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Sources: U.S. Rescues One Of Two Downed Fighter Jet Crew In Iran; Trump Says Downing Of U.S. Jet Will Not Affect Any Iran Talks; Krugman: Energy Crisis Impacts More Than Just Gas Prices; Iran Says It Struck Second U.S. Combat Plane; E.U. Fuel Prices Have Soared 30 Percent Since Start Of Iran War; U.S. Battling China For Chile's Lithium; Iran War May Worsen Hunger Crises Around The World. Aired 4-5p ET
Aired April 03, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:20]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": There is no closing bell on Wall Street because of course, U.S. markets are closed for
Good Friday as indeed European bourses likewise.
So why not just show you how Asia closed out the week there, you see the numbers. You had two up in Seoul and in Tokyo and two down in Hong Kong and
Taiwan.
Those are the markets that were trading. Let's have a bell, anyway. These are the events that you and I will talk about over the next hour.
The search is underway for one of two crew members of a U.S. Air Force F-15 fighter jet shot down over Iran.
A French owned container ship has become the western flagged vessel to pass through the Strait of Hormuz in weeks.
And after a brutal February, the U.S. labor market comes roaring back in March with strong revisions from the previous month. But is it all as it
seems?
We will put it all together for you. We've got Paul Krugman on the show tonight. Not often you get a Nobel laureate to talk economics with you.
We are live in -- no, we are live in London. There you go. What could possibly go wrong? It is Friday. It is April the 3rd in London, as in New
York. I am Richard Quest, and I mean business.
Good evening.
We begin with U.S. forces rescuing one of two crew members of an American F-15E fighter jet that crashed in Iran.
According to sources who say the crew member is alive and receiving medical attention, it is not clear on the status of the second crew member with
whom the search is underway. Sources say search and rescue operations are ongoing.
Meanwhile, Iranian state media released photos of the crashed jet, an anchor on state media said there was a reward for anyone who, in their
words, captured enemy pilots.
Months ago, President Trump had bragged about air superiority, U.S. air superiority in Iran.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: They have no air detection, that's been knocked out. Their radar has been knocked out.
PETE HEGSETH, U.S. DEPARTMENT OF WAR SECRETARY: In under a week, the two most powerful Air Forces in the world will have complete control of Iranian
skies, uncontested airspace.
KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: We expect to have complete and total dominance over Iranian airspace in the coming hours.
TRUMP: Their anti-aircraft weapons are gone, so they have no Air Force. They have no air defense.
HEGSETH: We are hunting and striking death and destruction from above.
Iran's air defenses flattened.
TRUMP: They have no anti-aircraft equipment. Their radar is 100 percent annihilated.
(END VIDEO CLIP)
QUEST: Now, this also comes at the same time as the reports that perhaps not as much of Iran's anti-missile technology or barrages have been
destroyed, as has been led to believe. There is Jeremy in Tel Aviv. Kevin is at The White House.
Start with you, Jeremy. You are there in region. What do you know?
JEREMY DIAMOND, CNN CORRESPONDENT: Well, Richard, as you said, one of these crew members has indeed now been rescued by U.S. forces. He is in the
custody of the United States and is receiving medical treatment.
The status of the second pilot is far less clear at this stage, and as we understand it, those search and rescue efforts are indeed underway. The
Iranian state media said that there was a reward out for the capture of any of these two airmen. And of course, should one of these airmen be captured,
that would make, you know, put a very different spin on this situation and could take this broader conflict, you know, from bad to worse.
From the Israeli perspective, we understand that Israel is not directly involved in any of these search and recovery efforts, but they have been
providing intelligence to the United States to try and assist with what is a U.S. search and rescue effort over the skies of Iran.
Israel also postponed some of its planned strikes in Iran, so as not to interfere with those search and rescue efforts. But we did see Israeli
strikes in the Iranian capital of Tehran that did take place. And clearly, these strikes are very much continuing. And this war overall, Richard,
showing no signs of slowing down. Instead, escalation seems the only route right now where we sit.
QUEST: Right. Let's go to Kevin.
What is The White House saying about this? First of all, do we know whether this aircraft was brought down or crashed through some other means?
[16:05:10]
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: I mean, the understanding that we have from sources is that it was brought down, it was downed by the
Iranians. You know, The White House has said virtually nothing about this all day. This occurred very early this morning. It has been a complete
radio silence from officials here.
And I think that is understandable in some ways. They want to make sure that everything that they put out is sort of buttoned up, and this search
for the second airman is still ongoing. We don't know the status of that individual, but it does, I think, raise a lot of questions about the claims
that The White House has made about the military dominance that it has achieved over the course of this war, the air superiority, all of those
clips that you played earlier, it just indicates that Iran still retains a number of these capabilities despite the massive military campaign that's
been ongoing.
You know, the U.S. has said, I think more than 12,000 targets, but it just underscores that Iran maintains some of these asymmetric capabilities. It
only takes one missile to down this, you know, multimillion dollar American aircraft with two Americans on board in the same way that there are
asymmetric capabilities that have kept the Strait of Hormuz closed.
So despite what The White House rightfully in a lot of ways, claims is military success and that the President says the war will be over in two to
three weeks, it just, I think, underscores that the Iranians still maintain and retain a lot of the capabilities that they have.
QUEST: One more for you, Jeremy and then back to Kevin.
Jeremy, as we sort of head into -- you've got Passover in Israel, you've got easter in the Christian celebrating countries -- and this grinds on in
a way seemingly. What's the mood now in Israel?
Earlier when you and I spoke about it, there was very much support for Netanyahu, even if they didn't particularly like his politics or the man or
him in power. But there is support for what he is doing there. Is that still holding up?
DIAMOND: Yes, I think it is to a large extent, Richard, I mean, Israelis continue to support this campaign in Iran. You know, most of them see it as
militarily necessary for the defense of the state of Israel. They have largely viewed Iran as an existential threat to the state of Israel and the
public has really shown quite a bit of resilience in the face of these, you know, daily, multiple times a day, air raid sirens going off, incoming
Iranian ballistic missiles.
I think that also has a lot to do with the fact that we haven't seen many fatalities in Israel in recent weeks as a result of these Iranian ballistic
missiles. You know, Iran has tried to get through Israel's air defenses by using these cluster munitions, which released these small bomblets that
have caused destruction, have caused injuries, have caused a couple of fatalities in Israel, but largely as long as people, you know, abide by the
instructions here and go into their shelters, they are not going to die or be seriously wounded as a result of those smaller munitions.
And so I think the Israeli public is still showing quite a bit of resilience in the face of this and willing and understands that this is
going to take some time. But, you know, that could all change on a dime, of course. But for now, everyone here seems prepared for this to continue for
at least several more weeks.
QUEST: And finally, to you, Kevin, thank you Jeremy, I will let you get on with your news gathering duties. It is late in Tel Aviv.
And to you, Kevin, we still have some more for you. The way in which this - - we have had the big speech earlier in the week. We've had market reaction. No markets today. And again, same to you. At what point are the
Republicans in Congress and the party generally getting really worried about all of this?
LIPTAK: I think they already are really worried about this and they say that in private as they stare down a very tough reelection year, as they
face a very troubled economy.
It is striking listening to Jeremy talk about the political environment in Israel, because it seems as if it is the complete opposite in the United
States. You know, polls show that support for the war is low and getting lower. That is part of the reason why the President delivered that speech
on Wednesday evening.
And I think the breaking point is going to be for Republicans, at least when they are asked to approve this massive military budget that we just
heard about today. The President asking for $1.5 trillion for the defense budget.
QUEST: Yes!
LIPTAK: That's the highest in history. It is a huge percentage jump year- over-year, and unless The White House provides some more details about what exactly its looking to achieve in the war, how much longer exactly it is
expecting to go, Republicans are not going to get on board with that.
It already includes cuts to programs to make up for the huge increase in the defense budget to programs that Republicans say that they need to
support in order to be reelected. And so that is going to be the breaking point, I think, for a lot of Republicans and that is coming, I think,
sooner rather than later.
[16:10:16]
QUEST: Grateful. Thank you. Have a good Easter weekend. Thank you, Kevin.
LIPTAK: You, too. Thank you.
QUEST: Retired General Wesley Clark is with me, former NATO Supreme Allied Commander with me from little Rock in Arkansas.
General, it is really always very good to have your wisdom and guidance on this.
GEN. WESLEY CLARK (RET), CNN MILITARY ANALYST: Thank you, Richard.
QUEST: And, you know, on one level, somebody like yourself is probably sitting here tonight saying, well, you know, yes, it is very -- it is
deeply regrettable that a plane has been brought down, but it was also entirely possible and likely and we plan for that sort of thing. And now we
just need to get on and sort it out.
CLARK: Exactly right. Now, we know we did a good job against their air defenses and radars. We know we've taken out most of it, but you never get
all of it. We don't know exactly where the aircraft was, what it was doing when it was engaged. We don't know what shot it down yet, at least we don't
know in the public.
And we've got the pilots still out there running around trying to get in a location where it can be picked up. He is on the ground, he is scrambling.
He probably has communications. It is night time, that is in our favor. We like that. And we are going to get him, if we at all can get there.
We know we had a little bit of a gun fight when we picked up the first guy. We know the Iranians are in the area somewhere.
When I was NATO commander, we lost two aircraft over Serbia. We got both pilots out, but it was a real scramble. A lot of sweat at every level of
the chain of command, including mine to get those men back out.
So, you can be sure there are a lot of eyes on this and a lot of assets being devoted to it right now.
QUEST: What did you make today of the $1.5 trillion with a T budget, a 40 percent increase? We don't have many details about it, but it is -- I mean,
it is an eye-watering amount of money from the world's largest military, well, in terms of spend on military or already.
CLARK: Richard, I have two thoughts about it. First is that we've underfunded defense for years, and there was an agreement in Congress in
2013 where they would just keep the defense budget flat. So, it didn't really keep up with inflation. And, while we were spending a lot of money
on the military in Afghanistan, Iraq, chasing ISIS, other nations like China were busy developing new technologies in space, increasing their
naval forces, increasing their Air Forces, building stealth, long range anti-ship ballistic missiles. So we've got some catching up to do, to be
honest with you.
And what you're seeing right now in Iraq is evidence that technology moves on and if you don't invest, you can't keep up.
But on the other hand, we've got a large budget deficit already, and there are limits at some point. So, I have concerns in both directions.
QUEST: That is the difficult part about it.
Finally, I just want to get also, you know, your thoughts -- your personal thoughts when the Defense Secretary asked the Army chief-of-staff General
Randy George to basically go and go now. It is an ignominious end to an illustrious career of some 30 to 40 years. What do you -- that's my sort of
nonmilitary looking on the outside in. From somebody who has been on the inside out, what do you make of it?
CLARK: Well, first of all, there is always politics in any organization. There are personal relationships, there are political preferences and other
things. I think Randy George was a great Army officer. He was a great chief-of-staff and if it is what he says it is, he drew the line. He didn't
want to take four officers off the Brigadier General promotion list, he had confidence in the integrity of that process. He believed they picked the
right people. And so when it came down to a discussion with the Secretary of Defense, he stood his ground and the Secretary of Defense, said, no, I
am in charge.
And so, those things do happen. So I give General George a lot of credit for his integrity, for standing his ground and for all the great things he
has done in his military career.
Nobody wants to go out that way, but character counts, and he has showed it. And so a lot of people in the United States will be very proud of Randy
George. We don't want to see the problems in the Pentagon, but you know, this is a war. There is a lot of stress going on.
[16:15:00]
And, so you also have to have some sympathy for the President and the Secretary of War, because they have to produce success on the battlefield.
So tempers are short and that is what happens.
QUEST: I am grateful to you, sir. Have a good weekend. Thank you for joining us, General. Kind of you to share your time tonight.
CLARK: Thank you, Richard.
QUEST: Thank you.
A French owned container ship has crossed the Strait of Hormuz according to data from Marine Traffic. It is believed to be the first western flagged
vessel to pass through the waterway since Iran closed it off.
Anna is with me.
Anna, now, I can see you've got your charts and you're ready to go do this. So you get yourself on your way and I will throw a question or two as we go
through.
ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Great. So, Richard, this map here, Iran, Oman highlighted. I think it is worth highlighting that
because this is a jointly controlled strait and since this war broke out, really Iran has been calling the shots. It has been allowing vessels from
so-called non-hostile countries to pass through Pakistan, India and China.
But as you mentioned there, there has been a real change over the past 24 hours. With this French vessel CMA CGM, one of the world's largest shipping
companies. But I think the route is really interesting, Richard.
Look how close that ship is going to the Iranian Coast. It is looping through those Iranian islands and coming back down.
Now, we know that other vessels that Iran has allowed to pass through have done a very similar route, which suggests, Richard, that Iran was aware of
this route and gave it its blessing.
We are not sure, but that's the implication here. We also know, I have seen lots of reporting about this so-called toll system that Iran has
introduced, basically getting ships to pay to go through the figure of $2 million has been bandied about. Again, we don't know what has happened with
this ship in particular, but I think it bears note.
QUEST: Right. Now, this is fascinating because the other ships have huge slightly closer to the Omani side, not the Iranian side, I am sure. And the
ship that we are talking about here, it actually had its transponder on when it went around and we could see it there flashing away its
transponder, which suggests it was doing it deliberately because it had permission and wanted to make sure it wasn't hit by accident.
COOBAN: Exactly. There was nothing really to hide in going through this route through this waterway. But you're right, there have been other
tankers that have passed through in the past 24 hours.
I just want to show you that the normal route pre-war slap bang in the middle of the Strait of Hormuz, this is what was happening about, you know,
30 something days ago. Okay, that French ship that was taking that northerly route, maybe with Iran's blessing, that's what it looks like
here. But then these three other tankers, an LNG tanker and two oil tankers, they have taken a route that really goes very close to the Iranian
coast, as you've mentioned, which implies that this may not have been done with Iran's blessing. Again, were not sure.
But Kepler, which is a data energy firm, they said that at least one of these tankers represents just the sixth cargo of Saudi oil to get out of
the Strait of Hormuz since the war started.
QUEST: And that's a core point because we are making a lot of rightly so, a lot of noise about this one that's got through. But how many a day usually?
COOBAN: Normally, it is about 138 to 150 vessels, around 70 oil tankers get through every single day. It has been just a trickle since then. And, you
know, Kepler was saying that in March, 53 million barrels of crude were getting out, but compare that with February. That was 440 million barrels
of crude.
So really, this waterway is still closed to the vast majority of vessels -- Richard.
QUEST: I am grateful. Thank you, Anna Cooban.
The energy crisis caused by the war is affecting much more than the gas price. The Nobel Prize winning economist, Paul Krugman. There he is. Good
to see you, Paul. We will be with you after the break. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:21:23]
QUEST: Jobs report for March came in much stronger than expected. The U.S. economy added 178,000 jobs and the unemployment rate eased down to just a
tad to 4.3 percent. It is a rebound from the brutal February, but even the February, the initial number was revised, 130,000 jobs. It is still too
early to factor in the war and how it is going to affect the labor market and the spike in oil will raise costs.
The economist, Paul Krugman says rising gas prices are only the beginning or half the story. The Nobel Prize winner says other energy related costs
are surging even more.
Diesel, for instance, used by trucks, is up nearly 50 percent since the war began, according to the AAA, and according to Paul, the fertilizer is also
becoming more expensive. Its production relies on natural gas, plastics and other petroleum products getting more expensive.
Paul Krugman is with me from New York.
The input costs, as I believe, is how we like to talk about these sort of fertilizer, the diesel and all of these other things, the plastics.
Are they at a rate of increase that you would expect to see them transmit into the wider economy, or can they be contained up to a point?
PAUL KRUGMAN, ECONOMIST AND COLUMNIST, "THE NEW YORK TIMES": Oh, I think this is clearly large enough to hit the wider economy. This is, you know, a
little bit less than half of the oil consumption in the U.S. is gasoline.
Diesel is less than half as big, but the price of diesel, if you look at it as dollars per gallon, it is up around 70 percent more than the price of
gasoline.
And then these other things, there is also jet fuel in there. Theres fertilizer, there are petrochemicals. The overall impact there is really,
you know, we are talking about a significant fraction of one percent of GDP in terms of increased input costs. There is no way that something that big
is not going to be passed on to consumers. It is not going to affect business hiring and investment decisions.
So this is further ugliness to the energy crisis.
QUEST: Are we at the tricky point? Five weeks in, this is the bit where, I mean, what I've been told is where it starts to get really dangerous
because until now, if it reversed, the war was over, prices came back down. You know, there wouldn't be much of an effect.
But five weeks on and we are really now talking about real effects.
KRUGMAN: Well, even if the war had ended sooner, we would have some significant effects because there is oil that will never be produced
because of the effects of the war and so on.
But now, we are at a situation where, you know, it stops being financial and starts becoming physical, just about now.
Until now, oil was still arriving from the Strait of Hormuz in Asia and Europe because it takes time in transit that has ended for Asia. It is
trickling, it is tapering off for Europe. So all of a sudden now, we are actually talking about a shortage of not a financial speculation that
things will go bad, but an actual shortage of barrels of oil.
And we are starting to hear, you know, the prices that you hear for oil, those are actually futures prices. They are not cash on the barrel right
there.
QUEST: Right.
KRUGMAN: They are prices for you buying a barrel sometime, you know, in a month or more from now and the data are not great, but the actual spot
prices of physical crude oil are substantially higher than the futures prices you see there.
[16:25:10]
I've been hearing numbers like $140.00 a barrel. So this is getting -- you know, this is getting seriously real and it is going to -- we are at the
point where this starts to become something more than just headlines about high energy prices.
QUEST: The fascinating part about it from the U.S. point of view is the U.S. doesn't, as the President reminded us on numerous occasions, doesn't
import much from the Gulf. It does, of course, import quite a bit from Canada and because of the pricing of energy, which is based on the global
price, it is being affected.
So when the President says, you know, to Europe, come and buy more of our oil, come and buy more of our LNG. Firstly, I don't believe there is that
much surplus that can be sold out and exported.
KRUGMAN: Yes, and also, I mean, when he says we aren't affected, I kind of want to say, you know, what do you mean? We, White men. Yes, there are oil
producers in the Permian Basin in Texas are doing very well. Consumers everywhere else in the country are doing badly. There is no mechanism to
transfer the windfall profits of the oil industry to ordinary households.
And in fact, I mean, it is a kind of a trivial point, but add to it, you know, this shows up as profits of oil companies. We don't know exactly who
owns these companies, but on average, something like 35 or 40 percent of U.S. stocks are foreign owned.
So, these windfall profits, when you say they're accruing to America, well, not exactly, and certainly not to you and me.
QUEST: Youve just given me -- I am -- hearing your answer, gives me a thought. Would you be in favor because of that, of some windfall tax, one
off or whatever? Because these companies are making so much more, and it is going to have to offset the costs of assistance to others.
Is it possible, do you think, for -- I mean, it has been done before, a windfall tax.
KRUGMAN: Yes, it has been done before, and now, you know, in the 70s we had first price controls which didn't work so well, ad then there was a
windfall tax that was imposed as the price controls were lifted, which in the 80s, which ended up being kind of a moot point because the price of oil
collapsed soon afterwards.
But there certainly is a case for it. You know, its interesting many governments out there do collect -- they essentially collect oil price
windfalls, among them the government of Russia. You know, this is not a big windfall profit to Russian oil producers. There are some, but a lot of the
-- Russia basically has what amounts to an excess profits tax, which is why Putin is celebrating about this war.
The United States doesn't have anything like that, and we really should, given that, you know, the conflict of interest between -- in a crisis like
this, between consumers and a handful.
QUEST: So as this inflationary hit goes through the economy. Do you think the Fed stays its hand just does nothing until it absolutely has to. Even
though inflation will hit four percent, the political and/or the reputational cost of putting it up, you know, you hold your nose and just
hope it doesn't go further.
KRUGMAN: Well, you know, the Fed normally looks at core inflation, which excludes food and energy and that means that the price of gasoline is not
going to enter the measure they normally look at, and they have in the past been adamant about looking through shocks to the price of gasoline,
basically.
But one of the things about this surge in the cost of diesel and the cost of petrochemicals is that that is going to show up in core inflation. And I
don't know how long the -- the Fed will wait. They will certainly wait to see until whether this passes. And especially given all of the hysterical
yelling that was happening just the other day from The White House demanding that they slash rates, they will be, you know, they will really
have to swallow hard before raising rates.
But on the other hand, everybody is thinking, is this the 70s again? And I don't think it is. And the Fed doesn't think it is. But how much do you
want to wager on that?
QUEST: That's the core point. Why wait and discover it?
Paul, I am grateful. Have a lovely weekend. Thank you for taking time to talk to us tonight on QUEST MEANS BUSINESS.
KRUGMAN: Same to you.
QUEST: Thank you, sir.
And you can find Paul Krugman's latest work at PaulKrugman.Substack.com. Both his written articles and his podcasts are all there, and if you're not
a subscriber, the only question is why not?
Coming up next, rising fuel costs and the trucking industry. Now, we've talked tonight about diesel. We've talked a lot about input prices. Well,
this is the -- these are the people who get affected, the people who actually take the goods to the factory from the factory to the -- you get
the idea.
The International Road Transport Union, the head of that, I will be talking to in a moment.
[16:30:11]
(COMMERCIAL BREAK)
[16:33:15]
QUEST: Hello, I'm Richard Quest. Together, we'll have more QUEST MEANS BUSINESS. I'll be speaking to the International Road Transport Union, the
IRU, about the rising fuel prices trucking and logistics and the effect of the so-called import prices.
We'll be in the Chilean desert to show you a new front in the United States economic battle with China, only and only -- will only get to all of that,
I should say, after news headlines, because this is CNN, and on this network, the news always comes first.
A search and rescue mission is underway for an American crew member who was on board a fighter jet that was brought down over Iran. Another service
member is rescued and is being treated. U.S. sources confirm the jet was an F-15E. Iranian state media released these photographs on what appears to be
wreckage from that aircraft.
Pope Leo has been presiding over Good Friday in the way of the Cross of the Coliseum. He's aged 70, and Leo's the first pope in decades to carry the
wooden cross to all 14 stations. The service has included prayers for war orphans and a warning to world leaders that they will be judged by God one
day.
NASA just shared new pictures of Earth taken by the astronauts on Artemis II. This image was captured by the mission commander Reid Wiseman. He joked
that the crew has smudged the windows of their spacecraft from spending so much time looking back at Earth. Some views, he said, have stopped them in
their tracks. Can you imagine looking at that and seeing that and realizing it's real, my word.
[16:35:11]
Into CNN, just at this moment, the Iranian military says it's brought down a second U.S. combat plane today.
Now, this is different to the one that we were talking about earlier in the program, the F-15. According to the Iranian state media, the A-10
Thunderbolt II, nicknamed the Warthog, crashed into the waters of the Persian Gulf after Iran's air defense systems intercepted and targeted it
near the Strait. It's only ours, of course, after the F-15 incident.
Matthew Chance is in the region. He's with me now from Doha.
So, being very careful, as I've tried to be, that we separate the two so that our dear viewers not -- we don't get the two conflated. Tell me about
this latest incident, the Warthog.
MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: The Warthog incident, the A-10 aircraft. Well, that's just being reported by the
Iranian military at the moment, there's not been any confirmation from the U.S. Department of Defense that that plane has also gone down.
But according to the Iranian military, the plane was downed over the Strait of Hormuz. It's unclear from what we understand from the reporting that
we've approved to put out at the moment, what's happened to the pilot in that plane. It's a single seated aircraft, so there would have been one
pilot, obviously.
But yes, it comes just hours after those confirmed reports that a U.S. warplane F-15 warplane, which is a two-seater aircraft in this context, was
downed elsewhere in Iran, one of those crew members has been rescued by U.S. search and rescue teams. The whereabouts of the second crew member are
unknown, but we understand that search and rescue operations are continuing, Richard.
QUEST: So, it's a very difficult day, one way and the other, with these two incidents. The first, obviously, the F-15s was confirmed, and the search is
going on. And the second is, is this one.
Does it -- I mean, bearing in mind the number of sorties, the number of flights that have been made, two is too, too many. But does it call into
real question, this idea that the U.S. has achieved full well air superiority, or is this sort of the thing you might expect even with that?
CHANCE: Yes, I guess it's a little surprising that, you know, what are we nearly five weeks into this conflict, which has been an air war, that these
are the first reports we've had of planes being shot down, at least over U.S. -- over Iranian airspace, and so I think that's significant.
But the fact that they've been shot down at all, especially given you know, the remarks that have been made by President Trump and other members of his
administration about how the U.S. enjoys total air superiority in the skies over the Islamic Republic, that all appears to have been overconfident and
an overstatement.
I mean, yes, certainly Iran has seen its military degraded and battered over the course of the past four or five weeks, that's for sure, but it
certainly retains the ability to strike and lash out at neighboring countries here in Qatar, in Saudi Arabia, in the United Arab Emirates and
elsewhere, there have been daily missile and drone strikes coming from Iran, and clearly it retains the capability to hit U.S. aircraft in the
skies over the Islamic Republic as well, Richard.
QUEST: I'm grateful for you this evening. Thank you. It's late night. Later night view. Thank you, Matthew.
U.S. gas prices have edged up even further, a gallon of unleaded now cost $4.09 on average, a 37 percent increase since the start of the war in Iran.
Now, I'm well aware that obviously where you are, prices have also risen very sharply, and you are also seeing higher prices at the pump.
So, rising fuel prices are impacting transport costs everywhere. In Europe, the shippers and the truckers say they're under increased financial strain.
Raluca Marian is the E.U. Advocacy Director for the IRU, the International Road Transport Union. I mean, this is all very difficult, isn't it? What
are your members seeing?
RALUCA MARIAN, E.U. ADVOCACY DIRECTOR, THE INTERNATIONAL ROAD TRANSPORT UNION: They see financial issues. They see a very different response
amongst member states. And we are talking in the E.U. about an average of 30 percent increase. But that's an average, and that's because there are
some member states (AUDIO GAP) prices at the pump.
[16:40:12]
So, we see in some countries almost 50 percent increase. So, that's also that's to be put in the context, because the fuel cost is around about one-
third of the entire costs for transport operators. So, that's quite a lot, and the margins are around about one to two percent in the sector. So,
that's quite a big hit that we are experiencing right now.
QUEST: Now, we've seen some countries, Australia is one of them, and some European countries have removed reduced or altered fuel duties to try and
compensate for this. And I'm guessing you would like to see more governmental support for your members and for companies, for road haulage
and transport companies, and even though that will come at a very severe cost for government budgets.
MARIAN: Yes, there are various types of measures. The one we just mentioned is one of them. Then we have (AUDIO GAP) states or financials direct
financial support in other cases, or, as I just said, they are capping the price of the fuel.
And of course, we would like to see more of that, because the reactions are very much uncoordinated, but it's little you can do about that on a E.U.
level. So, we are just -- would just like to see more discussions between member states, also because, and I like what the previous speaker said, he
made a difference between the financial and the physical, and actually one sometimes affects the other.
And I will give you a very quick example in border regions, when the price difference between countries is very big, the countries where the price is
much the operators in the countries where the price is much bigger, they cross the border, obviously, to tank where the prices are smaller, and this
can create shortages, or local shortages.
And of course, when you talk about shortages, then you affect the very continuity of the supply chain.
QUEST: I'm afraid that's just the law of supply and demand, isn't it, in a sense, that happens in the U.S. as well, where you see one state, and I'm
not sure that you'd really want too much government intervention in terms of the pricing of the product, because that's not good for the industry
either, is it?
MARIAN: Yes, definitely, but looking into the future. Of course, the price is very painful element of the whole situation, and all these small and
medium sized companies that are -- that are the majority in our sector, are very much affected, but we are very, very much afraid about shortages. And
perhaps we won't see shortages everywhere, but we are talking about transport corridors, and even if these shortages are regional, local,
regional country related that something that really has to be coordinated on a E.U. level, because to transport goods from Southern Europe, food or
other very, very essential products, pharma products, food from south to north, east to west, we really need to see this continuity working well.
QUEST: I agree. Thank you very much for joining us from Cusco in Peru. Thank you.
When we return, the desert of Chile, where the U.S. and China are battling for a piece of the country's lithium reserve.
(COMMERCIAL BREAK)
[16:46:04]
QUEST: -- maybe the new front in the U.S. economic battle with China. President Trump wants more of Chile's lithium. Of course, it's the critical
mineral used in electronics and electric vehicles. China's after it as well. CNN's Christopher Ulloa explains.
(BEGIN VIDEOTAPE)
CHRISTOPHER ULLOA, CNN CORRESPONDENT (voice over): In the race for global dominance between the U.S. and China, this remote Mars like landscape is
becoming a new frontline, deep in Chile's Atacama Desert, this is an oasis reaching the world's lightest metal, lithium, and the U.S. wants it.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: American dominance in the Western Hemisphere will never be questioned again.
ULLOA (voice over): Trump says minerals and metals like lithium are critical to the U.S. national security and Chile has the world's largest
reserves. Companies here drill into the ground to pump up lithium rich brine, creating these artificial lakes. The liquid is then left to
evaporate before being processed and shipped.
CARLOS DIAZ, GENERAL MANAGER, NOVANDINO LITIO (through translator): It's used in cell phones, electric vehicles.
ULLOA (voice over): Carlos Diaz is the general manager at Novandino Litio, the company exploring these mines. He says, despite Trump's ambitions, most
of the lithium they produce does not go to the United States.
DIAZ (through translator): About 70 to 75 percent of our product ends up in China. They're the world's leading producers of batteries and electric
vehicles, controlling over 80 percent of the market. So, it's roughly the equivalent the batteries they produce and the lithium we sell them.
ULLOA (voice over): But that could be about to change, during the presidential campaign in Chile, Trump threw his support behind the
likeminded Jose Antonio Kast.
TRUMP: We're grateful to be joined as well by the president elect of Chile, Jose Kast, congratulations. It's an endorsement, maybe a little
endorsement.
ULLOA (voice over): That endorsement is paying off, and one day after taking office, Kast government signed a joint declaration with Washington,
bowing mutual support in the supply of critical minerals is fundamental for the national security and commercial industries of both countries.
DIAZ (voice over): Lithium is one of the strategic materials, included in many government's plans. And the United States as part of its objective,
aims to produce lithium as well as batteries and electric cars in the near future.
ULLOA (voice over): Stacked between China and the U.S., its two largest trading partners, the Chilean government has to walk a tightrope and manage
both sides. But on the ground, they see opportunity.
DIAZ (voice over): We hope there will be new projects in Chile to help sustain and expand this production in line with the demand.
ULLOA (voice over): Christopher Ulloa, CNN, Atacama Desert, Chile.
(END VIDEOTAPE)
QUEST: Ahead on QUEST MEANS BUSINESS, the knock-on effects a protracted conflict and food prices go even higher. So, is there a better way to
manage it all?
(COMMERCIAL BREAK)
[16:51:40]
QUEST: Talked a great deal on QUEST MEANS BUSINESS about fertilizer and the shortage as a result of what's happening in the Strait of Hormuz. It's also
threatening to raise food prices considerably higher. The U.N. says prices have hit a six-month high driven mainly by rising oil prices.
So, if you talk about a clear spike in your air nitrogen fertilizer used around the world, natural gas is a raw material in its production. The U.N.
Food and Agriculture Organization warns farmers may plant less or switch crops if the conflict lasts longer.
Impact could already hurt those who are already hungry. I'm joined now by Mike Penrose, the former CEO of Action for Hunger, and he's now a special
adviser to the Government of Ukraine on its Food From Ukraine humanitarian program.
Mike, first of all, one of the things we are discovering is something that you will always have known, fertilizer is exceptionally important.
MIKE PENROSE, SPECIAL ADVISER TO THE GOVERNMENT OF UKRAINE, "FOOD FROM UKRAINE HUMANITARIAN" PROGRAM: Absolutely, for the volumes of food that
needs to be created to support a globalized market now, fertilizer is essential, and when fertilizer prices start creeping up. Everything creeps
up. Every commodity creeps up in price.
QUEST: Right. But that's the case. So, you've got these large age organizations going and buying either commodities or finished products. And
they're buying them centrally from governments, from major organizations, major commercial organizations.
PENROSE: Some is donated by governments. So, the U.S. government has a big program doing it. Some of them, they buy from spot traders. Places like
Turkey and Egypt have big markets in this. But the problem is, only really big agrarian industry can sell into it.
QUEST: Right. So, your solution is these smaller collectives?
PENROSE: Yes, in Ukraine, they came up with an absolutely fabulous program, which the majority of the beginning of the war, the majority of food being
imported into Ukraine was so brought in by aid agencies. Why import food into Ukraine? It's a massive producer.
So, what they did is they collectivized small processing plants and farms, and this program has gone from being a small scale, sort of farmers
collective to providing 80 percent of all food aid in Ukraine, 80 percent.
QUEST: This goes against everything that we've ever been told about, the need for centralization, size and scale, the advantages of that?
PENROSE: Well, different areas can have different problems. So, in certain areas, people use cash and then use the markets to provide the aid.
But when you've got places like Sudan, 40 percent of the population is in critical food stress. If you just give cash to people, prices go up. And
with fertilizer, prices are going up anyway.
QUEST: So, how realistic is it? Because Ukraine is a fairly well -- it's a very sophisticated environment that can put in place these things and can
manage them. Because other parts of the world can they do likewise?
PENROSE: They can, I think, with assistance and cooperation. And that's what -- so the Ukrainian government and the RIDNE Food Consortium, which is
this consortium in Ukraine, what they're doing at the moment is putting hubs into Africa. And the idea is, anything that can be sourced locally,
they'll use their expertise, their agronomic expertise, to help centralize and collectivize that.
QUEST: What happens after it's been grown, collectivized, centralized, it then has to go into a much larger market, a much more large commodity
market. And you turned up with your well, I've got this into a market that's vast, don't you? How do you manage that?
PENROSE: Well, firstly, we're 15 percent cheaper. We work on spot at the moment. We've got a first contract of stuff going into Gaza. We've got
others so we can actually come in cheaper.
[16:55:07]
But also, because the majority of aid is funded by people with purpose who want money to work better when we can offer, rather than it just going to
some spot trader in Turkey that it can create if we get 10 percent food aid budgets, 8,000 jobs in Ukraine, 25 percent tax field Ukrainian government.
It makes the money work harder.
QUEST: Can I just end on this question of cutting of aid budgets? I was listening to the debate in the U.K. Parliament recently where aid has been
specifically cut and defense increased, and that's not going to change, and it's going to be replicated elsewhere when, particularly when you see, for
example, the U.S. president has come up with a $1.5 trillion defense budget today. How devastating is this?
PENROSE: It is devastating at the moment, and that's why this program works well, because at the moment, you used to have $10.00 for Sudan, $10.00 for
Ukraine. Now, if you've only got $10.00 you can help Sudan by spending it in Ukraine and allow tax revenue and revenue into Ukraine to help them cut
their a dependency.
QUEST: So grateful. Thank you very much indeed, Sir.
PENROSE: Thank you, Richard.
QUEST: Thank you for joining us.
We will have a Profitable Moment after the bell.
(COMMERCIAL BREAK)
QUEST: Profitable Moment, I refuse to leave you at the start of a holiday weekend with misery, mayhem and mischief. Instead, let's talk about Artemis
II. I am old enough to remember, of course, the first lunar and the moon shots. 1972 I remember the last Apollo that went to the moon, and that one
of the reasons given is, oh, we're all bored by it. Oh, it's old, we're not interested.
Which is why it's fascinating to see an entire generation of people agog at these pictures that we've been seeing from the moon or from these were
taken. Now, these are -- these pictures have not changed since we went there in 1972, I promise you, or indeed from the Space Shuttle.
But the fact that a new generation is becoming enthralled, enlivened and energized, that the idea of space is really very gratifying. It truly is
baby steps to boldly go, etcetera, as they're going to around the moon and come back again.
And there will be -- let's be clear, there will be mishaps and things going wrong, and that could be very bad news, but that's the price we pay for
doing it, and it's just wonderful to see it. That in a time of such misery and awfulness, and you and I every night talking about what's going on in
the world, that we can at least pause, enjoy what's happening, enjoy the advancements, and say, do you know something? Maybe it's not that bad after
all.
[17:00:25]
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. I'm away next week filming in the Cotswolds.
Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you when I get back.
END
