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Quest Means Business
Trump Proposes to Slash U.S. Fuel Economy Standards; ISM Data: Divergence Between Services and Manufacturing Sectors; President Trump Takes Questions from Oval Office; U.S. Deportation Flight Lands in Venezuela Despite Tensions; Anthropic Eyes IPO; Russia Appears to Fall into Stagflation as War Drags On; Senator Introduces Bill to End Dual Citizenship. Aired 4-5p ET
Aired December 03, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:17]
PAULA NEWTON, CNN INTERNATIONAL HOST: A solid day on Wall Street, really perhaps we are skidding into that Santa Claus rally because a lot of
economic worries right now, the market seems to be fixated on a possible Fed rate cut instead of any of those worries.
Those are the markets and these are the main events: President Trump's immigration crackdown finds a new target, Somali immigrants in Minnesota.
Anthropic is reportedly gearing up for a massive IPO.
And one U.S. senator wants to do away with dual citizenship. What his bill could mean for people with two passports.
Live from New York. It is Wednesday, December 3rd. I am Paula Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.
And good evening.
In a push for affordability, The White House is loosening fuel economy standards for carmakers. Now, you are looking at live pictures at this hour
from the Oval Office. The President there surrounded by officials, politicians, but also executives from the automotive industry.
Now, U.S. officials estimate the proposals could reduce the upfront cost of a new vehicle by $900.00. Trump said the move will bring car manufacturing
back to the United States. Listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: We are protecting our autoworkers, and we are making it easier for every family to
afford high-quality cars. In other words, we are bringing automobiles back and the manufacturing of automobiles back into this country. We lost 52
percent over the years, 52 percent of our automobile manufacturers.
You see it. Closed factories all over the place. Now, they are all opening up. They're being, in most cases, they're being knocked down and new ones
are being built in their place.
(END VIDEO CLIP)
NEWTON: Now, at the Dealbook Summit in New York, the CEO of General Motors, Mary Barra says they will continue to make fuel efficient cars despite
these proposals.
Bill Weir is with me to try and dissect all of this. I need to get to the money sense in all of this first. How does saving Americans maybe $900.00
up front make up for less fuel efficiency over the life of a vehicle? Bill, is this just me? Like, what am I missing?
BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: No, it doesn't. That's a very common sense astute question, Paula, it doesn't, and an E.V. saves around
$1,000.00 over a gas powered car, and then it saves probably another $4,600.00 to $5,000.00 over maintenance because the electric motor is much
more efficient.
This has much more to do with politics. The President's promise to help fossil fuel companies, as he did before the campaign and he is doing it in
spades. He, of course, ended very popular E.V. incentives that came under President Joe Biden as well, shut those off as a result, sales have
dropped. They were on an incredible trend even in the United States. But that, of course, taking away those mandates has come down.
And the real reality is that right now, China, BYD makes a $15,000.00 electric vehicle called Dolphin that is getting rave reviews by auto
critics around the world. If that were allowed in the United States, some experts say it would be -- cars like that would just destroy the American
automotive industry. Even Jim Farley, who is at The White House today, who says today as America's largest automaker, we appreciate President Trump's
leadership in aligning fuel economy standards with market realities.
Jim Farley, just last month was saying Chinese car companies are an existential threat. And yes, by taking away American incentives to buy
them, the market reality is that they have to stay in fossil fuel cars to compete in North America.
Jim Farley said unlike Japan in the 80s, which threatened American dominance, China today has the capacity to basically sell the entire North
American market and wipe them out.
So there is a lot of moving pieces here. Of course, that means if China can do that with a cheap $15,000.00 E.V., they dominate batteries, we live in a
world that runs on batteries, not just in cars, but computers, everything else. So, this is part of a much bigger story about China leapfrogging the
U.S. in so many ways in the carbon economy, but especially when it comes to cars.
NEWTON: And, Bill, as we continue to just monitor what is happening live at The White House right now, as you point out, the CEO of Ford, Mr. Farley,
is there and so that brings me to my next question, who was lobbying for this? Because we heard from Mary Barra saying, look, we are going to
continue to make fuel efficient cars, and as has been pointed out by CNN, these car models, they take years in terms of to change the specifications.
[16:05:02]
Nothing may change overnight here, and it also brings us to the fact that China is already moving on to either fuel efficient cars or completely
electric cars anyway.
So who lobbied the administration for this? What problem is this solving?
WEIR: Well, again, it solves a problem created by a country that wants to cling to the fuels of the 19th Century, really. Even Gavin Newsom in
California, who laid out even more ambitious mandates. Now, just for context, Obama set out some fuel efficiency standards that Trump rolled
back in the first term. Then Biden put modest gains on those first ones. He wants to roll these again. This is this game of tug-of-war over fossil
fuels and the dominance of what comes next.
So again you know, in the rest of the world leaning into new incentives, moving beyond lithium ion batteries, for example, solid state sodium
batteries, American companies had a crack at that, and a lot of their incentives got yanked away under this Trump administration right now.
So again, part of a much bigger picture of the Trump administration sort of war on anything that is renewable energy and to prop up anything that
burns.
NEWTON: Yes, and again, that leads us to the logical conclusion that fossil fuels, at least fossil fuels, will continue. They'll continue to burn more
of those in the United States for some years to come.
Bill Weir for us. Thanks for taking a note of that for us.
Now, U.S. markets rose despite weak jobs data. The Dow rose, as you can see there, almost one percent or 400 points. The other indices making modest
gains there as well. That was after payroll company, ADP said the U.S. lost 32,000 private jobs in November. It marks a sharp drop from the 47,000 jobs
gained in October.
Meanwhile, data from the Institute for Supply Management shows a mixed picture for the U.S. economy. It said earlier, the services sector is
expanding, any measure above 50 indicates growth, but tariffs are taking a toll. That was especially true for the manufacturing sector, which shrank
for the ninth month in November.
Tom Derry is the CEO of the Institute for Supply Management, and he joins me now. I am wondering what your read is on the latest data, because I have
to say, sometimes there is a lot of noise accompanying this data right now. I mean, how do you see it?
TOM DERRY, CEO, INSTITUTE FOR SUPPLY MANAGEMENT: Well, I see it as a pretty, mixed picture, as you said, Paula, early on. I mean, we are seeing
contraction in the services sector, which is by far the largest component from a GDP perspective of the U.S. economy, almost 88 percent of activity
in this country, but it is not strong enough to overcome the weakness in manufacturing right now.
In fact, we calculated, ISM, based on decades of data that the economy today is growing at a 1.3 percent rate annually, which is quite weak. And I
think, frankly, where the long term trend is headed in terms of GDP growth in the country. So it is not a good signal. One could almost say that, the
prospect of stagflation is right around the corner.
NEWTON: Oh, wow. That just gave a lot of people chills, just you saying that. And again, you're looking at the trend line because a lot of the data
we are looking at is in the rear view mirror. What do you think is contributing most to this risk of stagflation then?
Do you believe it is the tariffs? Do you think partially it has to do with the job slowdown, perhaps leading into A.I.? I mean, what do you see?
DERRY: Yes, well I think tariffs do explain an awful lot of it and here is what is happening. Because tariff policy has been very fluid and uncertain.
Companies are not sure how to plan for it and they are being very cautious, and that comes through in the data we collect every month.
Lots and lots and lots of comments about we just can't see the future. We don't know what the demand signal is and so we are holding back, and in an
ordinary economy, when you didn't have these tariff issues, overhanging decisions that business people have to make, you'd see routine ordering and
stocking up in inventories, and we've seen a very different pattern.
In December, in the last quarter of last year, we saw a massive wave of imports into this country, anticipating tariffs and trying to buy ahead to
get inventory into the country before tariffs were imposed. Then we saw a massive drop off in imports in the second quarter. And so we went from a
one half of one percent contraction in the first quarter GDP, because imports subtract from GDP to a 3.8 percent growth rate in the second
quarter, because we weren't importing anything.
And now because imports again are low, we are seeing this rate drop down as GDP, real growth rate get down to about 1.3 percent. So I think if you kind
of take into account Q1, Q2, and now Q3, that's really the long-term growth rate of the economy, and with inflationary pressures building in supply
chain, and remember, the prices paid index for both manufacturing and services continues to be very elevated.
So the component prices that companies are paying for the things they need to build their products, they're going up, and we know for a fact that most
companies have not passed along the impact of tariffs to their end customer, yet, about a third of companies have done that, but two-thirds
have not.
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So inflation as it will be felt by the consumer has yet to appear. But it is coming.
NEWTON: But it is coming, and in fact some companies -- I was interested in your notes about that because some companies have been warning about it.
We've seen it anecdotally, but you're saying we are going to see it in the data very soon.
You know, I am curious. We have the President, The White House talking about trying to bring down the price of cars, but one thing of interest
that he notes, he wants to bring manufacturing back to the United States, whether it is in autos or anything else. Do you see any signs of a
rejuvenation of a renaissance here for American manufacturing?
DERRY: You know, it is very -- it is a split picture, I would say. We definitely see indications that some companies are exploring what are our
domestic options. Are there domestic suppliers? Can I re-shore operations to the United States?
But an equal number of companies, frankly, are looking for a third country of origin. So maybe it was China before, but now it could be Indonesia or
Mexico.
And by the way, Mexico is really benefiting because if your products can be imported to the United States under the existing USMCA, the effective
tariff rates on some of those products are only one or two percent So rather than manufacturing coming back to U.S. shores, the way the
administration would like to see it, it is actually -- the supply chain is sort of diffusing globally.
NEWTON: Right.
DERRY: That is what is happening.
NEWTON: Tom, forgive me. We do have to go to the President who is speaking in the Oval Office.
TRUMP: It is a terrible thing. But I thought they had a very good meeting yesterday with President Putin. We will see what happens.
You know, when I was in this office and I talked about no cards, I said, you have no cards. That was the time to settle. I thought that would have
been a much better time to settle. But they, in their wisdom, decided not to do that. They have a lot of things against them right now.
But you have President Putin had a very good meeting yesterday with Jared Kushner and with Steve Witkoff. What comes out of that meeting? I can't
tell you because it does take two to tango. You know, Ukraine, I think we have something pretty well worked out with them. They are very satisfied,
considering.
But the sad part is, if I were president, no war would have ever happened. They would have had a hundred percent of their territory. Nothing would
have happened. It is a very sad situation.
So think of this, last month, 27,000 soldiers. Twenty-seven -- that's like, when you take a stadium, a football stadium, not an arena, and you cut it
in half, 27,000 people died, young, mostly young soldiers died last month, in one month and that's the only reason I am involved.
You know, we are not spending any money in the war. We are selling to NATO. We are not being ripped off like we were under Biden. Biden was handing
everybody everything we had, giving us -- giving them all the missiles, everything they wanted free, no charge, just -- he had no idea what he was
doing.
They are paying top dollar, full price for everything. It goes to NATO and then NATO distributes it. NATO pays us. So we are not -- it is not money.
We would all -- I think I can speak for everyone behind here. The politicians I know and the auto manufacturers are good people. They don't
want to see 27,000 people die for no reason whatsoever, and that's the only reason I am trying to help.
Yes, please.
REPORTER: Mr. President, the issue of Venezuela, for a second. Have you checked back with President Maduro? I mean, is your pressure campaign
working? And do you think -- has he responded to your demand that he leave the country?
TRUMP: -- it is not a pressure campaign, it is much beyond that, I think. But I spoke to him briefly, just told him a couple of things. We will see
what happens with that. Venezuela sends us drugs, but Venezuela sends us people that they shouldn't be sending. They sent us -- they emptied their
prisons into our country.
They sent us killers, murderers. They sent us drug dealers at the highest level. They sent us gang members. They sent us people from their mental
institutions. They emptied their mental institutions into our country.
And so did other countries, because we had stupid people running this country, really stupid people. And I think probably you had some stupid
ones, and yet some smart ones, but they were bad people, too, because nobody, not all of them were stupid.
You can't cheat on elections like they did and be stupid. Okay.
REPORTER: Mr. President, you talked to him a second time or just that one time?
TRUMP: What's that?
REPORTER: Did you speak to him again?
TRUMP: No, I didn't.
REPORTER: Mr. President, when you spoke with Mr. Witkoff and with Mr. Kushner --
TRUMP: Last night.
REPORTER: Last night. Did they give you the sense that President Putin still wants to end the war? Still wants to make peace?
TRUMP: Yes. He would like to end the war. That's what they -- that was their impression. Now, whether or not --
REPORTER: Do you believe him?
TRUMP: You know that was their impression. Yes, their impression was that they'd like to see -- he would like to see the war ended. I think he would
like to get back to dealing a more normal life. I think he would like to be trading with the United States of America, frankly, instead of, you know,
losing thousands of soldiers a week.
[16:15:10]
But their impression was very strongly that he'd like to make a deal. We will see what happens.
REPORTER: Mr. President, if it is found that survivors were actually killed while clinging on to that boat, should Secretary Hegseth, Admiral Bradley
or others be punished?
TRUMP: I think you're going to find that this is war, that these people were killing our people by the millions, actually, if you look over the few
years. I think last year we lost close to 300,000 people who were killed. That's not mentioning all the families. Have you seen what happens with the
families of not only the people killed, the people that are trying to get their son or their daughter off of this poison that they've been fed?
I think you're going to find that there is a very receptive ear to doing exactly what they're doing, taking out those boats, and very soon we are
going to start doing it on land, too, because we know every route, we know every house, we know where they manufacture this crap, we know where they
put it all together. And I think you're going to see it very soon on land also.
Yes, please.
REPORTER: So to be clear, do you support the decision to kill survivors after the initial strike?
TRUMP: No. I support the decision to knock out the boats and whoever is piloting those boats, most of them are gone, but whoever are piloting those
boats, they're guilty of trying to kill people in our country.
Yes, please.
REPORTER: The House Judiciary Committee has subpoenaed Jack Smith to ask about his investigation of you. I wondered -- for a deposition. I wondered
if you'd prefer to see that as a hearing so that the American public can see the questions and the responses more easily.
TRUMP: I'd rather see it probably at a hearing. Look, Jack Smith is a thug. He is a failed prosecutor. He is a bad man. He is a bad -- he is an evil
man. He hurt a lot of people. Forget about me. You know, I do this stuff, but I got indicted many times by a guy -- they were dismissed.
He is a bad guy. He is a sick man. There is something wrong with him, actually. I think Jack Smith is a sick man. There is something really wrong
with him. I'd rather see him testify publicly, because there is no way he can answer the questions.
But Biden knew this was going on. Kamala knew it was going all along. And there is a lot of things happening right now that they don't like. One of
the things is the autopen. Everything he signed almost with the exception of the pardon of his wonderful son, Hunter, just about everything he signed
was not signed by him. He had no knowledge of it. He didn't know what it was.
People are sitting around the beautiful resolute desk knew exactly what it was and those people are guilty, in my opinion, of a major crime.
Everything that was signed by that autopen he -- the man operating the autopen and I am sure there were more than one, because I think some of the
people can operate it themselves, some of the high level people operated them so, they would just go in and sign his name with an autopen onto very
important documents, not only pardons, but policy, maybe cafe standards, okay, as an example, who signed cafe?
If you ask Biden what's a cafe standard, he would have absolutely no idea. He'd say, where is the cafe located? The guy didn't know anything.
Look, that just shows you what a rigged election can be, but you understand what I am saying. Thank you.
REPORTER: You've had conversations.
TRUMP: I did with Jensen.
REPORTER: Right.
TRUMP: Smart man.
REPORTER: In your conversations with him, have you kind of given a sense of where you are with export controls and the types of chips NVIDIA can give
to China?
TRUMP: Oh, he does know. He knows. He knows very well. He has done an amazing job. NVIDIA very good.
Yes.
REPORTER: Mr. President, when do you expect for phase two of the Gaza peace plan to be implemented.
TRUMP: Well, it is going along well. You know, they had a problem today. I understand with a bomb that went off and hurt some people pretty badly,
probably killed some people. They're telling me, it just happened. But it is going on.
We have peace in the Middle East. People don't realize it. We have tremendous support, 59 countries. There is tremendous support, but well,
phase two is moving along. Yes, it is going to happen pretty soon.
REPORTER: Mr. President, did you speak with House Republican Leadership about your decision to Pardon Congressman Henry Cuellar? And are you
concerned that you made a vulnerable Democrat, perhaps less vulnerable with that decision?
TRUMP: It didn't matter. He is a respected person. He was treated very badly because he said that people should not be allowed to pour into our
country, and he was right. He didn't like open borders. He didn't -- he was on the border, you know, he represents -- a very respected man.
He represents the people on the border, and he saw what was happening. And as soon as he made that statement, I then said, I will bet he gets indicted
and that's what happened.
You know, I put out my Truth from that. I did it at Truth. Wonderful Truth. We love Truth. But what happened is he got indicted for speaking the truth.
[16:20:10]
And his wife got indicted, Imelda, and that's sort of a first. Usually, they leave the wives alone, right? Don't they, Congressman? Typically they
indict somebody, put them in jail for the rest of his life. But the wife can just sit home and cry or she will find a new man. You know, a lot of
times they find a new man, makes them much happier.
In fact, a lot of times they like that man better than the one that is in jail.
Go ahead.
REPORTER: Mr. President, thank you. The mayor of Minneapolis, Jacob Frey, is saying that he is actually proud to have the largest Somali community in
the country and his police chief --
TRUMP: Then he is a fool.
REPORTER: Well, his police chief is also saying.
TRUMP: I wouldn't be proud to have the largest Somalian -- look at their nation. Look how bad their nation is. It is not even a nation. It is just a
people walking around killing each other.
Look these Somalians have taken billions of dollars out of our country. They've taken billions and billions of dollars. They have a Representative,
Ilhan Omar, who they say married her brother. It is a fraud. She tries to deny it now, but she can't really deny it because, you know, it just
happened.
She shouldn't be allowed to be a congresswoman and I am sure people are looking at that, and she should be thrown the hell out of our country. And
most of those people, they have destroyed Minnesota, okay.
Minnesota -- you have an incompetent governor. You have a crooked governor. He is crooked as hell, but he is incompetent, Walz is -- he should be
ashamed.
That beautiful land, that beautiful state. It is a hellhole right now. And the Somalians should be out of here. They've destroyed our country, and all
they do is complain, complain, complain. You have her. She is always talking about the Constitution provides me with -- go back to your own
country and figure out your Constitution.
All she does is complain about this country. Without this country, she would not be in very good shape. She probably wouldn't be alive right now.
So Somalia is considered by many to be the worst country on earth. I don't know, I haven't been there. I won't be there any time soon, I hope.
But what -- Somalia and what the Somalian people have done to Minnesota is not even believable. It is not even believable. And a lot of it starts with
the Governor. A lot of it starts with Barack Hussein Obama, because that's when people started coming in and you have to have people come in that are
going to love our country, cherish our country. They want to kiss our country good night. They talk about our country. We want them to pray for
our country.
This is not the people living in Minnesota, and she is a disaster. She should not be -- and her friends shouldn't be allowed. Frankly, they
shouldn't even be allowed to be congresspeople, okay? They shouldn't even be allowed to be congresspeople because they don't represent the interests
of our country.
Anybody else?
REPORTER: The automakers --
NEWTON: We have been listening to the President there in the Oval Office on a range of topics, but we will begin with his criticism of the Somali
community in Minnesota.
Sumakab Hussein serves in the Minnesota House of Representatives and is Somali American and he joins us now.
Look, I just have to get your reaction because this is a follow-up from yesterday where the President left no nuance whatsoever and basically
called the Somalis living in Minnesota in his words "garbage." I just want to get your reaction to what he said yesterday and what he said just now.
SUMAKAB HUSSEIN, MINNESOTA STATE REPRESENTATIVE: I mean, it is -- thanks for having me here to today and it is very sad to see our President is
targeting a minority, an underserved community who is trying to figure out the life of America and who is a working class and working hard.
There is a lot of chaos and confusion about what is happening in Minnesota right now, which is exactly what Donald Trump wants. He want the people to
be fighting and overwhelmed against each other, but let me tell you the truth, Minnesota Somali Community makes our state stronger. They are our
friends and neighborhoods and our family.
They are also, as it happens to be, a majority U.S. citizens who is part of the National Guard, is part of the lawyers, is part of doctors and first
responders, police officers, and they protect and they love Minnesota and their country.
It is very sad to see our President -- don't he have better to do? I mean, there are a lot of things that need to be fixed in our country, instead
targeting a small community that's not doing -- that is doing everything they can. A lot of my community works three jobs and they work so hard and
they try to be part of this society and America.
[16:25:17]
And they are not less than American, we are American, and those people are not going anywhere. I just want to clear this out. Our President, we are
here to protect those people, and we are here to represent them. And we want to make sure that we tell them to our President.
NEWTON: Mr. Hussein, I do want to get to that because the focus on your community has not just been rhetorical. Right now, we understand that the
federal government is getting ready for an immigration crackdown on Minnesotans.
I mean, how do you believe your state should prepare to really protect these undocumented residents? And what can you do in the face of these
kinds of raids?
HUSSEIN: I mean, first of all, I just want to respond back to our President. He is not only calling Somali American, a few days ago, I have
seen one of the reporter he called a prick. So I our citizens are allowing this to happen, and he has been bullying and attacking women and attacking
underserved people and attacking every individual. That is unacceptable and that is not what leadership should do.
He should be focusing on how to make people's life better. He should be concentrating how the economy need to be grown. He should be focusing how
the people healthy and wealthy in our state and in our country.
If I responded back to your question, we are doing everything we can. We will do everything we can in our power to fight back against Donald Trump
and racism and unlawful attack on our neighborhoods. We will protect and we will do whatever it takes to protect our community.
And let me clear this out, the Minnesota Somali community, 99.99 percent are citizens. It is a few percent that is not citizens and they are
applying and they're going through the process.
NEWTON: Mr. Hussein, I do have to ask you, though, you know what has put your community in the center of the news agenda right now and that is
because of the fraud/scandal going on in Minnesota itself.
By CNN's reporting, 70 of the people charged, the vast majority are from your community in that corruption scandal in Minnesota. I mean, what do you
say to the people of your state who, you know, do believe that this affects the reputation of your community going forward?
HUSSEIN: I mean, the people that are doing wrong, there are the courts and there is the law, we are going to hold them accountable for those people
and what they are doing, but the majority of the community are working class. They're first responders. They are doctors. They are part of the
National Guard and they are doing everything they can to protect, and they love their country. They love Minnesota.
And few of those people that have done something wrong, the system and we do have a court and we do have the law that is going to hold accountability
and that is all we can do.
I mean, we are not going to protect for those individuals, but we are protecting the people are doing everything they can, working class
community and good citizens.
NEWTON: Mr. Hussein, I will leave it there for now. I really appreciate you jumping on as I said, your community continues to be a focus for the
President and beyond. Appreciate it.
Now, a U.S. deportation flight has just landed in Venezuela. Despite the tensions between Washington and Caracas, President Donald Trump recently
declared that Venezuela's airspace should be considered closed.
Caracas says the U.S. requested Venezuela accept flights this week.
Stefano Pozzebon is in Caracas for us.
We are seeing the flight there. Can you describe Stefano why they are saying this cooperation still exists even though the rhetoric continues? We
just heard from the President again, describe Venezuela and the fact that they had let in his words, you know, criminals and gang members flood into
the United States.
STEFANO POZZEBON, CNN CONTRIBUTOR: Yes, well, Paula, let me tell you, it is not very easy for us and not very common to see the stars and stripes right
in Caracas. That is a flight that has just landed as we speak, great like we are really in front of the news, landed as we speak from Phoenix,
Arizona, which means basically two things, it is important to point out here.
The request for these flights to land here in Caracas was made early on Monday morning, that is more than 24 hours after the U.S. President Donald
Trump, posted on Truth Social, Paula, that all airlines, pilots and narcotraffickers alike should consider or should have to consider the
airspace over Venezuela to be closed.
[16:30:10]
Well, you can tell you that that order did not include deportation flights. This is a flight that is directly operated by ICE, the U.S. government
agency that is tasked with removing and deporting undocumented migrants.
Many of them are from Venezuela. And over the last few weeks and months, they have conducted at least two flights every week. That is because, of
course, despite the rhetoric against Nicolas Maduro, the announcement of potential strikes on Venezuelan soil in the last few days, well, one of the
big priorities of this administration is to deport as many undocumented migrants as possible.
And that's why we're still seeing these flights coming in, even though, frankly, and this is almost surreal, there are also two B-52s from the U.S.
Air Force that are roaming in the southern Caribbean as we speak, not too distant from where we are. And that is one of the main contradictions that
many critics have pointed out around the strategy that the White House is employing here in Venezuela, towards Venezuela.
The second thing that we're learning today is that, of course, there are still direct communications between the U.S. government and the government
of Nicolas Maduro. Remember, this flight is, of course, run by a private airline called Eastern, but it's managed by ICE. It's government agency who
are in touch, of course, they are coordinating the arrival of these migrants back from the West Coast of the U.S. to their homeland, to
Venezuela.
And of course, in order to do that, of course, they have to, they have to coordinate with Venezuelan authorities. So there is some level of
communication between the government of Nicolas Maduro and the White House as we speak -- Paula.
PAULA NEWTON, CNN INTERNATIONAL ANCHOR: Stefano, we thank you for giving us quite a front row seat to what's unfolding there. And again, it is
puzzling. We'll let you go do some reporting. Again, I point out that the Venezuelan government wants us to see this because they wouldn't allow you
there on the tarmac or in front of that airplane unless they wanted everyone to understand that they are cooperating.
Stefano, I have to leave it there for time. We'll let you continue with your reporting and catch up with you later. Appreciate it.
Now coming up for us, the "Financial Times" reports that Anthropic is moving towards an IPO. It could be one of the largest public offerings in
history.
(COMMERCIAL BREAK)
[16:35:34]
NEWTON: Hello, I'm Paula Newton and there's more Quest MEANS BUSINESS in a moment when Russia's economy feels the effects of the country's war in
Ukraine. We'll have a look at the impact. And a U.S. senator has introduced a bill to end dual citizenship. He says he wants people to have sole and
exclusive allegiance to the United States. But before that, the headlines this hour.
Sources tell CNN the U.S. Defense secretary risked endangering American troops when he shared highly sensitive war plans on a group message chat in
March. According to a classified inspector general report, Pete Hegseth could have compromised sensitive military information when he used signal
to share attack plans targeting Houthi rebels in Yemen.
The U.S. Department of Homeland Security has begun a major immigration crackdown in New Orleans. Officials tell CNN they are hoping to make 5,000
arrests. Homeland Security claims to be targeting criminals from other countries with similar operations in other cities have rounded up many
migrants who do not have a history of any violent crime.
The doctor, who illegally supplied ketamine to Matthew Perry, has been sentenced to two and a half years in prison. The powerful sedative led to
Perry's death in 2023. That's at the age of 54. Dr. Salvador Plasencia pleaded guilty in July to four felony counts of illegal ketamine
distribution.
So Anthropic is gearing up for what could be one of the largest IPOs ever. The "Financial Times" reports that the A.I. startup has hired a law firm to
begin work on the initial public offering. Sources tell the "FT" that the maker of the Claude chatbot could go public as early as next year. They say
Anthropic is eyeing a funding round that would put its value at above $300 billion.
Allison Morrow is with us today. Just seems like pennies really in comparison to what A.I. is doing in general. I mean, capital expenditure
for A.I. is through the roof. If Anthropic gets this edge in going public, I mean, will that really improve its chances of outdoing its A.I. rivals?
Because this is still quite a race.
ALLISON MORROW, CNN BUSINESS SENIOR WRITER: It's a huge race. And of course getting to the market first, getting to the public markets first would be a
huge advantage for whoever gets there first. And it's worth stating the number one rival is OpenAI, which is still the number one name in A.I.
startup land. So Anthropic has a long road ahead of it. And I think a lot of investors may be excited about this now.
It's worth noting a lot can happen in a year or 18 months or however long it takes to potentially do this deal. The market forces that are moving
A.I. and capital expenditures to be so strong right now may not last into '26 and '27, and a lot of Wall Street investors are already a bit skeptical
about how much capex is going into A.I. and how these companies, both OpenAI and Anthropic, are deeply unprofitable, have never made a profit. So
an IPO would really force them to open their books and let the public get a view of how they're going to be profitable in the future.
NEWTON: And owing to the uncertainty that you talk about in the future, you know, apparently there was a so-called code red by ChatGPT. I wonder how
confident they are in their market position, given that they're really cracking the whip at ChatGPT to really try and speed up the invasion there.
MORROW: Yes, this Anthropic news couldn't have come at a worse time for Sam Altman and OpenAI. The story with the code red is partly about Google as
well. Google just released its latest Gemini model, which is a rival to ChatGPT, and it's pretty solid. And what Google has that OpenAI doesn't is
scale, diversity, profits. You know, a long established track record of profitability.
So now there's kind of three leaders in this race when it comes to A.I. models. And OpenAI has for the past three years, it just turned three this
week, or ChatGPT just turned three this week, it's been the top chatbot and it has this huge user base. But obviously the competition is heating up and
it is feeling that internally.
NEWTON: Allison Morrow, grateful to you. Not an easy story to report on. You broke it down. Well appreciate it.
MORROW: Thanks.
NEWTON: Now Russia is beginning to feel the economic toll of its war with Ukraine and U.S. sanctions on oil and gas are only making things worse.
More on that after a break.
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[16:43:06]
NEWTON: NATO secretary general says there is one person able to kick start peace talks on Ukraine.
(BEGIN VIDEO CLIP)
MARK RUTTE, NATO SECRETARY GENERAL: As I said a number of times, there is only one person in the whole world who was able to break the deadlock when
it comes to the war in Ukraine, and that is the American president, Donald J. Trump. And he did.
(END VIDEO CLIP)
NEWTON: Mark Rutte spoke after Tuesday's nearly five-hourlong meeting at the Kremlin that failed to yield a breakthrough. It included Russian
president Vladimir Putin, U.S. special envoy Steve Witkoff and President Trump's -- President Donald Trump's son-in-law, Jared Kushner.
Now, nearly four years of war and Western sanctions appear to have taken a toll on Russia's economy. The IMF projects GDP growth will fall to 1.6
percent this year and reach 1 percent in 2026. And it also expects consumer inflation to climb this year to 9 percent. All of this while new U.S.
sanctions on Russian oil and gas apply even more pressure. The head of Russia's second largest bank, VTB, told me yesterday that Russia's economy
is doing quite well. And then I asked him how much longer it can endure sanctions. Listen.
(BEGIN VIDEO CLIP)
ANDREI KOSTIN, CEO, VTB: I think quite long because, you know, this kind of war that is requires probably less people, require less money because it's
kind of the new war. You know, you don't have a thousand of tanks or thousands of aircraft fighting. You know, it's some kind we call it a
special military operation rather than war.
(END VIDEO CLIP)
NEWTON: Elina Ribakova is the international program director at the Kyiv School of Economics, and she joins me now.
I think you agree with Mr. Kostin on one thing. You do believe there's nothing economic that is going to bring Russia to the peace table, right?
[16:45:00]
ELINA RIBAKOVA, INTERNATIONAL PROGRAM DIRECTOR, KYIV SCHOOL OF ECONOMICS: Well, your question actually has two questions in it. I think even if the
economic situation was -- were much worse than what we're seeing now, I think Russia is much more focused on the geopolitical objectives than
economic pain. And I think they demonstrated that decisively in 2022. That's one.
And the second one, the current reduction in growth. Available resources, even though painful, is just not enough to push Russia towards
negotiations.
NEWTON: So, Elina, the logical question then is what more can be done on sanctions? Now look, President Emmanuel Macron believes that the new
sanctions from Europe, that the new sanctions from the United States, especially on the two leading oil companies in Russia, that those will be,
in his words, a game changer.
Do you believe Europe and the United States have gone far enough to make this a game changer?
RIBAKOVA: Well, I think sanctions can be an important tool in ending this war, but it's not a magic wand. The sanctions will not end the war. They
will not make a regime change in Russia and many other wonderful things that people sometimes mistakenly expect from them. What sanctions can do is
make it more difficult and more expensive for Russia to finance this war.
I think VTB's Kostin just earlier was saying that, well, it doesn't cost much to finance the war. Well, news flash, about 40 percent of Russia's
federal budget revenues, almost half, goes to defense and security expenditure. Can you imagine that? That's a lot of money. So sanctions can
try to shrink that amount of money. At the same time, China is a monopolist supplier for most parts, including from the West to Russia.
And they have learned their lesson. They're charging extra for that supply, sometimes two or three times for the cost of the parts. So that's what
sanctions can do. They can make it more difficult, but they're unlikely to end the war.
[16:46:48]
NEWTON: And then that brings me to the Russian people who it's on their backs that this economy and war go on. Is there a tipping point there at
all? And look, we know it is a repressive regime. There isn't a lot of pressure coming from any kind of protest from within Russia. But the
president himself has to be concerned about what we see about, you know, line ups for fuel. And if a lot of those costs start to hit basics like
things like food, do you believe that could eventually actually be a tipping point for Russia?
RIBAKOVA: Well, Russia has been trying to redefine their contract with the population for the last 10 years. Basically it used to be we give you a lot
of money and you stay politically sort of uninterested in the current regime. Of course, since there's much less money, much more coercive
tactics came forward. And I think the fact that, for example, you can no longer make calls on WhatsApp or other international media, sort of
channels, sort of the communication channels, right?
It's all a signal that President Putin's administration is trying to limit the news, trying to limit the ability for people to find the truth about
what's happening, right? More coercive strategies. At the same time, we have seen contractual payments to go to fight in the war increased
dramatically. And that gives some cushion. And also, finally, in many regions which have never seen any kind of social lift, they are now seeing
some morbid social lift, whether if they work for the military enterprise or they're signing up for contracts to fight in Ukraine.
And actually they're realizing some economic gains. So, yes, on average, people are feeling the pain. But this is very uneven. And in some areas,
some people are actually seeing the benefits of this war, economic benefits of this war.
NEWTON: Yes. And Alina, you make a good point because for some people who have served in the military and survived, even when they go home injured,
their lives are completely transformed by the kind of money that they've been paid by the Russian government.
Elina Ribakova, really appreciate your insights. Thank you so much.
Now, a U.S. senator is trying to put an end to dual citizenship. We'll explain what that could mean, coming up.
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[16:51:29]
NEWTON: A U.S. senator has put forward a bill that would put an end to dual citizenship. The bill was introduced by Ohio Republican Senator Bernie
Moreno. Senator Moreno says the bill is intended to ensure, quote, "sole and exclusive allegiance to the United States." It would require dual
citizens to choose between their U.S. or foreign citizenship no later than one year after the bill is enacted. It would likely face serious legal
challenges if it were to become law.
Michael Wildes is the managing partner at Wildes and Weinberg, and Melania Trump's former immigration lawyer. He's also the Democratic mayor of
Englewood, New Jersey. And he joins us now.
Really good to have you on this story. Beyond the fact that this may not --
MICHAEL WILDES, MANAGING PARTNER, WILDES AND WEINBERG: Thank you, Paula.
NEWTON: This may not be legal, is it even practical? Like lay it out for us. Can the U.S. government actually ask dual citizens, you've got to
choose, and that includes your former client, the First Lady Melania Trump.
WILDES: Well, this is, you know, really an exercise in futility in so many different fronts. It never made a difference when we started as a nation
250 years ago if you prayed on a Friday, a Saturday or a Sunday. And it shouldn't make any difference, particularly when we give citizenship to
people who serve in our military and many of our wonderful soldiers end up marrying people that they love when they are in foreign lands. Even the
good senator himself was born in Colombia.
Now, do we want to turn our back on people's histories? I think really the best constellation of America is not just the food and the culture and the
identity from all these wonderful countries, but being American is being proud of that heritage and bringing that great Irish stew, or in my family,
they would call it a cholent together with all the different pieces. And it should be valued. It shouldn't be hidden.
And people are born sometimes, Paula, to foreign nationality, where they acquire citizenship of two countries because of their birth. Effectively,
the government is going to have to police this and end citizenship for people so quickly. And to make these kind of choices is just going to be
absurd.
NEWTON: And when you say that, it's absurd, though, even if in a wild sense, they wanted to try and enact this legally it would be quite
difficult. I mean, people do try and give up their U.S. citizenship today, and they find it a long and expensive process, right?
WILDES: Giving up citizenship is not easy, and it is unwise for a whole host of reasons, the least of which is that you're considered to be a
foreigner when you want to come back. There's no entitlement to come back to the United States. And effectively, you would be not just put at the
back of the line, but since you were a citizen, they could inure a dual intent that you want to be permanently in America again, and they can deny
your entry.
We caution our clients against giving up their citizenship for a myriad of reasons. This whole argument about being American doesn't mean that other
countries and our legacy, other nationalities have no value. My grandfathers are citizens by choice, not citizens by choice, and they
pledged their allegiance to this country when they came through Ellis Island. So long as they were going to bear arms and protect this country's
interests, that's what we need.
[16:55:06]
To now make it in -- it's inexcusable to kind of hold people responsible for things that they were born into.
NEWTON: And, Michael, I do want to ask you, though, where this concept of allegiance comes from, right? The rhetoric of late has put a whole new spin
on the term second class citizen. What are you seeing in cases, legal cases, and perhaps even citizens in New Jersey there, in terms of what
they're going through? Because this does seem to be a trend where there are certain kinds of citizens and other kinds of citizens.
WILDES: The government has now changed the dialogue, and I'm in a law school. I teach at Cardozo Law School in Manhattan, and we address foreign
nationals as non-citizens. The statute itself used to say aliens. I think a lot has to do with the dialogue deteriorating in our elected officials in
Washington, and not understanding that the greatest risk takers in entrepreneurs are founding parents and documents all envisioned a world
where foreign students, entrepreneurs and inventors would help really make America great.
And that if we don't give a way for students to onboard properly, if we don't help people in the talent remain here and then we compete against
them, or if we make it that Americans are better than other people. No, we're different. And this great experiment is only 250 years old, and it
seems to be working. And it worked with our founding parents that were citizens of an enemy country.
Remember that, Paula. Our founding documents were written by Brits who came here and became American citizens. This is a journey that we have a
responsibility because our kids will do what we do, not what we say, and what we're saying and what we're doing in Washington is going from bad to
worse.
NEWTON: We will leave it there for now. Michael, appreciate your insights and we'll wait to see if the senators' proposal goes anywhere at all or is
an exercise in futility, as you had indicated. Thanks so much. Really appreciate it.
WILDES: Pleasure.
NEWTON: Now, renewed hopes for the Fed rate cuts next week. That optimism was fueled by weak jobs data from the private payroll firm ADP. The Dow
rallied 408 points. The S&P gained 0.3 percent, and the Nasdaq ticked up just a 10th of a percent higher. Looking at some of those components,
UnitedHealth at the top up more than 4.5 percent bank shares. Goldman Sachs, JPMorgan in the green. Microsoft, though, at the bottom there. You
see it down 2.5 percent off a report that A.I. product sales are missing growth goals.
And that is QUEST MEANS BUSINESS. I'm Paula Newton. "THE LEAD WITH JAKE TAPPER" starts now.
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