NAVARRO: $17 billion we have raised to date on the tariffs. And by the way -- by the way, the people who are paying those, that money are the
countries that tariffs are levied against.
China clearly bears the burden of the tariffs. They bear most of the burden in the form of lower prices for their products. Fewer exports lower
profits. The Chinese government itself is having to devalue its currency out of desperation.
We have the Chinese government that is facing lower tax revenues. And meanwhile, I would point out in Q1, we had a 3.2 percent real GDP growth
rate. And guess what? A full one point of that was due to our reduction in the trade deficits primarily because of the China tariffs. Tariffs are
QUEST: You accept that the strict operation of the tariff is paid by the importer, which is then just passed on to the distributor, and ultimately,
the American consumer.
NAVARRO: Now, of course, come on, you know, better than that. This is a task in what's called tax incidence analysis. Let's say for example, I'm
an American consumer, I pay $100.00 for a product from China before the tariff, if I'm still paying $100.00 after the tariff, it's because China
has lowered their price and bitten that bullet and devalued their currency. In that case, I, as an American consumer didn't pay a cent more.
QUEST: Correct, but the evidence is --
NAVARRO: There is no inflation in this economy.
QUEST: The evidence, Peter, is that one of two things are happening, U.S. corporations are cutting margins to account for that tariff or they are
passing it on.
NAVARRO: Not U.S. corporations my friend unless they're setting up in China and selling back here, which we don't want to happen -- bring your
But if it's a giant corporation, we're not shedding any tears for a China corporation that uses all sorts of government subsidies to dump products
into this market.
Look, here's the thing. China is paying for the China tariffs not American consumers. There's no inflation in this economy. We're in a virtuous
cycle. This is why things are so bullish. And the stock it is reflecting that.
QUEST: All right, let's talk about China, what might happen next? Please, I know your time is tight. But please have a listen to what the President
said today. And we can discuss it after. Have a listen, sir.
(BEGIN VIDEO CLIP)
TRUMP: Right now, China wants to make a deal very badly. It's me right now that's holding up the deal. And we're going to either do a great deal
with China, or we're not doing a deal at all. Right now, China is paying us billions and billions of dollars. They never gave us 10 cents. And
China ate our country alive during Obama and Biden.
(END VIDEO CLIP)
QUEST: What are you now waiting for from the Chinese to do the deal? The President said he is now the one that is waiting. Waiting for what?
NAVARRO: Well, look, you know, the history of this, we go back to Mar-a- Lago at the beginning of this administration. We've given the Chinese many, many opportunities to negotiate in good faith.
And we had 150-page plus agreement across seven verticals, including the forced technology transfer and the intellectual property theft, and they
reneged on that at the end. So that's where we are.
I don't want to say any more than that, other than to say that we've got the President of the United States is the best negotiator in the world,
with a left-handed in Robert E. Lighthizer as the USTR, as the finest negotiator I've ever met in the trenches, basically working with the
Chinese, and we'll see what happens and we'll either get a great deal or we'll get tariffs. Simple.
QUEST: But finally, I just want to ask you, this sort of psychological, philosophical, geopolitical, whatever posh word we want to use of the
United States, using tariffs in this way, dragging effectively, humiliating Mexico, dragging them to Washington.
NAVARRO: We did not humiliate Mexico. We got their attention. We love the Mexicans. The President of Mexico and our President get along great.
[15:10:07] NAVARRO: They know that there's a crisis. As the President said, look, they had no incentive to do what they did until we gave them
the incentive. So I mean, this tariff policy is working. It's simply a negotiating tool that we use when we need to use it, and it's getting
people to the table.
Look, one thing I should say, the American people are behind this President. A recent Harvard Harris poll came out just a few days ago, and
it showed that a majority of people in this country support our tariffs on China, and close to 80 percent of Republicans are behind this President on
the China tariffs.
They understand, everybody in America understands that China has been eating our lunch and raiding our piggy bank. And one of the best successes
I think of this President has been to change the narrative and dialogue on China in a mere two years. Before this, it was like, let's engage with
China. They take our lunch.
QUEST: Peter, last question.
QUEST: You must be, I suppose impressed is the word. You came into this White House. Tariffs by and large have been a dirty word in economics
since Smoot-Hawley, you know, they've been very targeted. They've been -- but now they are part, a fundamental part of the United States industrial
or trade policy. Do you take much credit for that?
NAVARRO: No, not at all. I would say in our history, sir, you go back to the days of McKinley and Jefferson and Lincoln. Tariffs were what made
this country great, and we have a situation here, where around the world, countries are allowed to systematically charge us higher tariffs.
My office, the Office of Trade Manufacturing Policy, just came out with a report, which showed that over two thirds of the time, American exporters
faced higher tariffs on their products and we charge them the same or similar products.
So what we're trying to do, I mean, we're for free trade, but we're for fair, balanced and reciprocal trade. Tariffs are useful for -- defense
tariffs are useful to get people to the bargaining table. The President is playing it like a Stradivarius violin right now.
QUEST: Sir, good to have you. There's a seat in this studio, waiting for you or --
NAVARRO: It's been too long, my friend.
QUEST: Or my threat, I'll end up coming to visit you.
NAVARRO: We will host you on the lawn and we'll have tea on the lawn here.
QUEST: Now, that's a promise. All right. Good to see you, Peter, as always. Thank you.
Donald Trump tweeted, it's a good day in the stock market. He tweeted it, he might have jinxed it. We were up 186. It was red at lunchtime and
United Technologies of course, is up some 4 percent. A six-day winning streak on the line. Markets have been on a tear.
We shouldn't necessarily perhaps be too concerned, after all, there's action from the Fed, shrugging off a trade war, saber rattling from the
Art Hogan is with me to put some perspective. We need perspective. Chief market strategist at national securities, I suppose we shouldn't be too
alarmed that we're taking just a breather today.
ART HOGAN, CHIEF MARKET STRATEGIST, NATIONAL SECURITIES: Yes, I think when you look at this, Richard, we were down for seven weeks in a row. And we
are now retracing 75 percent of that downdraft in six trading days.
QUEST: But that's not good.
HOGAN: That's not good. Exactly.
QUEST: Because rise like a rocket, fall like a rock.
HOGAN: Right? That's exactly correct.
QUEST: That's exactly what we're seeing here. So this volatility, in large part is caused because the pendulum swung too far when we sold off
and the pendulum is probably swinging too far and retracing that move and getting -- clawing back some of that drawback because the narrative hasn't
changed that much.
QUEST: Right. But what does the market now want? I mean, you heard this, you could only hear half of it. You had the discussion I was having with
Peter Navarro. Tariffs is part of the U.S. trade policy now. Does not worry you?
HOGAN: It's bad economic policy and it worries me a lot. And it worries me even more that it doesn't sound like we're getting closer to the
negotiating table. I think we're looking at the G-20 as that magic moment, when it's going to be the start of a beautiful friendship with President Xi
and Trump again, and we're going to get something accomplished.
But it doesn't sound like this administration really wants to back down on this. I think they want to press harder and drag this out.
QUEST: But you can understand, I mean, to get the administration its fair due, on Mexico, it might be a different issue with immigration. But on the
question of China, there are legitimate valid concerns about the way China has done international business.
QUEST: And I suppose the argument will be whether the President is prepared to go to battle with all guns blazing, the rest of the world
should be pleased.
HOGAN: The rest of world is very pleased. I would think that there might have been a better way to do this without tariffs. And perhaps we'd all
get together as the rest of the world and put some pressure on China.
QUEST: You're an economist?
QUEST: What is so wrong with tariffs? When you hear somebody like Peter Navarro give a full throated robust defense as being a valid trade tool.
As an economist, what do you say is wrong with it?
[15:15:05] HOGAN: Well, three things. First of all, inflation -- it causes inflation that has no economic benefit to it. So you're setting
prices at an artificially high level for no good economic benefit.
The second thing is you strand capital. So we spent the last 20 years sending up complex supply chains around the globe, that's going to strand a
lot of capital so you're wasting money.
The third is they generally don't work. Right? It's the inefficiency of supply and demand. And so in large part, it's generally used as a short
term threat, but not an immigration policy. This is generally a short term threat when someone is actually dumping things into your market to get that
QUEST: Steel, tires --
HOGAN: Solar panels. Right. Exactly. And things like that. Commodity products that can get dumped that is sponsored by countries that are just
trying to get a foothold and put your companies out of business.
That doesn't work in a long term planning basis. What does work is actually getting a consortium of countries together to say we should
actually do a better job at working together on the international stage if you want to be part of that as a developed nation that would have been the
way I would have attacked it.
QUEST: Do you see any shift in terms of -- you know, as a result of what the U.S. is doing now, do you think it's conceivable that tariffs will
become part of the armory of most countries if and when they want to go to battle on trade?
HOGAN: Unfortunately, I think that's the case.
QUEST: In other words, is the U.S. normalizing the abnormal?
HOGAN: We're normalizing bad economic policy. And unfortunately, what happens is if you put a tariff on me, Richard, I have to retaliate somehow,
I have to protect myself.
So the natural unintended consequences, I have to retaliate with some other measure and it's going to be a tariff on things that you buy.
And then you get to a point where if this goes for much longer, and we retaliate with all $300 billion of the imports that we don't have tariff on
now, we're going to drive the economy into a recession.
QUEST: You're not seeing recession at the moment?
HOGAN: Not just yet.
QUEST: Good to see you as always.
HOGAN: Thank you so much.
QUEST: Thank you very much indeed. After the break, Beyond Meat is taking a battering today. Investors are wondering if the firm's valuation is
Also, one of the world's financial capitals faces major walkouts in the coming hours. It's in Hong Kong and the protests are growing.
It is quarter past three in the morning there, in just a few hours of course, we'll see the full results of those protests. It is QUEST MEANS
BUSINESS live in New York.
[15:20:01] QUEST: Big tech is now big politics in Washington. There are a series of hearings taking place on Capitol Hill with the U.S. House
Judiciary Committee and they are grilling tech companies about competition in digital markets.
Lawmakers are getting into how platforms like Facebook have affected news content. There are questions to be asked about the spread of information
online. The first here comes a day after the President suggested there's something going on in terms of big tech monopoly.
The chairman of the House Judiciary Committee opened the first thing with a warning. Jerry Nadler says big tech is a threat to free press.
(BEGIN VIDEO CLIP)
REP. JERROLD NADLER (D-NY): Today as the internet becomes the dominant platform for accessing news, and as this platform grows more and more
concentrated in the hands of just two major companies, the news media once again face serious threats and congressional action once again may be
As avenues for accessing news have narrowed in recent years, advertising revenue, which is the primary means of support for most news publishers has
steadily declined as well, and as revenue is full and so too is the number of journalists whose work can't be supported by news publications.
(END VIDEO CLIP)
QUEST: CNN's Brian Stelter is watching the first hearings. What do you make of them?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: This is the first of many hearings in the House looking at antitrust law as it relates to big tech.
Clearly, there are a lot of Democratic lawmakers who want to challenge the technology companies, some Republicans as well.
And at the same time, you have the Trump administration amping up its pressure on the companies. So Google, Facebook, they're getting it from
But it's notable that today, this very first hearing, it is about journalism, about local journalism, and how it's been upended by Google and
Facebook. Of course, print newspapers are already starting to fade in the United States before Facebook came along.
But Google and Facebook have sucked up so much ad revenue, the local papers feel they are a major threat. And now there's this interesting bill being
introduced in the House and in the Senate, both bipartisan bills, suggesting an antitrust exemption for local publishers, so they can
negotiate collectively with Google and with Facebook.
We will see what actually gets passed. But that's what they are talking about today on Capitol Hill.
QUEST: How much of what they're trying to do is holding back the tide? And I read your newsletter every day, and I read job losses in certain
areas with three jobs created, 15 jobs lost.
STELTER: That's right. Yes.
QUEST: But what are you going to do? You're going to break up Google? You're going to break up Facebook? I mean, there is historical precedent -
- Standard Oil, IBM, AT&T.
STELTER: There's very little I think that newspaper publishers can do right now on their own to stem this tide. They say working collectively,
maybe they can get a better deal with Google and Facebook. But this problem is much bigger than Google and Facebook. It's about a world that
has gone from few to many where everybody is a publisher.
And so I think this hearing today, probably less consequential to the future of antitrust law than the other ones will be because Google and
Facebook, Amazon and Apple, they're going to be under scrutiny for many months to come on Capitol Hill.
QUEST: But do you see this, particularly since the DOJ is involved, do you see this inexorably and inevitably ending up in some form of enforcement
STELTER: I'm skeptical. I think lawmakers are great at the bark and not as great as the bite. Certainly, Google, Facebook, other companies are
hiring even more lobbyists to try to fend off regulation that they don't want to see happen. But you know how this works, Richard, they say they're
welcome, they're open to new regulations. They're just not specific about which ones.
Clearly, these companies don't want to be broken up. They believe being broken up would hurt consumers at the end of the day and it's hard for me
to foresee a world where we're going to see serious government action. Maybe I'm being too cynical about politicians, though. Maybe. Maybe.
QUEST: I find that hard to believe. Donald Trump is in Iowa. Joe Biden is in Iowa. From what you can tell from the early tone of a very early
election. What's it like?
STELTER: That Trump needed someone to battle and he has chosen Biden as Biden is a front runner of the polls, so they're acting like it's a general
election already today, going back and forth.
You know, Trump, attacking Biden, very personal terms. Biden, giving multiple speeches against Trump today. Interestingly, Biden calling out
Trump's attacks on the Free Press, among other factors in his speeches.
You know, Trump is out there this week talking about the big tech companies, about antitrust saying something is going on. But that's
typical Trump, but he's just talking, he doesn't seem to actually be taking action.
He takes this very personally. He looks at Google and Facebook, he complains about so-called censorship that doesn't really exist. And for
him, it's all personal. No change there.
QUEST: Good to see you, sir.
STELTER: You too. Thanks.
QUEST: Thank you very much indeed. Good to see you. Now, one of the top Democrats involved with these hearings on big tech has told CNN, it's all
about keeping things competitive, and protecting the consumer.
(BEGIN VIDEO CLIP)
REP. DAVID CICILLINE (D-RI): It's really to look at the entire marketplace, these large technology platforms are very dominant, it is to
look at the sort of monopoly moment that we're in and figure out how we get the market working right.
We want to be sure that they aren't engaging in anti-competitive behavior, that isn't harming consumers, harming our access to truthful reliable
information that they're not excluding rivals. You know, competition matters in our economy.
[15:25:12] CICILLINE: It's how you generate innovation and entrepreneurship and protect consumers. And we've seen some consequences
of this tremendous concentration of economic power in these large technology platforms.
(END VIDEO CLIP)
QUEST: Tech companies may be falling out of favor on the Hill. But a new list shows they're still top in the eyes of the world's consumers.
Tech names dominate the 2019 list of most valuable global brands. They occupy the top 10 spots and the ranking by the research agency, Kantar. I
mean, all the obvious ones.
Amazon takes the top spot for the first time, overtaking Apple and Google who have held it since 2007.
Doreen Wang is with me, Global Head of BrandZ at Kantar, the company behind the list. If we look at the list, tell me what surprises you about it.
DOREEN WANG, GLOBAL HEAD OF BRANDZ, KANTAR: When we look at the global top 100 most valuable brands, it outperformed the S&P 500 by a massive 53
QUEST: But that's because they are tech companies and techs involve --
WANG: Not only tech companies and that there are many luxury brands. One of the top risers are like Chanel and Gucci all have recovery, and
Lululemon and like Instagram, they are all top risers and not just limited to tech brands.
But it is among the top 10, what is surprising to us, it used to be all American brands. And right now there are eight American brands, and two
Chinese brands and Alibaba and Tencent are being number seven and number eight, and Amazon is our number one that is surprising, but Amazon is
meeting and exceeding customers these and making our lives much convenient.
QUEST: So this is not about size of company. This is perception of brand or how do you value brand?
WANG: What is brand equity? Brand equity really lives in the minds and hearts of the consumers. So we research and interviewed over four million
consumers around the world and to see how meaningful and different these brands are connected with consumers and making their lives better.
QUEST: But isn't -- aren't some of them brands we use and love to hate. I'll give you a good -- you know what I mean? Amazon, you can have a
conversation on the bus with friends and family and they'll say, I think I'm really worried about what's happening with Amazon and local corner
shops and this that and the other. And by the way, I've just gone and bought all my detergent on it.
WANG: Yes. But we have to admit that Amazon is the best brand which makes our life much more convenient than before.
Amazon is not just e-commerce anymore. Amazon has Prime and Alexa and Amazon Go and wherever consumers are, and it is creating the new
QUEST: Interesting that Visa is there. And of course by the way, I do need to point out, AT&T is there, parent company of this network. Why are
WANG: Like Visa, for example is not a traditional payment credit card companies anymore. Visa has launched this innovation hub which has
nurtured a lot of growth of the FinTech startup companies.
QUEST: If you pull the strands together and you look at the list. What does it tell you?
WANG: Well, it tells us that the boundaries -- the traditional category boundaries have been broken and the competition is increasing.
There are so many small and agile brands that are entering the top 100 and even the top 10. So how can we keep building and they'll maybe jointly
building the ecosystem and those brands will win.
QUEST: Don't you find -- don't you slightly regret there's no manufacturing. There's no industrial -- there's no company that makes
something. I suppose Apple arguably, but you know what I mean.
WANG: You know, we still have GE.
WANG: It is among the top 30. It is not the top 10 anymore like 10 years ago, GE was at the top 10 and we have Haier, the home appliance brand,
number one worldwide and yes, we have -- we still have manufacturer brands.
QUEST: Good to see you.
WANG: Great seeing you.
QUEST: GE maybe your top 30, it's not even in the Dow top 30 anymore. So you're doing better than that. Good to see you.
WANG: Thank you.
QUEST: Shares of Beyond Meat are losing a bit of sizzle. Some investors are turning their noses up at the stock after an analyst downgrade. After
the break, all about meat.
[15:30:00] QUEST: Hello, I'm Richard Quest, a lot more QUEST MEANS BUSINESS in a moment. And it's the end of an era for a New York power
lunch as the Four Seasons Restaurant shuts its doors for good, and not a great day for fake meat burgers either. Beyond Meat is down more than 20
percent -- as you and I continue our evening chat, this is CNN, and on this network, the facts always come first.
Hong Kong is bracing for more mass protests over a controversial bill that would allow extraditions to China. Demonstrators are gathering ahead of a
second debate in parliament. But their numbers could swell dramatically as daybreak arrives as a powerful trade union is calling for a strike on
President Trump says he's received a very personal and beautiful letter from Kim Jong-un. He praised North Korean leader for in his words,
"keeping his word" on nuclear and missile testing, contradicting his own national security adviser who says Pyongyang is not complying with the deal
reached in Singapore.
Crews have now lifted the wrecked tourist boat from the Danube River in Hungary. They found four more bodies, the number confirmed, that is 24,
however, several people are still missing. The boat was carrying South Korean tourists when it collided with a larger vessel, it sank within
moments last month.
Russia has dropped charges against a top investigative journalist and set him free due to lack of evidence. Ivan Golunov is best known for exposing
corruption, he was detained on a drug charge he says was fabricated. His detention sparked outrage and an outpouring of support.
And consensual same-sex relations are no longer illegal in Botswana. The country's high court unanimously overturned a colonial era law that made
gay sex a crime. Heterosexual relationships had been punishable by up to seven years in prison. A senior adviser to Donald Trump is defending his
use of tariffs.
He says the president's deal with Mexico is proof tariffs work. Speaking exclusively to us earlier this hour, the president's senior policy adviser
Peter Navarro said the U.S. will either get a great deal with Beijing or China will face the wrath of more Trump tariffs.
(BEGIN VIDEO CLIP)
[15:35:00] PETER NAVARRO, SENIOR TRUMP POLICY ADVISER: We've given the Chinese many opportunities to negotiate in good faith, and we had a 150-
page-plus agreement across seven verticals, including the forced technology transfer, the intellectual property theft, and they reneged on that at the
So, that's where we are. I don't want to say any more than that, other than to say that we've got the president of the United States, he is the
best negotiator in the world, with a left-handed in Robert E. Lighthizer as the USTR, is the finest negotiator I've ever met in the trenches, basically
working with the Chinese and we'll see what happens. And we'll either get a great deal or we'll get tariffs. Simple.
(END VIDEO CLIP)
QUEST: Paul La Monica, simple.
PAUL LA MONICA, CNN BUSINESS REPORTER: It seems that way if you're in the White House. You just keep threatening tariffs until you get what you
QUEST: What was interesting about what Peter Navarro says is that tariffs is regarded as a legitimate, not just economic tool, but in all
LA MONICA: Yes, I think that obviously there are still some concerns about this game that the Trump administration is playing with China. Because as
you know, Richard, obviously, many companies in the U.S. and throughout the world do want China to open up its market for fair trade, particularly with
regards to technology.
So, anything that the Trump administration is doing to enforce patent protection, that would be something that I think most corporations would
applaud. The problem as we saw with what happened with Mexico is that many American companies are getting very tired of just we're going to do tariffs
as the knee-jerk reaction --
QUEST: But it worked! It worked! It's arguably worked with steel. It's arguably worked with China, and maybe not yet. It's arguably worked with
LA MONICA: It arguably has worked, and the U.S. obviously had more leverage over Mexico which I think probably helped. But China is a
formidable economic competitor, and obviously still, even though I doubt that China would pull the so-called kind of, you know, nuclear sort of
response of dumping treasury debt, because that would hurt themselves as well, that is still a card that they have, that they could play.
So China, I think is someone that the Trump administration has to be more wary about than say Mexico or even the European Union. And of course,
despite all the talk that the Trump administration loves to tout about how tariffs are a positive for the U.S. economy because it brings in more
revenue, it's not that simple, because it hurts all of those U.S. corporations --
QUEST: Not according to --
LA MONICA: I know, that is --
QUEST: Peter, you heard him.
LA MONICA: I heard Peter Navarro and I've heard the president say this time and time again, that doesn't mean that they're right. Just saying
something over and over again doesn't make it right.
QUEST: Let's talk -- don't go away, because I want to talk about Beyond Meat. It's been in the savory day for Beyond Meat. The shares soured and
JPMorgan downgrade. And if you look at the menu, shares down some 20 percent today -- I think, well, you have to have a cow mooing because
you've got to have a plant growing, it's a bit silent.
So, even though it's Beyond Meat, it's in sympathy. JPMorgan was an underwriter with public offering, so the fact that it's now saying
investment bank lower Beyond Meat to neutral is significant. The company is not yet profitable. And reported quarterly sales of a measly $40
million. When the market closed on Monday, the company was valued $10 billion, more like $8 billion, still sizable, Paul?
LA MONICA: Yes, first off, farm animals are obviously a much better sound effect than photosynthesis which it has been boring quite, but --
QUEST: You're right --
LA MONICA: That being said, I think that obviously right now, JPMorgan is recognizing what many on Wall Street are, which is that Beyond Meat is a
definite leader in a category that's growing rapidly. But the valuation was absurd, insane, you know, pick your adjectives of choice, and JPMorgan
is not souring on the company's business, it's just the valuation, and that is why the stock has come down.
QUEST: OK, but there's something wrong -- I mean, as far as you can't really say there's something wrong with the market, you know, the market is
LA MONICA: There may be something wrong with the market.
QUEST: But you know, to go 23 percent or 70 percent and then drop back 24 percent, this is the definition of a bubble.
LA MONICA: Yes, this is a company that has been extremely headline-driven. Any time there's good news about Beyond Meat, the stock goes up. When
there's good news about Beyond Meat's main rival, impossible, the stock goes up. Today, you have the negative news of one of the bankers, mind
you, that's the other thing.
This isn't just some second-tier, third-tier Wall Street research firm. This is JPMorgan which was one of the company's that helped bring Beyond
Meat public, and they're throwing up their hands and saying this is a little insane.
QUEST: How much of all of this is just a frolic of its own? It tells us nothing about the industry, it tells us nothing about food supply, it's
just a -- I mean, 24 percent.
[15:40:00] LA MONICA: Yes, I think this tells us more about investor psychology --
QUEST: Yes --
LA MONICA: And tulips and bubbles and --
QUEST: Oh --
LA MONICA: What have you. Tulips, plant based, not going to eat them but they are plant-based.
QUEST: Tulip -- I was in Amsterdam and I was reading about tulip-mania. It was very interesting.
LA MONICA: And it's a very -- I mean, it's obviously the pre-eminent bubble that to this day we all talk about, yes, so.
QUEST: People get -- tulips were selling for the price of a house.
LA MONICA: It was pretty crazy.
QUEST: So maybe your burger will sell for the price of your car. Good to see you. Still ahead, protesters in Hong Kong say they are fighting for
the identity of a city as they know it. A fueling day of protests that we need to understand, after the break.
QUEST: Hong Kong is in the grip of what could be its biggest protest movement since 1997 hand back. One of the city's biggest trade unions is
now calling for a strike in the coming hours. Earlier, there were more rallies over a bill that would allow the extradition of fugitives to
mainland China. The critics fear this bill however well intentioned could be widely abused.
The Hong Kong Confederation of Trade Unions says "this government wants us to be frustrated and defeated by it, but we are not. On the contrary, we
want to let the Chief Executive Carrie Lam know the protest on June the 9th is only the beginning of this fight."
Hong Kong is a city built for business, and mass strikes could hit hard. Jamie Metzl is the Senior Fellow at the Atlantic Council and author of a
new book "Hacking Darwin: Genetic Engineering and the Future of Humanity". Always good to have you, sir --
JAMIE METZL, SENIOR FELLOW, ATLANTIC COUNCIL & AUTHOR: Nice to see you again --
QUEST: Always good -- OK, how serious is this latest battle in Hong Kong?
METZL: It's a big deal because Hong Kong was promised at the time of the handover to China that it was going to have one country, two systems.
China is completely reneging on that deal, and every time the people who are supporting more independence for Hong Kong, more -- the maintenance of
this system, this legal system that has defended people's rights, they're getting pushed back. And this extradition -- and this extradition law is a
big and a fundamental blow to the concept --
QUEST: But there's nobody --
METZL: Of Hong Kong.
QUEST: It is only a negative if it is abused by the Chinese.
METZL: Yes, well, that -- think of what you're saying --
[15:45:00] QUEST: Well, I know, I know, but I know --
METZL: Of course the Chinese are going to be --
QUEST: I mean, on the basis of these two sides to have the argument, the Hong Kong government says look, at the moment, we can't extradite a Taiwan
murderer to Taiwan because there's no extradition treaty.
METZL: Yes, they don't have an extradition treaty with China, but they have extradition treaties with others who they think are responsible
actors. And as a matter of fact, the protection against the Chinese legal system is built into the Hong Kong law because people recognize that China
doesn't have the rule of law. And so if there aren't these kinds of protections, everybody knows that China is going to abuse that to limit the
freedom of maneuver inside of Hong Kong.
QUEST: The difficulty here is, regardless of the protests -- and maybe I'm just being cynical here that the law is going to be passed.
METZL: It is.
QUEST: There's a majority on LegCo --
METZL: Yes --
QUEST: For Beijing, a pro-Beijing majority in-built -- the chief executive was appointed by Beijing --
METZL: Yes --
QUEST: In some sham election.
METZL: It's true, so Beijing holds the cards in Hong Kong and it's really tragic, because we are watching Hong Kong and this idea of Hong Kong, and
not just the idea that was from the British or from the NGOs, but what China promised Hong Kong, and that space is being limited --
QUEST: It should be --
METZL: And it's very worrying.
QUEST: Did anybody really ever think that the Chinese were going to keep their word on that? I mean --
METZL: Yes, I mean, let's put it this way. One, people did, and I think it's right for people in Hong Kong to hold China to its word. And the
second thing is that if you're in Taiwan, you're looking at Hong Kong and China is promising you one country, two systems for Hong Kong, you'd be
insane to think that's a serious offer.
QUEST: So, 50 years takes us to 2047.
METZL: Correct --
QUEST: We're just -- we're not quite at the halfway point. But I was in Hong Kong recently, and there the business talk is what's after '47. It
seems a long way away, but if you're about to take a lease on an office building, a 20-storey office building, it could be a 30-year lease.
METZL: It could be --
QUEST: So --
METZL: And China has a plan of integrating that whole Pearl River Delta, and Hong Kong will be -- will be part of it. But if you're someone who
lives in Hong Kong and you believe that the rule of law means something to you, then you should be worried.
QUEST: But does it mean that China, before long, is going to have to make a statement of intent about -- not rather a traditional treaty, but about
the post 50-year policy that they will maintain for China? Because very soon and sir, within 20 years, people are going to say what's next?
METZL: Yes, well, China is making that statement now. It's very clear that the system of special rights for Hong Kong, a system of rule of law
has been limited. And that's where things are heading.
QUEST: This all seems very strange, when I look, you're the genetic engineering in the future of humanity. Does it seem weird to write a book
like this when we're all still arguing about, you know, systems of government in 40 years time. When you're talking about something far more
serious in --
METZL: Well, it's connected.
QUEST: Is it, how?
METZL: And it is because they're going to be the story of the 21st century, is the competitive ecosystems between China and the United States,
and the technologies of the future, the technology of the 21st century like AI, ergonomics are going to be part of this competition. It's part and
parcel of everything.
QUEST: Does it hurt or harm, maybe I'm being too narrow-minded and parochial, does it harm or hurt or harm when you have these -- the United
States go on this tariff war, this -- against somebody like China?
METZL: Well, the United States has to stand up to China. China has since it entered the WTO, has abused the privilege that it was given. And so the
United States and the European Union for that matter need to tow a much tougher line on China. But if the United States is being tough on China,
the best way to do it would have been to bring everybody together through an entity like the Trans-Pacific Partnership.
But even then, even now, the U.S. has to push hard on China because China has abused the system.
QUEST: Trans-Pacific Partnership, haven't heard that one for a while.
METZL: You know, we're still holding on to hope.
QUEST: T -- what are we?
METZL: TPP --
QUEST: Right though, but it's -- they've --
METZL: Well, now it's without the United States, and --
QUEST: It's T-12 minus one or whatever it is --
METZL: Right, and Japan is carrying the flag and some day, the U.S. will recognize that the best strategy for us is with our allies.
QUEST: Good to see you, sir, thank you --
METZL: My pleasure.
QUEST: Last call at the Four Seasons Restaurant. The venerable institution closes its doors of a proper farewell toast after the break.
[15:50:00] (COMMERCIAL BREAK)
QUEST: The music, the Four Seasons Restaurant, the legendary dining room of New York's elite has shut its doors. For 40 years, it created the power
lunch, and rose from executives to statesman, moguls to movie stars. Deals were closed over some of the most expensive meals in the city. And you
always had your own table, the right table.
You didn't want to be sitting too near the pool. You were rubbing elbows with coked-in insider ambiance. Now, the storied original dress in its
Picasso curtain closed in 2016, it moved only blocks away where it reopened only last year. It was about a $30 million or $40 million renovation. And
there it will close.
This isn't a mere shuttering of the business, it's the end of an era. So please, join me pool side, won't you, Steve Zagor is with me, the former
dean of the institute, good to see you, sir -- good Lord --
STEPHEN ZAGOR, FORMER DEAN, INSTITUTE OF CULINARY EDUCATION: There goes where --
QUEST: You can't take me anywhere. It's -- now, why did the Four Seasons -- it was an institution.
ZAGOR: It was an institution.
QUEST: What went wrong?
ZAGOR: It just -- it outlived its usefulness. At this point, it had become a little bit of a dinosaur in a world that had changed around it.
And the field was different, the people are changing, the whole texture of New York is changing, and it just was a relic.
QUEST: But I went to the Four Seasons several times. And you could only have certain tables, because other tables were always taken by the same,
it'd be Les Moonves reserve over there, there will -- names themselves as MP, Rupert would have his table over there, people would have their tables
and they'd have them there every day.
ZAGOR: Every single day, and that became part of a notoriety, but those people don't come around so much anymore. And it split a little bit
because remember the Four Seasons that you said moved. And so they had --
QUEST: That was a disaster.
ZAGOR: That was part of the end. They lost that historic moment that was in the old location. It had been there for so many years, with all the
great art and the great -- and the great pool room and all the stuff that you just --
QUEST: Yes --
QUEST: Just look at it.
ZAGOR: I know, I know, I feel like I want to dive in.
QUEST: The food, it was good, but I wouldn't have said it was --
ZAGOR: No --
QUEST: It wasn't something to die for.
ZAGOR: No, it was -- it wasn't the food, it was the entire experience. It was as you said, it was the regularity, it was being loved --
QUEST: They drove the soul --
ZAGOR: They drove the soul, exactly right --
QUEST: Oh, they drove a soul --
ZAGOR: If you're thinking soul, there's soul --
QUEST: Yes --
QUEST: So how much of the scandal of one of the owners who was kicked roundly out and nearly prosecuted over sexual offenses, how much did that
ZAGOR: I think it created a real black mark. And there are people who will never go back there because of that. It just is not politically
correct for them to do that. So, it didn't help. You've got an aging business with black marks on it, it had a really difficult time.
[15:55:00] QUEST: And they dare to spend on the new. It was, you know, arguably. So --
ZAGOR: Yes --
QUEST: Tell me, where are people going now?
ZAGOR: They're going all over. New York has changed. I mean, all of -- a lot of the businesses --
QUEST: We're not having candle amber and lights, where are we going now?
ZAGOR: I think that sort of light is out on the Four Seasons --
QUEST: It absolutely does it. So I will go somewhere trendy, I want to go somewhere in and somewhere powerful, somewhere Uber good.
ZAGOR: We're going to neighborhood places around where you are. We're going to your Omakase. We're going to your favorite restaurant that might
be downtown in the financial district, where all of the other powerful people go. You may be over here in Hudson Yards, it's disbursed. It's a
little less formal, a little less centric, it's just changed.
QUEST: So the Four Seasons is gone. The rainbow -- the Russian tearooms are sort of --
ZAGOR: Oh, my gosh, not so much --
QUEST: No --
ZAGOR: Twenty One a little bit is still going on --
QUEST: Twenty One, the burger?
ZAGOR: Yes --
QUEST: The most expensive burger in the city history --
ZAGOR: In humanity, nope, but it's big up there, absolutely, but the 21 is definitely a power place, no question about it.
QUEST: Where would you -- where should I take you for lunch next?
ZAGOR: Sweet Greens?
QUEST: Sweet Greens, downstairs, excellent!
ZAGOR: You've got it.
QUEST: Right, we will have our profitable moment after the break. More champagne?
ZAGOR: Oh, thank you.
QUEST: Tonight's profitable moment, you have to admire Peter Navarro. On this program tonight, a full-throated robust defense of tariffs, both as a
defensive weapon and as also an angle of attack. It's something that is so verboten, something so forbidden in many other economists' language, and
Navarro and this administration goes for it.
You don't have to like it, but you can admire the thoroughness and at least the difference in which they put it forward. He was honest, he was
forthright. Most don't agree with him, but that is the policy of the United States. Tariffs are part of the arsenal of weapons used in trade.
And it will continue with China and beyond. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up
to in the hours ahead, I hope it is profitable. I am off to Singapore and Sydney. If you see me on the travels, do stop and say hello. The bell is
The day is done! The Dow is down!