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Quest Means Business

Tariff Take Center Stage New York Auto Show; WTO Sounds Alarm on Impact of Tariffs on Global Growth; U.S. Retail Sales Surge Ahead of Tariff Hikes; Judge Says, White House Showed Willful Disregard for Order; Attorney General Says, Abrego Garcia Not Coming Back to U.S.; Automakers Scramble to Adapt to Trump's 25 Percent Tariff. Aired 4-5a ET

Aired April 16, 2025 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:09]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street, a grim session. The market turned turtle halfway

through the day. It was down, and I think we are pretty much off at the lows of the session, certainly on the Dow, and when you see the triple

stack, it'll be just as bad in a moment or three.

Please put us out of our misery and one gavel, two, gavel three. Yes, it is all over. The NASDAQ is off some three percent. Those are the markets and

the main events that we are talking about today.

A two-pronged warning. The World Trade Organization and the Fed, both projecting economic damage from President Trump's tariffs. Tonight on this

program, the World Trade Organization DG Ngozi Okonjo-Iweala will be talking to us.

NVIDIA shares are down very sharply because of new export restrictions for the company onto China.

And we are here at the New York Auto Show, the international auto show, where executives are going to be telling us how they are hoping to cope

with all this uncertainty.

Yes, live from the New York International Auto Show on Wednesday. It is April the 16th, middle of the month. I am Richard Quest, and of course,

with all of these glorious cars behind me, I mean, business.

Good evening from the New York Auto Show. It is an industry where we are today that seems to be at the ground zero of President Trump's trade war

for the very simple reason all of the world's largest automakers are here, and they are trying to navigate not only the magnificent new products, the

different concept cars, all the glitz, if you will, and the beautifully expensive things. But this is an industry that has been completely upended

by President Trump's new tariffs.

And as we wind our way through the program tonight, we will have much more on that and the effects.

But we must start with two major institutions, both warning about the effects of Donald Trump's tariffs. The Chairman of the Federal Reserve,

Jerome Powell, today said those tariffs, those duties will cause lower growth and higher inflation, and the World Trade Organization, not

surprisingly or unsurprisingly, says it expects trade to plummet.

The markets, having heard both of these pieces of data, took a sharp turn lower, particularly as Jerome Powell began to speak. He said the Fed did

not anticipate the scale of President Trump's trade war.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: The level of tariff increases announced so far is significantly larger than anticipated, and the same is

likely to be true of the economic effects, which will include higher inflation and slower growth.

(END VIDEO CLIP)

QUEST: We will factor in what the Chair said in just a moment, because the other piece of news that we got was the WTO, the World Trade Organization

based in Geneva, and the WTO is warning global trade is going to take a major hit. Again, you might arguably say, tell me something that you didn't

realize, but the significance is the trade of goods is expected to contract by a fifth of a percent this year in an industry or an area that is

normally constantly growing, bringing middle class and poorer developed nations out of poverty.

Previously, growth in world trade was projected to expand nearly three percent before the tariffs, and now, the WTO says, the war is going to

damage the global economy. Growth projected to come in at 2.2 percent this year. That would have been much higher without the tariffs. And the WTO is

warning its projections could get even worse if escalation continues and it deteriorates.

So with me, the Director General Ngozi Okonjo-Iweala, the DG of the World Trade Organization, who is going to tell us about the uncertainty and the

brake on global growth, joining me from Geneva.

Director General, thank you. The reality is now coming home to roost. The numbers are awful. And to some extent these are really just to some extent

preliminary guesswork on a level of uncertainty that's unparalleled. Would you agree?

NGOZI OKONJU-IWEALA, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: Yes, thank you very much, Richard.

Today, as you said, we released our forecasts, and when we look at trade policies currently in effect, including the pause, we do project that

global merchandise trade volumes will decline by about 0.2 percent, as you said in 2025, this is nearly three percentage points below the level we

would have expected without recent trade policy shifts.

[16:05:26]

But there are two -- there are two downside risks. If we reinstate reciprocal tariffs and if the spread of policy uncertainty goes beyond U.S.

trading relationships, we get a sharper decline of to 1.5 percent. That is global merchandise trade volumes will contract by 1.5 percent if both of

these risks materialize.

So yes, I think that merchandise trade volume growth is not in a good place.

QUEST: Right. So in this scenario, what can you do about it? Because the U.S. has already basically scuppered the appeals process. It doesn't seem

to want multilateral in any shape or form, and it begs the question, what the WTO can do besides stand and watch.

OKONJU-IWEALA: Well, before we talk about that, Richard, I think a very big concern we have has to do with the decoupling of trade between China and

the U.S., which we think is an even bigger problem because if you recall, before we had said that if we have this kind of decoupling and we have

fragmentation of trade into two trading blocs that this could really have a very big impact on the global economy, leading to a drop in real global GDP

of up to seven percent in the long term. This is a very big shock, and we don't want developing countries to become collateral damage in this kind of

trade war, because we are projecting that if we have this decoupling with two trading blocs, we will have double digit welfare losses in many

developing countries. So that's of great concern to us.

And at the WTO -- yes.

QUEST: Do you -- can I just jump in, so there is a terrible delay between me here in New York and you in Geneva, but are you forecasting now, do you

think a global recession? Do you think that is likely?

OKONJU-IWEALA: Look, all I can tell you, Richard, is that we are afraid of the impact on global growth of fragmentation. Trade fragmentation we think

will have a very, very difficult impact on global growth. And I've mentioned the number of seven percent real loss in global GDP in the longer

term.

So you can term it any term you like, but we are very clear that this is not something that would work for developing countries because they suffer

even more. And, you know, a large number of our members are also poorer countries. And that is why we are quite concerned about the China-U.S.

situation. So that is one of the things that really like to see how do we avoid the risk of poor countries becoming collateral damage in the trade

war.

QUEST: What do you see as the future of the WTO? Clearly multilateral is just not going to happen. So what can you do, Director General, to try and

in some shape or form keep global trade growing or getting it back onto track?

OKONJU-IWEALA: Well, I disagree with you about multilateral not happening. We have 166 members in the organization. U.S. trade is 13 percent of world

trade. That means that there is 87 percent of world trade happening between the other members of the WTO, and one of the things that has been so

evident now is members coming to realize just how important the organization is for them and how much they want to protect the most favored

nation terms of the WTO for the rest of the trade, 87 percent of world trade.

And this is why, again, we come back to, look, we don't want fragmented trading blocs. We want our members to be able to trade freely.

So at the WTO, members are talking to each other. They are reaching out. You've seen the E.U. reaching out to other members. You've seen New Zealand

and others coming together to say, how do we protect and safeguard the rest of the system so that we can continue to trade? They've come to value the

WTO more, if nothing else, because let me say one thing, Richard. It isn't governments that trade, it is businesses and businesses rely on the

predictability and stability of WTO rules to trade.

[16:10:13]

There are other agreements we have here, which if businesses don't have them, will create chaos. If you don't know how your goods are going to be

valued, we have a customs valuation agreement. You don't know how your goods will be valued when they land in a destination because you're not

part of the WTO. You can be subject to anything, and a business person doesn't want that kind of chaos.

We provide stability.

QUEST: So do you think that ultimately, other nations will circumnavigate the U.S. and long term, whatever the ambition is to rewrite global trade

that Donald Trump wants to do, ultimately, the U.S. is going to be the loser in the long run. Is that perhaps how it is seen in Geneva?

OKONJU-IWEALA: Let me tell you how it is seen. We do not ask nations to circumnavigate the U.S. at all. The U.S. -- United States is a member of

the WTO, and what were actually encouraging is that members have a good dialogue with the U.S. and this dialogue cannot be at the WTO because it is

not only about tariffs, it has been made very clear by the U.S. that they want to talk about other things beyond tariffs. It could be digital taxes

and levies. It could be VAT. It could be other types of expenditures that are not within the terms of reference of the WTO.

We have urged our members to have a good dialogue with the U.S., which is another member, and that is what we provide, a platform and they are doing

that. They will have bilateral dialogues. When they talk about tariffs, they will try to be WTO consistent in what they are doing.

When they talk about other matters, security, defense spending and so on, this is beyond the WTO, so they can't do it here. They have to do it with

the U.S. But all of them are members. We respect all of them, and we want them to have a dialogue. We don't want circumnavigation of the U.S.

QUEST: Director General, Ngozi, I am grateful to you. Thank you. We will talk more. Thank you for joining us tonight.

Now, the other big piece of news that we were talking about is from the Federal Reserve. Jerome Powell says the Fed is waiting for more clarity on

President Trump's tariffs before it would decide on interest rates. The U.S. President has repeatedly claimed foreign countries will pay for the

duties. Now, the truth, the Fed Chair says Americans will have to bear the burden.

(BEGIN VIDEO CLIP)

POWELL: Unemployment is likely to go up as the economy slows, in all likelihood, and inflation is likely to go up as tariffs find their way and

some part of those tariffs come to be paid by the public.

(END VIDEO CLIP)

QUEST: Now, the comments come as new data show consumer spending surged in march. Retail sales were at one percent -- at 1.4 percent, I beg your

pardon. It is the highest, and interestingly, sales of cars and auto parts were also up very strongly, up more than five percent because many

consumers are rushing to make purchases before tariffs come in. Economists warn that kind of spending will eventually fade.

Vanessa is with me here at the Auto Show. Splendid cars.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Lovely setup you have here.

QUEST: Absolutely. Good of you to join us.

I will ask you which one you want to take home, but listen, this idea of increased spending ahead of the tariffs, it has been quite dramatic, but it

is going to wear away.

YURKEVICH: And essentially this is looking backwards. This is spending that happened in March, but it indicates what consumers were thinking about

looking forward, right?

They were concerned about higher tariffs especially on cars, the foreign cars that are hit with this 25 percent tariff, the car parts that are going

to be hit. So we saw consumer spending in retail rise by 1.4 percent and as you mentioned, cars, that was the majority of it.

QUEST: And when that wears out, then we get the reality of the higher prices which the Fed today warned about. This is almost, you know, that

Jerome Powell has said it a few weeks ago, but this time he really nailed it.

YURKEVICH: Yes, I think he was very much saying as much as he could say in the moment to try to explain where the economy is heading and what the

Fed's role is in all of this.

What I took away from it is that he was messaging stagflation. He didn't say the word, but he talked about high inflation, high unemployment and

slower growth. That is the recipe of stagflation and that is very hard for the Fed to tackle and he said that tariffs in particular make it hard for

the Fed to essentially do their job, that dual mandate of keeping prices stable and keeping full on employment, full on -- excuse me, full

employment.

QUEST: Right, but what was interesting about that is when you read -- as you just read the statement is he also gave direction about where the

priority will be in that last part, where he said when they are in conflict, it is dealing -- it is almost the last line, isn't it?

[16:15:10]

YURKEVICH: Yes, it is the last line.

QUEST: Where they are in conflict, we will deal with the one that is most - -

YURKEVICH: Most pressing.

QUEST: Most pressing.

YURKEVICH: Essentially, is what he said, yes, ultimately the Federal Reserve is meeting next month and they will make a decision around interest

rates. He did message in here that the economy so far is stable on solid ground, and it didn't indicate that there were going to be any changes in

that next meeting, sort of what I am gathering from here is that they will hold rates steady.

But he did talk about sort of the worst case scenario, which is that stagflation and makes it very tricky for the federal reserve to combat all

of those together. They can only handle one at a time.

QUEST: I was going to say, if you could take one car home, which one is it going to be?

YURKEVICH: Oh, I can't -- I don't think I can say a name brand here. Someone is going to come after me.

QUEST: You're right. You're right. Good to see you. Thank you for joining me.

YURKEVICH: Good to see you, Richard. Thanks.

QUEST: I appreciate it.

Now, the auto industry that we are talking about is scrambling to respond to this trade war. Imported cars are already subject to 25 percent tariffs,

and as if that wasn't bad enough, companies are bracing for tariffs on auto parts expected to come into effect by May the 3rd.

The industry leaders are trying to lobby for a delay on tariffs. Now, that is something that the President, President Trump, made clear. He basically

said, well, we will think about some temporary exemptions coming our way.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: I am looking at something to help some of the car companies where they are switching to

parts that were made in Canada, Mexico and other places, and they need a little bit of time because they are going to make them here, but they need

a little bit of time. So I am talking about things like that.

But the European Union is taking terrible advantage. They don't take our food products. They don't take our cars. We take -- we have millions of

their cars -- BMW, Volkswagen, Mercedes-Benz, many others. They come in by the millions they don't take -- there are no Chevrolets in Munich, I can

tell you that.

(END VIDEO CLIP)

QUEST: So with me now, Mark Scheinberg, the President of the New York International Auto Show and President of the Greater New York Automobile

Dealers Association. It is good -- good to see you, sir.

MARK SCHEINBERG, PRESIDENT OF THE NEW YORK INTERNATIONAL AUTO SHOW AND PRESIDENT OF GREATER NEW YORK AUTOMOBILE DEALERS ASSOCIATION: Good to see

you, Richard.

QUEST: There really is only one topic of conversation, in a sense, besides new cars, everybody is working out. It doesn't matter who you are, what it

means for you.

SCHEINBERG: Well, the tariff situation clearly has a major impact as far as affordability for consumers. I represent 450 new car dealers in the New

York area, and it is all about dealers working with customers to create an affordable car for them to purchase

QUEST: What is interesting is I see signs all around different car companies, foreign car companies, U.S. made -- everybody that can is

trumpeting any way they can about their U.S. components.

SCHEINBERG: Well, I think the issue is more is -- is that this is a real global industry. So there is not one source where parts and product comes

from, it comes globally from all over. So when you talk about the tariffs on it, whether you're a domestic car manufacturer or U.S. domestic car

manufacturer or you're an importer, you're going to have an impact potentially on the cost of building a car.

QUEST: We see here the numbers on U.S. vehicle imports at the moment. Isn't the reality that in the U.S., and the Big Three, the entire industry for

the last 30 years, 40 years has been predicated on NAFTA and USMCA. This idea of a doesn't matter where the car is -- the parts come from within it,

or its constructed within it, and that is being thrown out the window.

SCHEINBERG: You've got to go back to when Ford built a plant in Detroit, and they were sourcing everything with inside their organization --

carpeting, windows and everything else. That's changed again. There is expertise all over, and that is why it is a global industry.

QUEST: Right. But nobody is immune in this situation because you know the Big Three don't benefit. This idea of complexity, a car built in the U.S.

may have gone or assembled, may have gone backwards and forwards a million times with auto parts from Asia and blah, blah, blah.

A car imported -- does anybody understand fully the tariff regime?

SCHEINBERG: I think they do. I think again, in all the manufacturers that I've spoken to here in the last two days at the New York Auto Show is

really trying to understand -- economists are still trying to understand exactly what this will mean to the bottom line of what product to buy.

QUEST: What -- are any of your dealers now putting up the price already because they've now received shipments in that have been tariffed at the

higher rate?

[16:20:00]

SCHEINBERG: It depends on which brand that they represent. They could have enough product on the ground for 30, 60, 90, 120 days. So those may not be

affected by the tariff as yet. But at some point, if the tariff remains the same and again, we are all hopeful that things will change is that there

will be some changes on.

But I will also say that the manufacturers have also adjusted the way they are doing. Mercedes-Benz has said they are going to absorb all the cost.

Some manufacturers said that they're going to make the parts manufacturers whole, because the bottom line is when the customer comes in, it has got to

be affordable.

QUEST: What do you think about this idea that, like airlines do, we are going to put a specific -- so you know, we are not take -- your members are

not taking the blame here, so there will be a specific line that says this is the tariff cost. So that consumers know.

SCHEINBERG: Sure, and it is a good point. And I think there may be a situation where a manufacturer has to raise the price of the car. And what

they may do is tell the consumer, this is not our profit line. This is a tariff that goes on it.

But I've got to tell you, the deal is, first of all, a very optimistic group. If they're not, they're going to be on Prozac for the rest of their

lives on it. But I do think that they have seen lots of different instances, whether its COVID, whether its computer chip shortages, and

somehow the industry has adjusted somewhat.

QUEST: I will say, sir, thank you. And at least the product is excellent, magnificent.

SCHEINBERG: Good, and I am glad you didn't ask me which one I like because that would be a problem.

QUEST: No, that would be like choosing your children. Thank you, sir.

SCHEINBERG: Thank you.

QUEST: $5.5 billion, that is the financial hit that NVIDIA expects to take as the Trump administration brings in new rules for shipping A.I. chips.

Clare Duffy is here. We've brought them all over. It a work's day out, if you will, to the auto show. Everybody's here, after the break.

(COMMERCIAL BREAK)

QUEST: NVIDIA says it will take a $5.5 billion hit as a result of the Trump administration placing new restrictions on the export of its H-20

artificial intelligence chip, the ones they want to send and sell to China.

Now, the shares are down more than six percent. Look at that. They had actually put on a bit of weight in recent days. But now of course, the

trade war between the U.S. and China seems to be dragging down the wider market, 700 points on the Dow, the S&P is off more than two, the NASDAQ was

down three percent.

Clare is with me.

NVIDIA just can't catch a break.

[16:25:08]

CLARE DUFFY, CNN BUSINESS WRITER: Yes, the company. stock was already down quite a bit on the year because of concerns around the tariffs, but these

new restrictions on the H-20 sales to China are really more because of DeepSeek. That is the issue here that the U.S. government is really

concerned that would allow China potentially to get ahead in the A.I. arms race. There is wide belief in the tech industry that the H-20 was used to

train DeepSeek and the U.S. government doesn't want those chips sold to Chinese companies anymore.

So now NVIDIA is going to have to be applying for a special license if it wants to keep selling them, we will see if that happens. But in the

meantime, it plans to take this $5 billion financial hit.

QUEST: I remain confused over exactly where we are with tech and tariffs. Things from China are the 20 percent, is that right?

DUFFY: The tech goods.

QUEST: The tech goods.

DUFFY: From China.

QUEST: The standard 20 percent and the rest is off for the time being. But tech is weathering it. How would you say bad? Indifferent? I mean, not

indifferent, but you know, what would you say is the mood?

DUFFY: I mean, I think in recent days, the Big Tech players have been buoyed by the thought that Trump may be willing to be flexible as we talked

about the other day on the Chinese tariffs. We saw shares of Apple and NVIDIA sort of gain in recent days because Trump moved that 145 tariff.

There is a temporary pause on that. Now, they just have the 20 percent tariffs.

But I think there is a belief that maybe among the big players, if they cozy up to Trump, if they go visit him in Washington, maybe they could

carve out exemptions for themselves in terms of tariffs on goods shipped in from China.

QUEST: I guess, we heard from Jerome Powell, as you know today, that there is going to be inflation, these magnificent cars, those that are imported

will be 25 percent more expensive.

You're covering it this every day. The reality is starting to come home here, isn't it?

DUFFY: It is starting to come home, and I think, the Trump administration also perhaps is starting to realize what this could mean, what these

tariffs could mean. And in the tech world in particular, the Trump administration has these two things that it has to balance. On the one

hand, it wants to implement tariffs. It wants the revenue from that. It wants U.S. manufacturing, but it also wants to avoid China getting ahead

and building its own technology and that is really what we are seeing today in terms of this NVIDIA news.

QUEST: Thank you so much. Thank you for coming over here.

DUFFY: Thank you.

QUEST: Very grateful. It is good to see you.

Now, more automakers are shifting production to the United States specifically to avoid the tariffs. It is a long-term strategy, but there is

a short term goal.

I will speak to the Chief Operating Officer of KIA America about his plans at the moment. It is after the break. It is QUEST MEANS BUSINESS tonight

live from the New York Auto Show.

(COMMERCIAL BREAK)

[16:30:00]

RICHARD QUEST, CNN ANCHOR: Welcome back to the Auto Show. The U.S. District Judge Boasberg has ruled on Wednesday that probable cause exists

to hold the Trump administration officials in criminal contempt for violating his orders on deportation flights. The judge ordered in mid-March

that the administration must stop using the Alien Enemies Act to deport alleged Venezuelan gang members. The White House says it plans to seek

immediate appellate relief from the ruling.

Joey Jackson is with me. Now, that is interesting because the Supreme Court has actually ruled on the -- if you will, on the substance of what was

happening, but that doesn't ignore the fact that they -- that the administration ignored the original order. So, what does the judge do now?

JOEY JACKSON, CNN LEGAL ANALYST: So, what the judge does, Richard, good to be with you, is what the judge said, the judge would do, and that is that

the judge wants information. And the judge issues an order, it's important that you follow it. This judge believes that there is reason to believe,

hence probable cause, that the administration understood the order, disregarded the order, and did so willfully. And as a result of that, the

judge in his 46-page opinion wrote out the timeline when he ordered the administration, when they were carrying people in a plane, right, outside

of the country to turn the planes around. Administration did not give any specific, concrete answers, and as a result, they disobeyed the judge's

order.

Now, did they do so? We're going to find out. Because he's ordered them to provide affidavits, written statements as to who made what decisions, when,

and if the affidavits are not very specific, unclear or otherwise, they will give testimony in his courtroom in a hearing to answer the question.

We have to operate under a system of laws. We cannot have an executive branch that does whatever they wish to do.

QUEST: Except that seems to be the way things are moving, which all comes back to that famous quote, you know, of how will the court enforce it? How

will -- if he goes for criminal contempt, what happens? Who do you put in the dock? How, what sentence do you do? Does it go as far as the attorney?

I mean, these are -- look, Joey, I know I'm taking you into hyperbole and I know I'm taking you into the extremes, but that's where we're heading.

JACKSON: So, Richard, I got to tell you, you know, you're absolutely spot- on to say what you did say. I think there's a very big concern that can the judge, first of all, hold him in contempt. Remember that the Department of

Justice works for the president and it's not clear whether or not the president would even, right, allow the Justice Department to hold him in

contempt, probably not, because of the fact that. You need the president's authority.

Now, what happens is we've seen the president who -- what is he doing now? He's firing people who actually give answers that are not consistent with

what he believes they should be. That's not lawyering. You have to give facts that are clear and specific to a court. And so if you're not doing

that, then if you hold them in contempt, what ultimately happens? That's why most people believe, as do I, that we are entering into a

constitutional crisis where you have a White House that believes it can do whatever it wants at its whim, unchecked, not responsible to anyone. That's

a problem.

QUEST: All right. I want to take it to one other area, and that is, of course, the Garcia in the Salvadoran prison. The attorney general, Pam

Bondi, has basically said, yes, if he arrives at the front door, we'll let him in, but he is not arriving at the front door. No. She said, we'll send

a plane and we'll let him in. But you know and I know that there's no intention of doing that because she also said there is no intention to

bring him back. That and, again, I mean, how do you square that circle of facilitating, as required by the Supreme Court order, and almost saying,

yes, boo, sucks (ph), we will facilitate in name only?

[16:35:05]

JACKSON: Yes, I don't think you can square it. I think that there's only one way to read, facilitate, and that means to make it happen, to expedite,

to ensure that it gets done, and it's not getting done. And so, therefore, the question becomes, if you have an administration that's not even

following the Supreme Court, then what do you do?

Now, I think the Supreme Court did not give -- well, I know the Supreme Court did not give a specific deadline definitive to bring him back, but

perhaps it felt it didn't need to because saying, facilitate, was enough. Now, the question becomes, in the event they do give a specific date, does

he follow that? And if he doesn't follow it, then what happens?

Look, no matter what you think about immigration and, you know, whether or not the United States has run amuck in immigration, that's not the issue.

The issue is that someone should at least be entitled to due process, right. I mean, at least have a hearing.

You know, you can call me whatever you want, but shouldn't there be a trial to determine whether the things you say about me are true? Should you just

be able to pick people up on the street corner, take them out of the country and say, hey, you're a bad guy? Well, how about the days when you

had trials to determine that and you had actual court proceedings in which you can argue that's not true? And guess what? Sometimes jurors agree with

you and they say it isn't true, and as a result, you're not guilty.

And so this is run amok. I think we're running into dangerous territory. We are in the twilight zone, Richard, in terms of being a democracy. I don't

know what this country is going to look like if this continues,

QUEST: Joey, we'll talk more about that in the days and weeks ahead. I'm grateful to you, sir. Thank you.

Now then let's return to our story of the Auto Show. I'm going to give you a bit of history here. So, this event, the New York Auto Show, was first

held in Madison Square Garden 125 years ago. The car was still a luxury that only the rich could afford. 48,000 people attended the show back then,

and indeed they paid 50 cents, that was a fortune, 50 cents, to see vehicles from 34 carmakers.

Now, in the 21st century, Honda's making changes to its supply chain because President Trump's 25 percent auto tariffs and the Japanese carmaker

is -- it'll move production of five-door civic hybrid from Japan to Indiana. Honda says the tariffs played a role along with the desire to

build cars where there is a demand for them.

And then you've got the South Korean carmaker, Kia, which manufactures cars both in the U.S., down in Georgia, and overseas. It makes cars in Seoul,

where its headquarters is located. Kia has another plant in Slovakia and here in the U.S. There's a manufacturing plant in West Point in Georgia

where the cars assembled would, of course, be exempt from tariffs, or we think so, as well as Mexico and Asia.

Steve Center is the chief operating officer of Kia America. Good to see you sir.

STEVEN CENTER, COO, KIA AMERICA: Good to see you.

QUEST: Your stand is over there. We can see the background, splendid vehicles. But does anybody -- so you make about you, you make about half

the cars you sell here roughly, give or take, correct?

CENTER: Correct.

QUEST: And are they tariffed, those auto parts? What do you know about those?

CENTER: The cars in the U.S. are not tariffed. The engines are built here. The cars are assembled here. And we just started building compliant E.V.s

here. So, the EV9, the EV6 are built in Georgia as well.

QUEST: And then you've got those that are from Mexico, and that's a completely different area.

CENTER: Absolutely, different kettle of fish, as they say. So, huge research project now because they're USMCA-compliant, but we have to

understand the new rules, where the components come from, where the metal in the components come from, things you didn't care about in the past,

QUEST: And those that come from South Korea? Tariffed?

CENTER: We don't know. It depends what time it is.

QUEST: But you've then got the issue of -- I mean, I suppose what I want to hear from you is how difficult is it for a company like yours that has

set itself up with plants here, plants in USMCA and plants here? How difficult is it?

CENTER: It's a big research project and typically you set a factory up to build a car. It's very difficult to move production. It's very difficult to

move a factory. And to try to comply with the tariffs and understand what the bill is going to be, enormous research project going on now.

QUEST: So, what are you going to do besides learn what the tariffs are? Are you planning to move more production into domestic U.S.?

CENTER: Well, as a normal course of growth, you do that anyway. We just had the grand opening for our meta plant on the other side of Georgia,

outside of Savannah, where we have over a 500,000 unit capacity that we share with Hyundai.

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So, as we continue to grow here, we're onshoring more and we're building more content here and batteries here as well.

QUEST: But do you feel that this has an air of permanence about it, in a sense? Because obviously the billions it costs to move plants, to move

production, you don't want to spend it if it's going to change. So you have to put in place a strategy that'll last.

CENTER: Correct.

QUEST: That's tariff-proof, but -- well, you know what I mean.

CENTER: Well, when the rules change faster than you can move your business. It's very difficult to comply in that way. So, as a global

automaker, we make products that we sell all over the world and we make them all over the world. So, in the end, we're going to do the best we can

to comply with the rules here and make the money here without paying those bills.

QUEST: I refuse to end our interview on tariffs.

CENTER: Great.

QUEST: What is the exciting thing about cars? What's the new thing, the exciting thing?

CENTER: Well, we just introduced the new K4 hatchback, which is our entry level internal combustion sedan. It's bringing new customers to the brand.

It's got -- the hatchback is going to bring younger customers. We just introduced EV4, which is an entry level E.V. sedan, which will come in

priced under the EV6. So, we're still growing. We're filling out the E.V. line, and we're still filling out our internal combustion line.

QUEST: You must just sometimes want to hit your head on a brick wall with all that's going. But I'm grateful to you, sir. Thank you for coming and

talking to us.

CENTER: Thank you.

QUEST: Thank you very much, indeed.

And now I'm going to leave you with just a thought or two before we finish. Just bear in mind, this entire industry in the U.S. was built on the idea

of cars moving between the U.S., Mexico, Canada, in a seamless fashion designed for a single market, and it is that which has been completely

thrown out the window. Nobody really knows exactly what's happening, but it will sort itself out because that's Quest Means Business for this Wednesday

night.

I'm Richard Quest at the Auto Show. Whatever you are up to in the hours ahead, I hope it is profitable.

Coming up next, Marketplace Asia, because the news never stops.

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