Return to Transcripts main page

Quest Means Business

Justice Department Drops Probe Into Fed Chair Powell; U.S. And Iran Sending Key Negotiators Back To Pakistan; U.S. Soldier Charged With Illegal Bets On Maduro Raid; United Nation: The Strain Of The War Is Already Visible In Asia; United States At Risk Of Running Out Of Missiles If Another War Erupts; Baldwin: The Old Trade Will Not Return. Aired 4-5p ET

Aired April 24, 2026 - 16:00   ET

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

[16:00:16]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": The closing bell is ringing on Wall Street. This doesn't tell the whole story. I will

get to it in just a moment. Sealed Air, which makes bubble wrap and paper packaging and those sort of things, one of the more interesting companies

on the stock exchange, they're ringing the closing bell on a good, strong day for tech stock on earnings. One, two three and one, two, three four. I

said that doesn't show the full story. The triple stack will show what I mean because although the Dow was down Intel and tech was up very sharply

and that's why we have a record on the NASDAQ.

Those are the markets and these are the main events we are talking about. U.S. prosecutors are dropping their investigation into the Fed Chair Jerome

Powell. Now it opens the door for Kevin Warsh to be confirmed as Fed Chair.

Sir Tim Clark -- Emirates tells me this crisis is not going to change the operations or the ambition of Emirates.

And a U.S. Special Forces soldier is arrested. The allegation, he placed bets on the Maduro raid that he personally was involved in.

Tonight, the former SEC Chairman, Gary Gensler, is with me on the program.

We are live in London. It is Friday. It is April the 24th. I am Richard Quest and I mean business.

Good evening.

We begin tonight with the U.S. Justice Department dropping the investigation into the Fed Chair Jerome Powell and that smooths the way for

Kevin Warsh to be confirmed as his successor.

The investigation centered on renovations at the Fed headquarters and whether Chair Powell misled Congress about the cost. Powell called the

subpoena a pretext. He said it was all about pressuring the Central Bank to lower interest rates as President Trump desired.

The investigation had cast a shadow on the confirmation for Kevin Warsh, Trump's pick to succeed Powell.

The Republican senator, Thom Tillis, said he would block a vote on Warsh until the investigation ended.

(BEGIN VIDEO CLIP)

SEN. THOM TILLIS (R-NC): The problem that I have here is that we had some U.S. Attorney with a dream or assistant U.S. Attorney thinking it would be

cute to bring Chair Powell under investigation just a few months before the position was going to be open. Let's get rid of this investigation so I can

support your confirmation.

(END VIDEO CLIP)

QUEST: Evan Perez is in Washington. Let's get rid of the investigation. The investigation has gone, I assume. I mean, how has the Justice Department

justified abandoning their investigation?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, Richard, they've discovered that there is an Inspector General investigation that has been

ongoing, frankly, since last summer, but that is the reason they're citing the U.S. Attorney Jeanine Pirro said that what she is going to do instead

is she is going to rely on the findings from that internal investigation, from that Inspector General investigation and then if she finds anything in

there, she could possibly reopen it.

But for all intents and purposes, this is over and it really has been over for a long time. It is just a matter of time before she actually

acknowledged this.

Here is what we know has happened. There was a hearing last month where the Justice Department, where lawyers in Pirro's office acknowledged that they

had no evidence to support the idea of a crime and so the judge, as a result of that tossed aside the subpoenas that had been issued for

information from the Federal Reserve.

And despite the fact that the Justice Department said that they were going to appeal that ruling, they never actually did. So what it really points to

is what Tillis has been saying all along is that this was really a pressure campaign on Powell to get interest rates lower. Obviously, you know that

Powell has been in sort of the crosshairs of the President for some time.

And so what we were anticipating was that the Justice Department would take this off ramp when they finally, you know, got around to it. So that's what

we expect now to happen. It clears the way for his nomination.

I should point out, though, that, you know, there have been signs that this has been not a normal investigation, Richard. The FBI has not been involved

in it and it has been really been just these political appointees in Pirro's office that have been handling it.

QUEST: This is actually quite distressing and disturbing in a sense, because you know, as I've said on numerous occasions on this program, if

Pirro genuinely believed there was a case for Powell to answer, she shouldn't give in to Tillis because that would be political pressure in

exactly the opposite direction if she genuinely believed it, if she didn't genuinely believe it, then she should --

[16:05:21]

I mean, either way, this stinks to high heaven.

PEREZ: Absolutely. And really, I mean, again, behind the scenes, we've known that this was not going the way a normal investigation goes, Richard.

We've known, for instance, that, you know, when you do criminal investigations, FBI agents are gathering the evidence and the facts, and

what we have seen is that they've not been involved.

Instead, what we saw is these two political lawyers from Pirro's office, they're the ones that showed up just a few weeks ago to the construction

site where the Federal Reserve construction is being redone and they showed up to try to get access to it. They were turned aside, if you remember and

that was an indication of how this was going. This was not being handled in the normal way.

QUEST: I am grateful, Evan. There is more -- the next thing, of course, who knows, thank you for joining us. Thank you.

Key negotiators for both the U.S. and Iran are now heading back to Pakistan. The White House says the Special Envoy, Steve Witkoff, and the

President's son-in-law, Jared Kushner, will take part in direct talks with Iran.

The Iranian Foreign Minister has arrived in Islamabad. Iran's semiofficial state media says the purpose is to meet with Pakistani officials, and he is

not planning to negotiate with U.S. officials whilst he is there.

Nic Robertson is in Islamabad. I mean, at this point, who on earth knows what is going on, Nic? Can you give us some guidance?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, the sequencing, I think, is a little bit opaque at the moment. The Iranian Foreign Minister

touched down here a couple of hours ago. We could see his jet coming in, and there were Pakistani jet fighters escorting him. You could hear the

roar of the engines. What you hear now is the roar of a thunderstorm behind me right now.

So he has been on the ground a couple of hours. He was met at the airport by Asim Munir, the Defense Chief-of-Staff, Field Marshal Asim Munir, the

most powerful man in the country, as well as Pakistan's Foreign Minister. Of course, these two Pakistani officials have been key mediators with the

Iranians.

But look, the sequencing from here, Jared Kushner, Steve Witkoff won't get in here before late Saturday, early Sunday and we are expecting from the

Iranian Foreign Minister, which is what he said, is that he will be going on to meetings in Oman and Moscow.

So the sequencing of when that meeting with the U.S. team could happen isn't quite clear -- Richard.

QUEST: Right. So while we wait to find out all of that let's have your take on the leaked Pentagon e-mail, which apparently reportedly lays out ways

the U.S. could punish NATO members that have failed to support the U.S. in the Iran War.

Reuters says one of the options was to review Britain's claim to the Falkland Islands. The U.S. has long recognized the U.K.'s claim. The

British government insists the sovereignty is not in question and is stressed it would not be dragged into it. The leaked document, King

Charles, is in the U.S. next week.

So now, I mean, we don't know how true all of this is, but it certainly, if the U.S. is playing funny games now with NATO membership for Spain, the

U.K.'s claim on the Falklands, anything seems to be fair game.

ROBERTSON: Look, there has been a robust defense clearly by Downing Street, by the MOD and the U.K. as well. As you said, the British say that

sovereignty lies with the U.K. the Defense Minister, Luke Pollard, has said that as long as the people of Falklands want to be part of the U.K., that's

how it goes forward.

The United States President Trump has sort of declared that hemisphere that includes both South and North America to be sort of the U.S. sphere of

interest. The Donroe Doctrine, the Monroe Doctrine, if you will, so you know what President Trump or the Pentagon is putting around behind-the-

scenes are things that perhaps will cause more than sort of passing concern and not least there is oil off the coast of Argentina, which is close to

the Falklands, the Malvinas Basin, perhaps 60 billion barrels of oil there, so not insubstantial oil reserve, of which the Falkland Islands sort of

touches into and have sovereignty and access to some of it.

So financial interests there political interests, hard political messaging and difficult messaging as you say, when King Charles is due in the United

States at the beginning of next week, not the kind of mess he wants to get embroiled in, really.

QUEST: Right, but it just shows the further depths, in a sense, to which the fraying of alliances is underway.

[16:10:06]

ROBERTSON: Oh, absolutely. The Transatlantic Alliance as we imagined it, the special relationship that the U.K. believes that it has with the United

States and is often talked about, you know, all of that feels on the ropes. The King is going there, you know, to celebrate 250 years of the United

States independence, independence from the British empire, of course.

So, you know, the relationship that began to fall apart 250 years ago or a few years before that is in further disarray. The relationships that

underpinned global security since World War Two, which really is what NATO, of course, grew out of, yes, they are under strain and under threat. And

with it, people worry about the peace, security, stability and prosperity that those years brought.

These are real and genuine concerns. And every time The White House brings forth a criticism of NATO and the Alliance and what they're doing and what

members are doing or not doing, or President Trump wants to have sovereignty over Greenland, these are real and genuine worries.

QUEST: Nic Robertson in Islamabad, who I suspect you have many hours of long work ahead and a thunderstorm as well. Thank you, sir.

The President of Emirates Airlines says his airline has been through worse than the current Iran crisis. Sir Tim Clark and I discussed the conflict at

the CAPA Airline Leaders' Summit in berlin. Sir Tim believes Emirates will recover quickly once everything settles down.

In fact, he says perhaps no other airline is quite as good as handling disruption.

(BEGIN VIDEOTAPE)

SIR TIM CLARK, PRESIDENT, EMIRATES AIRLINES: Well, look, the people who are familiar with this part of the world, I think a lot of lot of passengers

are and I think most of the world is aware of what goes on in the Middle East, particularly in the UAE and Dubai in particular, this trauma, which

by the way, is still ongoing. There is not a clear resolution at the moment, but there is a history of our ability to restore operations fairly

rapidly.

And we've honed our skills probably more than any other airline in the world now, because we've been subjected to all sorts of things over the

last 20 or 30 years, whether it be the First Gulf War in 1990, the second in 2003, various disruptors in the global economy, you name it, we know

that.

And as a result of that, we are fairly adept now getting there, the fleet flying again.

QUEST: As you look forward now, the issue is fuel. The issue is fuel. I mean, you know, IEA says that Europe has got six weeks left to be -- about

five weeks since they gave that warning of aviation fuel left. How worried are you, you will run out of fuel?

CLARK: Frankly, we are not that concerned. We have adequate supplies over here. We see, we produce and refine our own Jet A1. We know with the effect

of the closure of the Strait, that 40 percent, well, actually 40 percent of European Jet A1 is imported, but only 50 percent of that say 20 percentage

points comes through the Strait.

So I think this is more a question of, in the long term, if this continues, there could be an issue more about the price of the inter-plane price of

fuel and that will then militate against possible demand growth in the future. We will see.

What we have found is that whenever we've been through these traumas before, the strength of demand is so strong. The yields that we are

currently getting are still about 30 to 40 percent, would you believe, because we've got a class mix issue, lower than they were this time last

year, we know that the demand will take price increases surprisingly.

Others in other segments, particularly in the budget carrier area, are more price sensitive. And they're probably getting a little bit concerned about

what it may do if the fuel goes to $140.00 or something like that.

QUEST: Now, we've all seen the various videos, we've all seen the various influencer stuff, but this idea that both visiting the place and flying

over the hub is safe has it a perception of that taken a knock? If it has, what is it going to take to convince people that Dubai is what it was?

CLARK: You know, Richard, again, I go back to what I said in the early days. We've had a lot of issues in this part of the world over the last 40

years. I've mentioned a few of them, but certainly not all.

After each of these events, the draw of Dubai, which is now -- and the UAE has produced an economic operating model, which is the envy of the planet.

Frankly, I say that not because I live here, I am part of it. Because if you look around and see what these people have done, the power of this is

not half an inch deep.

[16:15:10]

It really is some very strong and I believe that once this is over, it will not take much, it certainly won't take much for Emirates to get back into

the saddle. It certainly won't take much for us to project the brand quality and the strength that brand, which is basically a good one, that

Dubai is a great place for business, for hospitality, et cetera. And they are dealing with this in a manner which is very upbeat.

So there is a great belief that Dubai will continue to excel, and the UAE come to that, that the aviation entities don't forget we have Fly Dubai as

well, which is a very big, player in this part of the world, will go back to their normal and expand, as we have always.

QUEST: Final thoughts, Tim, Emirates, this is -- I've known you a long time, Emirates was extremely fortunate that you are still at the helm in

such a crisis, being -- yes, you've got a great team, I can hear all of that, but at the end of the day, your vast experience of the industry

crises and solid direction, is to the airline's advantage. You must see that.

CLARK: Look, of course I do. In cry times like this, you need leadership. You've got to -- you know, you've got a hundred thousand employees in the

group and the leaders have got to be seen to making the right decisions, being there for the staff and not showing any signs of concern. Frankly,

I've been through -- personally, I've been through worse than this. I am absolutely determined to make sure that we get through this and that we are

after 41 years of building this airline, that we are not going to allow it to falter or slow down.

(END VIDEOTAPE)

QUEST: And that certainly can be taken to the bank, I guess. Sir Tim Clark talking to me.

A U.S. Special Forces soldier involved in Nicolas Maduro's capture, in court now for allegedly cashing in on top secret information about the

raid. In a moment, the former chair of the of the U.S. SEC, the Securities and Exchange Commission, on this whole Polymarket of people betting on

events that they already know are going to happen. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: A U.S. soldier who helped capture Nicolas Maduro, the former president of Venezuela, well, this soldier is now in court for allegedly

wagering on the top secret operation.

[16:20:10]

It is quite extraordinary, but these are the facts that has been put forward by prosecutors who are accusing him of placing long shot bets on

the prediction site, Polymarket.

The details from Kara Scannell.

(BEGIN VIDEOTAPE)

KARA SCANNELL, CNN CORRESPONDENT (voice over): A major arrest tied to a suspicious $32,000.00 bet that paid out in January by a trader who used the

name Burdensome Mix. The bet was a long shot that longtime Venezuelan President Nicolas Maduro would be out by the end of January.

Shortly after it was placed, a covert U.S. military operation ensued, extracting Maduro.

VICTOR BLACKWELL, CNN ANCHOR: President Trump says the U.S. carried out large scale strikes on Venezuela overnight.

JESSICA DEAN, CNN ANCHOR: Captured Venezuelan President Nicolas Maduro arriving in New York.

UNIDENTIFIED FEMALE: This is unprecedented. This is history in the making for Venezuela.

SCANNELL (voice over): Law enforcement now alleging that the trader who made over $400,000.00 is U.S. Special forces soldier Gannon Ken Van Dyke

and that he was involved in the planning and execution of the Maduro raid.

Van Dyke is alleged to have misused classified government information for personal gain and more bets and trades timed suspiciously around major news

developments are in question.

Fifteen minutes before President Donald Trump posted on Tuesday that he would extend a ceasefire with Iran, traders placed a whopping $430 million

bet that oil prices would drop.

The trade is one of four massive bets that preceded major announcements in the U.S. Iran conflict since late March, according to Reuters, raising

concerns about potential insider trading.

Last Friday, investors bet $760 million that oil prices would drop. Twenty minutes later, Iran's Foreign Minister said the Strait of Hormuz would

reopen. After the post, oil futures fell 11 percent, and earlier this month, less than three hours before President Trump announced on Truth

Social, a U.S. ceasefire with Iran, traders had bet $950 million that oil prices would fall. That bet paid off as well. Oil futures fell 15 percent

after the post.

SEN. CHRIS MURPHY (D-CT): This is corruption. This is just astounding corruption.

SCANNELL: These are not isolated incidents. Democratic Senator Chris Murphy called out a $580 million bet placed 15 minutes before Trump posted on

Truth Social he would delay striking Iran's energy infrastructure, it was another winner. Oil futures plummeted 15 percent.

MURPHY That kind of scale never happens on a Monday morning at 6:50, but it was happening for a reason, because people that were making those bets knew

that a few minutes later, Donald Trump was about to post something on social media.

SCANNELL (voice over): There are no obvious ties between the trades and White House officials, and a White House spokesman told CNN, any

implication that administration officials are violating the law is, "baseless and irresponsible."

ELIE HONIG, CNN SENIOR LEGAL ANALYST: The key phrase that makes something insider trading under the law is if somebody is trading based on material,

nonpublic information.

The question essentially, is this information that was known to the general public outside the Halls of Congress, outside of The White House, outside

of government itself?

SCANNELL (voice over): Last month, The White House sent a memo to staff reminding them that, "... the misuse of nonpublic information by government

employees for financial benefit is a very serious offense and will not be tolerated."

(END VIDEOTAPE)

QUEST: Now, President Trump said this about the latest arrest.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: The whole world, unfortunately, has become somewhat of a casino.

I was never much in favor of it. I don't like it conceptually, but it is what it is.

(END VIDEO CLIP)

QUEST: It is what it is, like a casino.

On these prediction sites, we can bet on nearly everything from elections to sports, entertainment, even the daily high temperature. Only this week,

a weather sensor in France's busiest airport, Charles De Gaulle, was tampered with in what the French weather associates suspects was a betting

scam.

The prediction betting site, Kalshi suspended three U.S. political candidates for betting on their own races. Kalshi, is saying the trades

were relatively small, but still constitute political insider trading.

Gary Gensler is with me, the former Chair of the Securities and Exchange Commission, also a podcast, "Power and Consequences," that recently covered

the prediction market. Gary is with me now.

Let's first of all just deal with this one with the soldier. I suppose the argument might be put forward that the system worked. Polymarket reported a

suspicious trade, an investigation took place, and somebody is now facing prosecution, ergo, the system worked as it should.

[16:25:10]

GARY GENSLER, FORMER CHAIR OF THE SECURITIES AND EXCHANGE COMMISSION: Well, Richard, I am so glad to be with you and to hear Kara Scannell's report and

she does a fine job.

Look, I am very proud of the work we did back in President Obama's administration, where we actually put in place the laws they're using right

now to go after Master Sergeant Van Dyke, and that is basically a government official can't trade on material, nonpublic information, or

their friends can't trade on it and we put that in place based on a movie called "Trading Places" and Eddie Murphy, you might remember that movie.

I think we need to go a little further, though. I think probably Congress needs to say, look, nobody in the government nor their friends or family

should be able to trade on this stuff. I think it is too hard to police this and to enforce it rigorously, these trading on prediction markets

around geopolitical events.

QUEST: Right, but two things have to happen here, Gary. First of all, the parties involved have to be so morally corrupt that they think it is okay

to bet on something that they know is going to happen, but the second thing is that the Polymarket and these predictions are now so small and tightly

framed that for you to bet on something and win by definition, almost suggests you had something, because otherwise you wouldn't have been

foolish enough to take a large risk on something as narrow as which tree will the sparrow land on?

GENSLER: Well, it is betting, and I think you're using the right term there, but I think that's -- look, it has been true since antiquity, we

humans like to bet on things and we go through different phases in public policy as to whether we ban it or we allow it and so forth. I think no good

comes from it, though if it is around assassination, war, terrorism, unlawful acts.

And in fact, Congress in 2010 gave a small agency, the Commodity Futures Trading Commission authority to ban those, prohibit them and I think that's

what I did when I was chairing that agency. We voted on that back in 2011.

QUEST: Can I suggest that perhaps there is a cultural shift? And, you know, there are numerous allegations and most unfounded or at least have not been

proven that members of the administration, arguably even the President's family in some shape or form, are involved in business conflict of

interest, cyber, crypto, they are doing deals with people in parts of the world that they are also involved in foreign policy.

Now, everybody involved denies that there is anything to do with it, but it sets a tone. It sets a tone of what is acceptable.

GENSLER: As Simon Johnson and I explore in more depth in our "Power and Consequences" podcast that we just put out two or three weeks ago on this,

I think there were two things that happened. One, the sports leagues wanted to have more of this. Adam Silver, who runs the National Basketball

Association in 2014, famously wrote, "Betting is happening, we may as well embrace it," and I think that happened and then you're speaking about a

second thing is that this administration, the current administration, has embraced business in a way, and the family of the President has embraced

business that even the son of the President has investments in Polymarket, advises the other one, Kalshi.

And so the public, you know, ask questions, and so I was pleased to hear, maybe the President would support congressional authority to prohibit this

stuff and make sure that nobody in government can trade on these platforms.

QUEST: Gary, I am grateful. We will be back with you again at some point to help us understand these tricky areas. Thank you very much, former head of

the SEC.

GENSLER: Thank you so much, Richard.

QUEST: Now, what does Polymarket say, they addressed the U.S. soldier's arrest. Speaking on X, the company said, that Polymarket had referred the

matter to the U.S. Justice Department, and the arrest is proof the system works.

We should note, CNN has a partnership with the prediction market, Kalshi, and use its data to cover major events. All editorial employees are

prohibited from participating in prediction markets.

As we continue tonight, governments in Asia are trying to manage the energy crisis. The U.N. is warning that pain will be felt most by those already on

the margin, in a moment. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[16:33:04]

QUEST: Hello. A warm welcome back. There is more QUEST MEANS BUSINESS in just a moment.

When the war in Iran has left U.S. missile supplies severely depleted. We will discuss what that means for the U.S., Europe, and the rest of the

world.

Also, I will speak to the author who says globalization isn't dying, it's being rebuilt without the U.S. in the wake of Donald Trump's trade war.

Here is the book. "The World Trade War".

Before that, this is CNN, and here, the news comes first.

The White House says President Trump's son in law, Jared Kushner, and the special envoy Steve Witkoff will travel to Pakistan on Saturday, where they

will meet with Iranian officials. Iranian foreign ministers arrived in Islamabad.

Iran's semi-official state media says the purpose of his trip is to meet with Pakistani officials, and he's not planning to negotiate with U.S.

officials there.

The criminal investigation into the Federal Reserve Chair Jerome Powell has now closed. The Justice Department was looking into accusations the

president made about Powell, as the Fed Chair oversaw expensive renovations at the headquarters in Washington that is dramatically over budget.

Dropping the probe clears the way for President Trump's nominee, Kevin Warsh to be confirmed as Powell's successor.

The Israeli Prime Minister Benjamin Netanyahu says he is healthy and doing fine, after undergoing treatment for prostate cancer.

The Israeli leader had not previously revealed that he had the cancer. Sources are telling Sean and it was first detected several months ago.

It is perhaps in Asia where the effects -- except for the Gulf, the effects are being felt, and the immediate consequences of the straits being closed

to shipping.

Most of the oil that goes through the Straits eventually travels east.

[16:35:02]

And with little spare capacity to protect against energy shocks, governments across Asia are rolling up measures to manage the strain.

So, whether it's long queues for fuel across the region, places like Bangladesh are saving power by closing schools and universities early.

Now, a U.N. panel on inequalities meeting in Johannesburg, the economist Jayati Ghosh is there and joins me now.

I get at one level, Jayati. It's sort of obvious that if you haven't got the fuel, people are going to suffer. But I don't think in many parts of

the world, it's appreciated how Asia is bearing a brunt of this.

JAYATI GHOSH, ECONOMICS PROFESSOR, UNIVERSITY OF MASSACHUSETTS AMHERST: Yes, you are absolutely right. It's not just Asia, it is the poor in Asia,

and it is the working poor, those who are running micro-enterprises, self- employed, those who need cooking gas, because they are, you know, having food stalls in the streets. They are suffering because they are unable to

get cooking gas. It's not just that it's higher priced, they are unable to actually access it.

And when they don't provide the street food, it means the working class that relies on that street food has to pay much, much higher prices. So, it

is really the poor across South India, South Asia, across the most of the region, other than China, that is really already suffering from this.

QUEST: You see, the real problem, though, is what you do about it. Because, at one level, yes, you can release strategic petroleum reserves in other

parts of the world. But if, you know, what is a solution that actually alleviates the suffering when there isn't the oil or gas to deliver?

GHOSH: Well, I think you are absolutely right that the absence of inadequate reserves is a major issue, and something that all governments

have to take into account now for the future. But it is also the case that there are better ways to think of distributing this when there is a

shortage, that you do not deprive those who will lose their livelihoods because of this.

(CROSSTALK)

QUEST: Right.

GHOSH: That you do not deny those who would go hungry for that absence.

QUEST: Isn't this just an example of a -- of a sad truth that we have always known, which is in real times of desperation and trouble, it ends up

being every man or woman or country for themselves. It's not nice, but that's what happens, and that's what we are seeing.

GHOSH: Well, that's not true, because there are some countries that are handling it better, and there are other countries where the poor or those

who are relatively worse off, are left to fend for themselves.

And this is really what our meeting today in Johannesburg was all about. We want to set up an international panel on inequality, which is looking not

just at the extent and nature of inequality, but the drivers of this inequality, so that we can do something about it.

And what you are observing is a very typical driver that shocks affect different countries differently depending on where they are in the global

economic hierarchy, and that within those countries, they affect the poor most.

But these are not inevitable. These are policy choices.

(CROSSTALK)

QUEST: All right --

GHOSH: There are countries that have learned how to handle the shocks.

QUEST: OK, but the idea of an international panel on inequality sounds good. But how do you prevent it turning into just basically a talking shop.

And more significantly, if the U.S. isn't going to become involved, then you are on a hiding to very great difficulty. I'm not saying it's

impossible, but this is the sort of thing that the U.S. would have led in the past.

GHOSH: Well, yes, but let's forget about the past. Let's deal with the world we are in now. And what we are talking about is a scientific panel

that will look at the nature and causes of inequality, the extent of it, how it affects different categories of people and countries, and what can

be done about it.

It's a scientific panel that will advise and be able to assist people and governments to deal with these shocks, with deal with these processes that

are generating greater inequality, and deal with the inequalities that are also destroying our democracies.

So, the U.S. can choose to be involved or not. I don't think that would affect this panel.

QUEST: I'm grateful for you joining us. And when there is more to talk on this, we'll talk to again.

Thank you for joining us this evening.

There is a new warning amid hope that talks between Iran and the U.S. will resume. The wars drain the U.S. of costly and critical weapons. But how bad

has the depletion been? After the break.

(COMMERCIAL BREAK)

[16:42:23]

QUEST: The war with Iran has significantly depleted the U.S. military's supply of precision missiles, and experts say the stockpile is no longer

sufficient to confront another potential adversary, China or Russia, for example.

Since the Iran war began, the U.S. military has burned through nearly half of its precision strike missiles and half of its inventory of THAAD

missiles, which are designed to intercept ballistic. It has also used nearly half of its Patriot air defense missiles, according to the Center

for Strategic and International Studies.

Retired U.S. Army Major General James "Spider" Marks is with me.

Spider, are you surprised or shocked? Or you choose your own adjective for how you regard the wanton usage of such expensive technology and missiles

in such a short period of time.

MAJ. GEN. JAMES MARKS (RET), CNN MILITARY ANALYST: Richard, those are not adjectives. Those are verbs. And, in fact, I am not -- I am not surprised

that the use of -- and again, you described it as wanton. I wouldn't put that adjective on top of it.

I would say that we have conducted the U.S. and Israeli air and maritime campaign, has been ducted with incredible precision and at great cost.

If you'll recall, about three weeks ago, the Department of War came forward and said, Look, we need an additional $200 billion. That was as a result of

not only what we see in Iran, but the consequence of that and as it affected those other combatant commanders, the Indo-Pac commander, the

European commander, NATO, the Southern Command -- Commander. Transportation command, who owns all the airlift.

All of those combatant commanders came forward and said, look what is happening in Iran is drawing down the reserves and the stockpiles.

(CROSSTALK)

QUEST: Right.

MARKS: -- to a dangerous level. And I now am at risk of meeting my obligations.

So, that's my readiness obligations against which you evaluate me and the readiness posture that I'm supposed to maintain.

(CROSSTALK)

QUEST: OK.

MARKS: So, yes, it's absolutely crystal clear.

QUEST: So, the way I read it this morning, you know, the U.S. will buy, say, a hundred of the more expensive missiles a year, and it's going

through -- it's gone through a thousand of them so far.

How can the U.S. replenish those supplies as quickly as possible, even allowing for the recent agreement with, for instance, defense manufacturers

where they will provide more quickly if they can?

[16:45:06]

MARKS: Well, bottom line is you, you can't push more of that through a very thin head of the needle. There is -- there is a guaranteed timeline that is

anticipated as a result of the stockpiles that have been decreased, and how we replenish those, and then, get to a level where we are at it excess

capacity, so that we can handle contingencies.

Richard, there is no quick solution to this. There are some possibilities. Obviously, you look at the proliferation of unattended platforms -- drone

platforms.

(CROSSTALK)

QUEST: Right.

MARKS: The ability to strike with those, to surveil with those, to combine both of those capabilities. Those need to be accelerated in the meantime,

because we are not going to take risk and not produce those other capacities, those higher-end requirements that we have, but we need to

increase those that we can where we can.

QUEST: So, if you take, for example, China, looking at the situation, seeing the U.S. bogged down and using, whether through Ukraine or through

Iran, and potentially using even more.

And all China has to do is basically just do nothing and just continue to manufacture more at the pace that it is. They are sort of sitting pretty in

a way.

MARKS: They are, Richard, you just summarized it. Look, I think the perspective that China has right now as a result of what has taken place in

Venezuela, sanctions against Russia, albeit they have been lifted, they will be put back on in place, so, what's happening in Iran.

China has for decades been in the discount energy market. That has gone away based on the past few months. So, they have got this additional ball

that they have to juggle, along with their debt challenges as a result of the Belt and Road Initiative, deflation.

(CROSSTALK)

QUEST: Right.

MARKS: And the then, obviously, their demographic challenges. So, China has got some real concerns. So, they have a much longer horizon in terms of how

they want to resolve their what they call their Taiwan problem.

So, you are exactly right. They can sit pretty, as you described it, as the United States works the requirements they have in Iran, and then, put more

challenges in terms of what will happen in the Indo-Pac region.

Quick final thought from you, Spider. This business of this soldier, allegedly poly market betting on something of which he was involved. If

it's true, it's criminality, pure and simple. From that point of view, I understand. But from a military point of view, from your point of view,

how, how distasteful do you find it?

MARKS: Well, it's extremely risky, and it's a security breach.

For this soldier, whoever he or she is, you have to assume that based on what they do for a living, they are under constant surveillance in a

digital world. And for them, to enter into a poly market and bid on the outcome of a -- of a potential operation.

They have to assume that every keystroke they make our priority, that they are potential adversaries have put together what they do, who they are, and

what their, you know, what their inputs look like.

(CROSSTALK)

QUEST: Yes.

MARKS: They have access to. That's the problem. That's the operational security problem. That's naivete at its highest level, and as you

indicated, it's also criminal.

QUEST: I'm grateful, sir. Thank you. Have a good weekend.

QUEST MEANS BUSINESS, get use --

(CROSSTALK)

MARKS: Thank you, Richard.

QUEST: Get use to the name calling and the insults, as trade talks become increasingly fraught. Our next guest says the old-world order will not

return. When it is right, then what's next? How do we make sense of where we go?

(COMMERCIAL BREAK)

[16:51:25]

QUEST: Canada's industry minister says her country wants to join the E.U.'s made in Europe initiative, telling the F.T., industrial policy in Canada

and the E.U. should be aligned.

Canada has been seeking new trade partnerships since President Trump returned to Office. Now, the president's commerce secretary, Howard Lutnick

insulted Canada in the lead up to crucial trade talks, saying, in his words, they suck.

With me is Professor Richard Baldwin, professor of International Economics at the IMD Business School. Here is your book, the author of "World War

Trade: Conflict, Containment, and the Emerging World Trading Order".

Globalization is not dying. You say it is being rebuilt, but rebuilt into what professor? We are -- we don't really have a clear idea of where

everybody stands, because the music is still playing.

RICHARD BALDWIN, AUTHOR, WORLD WAR TRADE: Well, I think that's absolutely right. But what we can say is that, to a large extent, the kind of lawless

behavior that the U.S. has been pursuing in trade policy has not spread. Other countries are not trying to coerce their weaker neighbors into making

concessions and stuff.

So, to a certain extent, it's the rest of the world trying to get along, and the U.S. continuing to be more or less a lawless actor of trying to

bully other countries into doing things. Now, the way things are self- organizing is that countries are starting to sign free trade agreements with each other, and they are starting to group around in bigger assemblies

of tools of predictability.

(CROSSTALK)

QUEST: Right.

BALDWIN: Of rules. And I think that's some way, one likely way we are going. And it's the one that Mark Carney, for example, talks about

(INAUDIBLE).

QUEST: Oh. I was -- you beat me to it. I was just about to quote to you, sir.

(CROSSTALK)

BALDWIN: Yes.

QUEST: "To help solve global problems, we are pursuing variable geometry". In other words, different coalitions of different issues based on common

values. But the problem, of course, is the U.S. as the largest market. They had legitimate -- they had legitimate trade concerns about the way they

have been treated. But they threw the baby out with the bath water, and now, it's difficult to see. Are they going to suffer in the long term as a

result?

BALDWIN: Well, I think what you can already see, I mean, this has been going on for more than a year. The U.S. is just becoming a more closed

economy. They are importing less, but they are also exporting less.

So, if you look at the U.S. share of world imports, it's less than 15 percent and falling. And the same is true of exports. It's even a lower

share.

So, basically, when you start blocking off tariffs of trade with other partners, you become more closed.

The rest of the world, however, is not doing that. Last year, 2025, there was a largest export in the world -- in history. So, it's not like the rest

of the world is shutting off the trade.

(CROSSTALK)

QUEST: Right.

BALDWIN: It's really just the US.

Now, I -- that, you know, may or may not suit the U.S., but it's not a shame for the rest of the world, because although, as you pointed out, it's

the largest market, it's only about 15 percent -- most. So, it --

(CROSSTALK)

QUEST: OK. But have we -- have we reached an equilibrium in terms of tariffs with the U.S. do you think? Where, you know. yes, there may be the

old little burst from the president. But by and large, we now know where everybody stands, and therefore, people can sort of get on with doing

business on that basis.

[16:55:06]

BALDWIN: I think that's very much correct. I mean, you have to try and think about what President Trump really wants to do. And he has this kind

of balancing act that he loves tariffs. He thinks is the most wonderful thing in the world, but they raise prices for his base, and he -- and he

has been lowering the tariffs by stealth since the fall, and I think they are at a point where he believes that they are doing what he wants them to

do without doing too much damage to the affordability crisis.

So, I think we are pretty much in a stable point. I mean, we can go into the legal basis, which is also kind of stabilized things, but I think

politically, they are pretty much where he wants them to be.

(CROSSTALK)

QUEST: Right. This whole question of tariffs, it's almost as if we were told the world is flat, after all. The orthodoxy that you and I grew up

with that tariffs are generally bad, unless they are in specific circumstances.

Do you see any evidence that, that has fundamentally been rejected by most economists?

BALDWIN: Well, I mean, the key was that there are certain circumstances when putting taxes on imports makes sense, just like there's certain

circumstances when it makes sense to put taxes on one thing or another. But what Donald Trump did was put taxes on all imports, from almost everybody.

So, it wasn't a tool, it was really sort of a bludgeon, and that there are no economists who think that's a good idea.

That -- if that's -- if I understood your question correctly,

QUEST: I'm grateful to you, sir. You did. And we thank you for joining us tonight.

Now, we'll take a "PROFITABLE MOMENT" after the break. QUEST MEANS BUSINESS, live from London.

(COMMERCIAL BREAK)

QUEST: Tonight's "PROFITABLE MOMENT". Now, at one level, you can arguably say, in the case of the allegation against the soldier who bet on the

outcome in Venezuela that actually the system worked.

A bet, an alleged bet was put forward that would have been criminal, and an investigation has taken place. The person allegedly has been found and

charged, and the law will take its place.

So, go all done and dusted. No, I think that's too simple, because the reality is, the very nature of the very specific bets that people will put

upon does lend themselves to some form of chicanery and some sort of nonsense and jiggery pokery.

[17:00:08]

For instance, how many bells will Quest do at the end of QUEST MEANS BUSINESS tonight? Would you take a bet on that?

Look, I can't, because I don't know how many bells I am going to do. But does anybody else? You get the point. It doesn't really matter.

Because that is QUEST MEANS BUSINESS for this Friday night. I am Richard Quest in London.

Whatever you are up to in the hours ahead, one, and the two, and the one, two, three, four. I hope its profitable. I'll see you in New York on

Monday.

Five, six.

END