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Quest Means Business
U.S. GDP Growth Sharply Declines in First Quarter; Sources: Last Minute Disagreements Could Derail Minerals Deal Between U.S. and Ukraine; The Czech Republic's Road Map for Economic Growth; U.S. GDP Growth Sharply Declines in First Quarter; Czech Government Boosts Investment in Tourism; Meta and Microsoft Report Revenue Beats. Aired 4-5p ET
Aired April 30, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:44]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. Dow Jones Industrials having a turbulent session.
First, it was sharply lower, and then in the last five or seven minutes or so of trade, ten, twenty minutes, it suddenly went positive. We end the day
with a gain of 140 odd points.
All sorts of factors playing into the markets at the moment. We will get to all of that over the course of the hour, but as you can tell, its 10:00
P.M. here in the Czech capital. Those are the markets and these are the main events of the day.
Anxiety over tariffs pushes the U.S. GDP negative in the first quarter.
A last minute disagreement could derail and delay the U.S. Ukraine minerals deal.
And Czech tourism looks to shed Prague's party reputation and attract a different type of traveler.
Live tonight from CNN Prima in the Czech Republic we are in Prague. It is Wednesday, it is April the 30th. I am Richard Quest and you better believe
it, in Prague, as elsewhere, I mean, business.
Good evening.
And ahoy, as they might say here, a warm welcome from the Czech capital to a very special QUEST MEANS BUSINESS which tonight comes to you live from
Prague and from our colleagues and from our sister studios of our network, CNN Prima. Delighted to be with you over the course of the next hour, where
we will be exploring the Czech Republic's place in Europe and the world, its vulnerability to Donald Trump's tariffs, particularly when it comes to
auto exports, as well as Czech's support for Ukraine now under scrutiny with an election on the horizon.
So we will be putting all of these various different points. In just a moment, I will be talking to the Czech Foreign Minister and getting his
perspective. And a little bit later, the head of Czech tourism, is this still the party and stag capital? Well, you know what I mean. It is the
problem of over tourism.
We will be talking about how they are going to reshape Prague's reputation for a rowdy nightlife.
First, though, let's begin with the European and U.S. economies diverging as global businesses react to Donald Trump's trade policies.
U.S. GDP shrank three percent at an annual rate during the first quarter. That's its first contraction since 2022, and it is mainly due to a surge in
U.S. imports as companies try to restock before the tariffs took effect.
Markets opened lower and they've since clawed back much of their losses. President Trump blaming the slowdown on his predecessor.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: Core GDP and this as you know, you probably saw some numbers today, and I have to start
off by saying that's Biden. That's not Trump because we came in on January. This is quarterly numbers. And we came in and I was very, against
everything that Biden was doing in terms of the economy.
(END VIDEO CLIP)
QUEST: Meanwhile, the E.U. economy grew 0.3 of a percent, barely growing at all, a third of one percent, and a good part of that growth comes from
Ireland and from foreign companies that are based there for tax reasons. You're getting the sort of picture and the way it comes. The E.U. is still
facing tariffs and declining consumer sentiment and things aren't looking too good.
Martin Wolf is the chief economics commentator at "The Financial Times."
Martin is with me now. I suppose the first core question, Martin, is how justified is President Trump in claiming that the negative GDP in Q1 is,
"Biden's market"?
[15:05:09]
MARTIN WOLF, CHIEF ECONOMICS COMMENTATOR, "THE FINANCIAL TIMES": Well, as far as I can see and we've only got very tentative numbers, is the 0.3
percent annualized fall cannot be due to Biden because it is essentially about import and growth.
The huge rise in imports actually shrinks GDP and the reason for a huge rise in imports, pretty obviously is people are accelerating imports ahead
of the tariffs, and that's a Trump policy.
So while it is true that part of the first quarter was under Biden, it is very difficult to explain this decrease, a modest decrease in an annualized
rate as anything but due to the Trump tariffs.
QUEST: If you now extrapolate forward because the first quarter didn't see the effects of the headwinds in place, would you expect Q2 and Q3, as we
see -- regardless of what agreements might or deals might be done, they're going to be badly affected by the existing tariffs. Everything from 145,
25, 20 -- it pays your money, you take your choice.
WOLF: I would assume, but this is now getting really difficult to predict because there are so many uncertainties that it will cause shrinkage,
particularly over this time period in retail trade, because retail trade is going to get so much more expensive when these tariffs go into effect. So
the real level of retail trade will shrink and that will show up in GDP and real consumption.
Of course, the longer term effects which you might expect if people expect tariffs to last, which is a big question on investment, might be positive,
but that won't kick in for a year or two. So I think, it is very plausible, nothing is certain that over the next three quarters, we are going to see a
shrinkage in GDP because of the impact of this on people buying.
QUEST: We are here tonight in the Czech Republic. Of course, not a Euro country, part of the union, but not a Euro country, a highly export driven
economy through Germany, which of course is -- or Austria, which is going to be affected more closely by the tariffs.
Are countries, like the Czech Republic, in some trouble in these circumstances?
WOLF: I don't know precisely how linked up they are, but there is no question that European exports of automobiles, which are a target sector,
will be affected by the Trump tariffs. Of course, we don't know what tariffs will be in effect a month or two from now. Anything could happen,
they might have changed.
I mean, I don't think the current tariff regime will last, but who knows? But yes, there is going to be, as things stand at the moment, a negative
effect on European exports in this particular sector, and of course, in other sectors and it is bound to affect the suppliers of inputs into German
production and German exports. So, yes, the Czech Republic and other European countries are vulnerable.
QUEST: Reading your recent articles on the battle between the U.S. and China, particularly the one most recently, you are suggesting that
essentially the U.S. although China suffers, the U.S. arguably comes off worse, and it is Donald Trump that blinks as he already has to some extent,
but has to blink even further.
WOLF: Well, my suggestion is that the U.S. will not be able to force or persuade countries around the world in return for low tariffs on their
exports to impose very high tariffs on China. I think they will regard that as too risky. The U.S. is too unreliable and therefore they will refuse
such deals.
If that is the case then the U.S. has the key question what does it do with its now delayed reciprocal tariffs? And nobody knows. But in a straight
just leave that aside because we don't know, the straight battle between the U.S. and China, I think China can bear more pain, assuming the U.S.
does not get the rest of the world to team with it against China can bear more pain, it can offset the demand shock from the tariffs by expanding
domestic demand while the U.S. is going to have a very significant supply shock from an absence of cheap Chinese imports.
[16:10:11]
So my guess is the politics of this are in the medium term, in favor of China.
QUEST: Right. Martin, I am grateful. Thank you, sir, for staying with us tonight. Martin wolf in London tonight.
Now, sources say the United States and Ukraine have run into some last minute disagreements as they try to reach that minerals deal. The latest
twist in the negotiations between Kyiv and the Trump administration.
CNN's Clare Sebastian reports the latest developments.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, this minerals deal has been a roller coaster at all stages and that continued on Wednesday. First,
Ukraine's Prime Minister told Ukrainian television that the final details were being ironed out and he expected it to be signed within 24 hours.
Then, in a Cabinet meeting later that afternoon, the U.S. Treasury Secretary said the U.S. is ready to sign, but Ukraine made some last minute
changes and there is a disagreement as well, sources say that Ukraine is ready to sign the main deal, but believes more work is needed on two
technical documents. The U.S. thought wants all three signed together, a source says.
Meanwhile, a Ukrainian delegation is now in Washington, D.C. Now, whatever happens next, it is clear that both sides really do care about this. For
Ukraine, it is a way to build on the goodwill from that Vatican meeting with President Donald Trump over the weekend to keep the U.S. invested,
both literally and figuratively in its security, and to provide an incentive for the U.S. to approve more military aid, since that may be
considered the U.S. contribution to this joint investment fund.
Well, for President Trump, this was originally, in his eyes, a way for the U.S. to get its money back for all the military aid it previously provided.
Ukraine's Prime Minister says that is off the table and only future aid will count towards the investment fund.
But either way, if it is signed, it will be a political win for the U.S. President amid a Ukraine peace effort that has otherwise yielded precious
little progress.
Clare Sebastian, CNN, London.
(END VIDEOTAPE)
QUEST: Now, the Czech Republic says it has delivered 400,000 pieces of ammunition to Ukraine since the start of the year. It is a sizable amount.
Other countries are also contributing to the initiative. For example, Canada, Norway, Denmark and The Netherlands.
The Czech Republic's Foreign Minister told us that his country is aiming to send 125,000 pieces of ammo to Ukraine every month of the year. It makes up
a shortfall, arguably from what they might not get from the U.S. and it is badly needed.
Ukraine has become a key issue in Czech Republic's national election later this year. The populist opposition leader, Andrej Babis, argues the
solution to the war is diplomacy, not weapons.
With me is Jan Lipavsky, the Czech Republic's Foreign Minister.
Minister, I am grateful to you for joining us tonight.
JAN LIPAVSKY, CZECH REPUBLIC'S FOREIGN MINISTER: Thank you very much for having me.
QUEST: Is Ukraine -- is the position on Ukraine going to become an issue as you see it in the election this year?
LIPAVSKY: It will be overall the discussion on global and European affairs. Ukraine is very important part of European security, so it is part of our
discussion. Yes, it is.
QUEST: Do you see a disagreement between yourselves? Because in many countries -- I am thinking if you look at Europe, generally, if it is held
together pretty well with the exception of certain countries like Hungary, for example, which is clearly more pro-Russia than for example, say,
obviously the Czech Republic under the current government.
LIPAVSKY: I always say we have to face the reality not to behave like ostrich who puts their head in the sand and pretends that world does not
exist around him. So we have to also face Russian war of aggression against Ukraine and support Ukraine in all means, so we will stop Russia there.
QUEST: But if we look, for example, at the United States and its tariffs, you're clearly going to be hit by them, arguably indirectly, because
Germany is going to be hit, and you're a huge exporter of machinery and car parts to Germany.
Do you still -- does the Czech Republic still regard the United States as a reliable ally?
LIPAVSKY: The United States, our reliable ally, and I think this is something which we discuss in NATO. I understand U.S. wants to withdraw in
the long term from Europe, so let's do it in a manner which is controlled and not hurting anyone.
But if U.S. is saying, please do spend more on defense, Czechia is now spending two percent of GDP on defense and we have -- we are now committing
to three percent of GDP. Mike Waltz mentioned us in his tweets just today. So we are doing our share.
QUEST: How are you going to pay for it? Where is that money going to come from at a time of, you know, essentially, I mean, you're not a Euro
country. Your economy has performed extremely well under the current governor. The interest rates are low, inflation is relatively low. But
where are you going to pay for the extra money from?
[16:15:07]
LIPAVSKY: It is a combination of shrinking the expenditure of budget, looking for the new resources, maybe new debt, of course, but responsibly.
QUEST: As one of the relatively -- I use this word -- relatively smaller countries within the E.U., where do you see the E.U. leadership coming
from?
Germany is a mess. Merz hasn't taken over. That's my comment.
LIPAVSKY: In one week, he will be there.
QUEST: In one week, he will be there, but he has got to learn where the photocopier is and he has got all of that sort of -- France, we really
don't know what's happening now with Marine Le Pen, et cetera et cetera. Spain and Portugal, I mean a bit of a dog's breakfast with all the lights
going out. Who is leading Europe at the moment?
LIPAVSKY: Speaking of defense, it is the Coalition of the Willing -- France, U.K. and I am sure that Germany will pretty soon follow suit. And
Poland has a European presidency, so the leadership is there. Definitely, the idea of Europe falling apart is not there.
QUEST: No. But do you see an example of what Alex Stubb in Finland calls Europe plus/minus? Do you see a future in Europe where, for example, the
United Kingdom is now getting closer again. Now, no one suggesting it will rejoin, but more arrangements will be made. A one size fits all, two speed,
whatever you want to call it.
LIPAVSKY: I think the Coalition of the Willing is now the place where the new European processes of integration on defense, because we have to defend
ourselves, are taking place. But the E.U. still is relevant. But yes, we have -- you know, it is the reality, so it will be -- most people will
process this.
QUEST: I guess what I am asking, Minister, is the E.U. cannot continue as it did before. It is going to have to reform itself in some shape or form,
decision making structures. Some countries, like Hungary and Slovakia, want to go, want to go in one direction; others want to go in another direction.
The tensions are there. How are you going to manage them?
LIPAVSKY: The E.U. is well functioning, it's foundations --
QUEST: Ah!
LIPAVSKY: Of course, so many agendas are working without any issue. We are not able to agree on defense, that is happening outside of the E.U. This is
--
QUEST: But the rule of law, for example, some countries on the rule of law are far way off other countries of the rule of law.
LIPAVSKY: But still the E.U. is well-functioning. So, this is something where I need to defend the institutions, even though I am very often very
critical of them. So --
QUEST: Minister --
LIPAVSKY: Do not believe in tragedy. So you are advertising visiting Prague with every penny matters, so I brought you an example of Czech pennies, so
please take them as a gift from Prague.
QUEST: Oh well, I shall give us an equivalent. These are three pennies.
LIPAVSKY: These are like 40 pennies of Czech korunas, so very little value actually.
QUEST: Well, I shall keep them as a souvenir. I am very grateful. Thank you. Thank you, Minister.
LIPAVSKY: Thank you very much.
QUEST: Thank you very much for joining us tonight in Prague.
Now, the United States is the Czech Republic's top export market outside of Europe. It makes the countries vulnerable to Trump's tariffs. The main
political anchor at CNN Prima News is with me after the break to put that into perspective.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:20:59]
QUEST: Welcome back.
Now the Czech economy is predicted to grow this year. That is if trade barriers and conflicts don't get in the way.
So for a country that of course where the Skoda Car comes from, that's -- by the way, first of all, we are very grateful to all friends and
colleagues here at CNN Prima News, our sister network, who very kindly allowed me to play with all of these toys and make sure I don't break them.
So as we look at the way ahead in terms of this, it is the driver's seat that we find the two growth factors that are moving forward. If you look at
this country, the first, of course, is low unemployment, which is incredibly significant. It is one of the lowest, if not the lowest
unemployment rate in Europe.
And for a country that has its own monetary policy, because it is not a Euro member, it has falling inflation. Inflation has to be down at one of
the lowest. Again, it has actually hit the target.
So you have to heed the warning signs that you see, bearing in mind these two factors, you have to heed the warning signs that come along the way.
First of all, you have an economy that is export heavily driven, that is crucially important via Germany or other countries, but such a high degree
of exports can cause problems in the future.
Then you have the issue of household consumption, which is only really fully recovering from the pandemic, and now might be a little bit tapped
out, particularly on the questions of inflation.
And also, of course, on top of it all, the neighbors that go next to each other, the European countries and the problems that they are having at the
moment, which have the problems of their own.
Now, put all of this together, and I spoke to the Czech Republic's Central Bank Governor about his view on the way, the U.S. tariffs and all of these
problems, bearing in mind their independent monetary policy. I asked about his policies and he says it is key to not be too concerned and to not be
emotional.
(BEGIN VIDEOTAPE)
ALES MICHL, CZECH NATIONAL BANK GOVERNOR (through translator): As Central Bankers, we need to approach this without emotion. In a year or two, the
situation might not look all that important. It will have become a part of history. We might all forget it.
So, I think we shouldn't be alarmed and we should continue our work as usual making sure that inflation in the Czech Republic remains low.
I saw you holding on to your earpiece, so let me be clear. What is happening is nothing out of the ordinary.
QUEST: But Governor, there is one big difference. One massive difference to the scenarios that you've suggested. Firstly, some of them were natural,
pandemic wise, but secondly, there was no question over the largest ally or the most significant ally or the ability of, if you will, the largest
friendly neighborhood superpower, the United States, and their ability. This time, much of the disruption has come from the very source of the
previous stability.
MICHL (through translator): All right, but that's a political question. But politicians have always had their own individual approaches, and they've
always caused a certain level of disruption in the economic system. I really wouldn't overthink it.
The fact is that Mr. Trump has a certain policy, another President had their, so for Central Bankers, it is business as usual. It is all about
securing low inflation and that's it.
(END VIDEO CLIP)
QUEST: Low inflation, it is all about low inflation.
Terezie Tomankova is the main political anchor for CNN Prima News. You saw her with me.
Were you surprised, Terezie, that the governor was quite so open, quite so blunt and honest?
[16:25:05]
TEREZIE TOMANKOVA, MAIN POLITICAL ANCHOR FOR CNN PRIMA NEWS: Frankly, I was surprised. He was really, really open and really honest and to my opinion,
it was his -- it was the best interview of the Governor recently I've ever seen.
QUEST: He was blunt, wasn't he?
TOMANKOVA: Yes.
QUEST: He says low inflation and he took all our questions about things like Bitcoin and all. You were determined to get him on that.
TOMANKOVA: Yes. It wasn't surprising for me because I've been interviewing him like in at the beginning of January, and it was the first time he was
talking about Bitcoin and cryptos, for the reserves of the Central Bank, so I wasn't surprised.
QUEST: What is the mood here in the Czech Republic at the moment? Because Ukraine obviously is very key. The government has clear policies and yet
there is an election later this year which the opposition is looking very strong at the moment.
TOMANKOVA: Yes, of course, the opposition is very strong. You know, according -- the public opinion polls, the biggest chance to win the
election is the former Prime Minister's party and he is very critical about the government.
QUEST: What is that criticism based on? What is the fundamental unhappiness at the moment? Because, I mean, admittedly, it is a beautiful pardon the
phrase, Prague spring day. It is magnificent out here. But what are people unhappy about here?
TOMANKOVA: About the economic situation, because the inflation was really high, about 18 percent at the peak, at September 2022, and the former Prime
Minister is blaming just the government for everything, for people losing savings, losing money.
QUEST: The Czech Republic has traditionally been more on, if you will, the western side. Certainly, I would say one of those the country from 2004
perhaps, except Poland, that most advanced the agenda, the western values agenda.
If there is a change of government, does the Czech Republic start to look more like Hungary?
TOMANKOVA: I wouldn't say so. I wouldn't say so.
QUEST: It doesn't start to take more of a Russian perspective, more of a --
TOMANKOVA: I would never say that. I would never describe it. I mean, the former Prime Minister's party, they are very critical about the government.
They support Donald Trump and his policy. But they wouldn't support Russian and even in the Parliament, they supported government with increasing the
defense spending and all the Ukraine topics.
QUEST: And the neighbors? Slovakia, Slovenia, Hungary?
TOMANKOVA: It is a different story. We just -- we are looking at that. Well, surprisingly, some of them are a little bit jittery about what is
going on in Slovakia, but I wouldn't say we will follow it.
QUEST: Can I thank you and your colleagues? You've been so wonderfully helpful to us. I mean, show this studio, this magnificent studio that you
have generously allowed us to interlope in. Your large, big studio. It is just phenomenal.
TOMANKOVA: It is great to hear that. Thank you for that, Richard. Thank you very much. Thank you very much. It has been great.
QUEST: Thank you for joining us.
TOMANKOVA: Thank you.
QUEST: Thank you very much. Now, it is so big, I've got to get up and shake hands. Could be until next week.
Coming up, QUEST MEANS BUSINESS, President Trump is hosting major CEOs at the White House where he is highlighting their investments in the U.S. and
the economy. Live pictures coming to us. Gosh, look at them all. They're arriving at the White House. What are they going to talk about?
Will they tell the President what they want -- what he wants to hear or what they need?
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:32:05]
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment from Prague. I'll be talking to the chief executive of CzechTourism
about all the visitors they hope to get and why this is no longer the stag capital of Europe. And strong earnings from Meta and Microsoft. We're going
to look at their latest quarters.
We'll get to that only after the news headlines because this is CNN and in Prague and on this network, the news always comes first.
U.S. economic growth slowed sharply during the first three months of the year. The GDP shrank 0.3 percent on an annual basis. It's the worst quarter
since 2022. At today's Cabinet meeting, President Trump shifted the blame to his predecessor, Joe Biden.
The U.S. says Ukraine is making some, quote, "last-minute" changes to the minerals deal. It was expected to be signed today. The agreement would give
the U.S. access to Ukraine's rare earth mineral deposits. Ukraine views it as a way to secure long term U.S. support as it fights its existential war
against Russia.
Sources are telling CNN that the U.S. Secretary of State Marco Rubio and the Salvadoran president Nayib Bukele are in direct talks about the fate of
Kilmar Abrego Garcia. Of course, he's the Salvadorian born Maryland resident that the U.S. has admitted to wrongly sending to a high security
prison in El Salvador. The secretary of state today declined to say whether there's been a formal request to return Abrego Garcia to the U.S., and also
said he would refuse to answer any such questions to a judge.
Now, any moment now, we're expecting to hear from President Donald Trump, who is hosting prominent CEOs at the White House. The event is to showcase
U.S. investments that have been made during his first 100 days in office. Among the invitees are the CEOs of Nvidia, Johnson and Johnson, J&J, and
SoftBank. It comes as U.S. GDP shrank for the first time in three years. The president claims the negative number is an overhang from the Biden
administration.
The numbers suggest a different story, as we were hearing earlier from Martin Wolf. Economic growth was solid in the last year of the Biden
administration. GDP rose by 2.4 percent in Q4 of last year. And today's report shows the impact of the policies. Why? Because there was a major
uptick in imports, which dragged on growth as companies stockpiled goods ahead of tariffs.
[16:35:05]
And imports, by the way, on economic growth don't show as your GDP because you subtract it instead of -- you get the idea. It's a sort of a temporary
increase and decrease in federal government spending and it lowered growth as well.
Joining me now, Phil Mattingly in Washington.
Phil, there are technical reasons because imports count against GDP, not in favor of GDP, but that merely shows just how the U.S. economy and how the
U.S. is preparing for this onslaught.
PHIL MATTINGLY, CNN CHIEF DOMESTIC CORRESPONDENT: Yes, that's such a critical point, Richard. I think we've spent a lot of days going back or a
lot of hours today going back and forth with administration officials. But what this report actually means, and contrary to the president, many of the
top economic advisers of the White House are defending the report, saying, actually, if you look under the hood, what it's showing is great.
What it's showing very clearly is over the three months leading into the April 2nd announcement of the reciprocal tariffs, as they call them, the
economy was in decent shape. It was solid. We've seen that, of course, in economic data throughout the course of the first quarter. GDP numbers under
the hood seem to show that as well. They also very clearly, to your point, show that when it came to imports, when it came to corporate investment,
there is an effort to pull things forward.
We have seen it on the consumer side as well. People are spending money now. It makes the consumer -- the spending actually look like it's robust.
It's pretty solid right now. The reality when you look at consumer surveys is -- sentiment surveys is they are pulling back. And I think the real
concern when you talk to economists but also if you have candid conversations with White House officials is they know that the durability
of the scale of the imports, the durability of the scale of the private investment is likely not going to hold quarter by quarter, given this is a
preparation part.
QUEST: So I guess what it's all going to come down to is how much pain is the U.S. consumer prepared for. Donald Trump today talked about toys and
there's loads of toys on ships. And we probably got too many buying of things that were -- I mean, rumors of shop shortages by the end of the year
on toys. Is the feeling in Washington that the U.S. consumer is going to turn this around and force Donald Trump to turn around?
MATTINGLY: It's as good a theory for a potential reversal as anybody has at this point in time. Right? And I think the biggest issue that you hear from
people outside the White House is how little visibility they have into the White House, not about what the day to day is. The day to day is a mess.
Richard, let's be honest here. Since April 2nd, other than the 90-day pause, we have not seen anything fundamentally change. And I think despite
the fact that markets have gone up or down a thousand points, what, seven, eight, nine times over the course of the last three weeks? Other than the
pause, there has not been any bilateral deal. There has not been any walk back or actual tangible conversations with Chinese officials. Everything is
the same.
And so no one is really operating off of hard news or tangible facts here. They're operating off vibes and hopes. And I think when you talk to
officials, they recognize right now that they are very, very up front and forward about their view that they will force Chinese officials to come to
them. They will force Chinese officials to break first because of the scale of the market in the U.S. I think U.S. consumers will have something to say
about that.
QUEST: Phil, I'm grateful to you. Phil Mattingly in Washington, thank you.
Now, on that point of consumers, what are they saying? Well, the Ford chief executive says it's hard to know whether he's seeing early signs of a
recession and consumer pullback. Jim Farley was talking to our Erin Burnett when he told her that the company, Ford, is extending a sale to encourage
buying and buyers who are nervous about tariffs and want to wait to see what happens after that, all depends, apparently, on how competitors react
to new duties.
Erin Burnett asked him whether he's seeing the effects of the weak consumer demand.
(BEGIN VIDEO CLIP)
JIM FARLEY, PRESIDENT AND CEO, FORD MOTHER COMPANY: It's tough to tell right now. The reason is because we're seeing double-digit sales increases
since March and April. But we ran this employee pricing. I don't know if that's unique to us. There may be a lot of customers going out and buying
cars, you know, before what they fear is the imports increasing prices. That may be a dynamic. We're certainly seeing our inventories are shrinking
at the dealership.
We know exactly what the tariff bill would look like, you know, in terms of cost for the company. We know the offsets. What we don't know is how
competitors are going to respond. You know, we're the most American company. So if there's any company that can manage through these tariffs,
it's Ford. We make 80 percent here. So -- and our competitors are different. Even the domestic competitors are some of the biggest importers
in our industry.
[16:40:06]
So, you know, they will have a totally different tariff bill. You don't think of all the three domestic companies as the same. We're not. We're
really different. But as I said, you know, next week I think we'll be able to tell people kind of what the tariff bill is for Ford would look like,
the most American company. What kind of offsets.
What we don't know, Erin, is what are the import competitors going to do? Are they going to build 10 factories? Are they going to take pricing and
pass it on to the customers this summer? You know, the stuff we built now is priced. If we announce a price increase now, it will go into play in
July and August. So we have to wait until then to see what our competitors do.
(END VIDEO CLIP)
QUEST: The CEO of Ford.
When we come back, the Czech Republic is investing more and more in its tourism industry. The chief executive of CzechTourism with me after the
break and he will hopefully describe and explain what these delicious pastries are of which I've eaten far too many of them after the break. I
think I'll have one. Shall I have one now?
(COMMERCIAL BREAK)
QUEST: I've been chomping my way through these delicious pastries, which of course any tourist knows is served at just about any time of the day or
night. Because Prague attracts more than eight million tourists a year, and that number is increasing. The city is trying to contain the unruliness of
some visitors. Last year it banned organized pub crawls at night. There's more to the city than its famous beer, some would say.
Prague castle has stood for over a millennium. The Holy Roman emperor made his palace in the 14th century. Today it's the residence of the Czech
president. Nice place, if you can have it. Nearby is Golden Lane, which housed the castle marksman of the old artists and writers, and have used it
as inspiration for centuries.
[16:45:07]
Prague also has an astronomical clock that dates back to 1410, which I've stood in front of, by the way, and was extremely concerned when, at the end
of the pandemic, thousands of people were there.
Frantisek Reismuller is the chief executive of CzechTourism, joins me now.
This city has been the victim of its own success. Overtourism has in the past been a problem for you. How have you handled it?
FRANTISEK REISMULLER, CEO, CZECHTOURISM: Well, you know, we like to call it uneven tourism because, you know, if you walk over the Charles Bridge in
February or in November, it's not as full as it might be in June or July. But then again, yes, we need to handle the problem. And there are many ways
to do it. You know, it's a better destination marketing and management on the one hand, and sometimes even prohibition on the other hand, as the
famous pub crawls unfortunately.
QUEST: Yes. I mean, it did have a reputation of the stag capital at one point. Now arguably that's now gone up to Estonia and Latvia and those
parts. And I guess you're quite grateful for that.
REISMULLER: Yes, we are definitely. It was harmful to the local communities and it was harmful to the image of Prague. You know, we call Prague the
mother of cities, so we should treat it as mother.
QUEST: So I have sort of always believed that we missed an opportunity after the pandemic to deal with overtourism or uneven tourism, that we were
so grateful afterwards just to get numbers back that we didn't put in place strategies that only now you're having to deal with.
REISMULLER: Well, yes, but actually we did put in place some strategies. And for CzechTourism we started promoting other regions more efficiently.
We started mentioning different topics, you know, something that, you know, maybe foreign people don't know about Czechia that well.
QUEST: Do you favor dramatic? I mean, obviously you've got the pub crawl ban, but do you favor as a general principle, a ticketing system, a
licensing system, a sort of, because they sort of don't really work. They harm those who can least afford it, don't they? There'll always be the
wealthy who can always afford to come and pay it.
REISMULLER: Well, this depends on the region, actually, you know, on the destination. There are some places, even in Prague where you can actually
implement a ticketing system. And it will be helpful, but, you know, you can't do it on the Charles Bridge.
QUEST: Where's your growth going to come from? In one sense, you're going to tell me everywhere. Asia wants to come here. Australasia, Latin America.
But where are you targeting growth?
REISMULLER: Well, we try to diversify because COVID taught us that much that we can't rely on just a few markets. But, you know, we have visitors
of course from Europe and from the neighboring countries, that those are the biggest markets, of course, but we are looking towards Asia definitely
with great hopes. Those numbers are not back yet, but they are growing rapidly. For example, China, you know, that was one of the winners of last
year's races so.
QUEST: These delicious, what are they called? Do have one.
REISMULLER: Kolache.
QUEST: Kolache.
REISMULLER: I'll pass.
QUEST: You're very wise. More for me later.
REISMULLER: Yes.
QUEST: Now they have a saying here, there's no kolache if you don't work.
REISMULLER: Exactly. That's the Czech's saying. You know?
QUEST: Give it me in Czech.
REISMULLER: (Speaking in foreign language) kolache.
QUEST: Well, you're not having any anyway because I'm keeping them. But this is -- they're everywhere, aren't they?
REISMULLER: Yes, they are. They are famous for breakfast or snack or even for weddings. You give it to the wedding guests actually.
QUEST: Really?
REISMULLER: Yes.
QUEST: Why wedding? Well, there we go. I suppose it's a good tradition.
REISMULLER: It means money, you know?
QUEST: It means money?
REISMULLER: Yes.
QUEST: Really?
REISMULLER: Yes.
QUEST: Money. I'll keep them over here. May I thank you, all your colleagues, everybody here who have been so hospitable to us.
REISMULLER: Thank you very much.
QUEST: And who've made us so very grateful. Thank you, sir. And no, kolache if you don't work. So I'll keep them over there. I'm grateful. Thank you.
REISMULLER: Thank you.
QUEST: Meta and Microsoft just reported their latest quarterly results. We'll be talking about them after the break. QUEST MEANS BUSINESS in Prague
tonight. I think I'll have a kolache. Maybe I'll have two or three because if there's no work, there's no kolache.
REISMULLER: Whatever they say.
(COMMERCIAL BREAK)
[16:51:56]
QUEST: To a pair of important earnings reports, Microsoft and Meta both reported quarterly results in the last hour, and both handily beat
expectations. Microsoft took in more than $70 billion in revenue. Think about it, it's better than expected, driven by its own Cloud computing
business, which is where in many ways is the main revenue driver these days.
Facebook's parent company, Instagram and WhatsApp, Meta also beat on revenue, and the stock is up sharply after hours.
Guru La Monica is with me, senior markets analysis writer for Barron's.
Pull those two together. What do you make of them? I mean, they did really well.
PAUL LA MONICA, SENIOR MARKETS ANALYSIS WRITER, BARRON'S: Yes. Very encouraging for investors who have been worried about the magnificent seven
and you know, the tech sector in general. The one caveat that I'm interested to hear about from both Microsoft and Meta platforms, are there
any concerns going forward? Meta platforms gave pretty decent sales guidance for its second quarter as well. That's a good sign.
Microsoft will be giving its guidance during its conference call in a little while. So are there lingering worries at all about this tariff
concerns and trade war situation that we're in, and is that having an impact, or are the growth trends for A.I. in the case of Meta and Cloud in
the case of Microsoft, just so strong and prevalent right now that they're able to counteract any macro concerns about tariffs, right?
QUEST: Well, as we came towards the end of the market day, the Dow suddenly popped, I mean, and I mean really popped. It had been down about 200. And
then all of a sudden it roared up the best part of 200. And there was no obvious or visible reason other than maybe, I'm thinking now, there was an
early wind on the results or whatever, and therefore, you know, people have got a better feeling of how it might go.
LA MONICA: Yes, that's possible. We did see a nice rebound for the S&P 500 from its lows also. The S&P 500 eked out a gain as well. And the Nasdaq
didn't finish in green but it almost did. It was down a lot more during, you know, earlier in the session. So a lot of people talk about how that
last hour of trading is very significant and worth watching. Hopefully this is a good sign that carries over.
Of course, tomorrow we have Apple and Amazon after the closing bell. We also have some important macro data in the morning with ISM Manufacturing,
weekly jobless claims. So there's still a lot for investors to digest, including those pastries that you're having --
QUEST: You talk about --
(CROSSTALK)
LA MONICA: That you're eating in Prague.
QUEST: Get your hands off. Get back, get back. These are mine. Have your own Danish pastries.
LA MONICA: I'm jealous, Richard.
[16:55:05]
QUEST: Listen, the one thing that is fascinating is as we'll get more results and on tech, we'll start to see whose misery is their own
misfortune. Apple, obviously, because it's much more directed as tariffs. Meta is a tech company, but not necessarily tariff related directly. But
we'll start to see that classic thing of who's swimming naked when the tide goes out.
LA MONICA: No, definitely. And we're going to have to wait a couple of weeks until the end of the month when Nvidia reports earnings. Given
Nvidia's ties to A.I. and its importance as, you know, a chip supplier, you know, that does business in China, Nvidia might be the company that really
gives us a sense of just what President Trump's trade policies are doing to big tech.
QUEST: Right. I'm going to give you, these are the kolache that we enjoy. There's no kolache if you don't work. So I'll make a judgment on whether I
think you've worked hard enough.
Paul Guru La Monica, it is always good to see you. I'm grateful to you, sir. Thank you for joining us tonight.
LA MONICA: Thank you, sir.
QUEST: Kolache to you, too. We'll take a "Profitable Moment" after the break. QUEST MEANS BUSINESS tonight live in Prague.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment" from Prague. Our first thanks must be to our dear colleagues here at CNN Prima, who have basically, well, they've
given us the keys to the castle, quite literally. And the castle has been so wonderfully generous to us.
It has been magnificent to be here in Prague, to be in the Czech Republic, because we're getting a good glimpse of what the future of Europe will look
like, particularly when you talk about the tariffs on Donald Trump. Here is an economy that directly won't be affected, but it will because of its
exports through Germany, Austria and elsewhere, which of course will dramatically be affected.
It is a country which will obviously have to deal with regional tensions, Hungary, Slovakia, Slovenia, and others. And it is a country that is about
to face a general election where, if the polls are to be believed, there could well be a change of government.
And yet, at the same time, this is the country I visited in 2004, just before it joined the European Union that I always thought had the best
chance of making a great success of being part of, if you will, the West. I come back many years later to see that success and realize they have
achieved it.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in Prague. Whatever you're up to in the hours ahead, I hope it's profitable. I'm
taking the kolaches with me.
END
