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Quest Means Business
India Carries Out Nine Strikes in Pakistan and Pakistan-Administered Kashmir. Aired 4:00-5p ET
Aired May 06, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:20]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. Hit the gavel. Bring everything to an end. One,
two. Oh, there we are. Trading is over for the day. Down on the Dow. In fact, the triple stack also largely lower.
Those are the markets and the main events that we will chew over. Canada's Prime Minister Mark Carney tells President Trump, his country is not for
sale.
Friedrich Merz officially now German Chancellor. It was an embarrassing first vote that revealed his coalition might not be as strong as they
think.
And the Vatican preparing tomorrow for the Conclave, which gets underway.
Live from New York, Tuesday, May the 6th. Busy day ahead. I am Richard Quest. Have another ding. I mean, business.
Good evening.
The Prime Minister of Canada, Mark Carney says his country will never be part of the United States following a tense encounter in the Oval Office
with Donald Trump.
Mr. Carney met the President a few hours ago. The interactions were polite, but they grew uncomfortable, cringeworthy, I would say. Mr. Trump has said
the U.S. is subsidizing Canada and giving them free military protection.
And during the meeting, he repeatedly said he thought Canada should become the 51st U.S. state.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: I think that there are tremendous benefits to the Canadian citizens, tremendously lower
taxes, free military, which honestly, we give you essentially anyway because we are protecting Canada, if you ever had a problem. But, I think,
you know, it is -- it would really be a wonderful marriage.
MARK CARNEY, CANADIAN PRIME MINISTER: Having met with the owners of Canada over the course of the campaign last several months, it is not for sale. It
won't be for sale, ever.
TRUMP: Never say never. Never say never.
(END VIDEO CLIP)
QUEST: Mark Carney held his own news conference a short time ago and he says his message to the President was clear.
(BEGIN VIDEO CLIP)
CARNEY: The President has made known his wish about that issue for some time. I've been careful always to distinguish between wish and reality. I
was clear there in the Oval Office, as I have been clear throughout, on behalf of Canadians, that this is never going to happen.
Canada is not for sale. It never will be for sale.
(END VIDEO CLIP)
QUEST: Paula is with me. I thought Mark Carney did a stunning job. He had the wry smile and humor when necessary. He -- the President knew that he
was never going to win one over on Carney. I mean, the two men have met many, many times -- G7s, G20s over the years. How did you -- how did you
see it?
PAULA NEWTON, CNN INTERNATIONAL HOST AND CORRESPONDENT: You know, it is interesting, especially when we spoke to officials about what happened
between closed doors. Some people regard Mark Carney as the smartest man in the room, maybe the smartest politician, but perhaps the smartest
economist. Right? And the President, behind-the-scenes during lunch peppered him with questions, continually engaged him on a swath of issues,
and seemed genuinely interested in what the answer would be.
Now, I would say, look on tone, it was fine, I would say, especially because the President did continue to say that he wanted Canada to be the
51st state. If you're, Mark Carney, that is the best you could hope for coming out of that Oval Office meeting. You stood up for the country at the
same time you didn't antagonize the President on his turf. Right? You're a guest. You don't want to be rude.
Having said that, when you really peel back some of the layers here, you talked about wish and reality. Let's talk about reality, Richard. There is
no closer to tariffs being lifted on Canada or anyone else at this point in time. And I think it was a sobering behind-the-scenes meeting in the sense
that, yes, it was constructive in terms of the trade talks, but Canada and the U.S. already have a trade deal, and it is that that that President
Trump ripped up, and now, they will have to start again.
QUEST: What was -- I am seeing -- in the picture I am seeing now, there is Marco Rubio, there's J.D. Vance. I noticed neither of those two decided to
lay on one to the Prime Minister.
NEWTON: You know, it is interesting and I can tell you for a fact that Republican and Democratic lawmakers on Capitol Hill, whether they're
senators or congresspeople, have spoken loud and clear to this Cabinet and said Canada is the largest buyer of our goods. And for that reason, they
laid the groundwork, really, for in that room for everyone to be respectful, understanding that Canada does have some cards to play.
[16:05:11]
They may not be great. They may not hold together the entire trade relationship. But I think they wanted to give him a good welcome to the
White House so that these talks could continue, and on to the G7, right?
Richard, now we've got the G7 in just a few weeks in June in Kananaskis in Alberta and Mark Carney is the host there.
QUEST: Yes, and by what he said at his press conference, the President is going because when I woke up this morning, I discovered -- you know, I was
reading in my morning newspaper, I am still old fashioned, that there was issues of whether or not the President was going. It seems like that's now
-- he has agreed to go.
NEWTON: In fact, Kevin Liptak and I reported on that for CNN as well and I can tell you from both sides whether it was the White House or the Prime
Minister's Office, it was not taken for granted that he would go. It seems that he continually said, I look forward to being there.
Was it an ironclad I will be there? No. But he kept saying, I look forward to being there. A lot of contentious issues there as well. I tried to get
into question about Ukraine. I want to tee this up for everyone. President Zelenskyy will be at the G7 and again, very substantive talks. The Prime
Minister hopes to come there.
QUEST: Good to see you. Safe journey home. Thank you, Paula.
Now, while meeting with Mark Carney, Mr. Trump suggested the U.S. and Canada would be better off going their separate economic ways.
(BEGIN VIDEO CLIP)
TRUMP: We really don't want Canadian steel and we don't want Canadian aluminum and various other things because we want to be able to do it
ourselves. And we -- because of, you know, past thinking of people, we have a tremendous deficit with Canada. In other words, they have a surplus with
us, and there is no reason for us to be subsidizing Canada.
Canada is a place that will have to be able to take care of itself economically.
(END VIDEO CLIP)
QUEST: Candace is with me, Candace Laing, chief exec of the Canadian Chamber of Commerce.
Let's not get into an interesting argument of whether the U.S. is subsidizing or not. That's a sterile point. Let's instead look at how you
now see, having seen, you know, there was no blowup. Mark Carney is far too, experienced to end up in a shouting match.
But are you encouraged by what you saw today?
CANDACE LAING, CHIEF EXECUTIVE, CANADIAN CHAMBER OF COMMERCE. Well, good to see you, Richard. Thanks for having me. And absolutely, I think today is
encouraging.
Heading into today, I was asked many times, what do you hope to see? And I mean, we hoped to see a reset on the relationship between these two leaders
and I think that's definitely what we had delivered today. So that is very, very good news.
I would say we were hoping things would be respectful and serious and as you saw, they were friendly and at times jovial, which is also a good sign.
QUEST: If we accept that the USMCA is gone and that this idea of a single market of the three countries is sort of history, for you and the Chamber,
what is the best scenario that comes out of the next sort of six months of trade talks with Canada?
LAING: Well, I mean, I think the question that was posed today, does USMCA live was an important one and there are multiple ways to look at that. I
mean, it is being utilized and utilized is better than saying it is respected even in the onset and execution of tariffs.
But tariffs by themselves are, you know, against the agreement. The agreement is there to help us avoid situations of any sort involving
tariffs.
So, heading down the road here, I mean, from the business community perspective, we hope to see good discussions and negotiations, if not just
a review of that agreement, which is what is scheduled -- a review six years into the 16-year lifespan of the agreement is what is scheduled to be
completed by July 2026.
But based on the situation we are in, I think it is practical to say we are in a renegotiation. But I think, what it is --
QUEST: Yes, but what is the future? What does -- assuming that the nirvana of USMCA can't be maintained, what is the next best thing for you?
LAING: I think we are about to see a leveling up of the discussion on the shared interests, which is really how Prime Minister Carney approached
today. This is not just about tariffs by any means. This is not just about trade. This is about our economies and are not only economic security, but
national security, and these things are absolutely linked. And this is, what we will see, I believe, as we head into the G7 discussions, huge
signal that we hope to see President Trump there because the collaboration from a continental perspective is just critical, in addition to the
collaboration with more partners, allies, like minded countries in economic security.
[16:10:28]
QUEST: Good to see you. We will talk more as those deals come along, we will discuss them in detail. Thank you.
LAING: Thanks for having me.
QUEST: I looked out the window of my office, it is stormy weather. I look out towards over the river, the Hudson and stormy weather threatening to
make delays at one of New York City's major airports from bad to worse.
For nine days now, the FAA -- Federal Aviation Administration has imposed delays for inbound flights at Newark International. It is largely due to a
shortage of air traffic controllers. The problems began last week. There was an equipment failure, which, according to sources, led controllers to
lose both radar and radio communication.
Newly obtained audio gives a sense of what that was like.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: No, you do not have a bravo clearance. We lost our radar and it is not working correctly. Radar service terminated. Squawk VFR.
Change approved. If you want a bravo clearance, you can just call the towers when you get closer.
(END VIDEO CLIP)
QUEST: Now, we are told five workers have taken trauma leave after that incident.
Pete Muntean is in Washington.
First of all, just the Newark delays, how much is runway out? How much is bad weather? How much is old infrastructure and how much is this air
traffic control shortage and problems?
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: It is mostly the latter two, Richard and I have to mention here that these delays are happening
primarily, at least according to the FAA and that outage of last week on April 28th, that happened in clear weather, in daylight.
We know that the controllers there in the approach control facility responsible for Newark flights did not have radio and radar for 60 to 90
seconds, leading five of them to take trauma leave, which has led to these shortages in air traffic controllers in the Newark Terminal Radar Approach
Control Facility. That's the facility responsible for flights not long after they take off, before they get to cruising altitude, and as they are
descending into the plane -- it is a critical -- at the airport. It is a critical role because they have to get vectored on the final approach.
And so these staffing shortages are a huge issue. Although you do mention some of the other things that are taking place right now at Newark. And the
runway construction problem is a huge one and that won't be done until mid- June.
QUEST: There is no easy solution on the air traffic controllers. They've been trying to get more air traffic controllers pretty much since Reagan
fired them all in the 1980s.
MUNTEAN: Yes.
QUEST: There is no easy solution to that. The infrastructure is old. So what is -- if you're United Airlines at Newark and this is your major
European hub, crucial, what are you going to do?
MUNTEAN: You have to wait it out essentially and lobby, lobby, lobby. And we have heard United CEO, Scott Kirby hammer the FAA repeatedly on this
issue. We will see, though, if Capitol Hill takes this up and we know some of the main members in Capitol Hill who oversee the FAA have put forth a
bill to provide another $15 billion for an air traffic control overhaul, but that is just a down payment. It will take so much more money and so
much more time to really turn essentially, what is an aircraft carrier around with a single boat oar.
It is not simple, and it is going to take a long time, probably decades -- Richard.
QUEST: Now you're a pilot, an experienced pilot. I need to ask you. So tell me, in the situation where ATC loses control and/or loses contact and you
are the aircraft in that region, what is the emergency default position that aircraft do when they lose control? When they lose contact?
MUNTEAN: Typically, you squawk 7600, which is the squawk code for lost communications. And you do the next best thing that you were told to do by
air traffic control previously. If they told you to do an instruction, you do that same thing. In clear weather, in the daytime, it is not all that
big of a deal, but it has the potential to be really dangerous, especially in this airspace, which is some of the most congested and busiest airspace
in the United States and perhaps the world.
The stat that's been thrown around is that Newark is the 14th busiest airport in the U.S., but that is only at certain times. I think a lot of
the time in the U.S., it can be one of the busiest, depending on when you think about the morning rush or the evening rush.
It is very, very congested and so things can go haywire really quickly. As pilots, you try and just do the next right thing that air traffic control
told you to do, get the airplane on the ground and simply not hit anybody. It turns into see and avoid, although we know how quickly that can go
sideways when you look at the mid-air collision of January 29th over the Potomac River.
[16:15:11]
QUEST: Pete, glad to have you with us tonight on QUEST MEANS BUSINESS. Very grateful for you. Thank you, sir.
As we continue, Germany's new chancellor, Friedrich Merz was sworn in, but not before a rather nasty hiccup, the first vote failed. The second one
succeeded. The co-leader of the German Greens will tell us what this means, in a moment.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Friedrich Merz is now officially Germany's new chancellor hours after a stunning Parliamentary defeat. The new chancellor fell six votes
short in the first round of voting. It was a hastily organized second vote that squeaked him through. His CDU, Christian Democratic Union won the
February election without getting enough votes to govern outright.
Anna Stewart is with me.
How on earth -- I just realized we are matching. We are both wearing purple today.
ANNA STEWART, CNN REPORTER: Oh, really.
QUEST: Yes, sorry, that's completely --how on earth does that happen on this crucial vote that you don't know that six or seven of your own lot are
not going to vote for you?
STEWART: It was fascinating. This is historic. It has never happened before in German history and what was so interesting was just that, how could this
happen when its meant to be a rubber stamping process and from within the coalition, because the coalition has 328 seats and the first vote came in
and he only had 310, so 18, at least 18 people from within the coalition abstained or voted against him. That's quite a rebellion.
QUEST: Right. So they are obviously making a protest, knowing that there will be a second or third vote that they can get him in, unless they wanted
to bring him down and have another election, which is highly unlikely at this time.
STEWART: Yes, well exactly that. So what are they protesting against? Could it be some of the Cabinet appointments? Could it be some of the policies?
Clearly they voted him through on the second round and they were clearly not going to want an election, and for the AFD, the far right party, to
make any more gains than they already have. So that's where it ended. But it doesn't bode well, this is a very bad omen for the start of this new
government.
What Germany needs is stability. It is six months to the day that the last coalition collapsed, and obviously the German economy is stagnating. This
was a time to show leadership and stability, and that's exactly what we didn't really have. It was a very messy beginning.
QUEST: Right. All right, Anna, I am grateful to you. Thank you.
Anna Stewart there.
[16:20:10]
And now, Chancellor Merz's coalition have a variety of ideas to boost the German economy. They've agreed to cut taxes for the lower and middle class,
as well as for businesses. The Chancellor is vowing to lower energy prices and support the E.V. industry, and the coalition has plans to reform
Germany's spending limits.
Critics point to these restrictions as a reason for the nation's slow growth. He has also supported an increase in defense spending.
Franziska Brantner is the co-leader of the German Greens Party, currently holding 85 of the 630 seats, and believes that Mr. Merz's inability to win
during the first round of voting weakened Germany.
Good to see you, ma'am. Thank you.
What do you think happened? Why -- I mean, what were his own people trying to tell him? And why do you think that weakens him?
FRANZISKA BRANTNER, CO-LEADER, GERMAN GREENS PARTY: I was shocked today because it was really not expected that he doesn't manage to get a majority
within his own party and within the Social Democratic Party, and I think it is linked to his style over the last couple of, days, months, he has been
very polarizing. His style was, you know, either you go my way or you don't go anywhere and this has been offending a lot of people in his party in the
Social Democratic Party, and I think he really needs to change that style to say my role is now to bring people together, not to split them apart.
And I think some people probably wanted to give him that lesson today.
QUEST: Yes. I mean, it was -- you know, I suppose it was always going to be a case, he would eventually get it. In terms of now what you want from this
government and the areas where you believe you can work with them. I guess it is easy to point out the areas where you can't, but if you're talking
about unity, what are those common areas where you can agree?
BRANTNER: We really want Merz to be a strong European chancellor. We want him to be there to support Ukraine, to support European defense, to really
invest in European security, to make Europe a safer place. We will support him and his government if he is going this way.
Second, we really want him to do the necessary, give him -- give the necessary support for our companies to deliver better upon their
capabilities in these difficult times. We have been proposing tax cuts in the fall. They will now do the same. I really hope they will do this fast.
Our companies have been waiting for this for six months now.
QUEST: What will you disagree most violently on? I mean, you know, most -- where will be the biggest area of disagreement?
BRANTNER: This coalition has been giving up our goals when it comes to the climate and also our being less dependent on fossil gas imports, for
example, from Russia. We really think we need to become more resilient as an economy to invest in new technologies, be they climate or digital. This
is where this government is looking backward and stopping the changes we have started.
QUEST: Every panel, every discussion, every debate I hear now suggests that your ambitions on Green Deal are inconsistent or contradictory to the
increased defense spending and the necessary say, for example, debt break release that has to take place.
You can't have one. You have to choose.
BRANTNER: No, that's not true. I mean, we just managed to do both. That's the good news from Germany. We just managed to change our debt break in a
way so that we can have 100 billion for climate and independent spending for dependent -- indefinite, almost spending for defense. So we have
managed to do both. It is not either or, but we have to make sure that we do both right and that comes to the area.
I also want to highlight that Germany has to speed up its procedures, become you know, reform its institutions. We are a federal state. It is not
always easy to maneuver here and we want to become again the best made in Europe, to be made in Germany.
QUEST: Made in Germany, as we have the weeks and months ahead, you and I hopefully please, we will talk more. You're always most welcome on QUEST
MEANS BUSINESS. Thank you.
Now, the U.S. Treasury Secretary Scott Bessent has told members of Congress that a number of big deals are in the works. The U.S. is negotiating with
17 different countries, though talks with China have yet to begin. Then Mr. Bessent suggests Beijing will make concessions.
(BEGIN VIDEO CLIP)
SCOTT BESSENT, U.S. TREASURY SECRETARY: I expect that we can see a substantial reduction in the tariffs that we are being charged, as well as
non-tariff barriers, currency manipulation and the subsidies of both labor and capital investment.
[16:20:12]
QUEST: So now the economic puzzle and the jigsaw is coming together as we start to work out. The small businesses, for example, who stand to get hit
by the tariffs, just listen to some of the guests that we've had on this show.
(BEGIN VIDEO CLIP)
ARNOLD KAMLER, CHAIRMAN, KENT INTERNATIONAL: We're trying to get out of China as soon as we can, but you can't just snap a finger and it is just --
it is not fair to business, our business and many businesses to have to get out in two weeks, three weeks, four weeks. It is just not enough -- it is
just not enough time.
LINDA SCHLESINGER-WAGNER, FOUNDER AND CEO, SKINNYTEES: What about the logistics and the supply chain? Is that going to be affected by all of
this?
JYOTI JAISWAL, FOUNDER AND CEO, OMSUTRA: It is going to affect in a bigger way because it is not only the tariffs. There is added cost of
administrative expenses like more fees to the brokerage, administrative expenses, shipping and logistics.
So there are so many things that goes in the supply chain that we have to look into along with the tariff.
(END VIDEO CLIP)
QUEST: Now, as the trade war rages on, we are beginning to see pieces of the economic puzzle falling into place. GDP had its worst quarter since
'22, shrinking 0.3 in the first quarter of the year. Another piece of the jigsaw, job growth slowed down in April, but remains strong. U.S.
manufacturing contracted for the second month in a row.
The markets have been on a roller coaster with major averages, mostly recovering from the shock. And finally, there is trade. U.S. imports
surged, obviously, as people tried to beat the tariffs that are now in place on China. Shipping volumes are now down sharply around 35 percent at
the Port of L.A.
Ryan Petersen is the CEO of the supply chain management, Flexport. Well, we've talked before. We will talk again. We will keep talking.
Contrast the environment now versus, say two or three weeks ago or just before the tariffs came in? Have things got quiet?
RYAN PETERSEN, CEO, FLEXPORT: Well, hey, thanks for having me back on. It is pretty -- you know, not that much has changed. I think people are still
in a moment, sitting here waiting for something to change. Sitting here waiting patiently and excitedly, maybe that's the wrong word. No one is
that excited. People are kind of horrified by what has happened to their business.
We see a 60 percent decline in ocean freight coming from China to the U.S. since April 9th, since the tariffs kicked in. So 60 percent is just a
massive drop in the amount of volume coming to the country from one of our biggest trading partners. That's disproportionately affecting small
business.
You know, at some point you don't have any product left to sell and you fail, you know, putting pause on a business is not the that worth it.
QUEST: So as those ships, they leave China, as they come across the ocean, you then have to deal with them, of course. I mean you now at least know
the tariffs, you know the harmonized details in terms of the tables and the tariffs. It is really just a question of paying the money.
Are you now writing -- are your clients writing large checks to the U.S. Treasury for tariffs?
PETERSEN: Yes, absolutely. So the tariffs took place -- they started on April 9th, but that was based on the departure date of the ship. It takes
about two weeks to cross the ocean. So we really saw last week was the first week of these higher duties actually getting paid to the government.
There is a lot of scramble right now to move cargo into what is called a bonded warehouse, which lets you avoid paying duties until it leaves the
warehouse. So that's a big thing that's happening is people -- if you think the duties are going to come down on China, which most people, including
the President have said they will, then if you don't need the inventory immediately, it is a good idea to move it into a warehouse, a bonded
warehouse that lets you avoid paying those duties until the rates come down.
QUEST: Hang on, but I thought the rate was set when the thing ships. You're saying it can change if it is in a bonded warehouse and the tariff comes
down?
PETERSEN: Yes. If you have a bonded warehouse, then the duty that you pay is based on the rate effective on that day when it leaves the warehouse
rather than when it entered the country. So that's one strategy. It doesn't really work because -- it will work for a period of time, but at the end of
the day, you bought these goods because you want to sell them. So like, you know, why leave them in storage?
QUEST: What are you seeing, As-Pac, Asia Pacific x China. Are you seeing fall off in volumes from ASEAN and other parts of Southeast Asia?
PETERSEN: No. In fact, we are seeing growth from every other place in the world except for China. Well, on average, you see about a five percent
increase in volumes from rest of world into the United States, and that's a Flexport statistic. So I don't know what the whole market looks like. We
are about one percent of the market, but it is probably relevant. It is a statistically valid sample.
So you are seeing growth out of Vietnam especially, but the rest of world overall people are shipping more to the U.S. Companies are shifting their
factories, their production to other factories besides their Chinese ones.
QUEST: This is interesting because that suggests -- I mean obviously people are trying to substitute supply chains with other countries, and of course
a 10 percent tariff for most of these other countries is clearly better than a 145. But it does suggest that global trade can live, harmonized, if
you will, at a 10 percent global tariff.
[16:30:00]
RYAN PETERSEN, CEO, FLEXPORT: That's our view is 10 percent is pretty -- people can absorb it. The currencies may go down for those countries.
They'll strike deals with those factories to get better pricing, and they'll be able to pass it through to consumers in slightly higher prices.
And life will go on. But 145 is really a decoupling rate with China.
And by the way, a 5 percent increase on rest of world and a 60 percent decline on China, it means that it's about -- the way that these volumes
work out it's about a 15 percent decline in overall volume entering the country. So you are talking about extreme recession scenario. If you if you
decrease trade by 15 percent overnight.
QUEST: Ryan, I'm so grateful we had to talk -- we were able to talk to you tonight because I'm getting real insight into what's happening, if you
will, as we used to say, at the factory gate and at the port door. Thank you, sir. We'll talk more.
This is CNN.
PETERSEN: My pleasure.
QUEST: Serious breaking news to bring to your attention. India's armed forces says it's carried out precision strikes in Pakistan and in Pakistan-
administered Kashmir. In a statement, it says nine sites were targeted. It comes two weeks after an attack on tourists in Indian Kashmir left 26
people dead.
You can imagine we are getting our correspondents up. It's late, it's middle of the night. We will be talking to them shortly, in a moment. QUEST
MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: So breaking news that we bring to your attention this evening. India's armed forces says it's carried out precision strikes in Pakistan
and Pakistan-administered Kashmir. In a statement, it says nine sites were targeted.
[16:35:04]
It follows two weeks ago, an attack on tourists in Indian-administered Kashmir, which left 26 people dead. Over the last two weeks, India and
Pakistan have engaged in various bellicose acts, both verbal, diplomatic, trade and travel restrictions. There's been water treaty suspensions
between the two, between India and Pakistan, and the statement -- and things have been deteriorating more.
Nic Robertson is with me. And we've got a statement, though, before I come to you, Nic, the statement says, from India says, these steps come in the
wake of the barbaric Pahalgam terrorist attack in which 25 Indians and one Nepalese citizen were murdered, according to the India's Ministry of
Defense. It refers to the attack of course.
Nic Robertson is with me.
Nic, good evening, good morning to you. The Indians also say all actions have been focused, measured and non-escalatory. No military Pakistani
facilities have been targeted. He says India has demonstrated considerable restraint in the selection of targets, et cetera, et cetera.
But, Nic, the fact, the mere fact that India has taken military action against Pakistan and Pakistan-administered Kashmir is a massive escalation,
even though it was expected.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (via phone): It's a huge escalation, Richard. It is the very early hours of the morning here. The
information coming in is sketchy but it does seem to run in part with what India is saying about hitting that number of different locations inside
Pakistan and Pakistan-administered Kashmir.
Now, from the Pakistan perspective, they had never accepted India's allegation that Pakistan was behind that attack that killed 26 civilians.
Officials that I've talked to here, senior security officials, very senior security officials, have all said exactly the same thing, that as a matter
of military doctrine, without any shadow of a doubt, if India strikes Pakistan, Pakistan will strike back.
And that the way that they would strike back would depend the way that they were struck. And the fact that it is not just Indian, not just Pakistan-
administered Kashmir that has been struck, it is Pakistan proper that has been struck. That is a massive, massive escalation at this time. Really, we
need to wait until we get more information and more details available to us. But the indication at the moment is this is on the extreme level of the
sort of response that Pakistan was expecting.
Pakistan had expected a response and said they'd expected an attack. They had indicated that they thought a week ago that an attack had been planned
but didn't take place. That was the information that they were saying. They couldn't provide full --
QUEST: Right.
ROBERTSON: You know, details to sort of support that. However, they were expecting this moment.
QUEST: I get the sort of feeling here that we're heading into obviously an element of tit-for-tat and once and one now one or the others. But at what
point will both sides be looking for that common, you know, all right, you've done your bit. We've done our bit. We don't want it to escalate any
further than that, to use a horrible phrase, honor has been served on both sides.
ROBERTSON: The conversations that I've had have indicated that from a Pakistani perspective, if there was a strike and they did -- from India and
they did respond, then for them, that would be it. But now Pakistan has to calculate the nature of its response in the light of the fact, as I say
again, that they have struck Pakistan proper, which was at the extreme end.
QUEST: Right.
ROBERTSON: So this is what diplomats have been worrying about. Will, as you say, honor has been served, and I think at the moment that question is
very, very hard to judge.
QUEST: If we go back to the original horrific murders, 25 Indians and Nepalese, the Indians essentially say that the Pakistani were either
involved or complicit, despite whatever rebel group there might have been involved in this. To that extent, can we attribute, how much can we
attribute to what India says as being valid?
[16:40:10]
ROBERTSON: Well, if you were to ask Pakistani officials, security officials, and I have, senior security officials, they would say no. They
would say India's allegations that they were behind and complicit with these groups might have held water several decades ago, but they say they
don't support those groups. In fact, they would say that one of the groups that India appears to link to the attack is under house arrest in Pakistan.
They would say that there was no interest in them doing this because it doesn't serve them. They're fighting an insurgency on their western border,
and to have to pull their forces to the east to face India is counter to that. They would say that their economy has been improving and that they
wouldn't want the economy to be dragged down by a conflict. So these are the things that officials have been saying to me when I asked them about
India's allegations.
QUEST: Nic Robertson, I'm grateful. Thank you, Nic Robertson. Very late night, early morning. And obviously you've got many more hours ahead. We'll
leave you to get on with your newsgathering duties. Thank you, sir.
QUEST MEANS BUSINESS, we'll have more in just a moment.
(COMMERCIAL BREAK)
QUEST: Breaking news to bring to your attention. India says it has launched a military operation against nine sites in Pakistan and Pakistan-
administered Kashmir. These are, well, I mean, you can't really tell much from these pictures, but they are from the scene. And I'm told that there
are pictures of explosions, but we'll obviously need to sharpen up the pictures in the hours ahead and we'll see to them.
Sajjan Gohel is the international security director at the Asia-Pacific Foundation.
[16:45:01]
You know, I'm guessing no one is surprised by what's happened and everybody is horrified by it. One and the same thing because of the escalation and
what it portends.
SAJJAN GOHEL, INTERNATIONAL SECURITY DIRECTOR, ASIA-PACIFIC FOUNDATION: Well, Richard, you're absolutely right. No one was surprised. The question
wasn't if it was going to happen, it was when. And we've now seen coordinated strikes, it seems, by India's air force in Muzaffarabad, Kotli
and Bahawalpur.
The suspicion is that they were probably targeting terrorist camps that have belonged to groups like the Lashkar-e-Taiba, which its affiliate, the
TRF, the resistance front, stands accused for the attack that has got us here today.
QUEST: So what does India hope to achieve by this? Besides honor must be served from what they believe was the complicity in the terrorist attack.
Other than that, what do they hope to achieve by this action? Bearing in mind that we now are just are waiting for, you know, at what point will
Pakistan retaliate.
GOHEL: Well, if we go back to what transpired several years ago, you may remember the 2019 Balakot airstrike where Indian warplanes targeted certain
strategic parts of Pakistan-administered Kashmir. And that was after an attack in Jammu and Kashmir and a suicide bomber killed dozens of Indian
security personnel.
Now India, I think you're seeing a demonstration of their frustration with the fact that these terrorist groups have been allowed to operate in
Pakistan unhindered, and that has been an ongoing challenge, Richard. We've been talking about this, you and I, for the last two decades since during
the war on terrorism.
So nothing has necessarily changed. But what you're seeing is that under this government in India, they are pursuing a more direct approach, as
opposed to, say, the previous strategies by the Manmohan Singh government or the Vajpayee government.
QUEST: So what was the -- what do you believe was the object and goal of the terrorist attack besides the murder of the people involved? Was it to
inflame tensions between the two countries, which rarely need much kindling before they set off?
GOHEL: The timing is really interesting, Richard, because that particular terrorist attack coincided when U.S. Vice President JD Vance happened to be
visiting India, ostensibly to talk about a trade deal.
QUEST: Right.
GOHEL: And there's often been this concern that as India and the United States get closer there are concerns that Pakistan tends to get nervous,
tense about that closening of relationship. And they try to remind the West, they try to remind India that they're potentially still there as a
nuisance factor, because we know that Pakistan's military and intelligence agency, the ISI, tends to have these very murky ties with these terrorist
groups.
And keep in mind that if you look at other instances, whenever India and Pakistan seem to have a thawing in relations, suddenly you have a terrorist
that ruins the relationship. Go as far back to the 2008 Mumbai attacks, where you had these marauding terrorists from the Lashkhar carrying out --
QUEST: Sure. So put this into perspective so I can understand because the moment you hear that India and Pakistan are in any form of hot war or hot
activity, one always thinks, oh, no, we're in real trouble here. The two nuclear powers who basically loathe each other at a certain level and never
miss the opportunity to attack. So how would you gauge what we're seeing tonight in terms of seriousness?
GOHEL: It's very significant because this is the first time you have seen coordinated multiple airstrikes occurring. In the past we saw specific
targeted operations by the Indian military. This time, they seem to have expanded it quite significantly. The Pakistani military has already reacted
to say that they may retaliate at a time of their choosing because in Pakistan, the military is seen as the most powerful entity.
If they don't react, it could look as a huge sign of weakness. But there's also going to be a lot of pressure on Pakistan by the United States and
other countries to not escalate the situation. In fact, the U.S. had been telling Pakistan to condemn those terrorist attacks, the reason why we've
got to this situation in the first place. And even though there were some comments by the Pakistani government, they didn't do enough to actually
condemn it.
QUEST: Right.
GOHEL: Which implied that there was a degree of complicity.
[16:50:00]
QUEST: We'll talk more. I'm grateful to you, sir. Don't go anywhere. We've got more. I was just thinking about the answer you gave me about the degree
of seriousness. It's not the answer particularly we want to hear, but it is the answer that we need to hear tonight to try and help put us into
perspective.
Stay with me, sir. Don't go away. We're going to take a short break. It's QUEST MEANS BUSINESS. There's a lot of breaking news and you need to hear
it after the break.
(COMMERCIAL BREAK)
QUEST: Allow me to bring to your attention India's armed forces says it's carried out precision strikes in Pakistan and Pakistan-administered
Kashmir. Nine sites have been targeted, according to India's Ministry of Defense. We've got a statement. Let me go through it, if I may.
These steps come in the wake of the barbaric Pahalgam terrorist attack in which 25 Indians and one Nepali citizen were murdered. Now we know about
this. Islamabad has denied any involvement or complicity in the attack.
Aparna Pande is a research fellow at the Hudson Institute.
Let me start as I just asked our previous guest to give me an idea of how significant -- you know, look, when you hear India and Pakistan firing at
each other in any shape or form, it is serious matter, obviously. But how do you gauge the seriousness of what we're hearing tonight?
APARNA PANDE, RESEARCH FELLOW, HUDSON INSTITUTE: Hi, Richard. It is serious anytime two nuclear armed neighbors up the ante. However, the attacks are
similar to the 2019 attack. At that time, India had struck a terror, sort of, you know, outpost inside Khyber Pakhtunkhwa in Pakistan. This time it
has just crossed the border and struck terrorist camps. And the Indian Ministry's press release, which you read out, says it is focused, measured
and non-escalatory.
So it was predictable that India would respond with a punitive strike. But India is trying to ensure that the message goes out to everyone that India
has no intention to escalate this to war. That is what the Indian government is trying to let everybody know. And so while it is significant,
it is not worse than 2019.
QUEST: But Pakistan, and when I say must retaliate, I mean only by their own definition, Pakistan will retaliate in some shape or form.
[16:55:01]
I feel that awful phrase, proportional response, which as they once said in the West Wing, would somebody please tell me what is the definition of a
proportional response? But I feel that that's where we're heading to, isn't it?
PANDE: Yes. Pakistan will be forced to respond. The question will be, what happens after that? If you recall 2019, there was a terror attack inside
Pulwama. India responded by a strike inside Pakistan. Pakistan responded by a strike inside India. And then there was a dogfight between their air
force, and it stopped after that. So Pakistan will respond. The question will be, what will Pakistan strike and where will it strike inside India?
QUEST: So who are the interlocutors that have any form of influence over where this goes? The U.S., E.U., China, Russia? Who is playing which side
of the blanket?
PANDE: So U.S. would be speaking to both India and Pakistan. China primarily to Pakistan. Russia is speaking to both. Of these the country
which is normally played the key role is United States because it has leverage with both countries. And so I'm sure the U.S. State Department and
NSC are having conversations to ensure that it doesn't go up the escalatory ladder more than, you know, you have struck, now you have struck, now, you
know, now, let's sort of, you know, stop this and have conversations and move forward.
QUEST: OK, OK. But I need to also understand how does the new Trump administration, the new much more muscular foreign policy of the Trump
administration, we know that the president gets on -- likes the Indian prime minister very much. And just by the visits, recent visits that
they've had. So has Donald Trump, to your best reading, shifted U.S. policy on India-Pakistan?
PANDE: Actually no. Richard, I'm sure you saw the video in which when the president was asked about the India-Pakistan sort of, you know, when the
terror attack inside India took place last week, on 22nd, he was asked and the president said that, you know, sort of, he has good relations with both
India and Pakistan. This has been going on for a long time, and he will let the two of them sort it out. And that the Kashmir conflict has been going
on for 1500 years.
So I do believe that, you know, sort of the president himself has not shown an interest in getting into the weeds on Kashmir, but I'm sure the outgoing
National Security adviser, Mr. Waltz, and Secretary Rubio and Secretary Hegseth are in the weeds.
QUEST: Right. Sir, I'm grateful. Thank you. We'll talk more.
PANDE: Thank you.
QUEST: And we'll be back with more breaking news from India and Pakistan after this short break.
(COMMERCIAL BREAK)
END
