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Quest Means Business

DeepMind CEO: Humanity Must Come Together To Manage A.I.; Lee Jae- Myung Wins Presidency Following Snap Elections; Ukraine Hits Crimea Bridge With Underwater Explosives; OECD Slashes U.S. Economic Growth Forecast; Trade War Hangs Over U.S. Pharmaceutical Supply Chains; Emirates President Talks About Boeing and Economy Seats; Dollar General Boosts Forecasts. Aired 4-5p ET

Aired June 03, 2025 - 16:00   ET

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

[16:00:22]

LYNDA KINKADE, CNN INTERNATIONAL HOST: The closing bell ringing on Wall Street. A little lift there for the Dow. Well, these are the markets and

these are the main events.

The CEO of Google DeepMind tells CNN, A.I. will bring change on the same scale as the industrial revolution.

Opposition leader. Lee Jae-myung will be South Korea's next President.

And Tim Clark, president of Emirates, on the mission to build a more comfortable economy seat.

Live from Atlanta. It is Tuesday, June 3rd. I'm Lynda Kinkade in for Richard Quest and this is QUEST MEANS BUSINESS.

A very good evening.

Tonight, one of the top names in A.I. warns that humanity must come together to manage the new technology. Google's DeepMind CEO, Demis

Hassabis says he is confident the field will keep advancing on the engineering side. He says it is the human challenges that concern him most.

Hassabis sat down with Anna Stewart in London and explained why he thinks the geopolitics of A.I. will be the hardest part.

(BEGIN VIDEOTAPE)

DEMIS HASSABIS, CEO, DEEPMIND: The chatbot era has allowed everyone to get a feel for what cutting edge A.I. technology looks like, so that's a good

thing. I think that's a good thing that's happened in the last few years. But yes, it needs to translate to difficult action and we are not very good

as a society coming together to deal with complex long term problems.

So, you know, we will have to see how that progresses from here.

ANNA STEWART, CNN REPORTER: So in many ways, the engineering challenges are probably easier than the human challenges.

HASSABIS: I think, I suspect that is the way it is going to be. The engineering challenges are pretty big, too, in terms of, you know, putting

guardrails around these systems, understanding they are phenomenally complicated systems, understanding what they do, how they represent

knowledge.

But I think, you know, I am actually pretty optimistic about that. If we get the best minds in the world to focus on it and use the scientific

method and approach it with sort of humility as well of like what we don't understand and given enough time to investigate those topics, I think we

will get that right.

But I think in the end, the geopolitics and the societal part of this will be harder.

STEWART: One of the risks you haven't mentioned, that was big news last week is jobs. The CEO of Anthropic warning about a potential sort of job

apocalypse of half of white collar jobs being wiped out in five years' time. Do you share that level of grim view?

HASSABIS: No, I don't. I don't know -- I think my view is that what we know for sure is there is going to be huge change, and in the past, when this

has happened, industrial revolution, internet era, it is going to be at least of that magnitude advent of in --

STEWART: A shorter period of time.

HASSABIS: Shorter period of time and it may be a bigger, bigger change than that -- transformation than that. So there is going to be a huge amount of

change. Usually what happens is new, even better jobs arrive to take the place of some of the jobs that get replaced. We will see if that happens

this time, and I think there will be partly that.

I think also these tools initially will be incredible enhancers for productivity. So people using these tools for their creativity and other

things will be almost superhuman in their capabilities in the next five, ten years, but then beyond that you know, we may need things like universal

high income or some way of distributing all the additional productivity, that A.I. will produce in the economy.

STEWART: Now, VO3 you say demand is off the charts? I am not surprised. Look at the videos, they are incredible.

Obviously, A.I.s got creative. You are partnering with filmmakers, but how do you make sure that this technology isn't used for misinformation, which

of course has always been a big challenge with A.I.?

HASSABIS: Yes, and we've thought about that from the very beginning, creating these world models and these video models. We work with creators

big film directors and musicians to work out, to kind of design with them what do they want from these A.I. tools to enhance their creative

processes? And it has been fascinating working with them.

And for misinformation, we obviously knew that these technologies were coming down the line, so we built what we call SynthID, which is an

invisible, A.I. driven, actually watermarking, of the images which, you know, are not possible to remove as well as visible watermarking as well.

STEWART: Project Astra VO3 are all of these incredible initiatives you have. Are they all going to feed into AGI?

HASSABIS: Yes.

STEWART: Helping you understand the world around you.

HASSABIS: That's why we are building them all. They're all going to be interesting products in themselves. So generating videos and cool videos,

maybe send to your friends this kind of thing. Also Project Astra, which is our first research prototype of what a universal assistant could look like.

[16:05:10]

Understands the world around you, maybe through Smart Glasses. Those are all capabilities and technologies eventually an AGI system will need. So

that's why we are building them, as well as the media product applications.

STEWART: I often wonder, you have so many projects on, deciding what your next project is, there has to be a real purpose behind it.

HASSABIS: Yes. And I mean, always the north star is cracking this general intelligence and then using it for scientific understanding. So everything

that feeds into that is something that we will attempt to do.

STEWART: And Google will be first?

HASSABIS: I hope so. That's the idea. But the most important thing is to make sure it is done responsibly for humanity given what is at stake.

(END VIDEOTAPE)

KINKADE: Thanks to Anna Stewart there.

Well, LinkedIn executive, Aneesh Raman warns that A.I. poses a major threat to lower level jobs. Raman wrote an op-ed in "The New York Times" a couple

of weeks back. He says it is the bottom of the career ladder that's most threatened right now.

Raman says A.I. has crept into law firms, retailers, and software developers, taking the jobs that fresh graduates typically use to gain

experience.

Well, LinkedIn chief economic opportunity officer, Aneesh Raman joins me now. Good to see you.

ANEESH RAMAN, CHIEF ECONOMIC OPPORTUNITY OFFICER, LINKEDIN: Good to see you.

KINKADE: So let's start on the potential of job losses for those entry level positions, because you do clearly mirror what we heard from Anthropic

CEO warning that 50 percent of white collar jobs could disappear due to A.I. What sort of challenges could that pose economically? Socially?

Psychologically?

RAMAN: Yes, First, I think we need to focus on job impacts. I think it is too early for anyone to have an absolute prediction about net employment in

any sector, for any group of workers. But I wrote this piece because entry level jobs, that first rung on the career ladder are breaking down a bit,

and I think we should all be talking about that more. And leaders, especially policy leaders, academic leaders should be feeling more urgency

to act.

What we are seeing right now for entry level workers is sort of this perfect storm between the uncertainty in the macro environment and the

disruption that we are starting to see play out as A.I. takes on more and more of the tasks of entry level work.

Together, those two forces are creating one of the most challenging job markets for young people in decades. I will say the response to the piece

has been really encouraging. People are realizing we need to reimagine entry level work. We've got to better train workers who are coming into the

workforce, and we've got to build better jobs for them, higher value tasks in those jobs.

So we are seeing the conversation shift to not just A.I. as an end in itself, but A.I. as a means to an end and if we can build and redesign the

systems around working this way, a means to an end that is better work and more human work for us all.

KINKADE: And Aneesh you also pointed out an interesting study by IBM, which found that 75 percent of all A.I. projects fail to deliver on that promise,

return on investment. What does that statistic reveal to you about how A.I. is implemented, or perhaps misunderstood by many companies?

RAMAN: Yes. I think a lot of companies and I talk to companies all over the world all the time, think A.I. is just a tool you bring into the workplace.

It is again, a means to an end. It has to come with culture change, where it isn't just about A.I. adoption, but as we heard earlier, is leading to

new work, is leading to better work.

There are three things everyone needs to know about what is happening right now. The knowledge economy that we have been in for the last half century,

it is on the way out. What is going to replace it is a new economy that I am calling the innovation economy, where our unique ability as humans to

imagine, to invent, to innovate is going to come to the center of economic mobility for individuals and for economic growth for companies.

That means thing to, the "it" skills of this new economy are the non- technical skills. I've coined this term, the five Cs -- curiosity, compassion, courage, creativity and communication. We all have those

abilities. We've got to shore those up in the work that we do with A.I. tools. And the third thing I would say is, this has change what's already

happening. Our data at LinkedIn shows that 70 percent of the average skills for the average job will have changed by 2030.

So everyone who works at CNN, everyone who is watching CNN right now, our job is changing on us, even if we are not changing jobs. And so it is

really important at an individual and organizational level, we are pro- human and human-centric as we think about A.I.

KINKADE: Yes, and it is interesting you mentioned that given the predictions that you know, A.I. could replace not only so many jobs but

could surpass, you know, humans in some areas in the next five to 10 years.

But in terms of entry level jobs and you know, the fact of the matter that so many young professionals gain hands on experience in those early years,

they make mistakes, they learn how to, you know, think critically. What do companies need to do to ensure that, you know, the next generation still

has that experience to some extent?

[16:10:20]

RAMAN: Yes. I mean, my first job out of college was at CNN, overnight assignment editor on the international desk, formative learning to the

career as a foreign correspondent that I launched my career with. These are really important jobs.

And so we have to think about how do we reimagine them, not that there is a world without them. You're starting to see some employers realize that

they've got to up level the work. So KPMG, we talk about them in the op-ed, new grads are working on higher level task assignments because of the A.I.

tools.

At law firms, Macfarlanes in the U.K. as an example, early career lawyers are now being trained on complex contracts, not just document review. So

that's the beginning of entry level work actually getting elevated.

At the other end, though, you need educators to be teaching and training new workers about these tools and what this means for new work and there

are some early signals in the U.S., for example, we call out a couple of American universities business schools, some community colleges. I've

traveled all across Asia and Europe over the past six months. I am seeing this at educational institutions there.

So we are seeing the beginnings of this shift that will go into a new economy where we will see all jobs change, new jobs emerge. The key thing

right now is what do we, as individuals, as societies and as a species do to shape this moment of change so we can bring everyone with us?

KINKADE: Certainly interesting times we live in. Aneesh Raman, good to have you with us. Thank you.

RAMAN: Thank you.

KINKADE: Well, South Korea elects a new president. What the incoming leader is promising the nation after months of political turmoil. We will have a

live report from Seoul, next.

(COMMERCIAL BREAK)

KINKADE: Welcome back. I'm Lynda Kinkade.

South Korean opposition leader, Lee Jae-myung is set to become the country's next president after his main rival conceded defeat in the snap

election.

And after six months of political turmoil, he is tasked with bringing back stability as the nation also grapples with economic uncertainty. U.S.

President Donald Trump's tariffs also a major concern.

Well, here is what he said just a short time ago.

[16:15:01]

(BEGIN VIDEO CLIP)

LEE JAE-MYUNG, SOUTH KOREAN PRESIDENT-ELECT (through translator): From the moment I am officially confirmed as President-elect tomorrow, I will devote

all my efforts to revitalizing the economy and restoring livelihoods so that I can relieve your struggles as quickly as possible.

(END VIDEO CLIP)

KINKADE: Well, he replaces Yoon Suk-yeol, who declared a brief period of Martial Law in an attempted power grab. Yoon was impeached and formally

removed from office back in April.

Well, Mike Valerio joins us live from Seoul.

Good to see you, Mike.

So we've got this progressive liberal figure now declared the winner of the South Korean presidential election.

What more can you tell us about him and what sort of impact he will have, both domestically and internationally?

MIKE VALERIO, CNN CORRESPONDENT: Lynda, where I like to start to bring people up to speed with politics here in Seoul, is that, Lee Jae-myung who

is going to be the new President of South Korea, once described him as the Bernie Sanders of South Korea.

So when you think about what that means, think about huge levels of government spending to spur economic development, what a Bernie Sanders

progressive agenda would look like in this corner of the world.

And also, interestingly, I think that his policy towards potentially warming up towards China and maybe not so much an unconditional bear hug

when it comes to relations with the United States -- those are the most interesting things about the new president.

So we have a couple of graphics to talk about his biography because I think that informs who he is and where he is coming from. You know, our

biographical bullet points don't tell you, Lynda is that he grew up the poorest of the poor in the echelons of South Korean society, worked in a

factory making baseball gloves, had part of his left wrist crushed by a machine, so he suffered in his childhood and is seen consequently as a

voice of the working class.

So he went from those lower rungs of South Korean society to become the mayor of Seongnam, which is about an hour train ride south of here in

Seoul. It is a tech hub, then went to become the Governor of Gyeonggi Province, which is the most populous province in South Korea. It has the

GDP the economic size of Norway to give you a feel of how important Gyeonggi Province is, and then he becomes a legislature, leads the charge

towards impeachment and now is President.

So what he is promising again is a huge level of government spending specifically to bolster R&D, A.I. development here in this country and is

also along the lines of Bernie Sanders, proposing a universal basic income to help the poorest of the poor, much like the people who surrounded his

upbringing, young people, farmers, and then expand that to all levels of South Korean society -- Lynda.

KINKADE: And so, Mike, this snap election happened, of course, because the last president was impeached. Just talk to us about what the incoming

president is going to have to do to unify the country.

VALERIO: Yes, I think that the challenges are staggering. It is a very similar dynamic to back home in the United States, where the country is

roughly cleaved in half between conservatives and liberal forces. So I think priority one for Lee Jae-myung is to certainly lend credence and

credibility to South Korea on the world stage.

And when he is talking to allies in Washington, Canberra, the Middle East, Europe, say that what we saw in December, a brush with authoritarianism

with troops sent to the heart of South Korean democracy because of a political logjam that is never going to happen again. So that is job number

one for him to hit the reset button.

And job number two is to instill confidence here at home. So one of the things he is going to do is to make it harder for a future president,

himself included, to declare Martial Law, to perhaps scale back the powers of the presidency, to not just have one five-year presidential term, but

perhaps two four-year presidential terms, like in the United States, to make presidents more accountable to voters.

I mentioned China at the beginning of our segment. Look for warming of relations, he signaled that, you know, it is incumbent upon South Korea, a

country of 50 million relatively small in this region, to be able to cooperate with Beijing.

And also, he has mentioned, Lynda, that maybe they are not going to rush into a trade deal with the United States. He signaled in interviews over

the past couple of months that perhaps the United States and Donald Trump don't have as strong of an upper hand as they project to have. So that

should be fascinating to watch.

But again, now he launches himself onto the world stage after, you know, playing this very prominent progressive figure on domestic politics in the

world of domestic politics, so it is going to be fascinating to see how he leads the country out of this very strange chapter of Martial Law -- Lynda.

KINKADE: All right, Mike Valerio in Seoul for us. Thanks so much for joining us.

[16:20:06 ]

Well, The Netherlands is headed towards new elections after the leader of the far right party for freedom quit the ruling coalition. That move

triggered a collapse of the Dutch government and the resignation of Prime Minister Dick Schoof. The coalition came apart over the migrations law.

Now, Floor Bremer from CNN affiliate RTL Netherlands has the details.

FLOOR BREMER, CNN AFFILIATE RTL NETHERLANDS: This coalition of four parties we have in The Netherlands is not a coalition that necessarily wanted to

work together. It was, what you would say, a rocky road right from the beginning. But up until this week, they overcame all their differences with

a lot of talking and even some talking that took the whole night.

Geert Wilders is the leader of the biggest party in the country, and also the biggest party in the coalition, and his PVV Party is a far right wing

party. He is politically aligned, for instance, with Viktor Orban in Hungary.

Last week, he unexpectedly held a press conference. He wanted stricter rules on migration, and the other three coalition parties did not want to

sign his ten-point plan that he presented there. They said, your party has the Migration Minister, so let her do it or bring your plans to Parliament,

but we are not going to renegotiate.

But that was not what Geert Wilders wanted to hear, so this morning he told the others, I am stepping out of this coalition and my ministers will do

the same.

So that means that by the end of the year, we will have new elections in The Netherlands.

KINKADE: Well, Ukraine says it has carried out a bold attack on the bridge connecting Russia and the Crimean Peninsula. In this video, which was

posted by Ukraine's intelligence agency, it shows the moment the bombs went off. It is the third time Kyiv has struck the Kerch Bridge, which is a

vital link in Russia's supply lines.

The scale of the damage is not clear just yet. The attack comes as Ukraine loses more ground in the north, and peace talks show little sign of

progress.

Our Nic Robertson reports.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): Ukraine's latest spectacular attack targeting the Crimea bridge vital to Russia's war

in Ukraine, 1,100 kilograms of explosives hidden underwater. A months' long operation, according to Ukraine's Security Service.

It is not the first time Ukraine has tried to take out the 12-mile rail and road bridge that links Mainland Russia to annexed Crimea. In 2022, Ukraine

blew up the roadway, briefly disrupting Russia's flow of warfighting material.

In 2023, Ukraine again tried to take out the bridge, pioneering new technology a so-called sea baby or water drone hitting the bridge at water

level, but the bridge held.

The estimated $3.7 billion link was opened by Russian President Vladimir Putin in 2018, four years after he illegally annexed Crimea during Russia's

first invasion of Ukraine. Roughly, the size of Maryland, Crimea is hugely important to Putin, home to Russia's strategic Black Sea fleet and a key

hub in attacking Ukraine.

Since his 2022 Ukraine land grab, Putin has also secured a land link to the island like peninsula. Ukraine has vowed never to give it up.

Ukraine's Crimea bridge attack comes days after another spectacular strategic strike hitting Russia's long range bombers at air bases thousands

of kilometers from Ukraine.

But on the grinding battlefront, Ukraine is incrementally losing ground, nowhere fast than right now than around the Northern City of Sumi.

Russian artillery now so close at striking the city's center, at least four civilians killed about 20 injured, Tuesday, according to city officials.

(END VIDEOTAPE)

KINKADE: And our Nic Robertson joins us now live.

Good to see you, Nic.

So, I want to ask you about the strategic capabilities of Ukraine because that attack on the Crimea bridge followed that massive drone attack on

military bases, deep inside Russia.

What does it tell you about Ukraine's capability here?

ROBERTSON: Yes, I think it is a very strong signal to Vladimir Putin and to President Trump that Ukraine has got cards to play. The White House was not

aware of either the Kerch Bridge attack or the drone attacks on the air bases all the way across Russia in advance.

So this was a signal to the White House that Ukraine has cards to play that President Trump isn't aware of, and this is something President Trump has

used as a putdown of President Zelenskyy in Ukraine, that he needs to kind of fall to Russia's pressure because he doesn't have cards to play.

[16:25:11]

And the message, of course, coming from Ukraine for Vladimir Putin inside the Kremlin is actually your forces are not safe wherever they are. Either

it is hubris, either it is the arrogance of a perceived military dominance by scale, by numbers that Russia has, that it doesn't have high security

around some of its remote bases, that it isn't able to patrol and keep safe the many, many concrete columns, like the ones we saw being attacked on the

12-mile Crimea bridge, that Russia has vulnerabilities it may not even be aware of. And of course, that is Ukraine's way of trying to undermine

Russia's confidence in holding out for further grinding war of attrition, aggression at the front lines versus Ukraine's moonshot, if you will,

strategic attempts.

I think the takeaway here for Ukraine is this is the moment where they need to put -- need to do some of their big plays because they need to win

President Trump over at this critical moment to get his support. You have a NATO Leaders Summit coming up in just a few weeks' time. Ukraine wants its

European allies to know that it is worthwhile supporting it because it is innovative, because it is plucky, because it is not giving up against a

bigger aggressor.

Putin, though, really does just seem to perceive his own strength in this and his own ability to spend men, to spend material to take on the chin,

even such strategic losses as one-third of his strategic long range bomber force, which is what happened over the weekend. But it does leave us in an

impasse. Everyone is convinced of their own position. No one is budging at the moment.

KINKADE: Yes and Ukraine estimates those losses of $7 billion to Russian assets. Nic Robertson from London. Good to have you with us. Thank you.

Well, for a third straight day, Palestinians heading to an aid distribution site backed by the U.S. and Israel have come under fire. Gaza's Health

Ministry says at least 27 people were killed, dozens more injured. The Israeli military says its troops opened fire after identifying what it

called suspects, moving towards them. It says those individuals were, "deviating from the designated access routes."

Well, Jasmine El-Gamal is a Middle East Analyst who served as a Middle East adviser to the Pentagon and joins us now live from London. Good to have you

with us.

JASMINE EL-GAMAL, MIDDLE EAST ANALYST AND FORMER MIDDLE EAST ADVISER TO THE PENTAGON: Thanks for having me, Lynda.

KINKADE: So for three consecutive days, Palestinians have come under fire while trying to get aid. How would you describe the situation on the

ground? Can it get any more dire than this?

EL-GAMAL: The way I would describe the situation is tragically, tragically avoidable, Lynda, because from the very first moment that this humanitarian

foundation was announced, every single humanitarian organization, every single U.N. agency, anyone who has ever had any experience working on

humanitarian assistance operations, said that this was going to be incredibly dangerous and incredibly irresponsible and that's what makes

this so tragic over the last three days, is that everybody knew that this was going to be the scenario.

You basically had a mechanism that ignored previous existing U.N. mechanisms, try to do something different, where instead of bringing

humanitarian assistance to the people who need it the most, where they are, they basically forced people, the most able-bodied, the most willing to

take the risk to walk for miles, be separated from their families in an active war zone, to try to reach these distribution sites. People who

haven't eaten really.

You remember that Israel has had this siege on Gaza since March 2nd now, where no food, water, fuel, medicine, anything has entered the Strip. So

you have these desperate, hungry, scared, confused people running to these distribution sites to get their hands on any food they can. What did they

expect was going to happen? That's the question that people are asking as they look at these awful scenes that you're showing on your screen and

describing right now.

KINKADE: Yes, the U.N., of course, are calling the situation a war crime, describing this as a death trap, saying that, you know, this isn't working,

but Israel continues to say that it is and that it is the only way to prevent supplies from getting into the hands of Hamas.

What do you say to that?

EL-GAMAL: It is such an insane argument to make. I am sorry that I can't think of any other word for it, Lynda, because if you're saying that you

want to stop Hamas from getting its hands on aid, is this really the way to do it? Say people go to these sites and get their boxes of aid, you know,

this meager assistance that they're getting, now they have to walk back to where they came from.

They're going to be exposed on the roads, not just to Hamas members, to looters, to gangs, to other people who maybe haven't gotten enough food.

This is not a normal situation. This is not like standing in line at the supermarket to get your food.

Again, these are people who have been starving for months and they're trying to get their hands on anything they can to feed their families. And

so what's happening here is that this humanitarian foundation has basically -- it has created some sort of twisted Hunger Games scenario where people

are going out trying to get whatever they can because they are in absolute survival mode.

So again, I just come back to what the U.N. and the humanitarian community has been saying since the beginning that this was dangerous, this was

irresponsible, this was going to cause harm, and that this was a way of bypassing the actual problem, Lynda, which is that Israel won't open the

borders to let humanitarian assistance in through the existing mechanisms that have worked time and time again in conflict zones.

KINKADE: Yes, Jasmine El-Gamal, we appreciate your time. Thanks so much for joining us.

EL-GAMAL: Thanks for having me.

[16:31:21]

KINKADE: Well, forecast suggests that Donald Trump's tariffs will damage U.S. economic growth. We're going to look at the OECD's latest outlook and

latest U.S. jobs numbers when we come back.

(COMMERCIAL BREAK)

[16:35:22]

KINKADE: Hello. Welcome back. I'm Lynda Kinkade. There's more QUEST MEANS BUSINESS in a moment.

And the OECD says global growth is going to suffer due to Donald Trump's tariffs and the U.S. will be among the worst hit. And discount store Dollar

General reports record sales. Before that, the headlines this hour.

South Korea has a new president-elect as it tries to emerge from a period of political turmoil. Democrat Lee Jae-myung winning the country's

presidential election. His rival Kim Moon-soo of the ruling conservative party concedes defeat. Voter turnout was the highest it's been in more than

25 years.

Ukraine's intelligence service says it carried out a major attack on the bridge connecting Russia to Crimea. The road and rail bridge serves as a

critical supply route for Moscow's military. It also symbolizes Russian President Vladimir Putin's goal to bind the Crimean Peninsula to Russia.

A senior Iranian official says a nuclear deal proposal presented by the U.S. is, quote, "incoherent and disjointed." U.S. officials told CNN that

Washington has shifted its stance on uranium enrichment, suggesting it could be done for civilian purposes. President Trump posted on Monday on

Truth Social that terrain must stop enrichment entirely.

The family of the man suspected of attacking a Jewish event in Colorado has been taken into custody by U.S. Immigration authorities. Court filings show

that Mohamed Soliman had an Egyptian national, has a wife and five children. Soliman is accused of attacking people with a flamethrower and

Molotov cocktails. 12 people were injured.

Well, a new economic forecast highlights the risks of Donald Trump's trade war. The OECD now estimates the U.S. economy will grow just 0.6 percent

this year, 1.6 percent. It was predicting 2.2 percent growth back in March. The organization blamed the downgrade on several Trump administration

policies, including tariffs, slowing immigration, as well as those federal job cuts.

Well, for more, Vanessa Yurkevich is following the story and joins us live from New York.

Good to see you, Vanessa. So Trump's trade war seemingly doing more damage than expected. And it's not just the tariffs impacting the U.S., but other

countries will be hit hard by this and it is being shown in this latest report. Take us through it.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes. Well, this is now a global trade war, right? This is not just isolated to the United

States or a select group of countries. And what this report by the OECD says essentially, is that this trade war, along with some other policy

decisions, is going to have an impact on the growth, the global growth of the economy and on the U.S. economy in particular.

You showed those numbers earlier, but just look at the difference between what the OECD predicted in March of this year. U.S. economic growth was

going to be about 2.2 percent, but just a few months later that was slashed to 1.6 percent. And as you mentioned, it's because of tariffs. It's because

of net immigration and also because of the sizable reduction, as this report says, in the federal government, specifically jobs. This was part of

Elon Musk's effort to cut jobs in the federal government because of what he called waste, fraud and abuse.

Also, on the global scale, it's worth noting that the revisions also trending downward. The global economy slated to grow by 2.9 percent. That's

down from about 3.1 percent. And essentially, this report points out that the global economy, the U.S. economy was doing great. It was resilient.

Inflation had been tamed. But now we are on this uncertain path. This report also highlights key countries that will see sort of the slowest

growth. The United States, Canada, China and Mexico. These are the countries that have been throwing back and forth the highest retaliatory

tariffs.

And of course, what could make all of this worse, this report indicates, is if there's new tariff hikes, new retaliation, and if inflation grows, that

will change the game in terms of where this report finds growth on the global scale and here in the United States -- Lynda.

KINKADE: All right. Vanessa Yurkevich in New York, good to have you with us. Thank you.

Well, tariffs are also a concern for the U.S. pharmaceutical industry.

CNN's Kristie Lu Stout looked at how drug companies have come to depend on China.

(BEGIN VIDEOTAPE)

KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: This is the most prescribed antibiotic in the United States. Amoxicillin is used to treat

everything from chest and sinus infections to strep throat. And China controls 80 percent of the raw ingredients needed to make it.

[16:40:06]

DR. BRUCE Y. LEE, PROFESSOR OF HEALTH POLICY, CITY UNIVERSITY OF NEW YORK: It's not an insignificant percentage of antibiotics, and also things like

heparin are imported from countries like China.

LU STOUT (voice-over): Along with antibiotics like amoxicillin, blood pressure medications like ARBs and pain relievers like ibuprofen all are

medications that medical experts say are often traced to China.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: There's going to be a tariff wall put up.

LU STOUT: That's a major vulnerability as U.S. President Donald Trump threatens to impose tariffs on imported medicines in a bid to move more

drug manufacturing back to America.

TRUMP: We don't make our own drugs anymore. The drug companies are in Ireland and they're in lots of other places, China.

LU STOUT: As the world's factory, China has dominated the global drug supply chain in the production of the chemical compounds for active

ingredients and the ingredients themselves. Hong Kong University professor Qingpeng Zhang has identified the factors behind China's dominance,

including a government policy that puts a strategic focus on advanced biotechnology through nurturing top STEM talent and building a robust

pharma supply chain.

QINGPENG ZHANG, PROFESSOR, UNIVERSITY OF HONG KONG: It's also super expensive and costly to try to reshape this very well-established global

supply chain. So it may take five to 10 years and a very high cost to actually to manufacture those generic drugs in the U.S.

LU STOUT: To be clear, China has made no threat about weaponizing the supply chain. But one Tsinghua University professor has suggested China

could use its, quote, "leverage" to intentionally limit drug supplies to the U.S.

LEE: If there is a cutoff in terms of the actual supply from China or from any other country for that matter that actively supplies medications to the

United States, you could see shortages.

ZHANG: It is a moral obligation because it's actually directly linked to people's lives, to patient's lives. And on the other hand, it is also very,

I mean, currently it's very profitable.

LU STOUT: So far, pharmaceutical products have been spared from Trump's tariffs.

(On-camera): Now amoxicillin is already in short supply, with only one manufacturer in the United States. Whether Beijing pulls the trigger or

not, it is a choke point that China is holding over the U.S.

Kristie Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

KINKADE: Well, the president of Emirates tells Richard Quest his frustrations about getting new planes and reveals a bit of new information

about economy seats and how they're going to change. We'll have that interview next.

(COMMERCIAL BREAK)

[16:45:03

KINKADE: Welcome back. The president of Emirates says he sees progress in Boeing's ability to deliver airplanes. Airlines, of course, have been

struggling to renew their fleet because of delays at Boeing and Airbus. So Tim Clark told our Richard Quest that handling the shortage of new planes

hasn't been easy.

(BEGIN VIDEOTAPE)

TIM CLARK, PRESIDENT, EMIRATES AIRLINE: People are still continuing to rig their hands because of supply chains. Well, enough is enough, guys. COVID

started over five years ago. It ended two or three years later. By now, you should have got your act together and sorted out.

You have never seen this level of demand for aircraft and for the support of those aircraft and existing aircraft, such as retrofit as we do. You've

never had it so good. How are you still in a position to tell us that you can't do this? Because obviously, if you can't by now, we need to get other

people who can.

And so, you know, I would say to a lot of these very consolidated OEMs, you need to refocus on what your business model really is. And you've got to --

some of these consolidated groups have produced APUs, they've produced seats, they produce landing gear, they produce, and they've all been

consolidated over the last year in the belief that a consolidated of this hotchpotch arrangement will be able to produce lower unit costs, economies

of scale, et cetera.

Well, it doesn't work. It doesn't work. You're not actually performing nearly as you should do.

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Do you say to their faces that?

CLARK: Regularly. Regularly. Somebody has to.

QUEST: Actually getting the new aircraft, the 777X. I hope, I mean, I imagine you're hopeful sooner rather than later.

CLARK: Yes.

QUEST: Have you got a date yet?

CLARK: Well, we don't, but I'm, look, if you had asked me a year ago as you probably did, I was not optimistic about it. I was concerned to put it in

parentheses. But I'm now seeing the beginnings of where green shoots light at the end of the usual statements, but I believe there is a coordinated

attempt, pressure, to get these aircraft out the door, not just the 777, but the 737 and 737-10 MAX, and the 777X.

And I think that Kelly Ortberg, the new man, and Stephanie Pope are trying their level best to ensure that their part of the deal is that they will

produce really good aircraft, as they always used to, Richard, let's be quite honest, meeting all the quality control standards without howlers

coming down the line post-delivery, et cetera, et cetera. And that the certification process will be more focused, will be brought to that, so

that they -- so that Boeing can start producing aircraft to ensure that its financial strength is as it should be.

QUEST: Riyadh Air comes on air, comes online later this year. They'll have a measured ramp-up over the next few years. They will be a formidable

competitor in future years, won't they?

CLARK: Well, will they? I -- to be to be quite honest, I'm, how many years have I've been dealing with this particular question. In 2001 it was Qatar

Airways. Then in 2003 it was Etihad. And people were saying, is there enough room for all? And look at how those carriers have developed one way

or the other. Look at the size of what they're doing today. Look at what is happening in the Middle East, particularly in Saudi Arabia where there are

mega-trillion-dollar plans to do all sorts of things to the economy in all segments.

So what Tony has got to do with Riyadh Air is meet the obligations that the air carriage side of it has got to be put in place for Saudi.

QUEST: I'm fascinated by what New Zealand is doing with the Skynest and the bed for economy, you can rent. Do you see any innovation that you can do?

Because you have some pretty long routes that are almost the sort of similar.

CLARK: We have been working on a new economy seat for three years.

QUEST: Tell me more.

CLARK: No, I can't do that.

QUEST: Tell me more.

CLARK: I can't do that. But I'm well-engaged. We know what it is that we need to do with that economy seat. There is quite a lot of work going on.

We are testing that at the moment. And I'm hoping that within the next 18 months we will reveal something which then has to go through the rigors of

certification, which is really painful.

QUEST: Do you want that something to be groundbreaking, or do you want it to be just incrementally better? Do you want it to --

CLARK: It won't be groundbreaking. And a chair is a chair.

QUEST: You know what I mean.

CLARK: But significant improvements. I'm not going to say they're suddenly going to rise 10 feet in the air, spin round and fall, become a bed. What

I'm saying is that the dimensions of the seat, OK, have been determined from the days the DC-7s used to fly, and DC-6s as well.

[16:50:04]

We're all stuck with height. We're all stuck with cabin viewing, et cetera. We have to look at that completely differently now. We can do more. We can

do better. Technology is always helping us in that respect. Ergonomic design for the human body. Foam is really changing out as well. So we don't

have this really -- and you can do all sorts of things with foam. You can do a lot of things with electronics.

You can do a lot of things with your footwell, your seats. There's a lot coming, but I'm not going to say what they are apart from what I've just

said.

(LAUGHTER)

(END VIDEOTAPE)

KINKADE: That is some exciting developments there with Richard Quest and the CEO of Emirates.

Well, Dollar General is upgrading its profit forecast for this year. We'll tell you why economic uncertainty is actually helping the budget retailer

when we come back. Stay with us.

You're watching QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

KINKADE: Welcome back. We've got news just in. U.S. President Donald Trump has signed an executive order doubling the tariffs on steel and aluminum

imports. The new 50 percent rate will take effect at midnight Eastern Time.

Well, shares in Dollar General soared after the discount store reported strong quarterly sales. Shares finished nearly 16 percent higher after the

company raised its annual profit forecast. Dollar General caters to low- income customers. Its sales have been rising as wealthier shoppers turn to inexpensive goods.

Well, Nathaniel Meyersohn is covering the story, joining us from New York. Good to see you.

So unlike many businesses, Dollar General is upgrading its financial forecast. This is a business that generally does pretty well when times are

tough, right?

NATHANIEL MEYERSOHN, CNN BUSINESS CORRESPONDENT: It does. This is kind of the sweet spot right now for Dollar General. And it's doing really well

right now, not only because it's getting more business from its core lower income shoppers. You know, this is a company where its core customers make

under $40,000 a year. Most of its stores are in rural locations.

But the reason that Dollar General is doing really well right now is because it's getting more business from middle income shoppers and

wealthier shoppers that are trading down into Dollar General's business to try to save money. And while this is good news for Dollar General, of

course, it's kind of a warning sign for the broader economy and for the health of U.S. consumers if where middle income shoppers and wealthier

shoppers are going is Dollar General. It is a sign of strain on U.S. consumers.

[16:55:08]

KINKADE: And of course, this latest forecast by Dollar General assumes that the tariffs currently in place will remain in place through mid-August. Of

course, we're seeing tariffs change every other week. A call is expected to happen between Donald Trump and the president of China, potentially later

this week. It can't come soon enough, though. Businesses want certainty.

MEYERSOHN: Businesses need certainty, particularly retail industry businesses. You know, retailers are getting hammered because of tariffs.

They're having to cut products from their lineups. They're, you know, scrambling to try to secure inventory. They're raising prices on consumers.

So you're hearing that from so many companies right now. Walmart, Target, Home Depot, just the biggest retailers in America.

And even though Dollar General has raised its guidance because of, you know, kind of economic uncertainty, because of tariffs, it doesn't

necessarily mean that tariffs are going to be good for Dollar General's business. The companies will have to raise prices. And that's going to

squeeze its lower income consumers.

KINKADE: Yes. Exactly. So for those lower income consumers, I mean, eventually like some of these tariffs are going to impact stores like

Dollar General, right, if they do change, as we have just seen with the latest executive action from Donald Trump.

MEYERSOHN: Absolutely. I mean Dollar General is catering to some of the, you know, lowest income Americans who are incredibly price sensitive. And

companies are going to have to raise prices. Dollar General said that it would raise prices as a last resort because of tariffs. But if you look at

where it's importing its goods from, you know, China, most of the products that Dollar General sells are imports.

So tariffs, you know, really squeeze companies like Dollar General, Walmart, the CEO recently said that prices will rise because of tariffs. So

we're all kind of waiting to see exactly where prices are going to rise. And then you're also going to see companies cut products from shelves.

Consumers are going to have fewer options because there's just going to be some products that tariffs make cost prohibitive.

KINKADE: All right. We'll leave it there for now.

Nathaniel Meyersohn, in New York. Thank you.

We'll take a final look at the markets before we go. The Dow Jones did rise today. Right now you can see it up just under half a percent. 200 points

higher on the session. You can see it dipped into the red earlier in the day but quickly recovered. The Dow is now up more than 3 percent over the

last month.

We'll that is QUEST MEANS BUSINESS. I'm Lynda Kinkade. Stay with us. "THE LEAD WITH JAKE TAPPER" starts right now.

(COMMERCIAL BREAK)

END