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Quest Means Business
Russia: Ukraine Fires US-Made Longer-Range Missiles; Trump Arrives In Texas For SpaceX Launch; District Attorney Agrees To Postpone Trump's Hush Money Sentencing; Trump Joins Elon Musk In Texas For SpaceX Launch; U.S. Manufacturers Urge Trump To Roll Back Regulations; Democrats, Some Republicans Urge Release Of Gaetz Report; Walmart Stock Hits Record High After Earnings Report; High-End Art Auctions Could Mark Sales Resurgence. Aired 4-5p ET
Aired November 19, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:10]
ERICA HILL, CNN HOST: The closing bell ringing there on Wall Street. Markets clawed back some losses earlier in the day with the Dow closing
lower, while as you can see there, the NASDAQ and the S&P posting gains.
So those are the markets. These are the main events: US officials say Ukraine hit a Russian weapons arsenal with American made missiles. The
first time Ukraine has used longer range weapons across the border.
Donald Trump is joining Elon Musk in Texas for today's SpaceX launch.
And a conceptual artwork featuring a banana and duct tape could fetch up to $1.5 million at auction this week.
Live from New York. It is Tuesday, November 19th. I am Erica Hill, in for Richard Quest. This is QUEST MEANS BUSINESS.
Good evening from New York.
Ukraine has fired longer range US missiles into Russia just two days after President Biden lifted restrictions on their use. Moscow says Ukraine fired
the missiles into the Bryansk Region. US officials say Kyiv used them to strike a weapons arsenal.
In apparent response, Vladimir Putin updated Russia's Nuclear Doctrine. The Kremlin says Russia now has the right to use nuclear weapons in response to
conventional attacks. All of this coming as we mark 1,000 days now since Russia launched its full scale invasion of Ukraine. US officials say they
were unsurprised that Putin changed Russia's Nuclear Doctrine. They say Moscow had signaled the move for weeks.
Fred Pleitgen reports now on the shift and how Russian citizens are reacting.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Ukraine not wasting any time striking deep into Russian territory using US
supplied ATACMS surface-to-surface missiles only days after getting the go ahead from the Biden administration, the US confirms.
Ukraine's president coy when asked about the strikes.
"We now have ATACMS and we will use them," he said. Moscow up in arms claiming Ukraine targeted military installations in Southwestern Russia
overnight. The foreign minister ripping into the Biden administration.
(SERGEY LAVROV speaking in foreign language.)
PLEITGEN (voice over): "The fact that ATACMS were used repeatedly tonight in the Bryansk Region is, of course, a signal that they want escalation and
it is impossible to use these high tech missiles without the Americans and Putin has spoken about this many times."
And now Putin has reacted.
Breaking news on Kremlin controlled-TV after the Russian president signed an order changing the country's nuclear doctrine. The use of western
missiles for strikes into the strategic depths of Russia means direct involvement of NATO in the war, the host says, and now Moscow's hands are
untied.
Among the changes, the Russians now consider attacks by non-nuclear nations like Ukraine with the help of nuclear nations, like the US, worthy of a
nuclear response, at least on paper.
PLEITGEN (on camera): The spokesman for the Kremlin says the reason why the Russians decided to update their Nuclear Doctrine is so potential
adversaries of Russia know that retaliation will be inevitable if Russia is attacked.
(FREDERICK PLEITGEN speaking in foreign language.)
TRANSLATION: We're with American channel CNN. Can we --
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Okay.
(FREDERICK PLEITGEN speaking in foreign language.)
TRANSLATION: This morning, your president, Vladimir Putin signed an update to Russia's nuclear doctrine. What do you think of it?
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: What is there to think about? What kind of response can there be? Only this kind.
(FREDERICK PLEITGEN speaking in foreign language.)
TRANSLATION: He has greatly expanded the possibility of using nuclear weapons. Do you think this is a good idea.
(UNIDENTIFIED FEMALE speaking in foreign language.)
TRANSLATION: What should our president do? He has to think of something. We need to scare someone.
PLEITGEN: Do you think that the threat of the use of nuclear weapons has increased now?
UNIDENTIFIED MALE: I don't think they will do it. It sounds like mad people. No, they are not mad people. They are very clever, not mad.
PLEITGEN (voice over): Russia's moved to change its nuclear posture comes exactly on the 1,000th day of the war in Ukraine as the US is trying to
help keep the badly outgunned Ukrainians in the fight, now allowing Kyiv to fully use some of the most powerful weapons they've been given.
Fred Pleitgen, CNN, Moscow.
(END VIDEOTAPE)
HILL: And we will continue our coverage of what is happening in Ukraine and, of course, across the border in Russia. But I do just want to bring
you this into us just moments ago, there you see Donald Trump arriving in Brownsville, Texas.
He is there. You see, that's Elon Musk's back to us, back to the camera right there. He is there for the launch of SpaceX's Starship. Of course,
Elon Musk, CEO of SpaceX and strong ally to the president-elect. We are going to bring you much more on that launch, their relationship and also
the latest on Cabinet picks just ahead here on the show.
Let's return, though, to our top story, which is of course, we are covering those strikes inside Russia.
Melissa Bell joining me now from Paris with more.
You know, as Fred noted in his piece, President Zelenskyy somewhat coy, not really responding, although the US has in terms of confirming some of what
happened.
[16:05:14]
Where do things stand at this hour? What is the reaction within Europe?
MELISSA BELL, CNN CORRESPONDENT: Well, certainly there is a lot of concern about this possibly being a more dangerous stretch into which we enter than
even what had preceded it as we await the arrival in the White House of President-elect Donald Trump with his well-known views on the need for
peace quickly.
What we had expected to see and we appear to be seeing, is the possible escalation, as both sides seek to take as much territory as they can ahead
of possible peace negotiations which are inevitably ahead given President- elect Donald Trump's views on the matter.
For Europeans, that, of course, has caused a great deal of alarm. There are concerns in the European continent about what the negotiated peace will
look like. The question for many European countries now whether they will follow the American lead and allowing their long range missiles to be used
by Kyiv in those precious weeks that remain of 2024.
We heard from President Zelenskyy today, speaking to European lawmakers, describing himself, 2025 as he believe the year for peace. He also,
apparently aware of these imperatives that are likely to bring everyone around a negotiating table.
As to the long range missiles, London and Paris, the United Kingdom and France have signaled that they could follow suit. Berlin very determined
that it will not. But certainly a lot of anxiety that's also been caused by what we heard today from European leaders. More acts of sabotage, they
believe, carried out by Russia involving subterranean internet cables that have impacted a bunch of countries over the course of the day.
The United States had been warning that there would be increased pressure from Russia for all the reasons I just described in the next few weeks that
appears to be happening. It is not new here in the European continent. There have been such acts of sabotage before. There have been efforts on
the part of Russia, it is believed, by European leaders to cause trouble, to add to tension and that is likely to increase as well.
All eyes very much now on what the actual response from Moscow will be to these launches of these ATACMS. Moscow says that five of them were taken
down, only one made it through and certainly what we expect is more pressure from North Korean troops, of which President Zelenskyy says there
are now 100,000 inside that Kursk Region where the Ukrainians have managed to hold those positions for so many weeks now.
What is expected by Kyiv and the backers -- its western backers, is that there should be fresh pressure on that front as Russia and its North Korean
ally seek to retake the ground that they lost, pushing Ukrainian forces back within the borders of their own country.
HILL: Yes, absolutely. Melissa Bell live in Paris this hour. Appreciate it. Thank you.
Ukraine's Parliament today approving a new budget that channels more funds to the war effort. That 2025 budget includes some $54 billion in defense
and security spending. It accounts for just over a quarter, 26 percent of Ukrainian economy. Ukraine's economy, of course, facing major long term
challenges at this point.
And keep in mind, part of that involves people, 3.7 million, as you see displaced inside the country as of August, some 6.7 million refugees
seeking safety beyond Ukraine's borders and that upheaval of course, could impact rebuilding efforts.
Oleg Ustenko is the former economic adviser to Ukrainian President Volodymyr Zelenskyy and joins me from Kyiv at this hour. It is good to have
you here.
As we look at the situation on the ground and we look at that budget, nearly $54 million for defense and security, is there enough money there in
Ukraine to continue this fight?
OLEG USTENKO, FORMER ECONOMIC ADVISER TO UKRAINIAN PRESIDENT VOLODYMYR ZELENSKYY: Definitely, we are spending a lot now for security and defense
sector, you rightly pointed out already. So we are talking about 26 percent of our GDP. It is a huge, huge number. Before the war, we were spending not
more than 2.5 percent of our GDP. And now you can compare with what people in NATO countries are spending.
They are spending between two to three percent of their GDP. Here, we are spending eight times more compared with others. And it is understandable
because we are in a state of war, definitely, after the first year, our economy dropped and dropped significantly. We basically fell down by almost
one third, by 30 percent, and the level of unemployment increased and all the rest. I mean, the other problems, economic problems also appeared.
[16:10:09]
And yes, it is very rightly to ask now whether we have enough funds in our hands in order to continue to fight and I would tell you that definitely
not. Definitely not, even if you compare with the Russian Federation.
In Russia, the military budget at least on a level of three times more than we have here in Ukraine. For the next year, they already reserved $150
billion for their military expenses compared with $50 billion which we have in our hands.
So basically, when we are spending everything for military and defense expenditures, definitely we don't have cash to fund all the rest of our
expenditures including social expenditures in the country.
So basically what was decided already, and it is already in the budget for the next 2025 year that we are going to freeze all our social expenditures,
despite the fact that the inflation rate is pretty high. This year, the inflation is on the level of eight percent, but next year we are expecting
that it is going to accelerate and will be up to 10 percent.
So basically, despite this fact, we are not able -- because of the lack of funds, even not thinking in terms of extra support to our people and that's
why you know, everything what we have in non-defense and nonmilitary expenditures are fully funded by our allies, by EU, by IMF by United States
and it is really a huge challenge for us.
HILL: I mean, you paint, quite frankly, it is quite a bleak picture that you're painting there. You talk about outside funding, the IMF and Ukraine
coming to an agreement today for $1.1 billion in aid, of course, at the end of last month, there was the announcement of that $50 billion in loans, $20
billion of that coming from the US. The additional 30 from Europe and western allies.
Are you concerned, though about that funding drying up?
USTENKO: I do concern about this funding as well.
So basically let me explain to you why I see certain risks following even, you know, these decisions which were already taken.
First of all, it is extremely important to make sure that the funds will be available for Ukraine at a certain time. It is not like, you know you can
get an agreement, you can have this agreement and then you are waiting for these funds for a longer period of time compared with what you were
expecting.
It is really necessary to make sure that the funds are available for the country at a certain date. Otherwise, you are not able to manage your
public finance. So from this point of view, I see certain risks.
Also, I see certain risk in terms of the level of this financing because as far as we know, IMF is going to provide next year roughly around $2
billion. We have an agreement with the EU that is going to be 12.5 billion euro from them, but the deficit is on the level of 40 billion.
And here, we have open questions in terms of financing, which will be available for Ukraine from the side of the United States of America. And
that's why from this point of view, I think that it is critically important eventually to make a decision in terms of in the frozen Russian assets and
using only profit out of these assets, but to use these assets per se in order to finance Ukraine under these, you know terrible scenario of war,
which we are experiencing now.
HILL: Oleg Ustenko, we really appreciate you joining us. Thank you.
USTENKO: Thank you for having me.
HILL: Well, Donald Trump's election win is now helping him out a bit in the legal department. Why the Manhattan District Attorney's Office is pulling
back on plans to sentence the president-elect for his felony hush money conviction for now. That's next on QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
HILL: All right now in Texas, here is the scene that is playing out. You see of course, the President-elect Donald Trump there with Elon Musk there
in Brownsville, Texas for a planned launch of SpaceX's Starship.
Musk of course, the CEO of SpaceX, now also a strong ally to the president. That launch expected in the next hour. We are going to continue to monitor
that for you.
Also, take a closer look at what this means, not just the relationship that Musk's company, SpaceX has with the US at this point, but his influence on
the president, some of his top picks, including just announcing Commerce Secretary, his pick for Commerce Secretary today, Howard Lutnick, who has
been co-chairing the transition for the former president, now president- elect, all of that still ahead.
We also just learned a few moments ago that Donald Trump has picked Dr. Mehmet Oz to serve as the administrator of the Centers for Medicare and
Medicaid Services. If confirmed by the Senate, the well-known TV personality would oversee those two programs along with the Children's
Insurance Program and the Affordable Care Act Insurance Marketplace.
Trump, of course backed Oz during his unsuccessful 2022 bid for a seat on the US Senate.
Donald Trump, it turns out, is getting a temporary reprieve in the hush money case against him. The Manhattan District Attorney's Office has agreed
to postpone sentencing in the case, it had been scheduled for next week.
In a letter to the judge, though, the DA's Office said the felony conviction against the now president-elect should stand, but acknowledged
he was unlikely to face punishment until after the end of his upcoming presidential term.
Zachary Cohen joins me now.
So we are still waiting to hear from the judge on this. But they also said, oh, sure, you could just post a sentencing until he is done with his term,
2029. It is a little far out.
ZACHARY COHEN, CNN NATIONAL SECURITY REPORTER: Yes, it is acknowledging the inherent complications to this case and to sentencing with Donald Trump's
election win. And look, this is an acknowledgment, too, of the issues that the Manhattan DA's Office knows are coming down the line. They are saying,
yes, we can pushing, we are okay with pushing sentencing down the line for four years, but at the same time, we intend to fight to try to uphold
Donald Trump's conviction in this case regardless of when that court battle or how long that court battle might take.
And look, the Manhattan DA's Office has the only case that actually went to trial and these prosecutors are the only ones to secure a conviction of
Donald Trump.
Donald Trump's team is really claiming victory. They actually called this a total and a complete victory today in a statement reacting to the DA's
agreement, but as you mentioned, the judge still has to weigh in and formally issue an order postponing that sentencing.
But look, this case is not going away. As you mentioned, over the next four years, we are going to see Donald Trump's team repeatedly try to get this
case dismissed. And then also undoubtedly try to appeal any verdict that doesn't go in their favor. That's what the prosecutors in this case are
really anticipating, and why they are okay with pushing sentencing, even if it takes four years for that day to eventually come.
HILL: All right, we will be watching it all. Zachary Cohen, appreciate it. Thank you.
Human rights groups and the US Consulate in Hong Kong are condemning the sentencing of dozens of pro-democracy advocates and former lawmakers in
Hong Kong.
[16:20:04]
The US Consulate says the 45 defendants were, "peacefully participating" in normal political activity protected under Hong Kong's basic law.
This is the largest single prosecution under Hong Kong's national security law enacted four years ago.
Here is Ivan Watson with more.
(BEGIN VIDEOTAPE)
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Judges in Hong Kong handed down a combined prison sentence of more than two centuries behind
bars, in fact, more than 245 years to 45 defendants who have been convicted of the crime of conspiracy to commit subversion.
The defendants, the judges ruled if their scheme had been carried out to the end, the adverse consequences would have been no less serious than,
"overthrowing the government." Now the defendants, they organized an unofficial primary election back in 2020 to prepare candidates to compete
in elections for the city legislature and that is essentially their crime, their plot, that they were convicted of.
This has all but killed off the once vibrant pro-democracy movement that thrived in this city until a crackdown that began four to five years ago
with the imposition of a controversial national security law, part of a broader crackdown that has killed off independent newspapers in the city
and the protests and demonstrations that were once tolerated and in fact allowed to participate in the streets of this city.
Outside the courtroom on Tuesday, a single woman tried to hold up a protest sign, and she was quickly carried away by police to a police van, that is
symbolic of how dramatic the shift in political culture has been over the last four to five years.
Critics of the crackdown and of the sentencing include human rights groups as well as the US Consulate here, which has condemned the sentencing and
added a statement: "We call on China and the Hong Kong authorities to cease politically motivated prosecutions of Hong Kong citizens and to immediately
release all political prisoners."
The Hong Kong government and the Chinese National government have rejected this kind of criticism, arguing that this is meddling in Hong Kong's
internal affairs. They contest that this court case has helped bring back stability to Hong Kong, which went through nearly a year of anti-government
protests in 2019 that had grown increasingly violent.
Ivan Watson, CNN, Hong Kong.
(END VIDEOTAPE)
HILL: They've been seemingly inseparable for weeks. Now, Donald Trump and Elon Musk are in Texas for the launch of SpaceX's biggest rocket. A closer
look at their increasingly close relationship, up next on QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:26:09]
HILL: Hello, I'm Erica Hill in New York. There is more QUEST MEANS BUSINESS in a moment.
First though, Walmart executives say they are attracting wealthier customers as they raise their guidance. And a banana duct taped to a wall
could sell for over a million dollars this week, as the art market looks for a rebound.
But before that, the headlines this hour: US envoy Amos Hochstein holding meetings in Beirut with Lebanese officials on Tuesday to discuss ceasefire
efforts. His trip is seen as a sign of progress in negotiations between Israel and Hezbollah.
Hochstein has said though a deal is within grasp, but it is ultimately the decision of the parties.
China apparently turning down a meeting with US Defense Secretary Lloyd Austin. A senior US Defense official says Beijing claimed a recent US arms
sale -- blamed rather -- a recent US arms sale to Taiwan. Austin had offered to meet his Chinese counterpart at a gathering this week in Laos.
That rejection comes just days after President Biden and President Xi Jinping met in Peru.
First class passengers on Delta Air Lines are getting a new perk. Shake Shack cheeseburgers on certain flights.
Now, the airline says this is a first of its kind partnership. Fear not, though, you can customize your toppings, even get your famous Shake Shack
sauce on the side, but I hate to be the bearer of bad news, there will not be any crinkle cut fries on board. Your burger will instead come with
potato chips.
Donald Trump is in South Texas. He is there, of course, to watch a scheduled test launch of SpaceX's most powerful rocket. It is known as
Starship, and he is there as a special guest of SpaceX CEO, Elon Musk who some are referring to as the president-elect's First Buddy.
About an hour ago, Mr. Trump picked Howard Lutnick, the CEO of Cantor Fitzgerald, as his Commerce Secretary. Lutnick had been serving as well as
co-chair of Trump's transition team and was angling, of course, for the role of Treasury Secretary. Musk had thrown some weight behind that idea.
Joining me now to discuss, senior politics reporter, Stephen Collinson and CNN's space and defense analyst, Kristin Fisher.
So, Kristin, I am going to start with you. So we are looking at this, I mean, this is a huge deal. I believe it was October 13th, the last time we
saw this SpaceX activity. The fact that it is happening again so quickly, what are we watching for in the next, I guess, half an hour or so when that
window opens?
KRISTIN FISHER, CNN SPACE AND DEFENSE ANALYST: Well, first you want to make sure that this spacecraft successfully launches, that it is then caught
seven minutes later by those huge metal chopsticks like we saw it catch back in October, and then about an hour later, we are going to watch the
actual space ship, Starship, if successful make it about three quarters of the way around the Earth, and then splashdown in the Indian Ocean.
Two big things to watch here, one, Erica, they are going to attempt in flight, the first refiring or ignition of a raptor engine in the vacuum of
space that has not been done before. Really critical for an orbital flight. This is just suborbital, not being able to fully circle the Earth. And then
the other thing is, you know, can SpaceX actually do this so quickly back- to-back just one month apart between these two Starship launches, a crucial test for the space company, because this is exactly what they're going to
need to do to reach its ultimate goal of rapid reusability, crucial to get astronauts, people, and cargo to and from the moon, and of course, someday,
Mars.
HILL: Yes, absolutely. Stephen, as we look at this, you know, through the political lens here, Donald Trump has praised Elon Musk, has talked about
how impressed he was, he is rather, with everything that SpaceX is doing.
SpaceX of course, also has some government contracts, I believe, about $4 billion for NASA's Artemis Program. Elon Musk has tussled a number of times
with the federal government, whether its violations with the EPA, complaints about the FAA, and launch licenses.
The fact that the president-elect is now here for this moment, what should folks read into that in terms of what it could show in terms of benefits
for Elon Musk?
[16:30:13]
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: I think that what it shows is that this new position that Musk has leading this new Department of
Efficiency in the government gives him the ability potentially to sweep away regulations and tilt the marketplace, if you like, towards his
companies at a time when he does benefit, as you say, from massive government contracts.
His other pioneering business Tesla is a key player in the electronic electric vehicles field, and there was also talk that Trump may actually
tilt the playing field regulatory wise to Tesla as well by withdrawing some subsidies that are used by other electric vehicle manufacturers.
I think what it tells us is that the idea of conflicts of interests are very old fashioned at Donald Trump's new Washington.
HILL: And as we look at this, too, there is the broader impact. Donald Trump has always been interested in space. We saw that during the first
Trump administration, Kristin, with Space Force of course, and SpaceX in a large way, is sort of the one left standing at this point in terms of
private companies that can work with the government.
KRISTIN FISHER, CNN CONTRIBUTOR: Well, and not just SpaceX, Erica, but the Artemis program, NASA's Artemis program. This is the program that was born
in the Trump administration, survived the transition to the Biden administration. President Trump obviously a champion of it, but even he at
times has said, hey, why are we going back to the moon, why aren't we just going straight to mars?
And of course, Elon Musk's entire goal was starting and founding SpaceX was to make humanity multi-planetary, to make a human colony on mars, and so a
lot of people in the space community and the space industry are wondering what happens to the Artemis program once Donald Trump takes office. Does he
keep the U.S. on course to return American astronauts to the moon in 2026? 2027? Or is there perhaps another change in destination?
Do you do a moon, mars and give SpaceX contracts for both? A lot of people sitting back and wondering what indeed, when you have Elon Musk, who is in
charge of this new Department of Government Efficiency, also in charge in running, you know, arguably the most efficient and successful space company
in the world. What does that do when he then makes recommendations towards a big government bureaucracy like NASA?
HILL: Yes, we will certainly be watching all of those questions. I think you're 100 percent right. Top of mind for so many.
When we look at Elon Musk's influence, even, I just want to get a quick button from you when we look at the fact that confirming CNN's earlier
reporting a short time ago, the president-elect put out a statement saying that in fact Howard Lutnick was his choice, the chairman and CEO of Cantor
Fitzgerald, co-chair of his transition team. for Commerce secretary but not that long ago Elon Musk was pushing to see him in Treasury. Anything to
read into that?
COLLINSON: Well, Musk, as you say, has been very influential on a lot of these appointments, including Matt Gaetz, the controversial attorney
general appointment. It's true that he was pushing him for Treasury as far as our reporting goes. There has been some speculation that Trump has got a
little bit irritated with Lutnick promoting himself. He's the head of the transition, perhaps campaigning too much for that Treasury job.
But he's still going to play a very important role in the Trump administration. He is a very aggressive exponent of the tariff policy that
Trump is promising. Tariffs of up to 10 percent on all goods, up to 60 percent on Chinese goods imports into the United States. I think his
appointment is a signal that Trump was not bluffing when he was talking about tariffs. Of course tariffs are always seen as a potential negotiating
ploy that we learned that during the first Trump administration.
But I think the signal that world powers will take from this is that Trump plans to ignite new trade wars and to drive very hard bargains when he
takes office in January.
HILL: Stephen Collinson, Kristin Fisher, appreciate it. Thank you both.
A new survey finds 93 percent of North American manufacturers want closer economic ties between Canada, the U.S. and Mexico. That survey was
conducted in part by the National Association of Manufacturers, which represents firms in the U.S. Its members could of course be impacted by
President-elect Trump's push for higher tariffs and also a crackdown on immigration.
The group itself represents 79 percent of the country's largest manufacturing firms. It's been calling for lighter regulations and lower
taxes.
Jay Timmons is the group's president and CEO. He's at the North American Manufacturing Conference in Ottawa, joining us from Canada this hour.
Good to have you here, Jay. That survey really stood out to me. 93 percent of the members want closer ties, right, for these three North American
nations. In some ways, though, that seems to be the opposite of what the president-elect is after. Does that concern you?
[16:35:07]
JAY TIMMONS, PRESIDENT AND CEO, NATIONAL ASSOCIATION OF MANUFACTURERS: Well, I'm not sure it's the opposite of what the president-elect is after.
After all, he did negotiate the USMCA five years ago or four years ago. And that really served as the basis for strengthening the economies of our
region. And it also served as the basis for thwarting frankly bad trade practices coming out of other areas of the world.
What we want to do is we want to strengthen the ties here in North America so that we are more economically strong and fit, but also supporting
countries that share our values and frankly are our neighbors.
HILL: As we look at where things stand Howard Lutnick of course just announced as the president-elect's pick for Commerce secretary. He has
been, as my colleague just noted, an aggressive proponent of the tariffs that Donald Trump is proposing. You had said recently what's needed are
trade deals. There are major concerns that if the president elect follows through with this promise of these severe tariffs, it could lead instead to
a trade war.
TIMMONS: Well, look I think you can use, and your previous guest also talked about this, you can use the prospect or, you know, the thought of
tariffs if you will to actually work on negotiating trade agreements. And we're hopeful that that's what the president will do.
If tariffs are going to be imposed, we are hopeful that they will be strategically targeted to deal with very specific problems that we're
facing, for instance, an intellectual property theft or dumping, subsidization. Those are things that threaten manufacturers in the United
States and in North America as well.
HILL: You mentioned working closer together with neighbors, right? Canada, the U.S., Mexico. Some of those threatened tariffs have been directly aimed
at Mexico. Does that concern you specifically?
TIMMONS: Well, look, you know, I think Mexico has a little bit of soul searching to do right now because if you look at the agreement that was
signed a few years ago, Mexico has done a few things that actually have not been completely in alignment with the spirit and the letter of that
agreement. Now that there's a new administration in Mexico, hopefully they're going to be taking a very hard look at some of the things that the
previous administration had chosen to do that I don't think actually were really in line with what the intent of the agreement was.
President Sheinbaum, I think, wants to see stronger relationships with the United States, had an opportunity to talk to some of the ministers in
Mexico about a month ago, and I think that they really would like to see a stronger relationship and that means that they're going to have to ensure
that that their practices, their economic practices, some of the legislation and the constitutional amendments that have been put in place,
there probably needs to be a second look to make sure that they're in compliance with USMCA.
HILL: You had told Bloomberg earlier this year that you can't have a conversation without a business owner, without it revolving around
staffing, and the difficulty of finding a skilled workforce. Pew found that 13 percent of all undocumented immigrant workers are actually working in
manufacturing.
As we're waiting to see how things play out in terms of Donald Trump's promise for mass deportations, there are concerns about the impact on
manufacturing and a number of other industries in this country. How concerning is that to you, given these numbers, some 13 percent of workers
in manufacturing are in fact undocumented immigrants?
TIMMONS: Well, I'll be honest with you, Erica. I don't know of any manufacturers that hire undocumented workers. I think that perhaps that is.
you know that is a rare case, but having said that, obviously issue is where do we find the workers to be able to grow the manufacturing sector in
the United States. Today we have almost a half a million unfilled jobs in manufacturing, a half a million.
And we're not were not cranking folks out of the trade schools and the technical colleges that we really need to do. That was something I worked
on with the first Trump administration. Ivanka Trump headed up the workforce policy commission for the administration. And our hope is that
that will be a focus to train more young people in, you know, get them in the career path for manufacturing jobs in the future.
HILL: Jay Timmons, good to have you with us. Thank you.
TIMMONS: Thank you.
HILL: Well, pressure is building on Capitol Hill over the possible release of a House Ethics report on Matt Gaetz. A number of lawmakers on both sides
of the aisle say Congress should get the details on that investigation into the man who is of course now Donald Trump's pick for attorney general.
The report is thought to detail allegations of sexual misconduct by the former Republican congressman. Gaetz has repeatedly denied any wrongdoing.
An attorney representing two women who claim Gaetz paid them for sexual favors spoke with CNN.
[16:40:07]
(BEGIN VIDEO CLIP)
JOEL LEPPARD, ATTORNEY: She was invited to a party in July of 2017. She testified to the House that as she was walking out to the pool area she
turned to her right and she witnessed her client -- I'm sorry, her friend having sex with Representative Gaetz and her friend at that time was 17.
ERIN BURNETT, CNN ANCHOR: So did -- does your client have any idea as to whether Matt Gaetz knew about the age?
LEPPARD: She testified -- yes. So she testified to the House that Representative Gaetz did not know her friend's age at the time they had
sexual intercourse and when he found out about her age that Representative Gaetz stopped having sexual intercourse with her, and he only started the
sexual intercourse interactions later on when she turned 18.
BURNETT: So then it continued again.
LEPPARD: That's correct.
(END VIDEO CLIP)
HILL: Annie Grayer joins me now live from Capitol Hill.
Look, there is a lot that people want to know. There is a big push, of course, for this report to come out and there is also a lot of jockeying
for Senate Republicans to get behind this nomination of Matt Gaetz. It is busy up there on Capitol Hill for all things Matt Gaetz.
ANNIE GRAYER, CNN CORRESPONDENT: That's absolutely right. I mean, the pressure campaign both to release the report and suppress it are building
at rapid speeds. I mean we're having Donald -- we know Donald Trump is calling senators directly as he's trying to build his case for Gaetz to be
his attorney general nominee.
And Gaetz is starting to make the rounds himself. He met with a group of House Republicans last night where he talked about this ethics report and
started to downplay it according to sources in the room. And we know that Republicans on the House Ethics Committee are weighing what to do here. And
sources tell us that they're also looking at ways to potentially delay or suppress this report from ever coming out.
The ethics panel is supposed to meet tomorrow. We are waiting to see if that meeting happens because Republicans have already delayed this meeting
once. And then you also have House Speaker Mike Johnson, who's saying publicly that this report should not see the light of day. So while this
effort to keep this report from coming out is underway, there are also a number of Republican senators who are saying, we need to see this report.
It's a huge part of the confirmation process.
Senator Chuck Grassley, who's going to be leading the Judiciary Committee in the next Congress, said the report should come out. It will help speed
up Gaetz's confirmation process. You had, meanwhile, 100 Democrats in the House sending a letter to the committee, pushing them to release the
report. So the pressure campaign on all sides is mounting and all eyes are on this ethics committee which is really a black box. No one knows what
they're going to do.
HILL: Yes. Annie Grayer, appreciate the update. Thank you.
Walmart's stock hitting a record high today. We're going to take a closer look at that earnings report, sparking the bumper day next.
(COMMERCIAL BREAK)
[16:45:30]
HILL: We're counting down now to that SpaceX launch in Texas. Donald Trump as you know is there alongside, can't him right now but I promise you. You
see Senator Ted Cruz behind him. SpaceX CEO Elon Musk of course who is there and has become a strong ally to the president elect. So we're keeping
an eye on those events in Brownsville. We'll bring you that as it happens.
Taking a closer look at some of the business headlines for today. Walmart stock hitting an all-time high, closing around 8660. That's just off its
high. Walmart raised its annual forecast when it reported earnings earlier today. And that is basically the cherry on top for Walmart's more than 60
percent stock jump so far this year.
Take a look at that. The store chain says it has gained more market share from higher end customers, but it did warn tariffs could lead to higher
costs, which of course will be passed on to customers.
Nathaniel Meyersohn is covering all of this from New York.
So overall a very strong earnings report with a little bit of caution. Walk us through what we heard.
NATHANIEL MEYERSOHN, CNN BUSINESS CORRESPONDENT: So, Erica, I think it's pretty remarkable when you look at Walmart's rise the last few years. You
know, five, 10 years ago people were counting out wondering, how is Walmart going to respond to the rise of Amazon and online shopping, and Walmart,
quite frankly, has never been in a stronger position.
I think what's so remarkable about what the company has been able to do is that they've added online shopping to this really strong in-store business
that they have. They've added -- you know, their strength right now, Erica, is in groceries. They're the largest grocery seller in in the country. But
then they've added clothing, electronics, home goods, and really been able to kind of mix this assortment and get customers from all income
demographics.
Typically, Walmart's shoppers have been lower income, but they've been really strong the past few quarters and past few years with higher income
customers, customers making more than $100,000 a year. Typically Amazon's base. So Walmart, it's cutting into Amazon's base and it's expanding it
online in store. So just really strong performance right now from Walmart.
HILL: Yes, strong growth across the board. There is concern, though, right, as they were pointing out, there is concern over the potential tariffs
which Donald Trump has threatened. And we have talked extensively about those costs will in fact get passed on to consumers. What more did Walmart
have to say about that?
MEYERSOHN: So I think that is the elephant in the room right now, Erica, with all of these retailers. What is going to be the impact of president --
incoming President Trump's tariffs on the industry? I think you'll have some companies like Walmart. We also heard Lowe's today. Big companies are
going to be able to handle increased tariffs. Now they're going to have to pass on some of those costs to consumers. So customers will be paying
higher prices, particularly for imported goods from China.
But you know, Walmart has the size and the scale and the buying power to be able to drive down costs from suppliers and kind of diversify its supply
chain but, Erica, the big challenge is going to be for smaller companies, for mom and pops, for independent stores that just don't have the scale of
a Walmart or an Amazon or a Costco to be able to kind of leverage its supply chain. So the big impact is going to be from tariffs is going to be
on certainly consumers, but also smaller businesses that just cannot compete in a type of environment.
And those are the companies of course that have been squeezed, you know, the past several years and even decades from the rise of the big box chains
and Amazon.
HILL: Absolutely. Nathaniel Meyersohn, appreciate it. Thank you.
So just how much would you pay for a banana and a strip of duct tape? Well, the auction house Sotheby's thinks it could be as much as $1.5 million.
We'll explain, next.
(COMMERCIAL BREAK)
[16:52:01]
HILL: A banana taped to a wall could fetch up to $1.5 million at a Sotheby's auction on Wednesday. The piece called "Comedian" is one of more
than 1600 items being offered this week by major auctioneers. Auctions that could bring in more than $1 billion and are really seen as a test of the
art market's strength and the sentiment of wealthy collectors following Donald Trump's election win. Just last spring the CEO of Sotheby's told
Richard Quest a strong art market goes far beyond the U.S.
(BEGIN VIDEO CLIP)
CHARLES F. STEWART, CEO, SOTHEBY'S: I think part of the reason our markets have been so resilient is, first of all, they're very global. So at the
same time as you may be seeing concerns about inflation or interest rates in the U.S. you're seeing heightened concern about geopolitics and conflict
in Europe but Asia is coming back out. The Middle East is very strong. There's all kinds of, you know, countervailing forces that are supporting
the market.
(END VIDEO CLIP)
HILL: Vanessa Yurkevich is following it all for us from right here in New York, as well.
The banana taped to the wall. I mean, it certainly created a buzz the first time around, but 1.5 million potentially. Wow.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes. And the art industry is banking on it. They're banking on big sales this season.
You have about $1 billion worth of art hitting the auction houses all this week here in New York City. And this is an industry that's hoping for a
resurgence. In 2023 art sales were a little bit lackluster. Sales of high- end art dropped by 27 percent in 2023 year over year, and then the amount spent on art dropped 32 percent in 2023 year over year.
So this year's sales could really be an indicator about how the uber- wealthy are feeling about the economy and some art analysts are saying that Donald Trump's win could be a key indicator. That is because in his first
term, a lot of Donald Trump's proposals and policies benefited the wealthy. The rich got richer. We're also seeing lower interest rates, which makes
financing for art a lot easier.
And tax breaks for the wealthy obviously mean more money in the pocket, more money to spend on art. So some of the as you mentioned "Comedian," the
banana taped with duct tape to the wall. Essentially, you get instructions and a one-time banana, but you have to replace the other bananas yourself
once it rots. Also coming to market is "Empire of Light". This is a piece of art that is expected to go from $95 million. That would be a record for
the artist Rene Magritte.
Also, Andy Warhol's "Skyscraper." This is actually an art piece that was commissioned for Donald Trump. He didn't like it, so he didn't end up
taking it. They're estimating this could go for $500,000, but if you want a piece of drama, I guess maybe you'll spend a little bit more. And then if
last night's sales were any indication, the art market sure is heating up right now. "La Grande Dame," the cat woman, sold for $11.4 million, double
what it was expected to go for.
And one of Monet's beautiful "Water Lilies" sold for $65.5 million. $5.5 million more than what was expected.
[16:55:06]
But like you, Erica, I am keeping my eye on that banana because, as we know, we could probably make our own for $2.
HILL: Yes.
YURKEVICH: But whoever owns the $1.5 million version, good for them.
HILL: I am struck by the fact that, as you point out, you have to keep replacing the banana.
YURKEVICH: You do. You do.
HILL: Which is really, really something. So it's sort of a DIY installation in some ways.
YURKEVICH: Yes. Yes. You get the you get the instructions on how to install it, but you have to buy your own banana. Amazing.
HILL: Trade off. Yes. You got to find the right street corner in New York City where they're a good deal. Some places you can still find them five
for a dollar, but they're hard to find.
Vanessa, appreciate it. Thank you,
YURKEVICH: Thank you.
HILL: Just ahead here, we are waiting for that SpaceX launch in Texas. Donald Trump of course is there in attendance. Stay with us. That's ahead
after this quick break.
(COMMERCIAL BREAK)
HILL: Thanks for joining me this hour on QUEST MEANS BUSINESS. I'm Erica Hill in New York. Stay with us. "THE LEAD WITH JAKE TAPPER" picks up.
KAITLAN COLLINS, CNN ANCHOR: Trump was talking about watching it live on TV, leaving some billionaire donor on hold while they were talking. And
you're seeing that continue. Jake, of course, the question that we've heard even lawmakers raise is potential for conflicts of interest, given just how
many contracts, how many billions in contracts that SpaceX has with the federal government. And of course, a question of what's to come.
JAKE TAPPER, CNN ANCHOR: And Kristin, tell us what we're about to see here any minute. Right now we're looking and we see the image that Senator Bill
Hagerty of Tennessee to the left, Senator Ted Cruz, President Trump there. Obviously, Donald Trump Jr. is there as well. But forget the political
celebrities. What are we going to see from this beautiful space craft?
KRISTIN FISHER, CNN CONTRIBUTOR: You are about to see something that no other company or country in the world can do. I mean, not only is SpaceX
going attempt to land this rocket booster on earth or on a drone ship, they're going to attempt to catch it mid-air with these two giant metal
chopsticks. And, you know it's so easy to get caught up in the politics of the moment with Trump and Elon Musk. They are just two weeks after the
election.
TAPPER: We can put that aside for a sec.
FISHER: But -- yes. And, you know, I was going say because this is such a moment, an engineering moment for all of humanity. SpaceX is more than just
one man. It has some of the most brilliant engineers in the world working for it. And what they're about to do and what they're trying to do, this is
the first spacecraft that's ever flown that's designed to take humans not just to the moon, but to mars. And we're not just talking about taking a
few people to mars. We're talking about lots of people. Each Starship rocket can carry 100 people.
END
