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Quest Means Business

Rubio Recent U.S. Strikes During Ceasefire A Defensive Operation; Conflict Has Sprawling Impact On Global Economies; Spirit Airlines Blames Demies On Spike In Jet Fuel Costs; U.S. To Test New A.I. Models For National Security Risks; U.S. Farmers Under Pressure Amid Tariffs And Iran War. Aired 4-4:45p ET

Aired May 05, 2026 - 16:00   ET

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

[16:00:00]

REPORTER: -- are a moot point then?

MARCO RUBIO, U.S. SECRETARY OF STATE: Look guys, I love talking about this topic. This is about the War Powers Act.

REPORTER: Yes.

RUBIO: Okay, I love it. I was hoping somebody would ask. All right, hold on, hold on! No, you don't let me answer. I've got to answer the question.

Okay, and I love it. I will tell you why I love it because even as a senator, I said something.

The War Powers Act is unconstitutional 100 percent. Now, this is not the position of me. It is not the position of the President of the United

States now. This is the position of every single president that has occupied this position since the day that law passed. It is completely

unconstitutional.

Now, we comply with it in terms of like notification, because we want to preserve good relations with Congress. Right? And we do that.

But even as a senator, I would say that the War Powers Act is 100 percent unconstitutional. And look, I know some of you, whatever you want to say,

but this is not this President's position, that has been the position of every single presidential administration since the day that law passed, it

is an infringement on the President's constitutional powers.

We don't acknowledge the law as constitutional. Nonetheless, we comply with elements of it for purposes of maintaining good relations with Congress and

we want them to be involved, and we want them to be informed.

I have gone on Capitol Hill, I don't know, four times this year for all senators and all House members and Intel Committee and the Gang of Eight.

We want them to be involved in this. But I want to be clear on the point of the War Powers Act. It is unconstitutional and every president and every

administration has taken that position.

All right, guys, I gave you 50 minutes. Thank you. Thank you, guys. Thank you.

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": It is a different world. The Secretary of State taking The White House press

conference, news conference with Karoline Leavitt now on maternity leave and that was a robust, I would say -- good evening. It is QUEST MEANS

BUSINESS with you this evening.

It was the Secretary of State delivering the press briefing and whilst the Secretary was speaking, we learned that a ship in the Strait of Hormuz has

been struck by a projectile. We don't know any more details than that. It is happening whilst the U.S. says the ceasefire with Iran is still in

effect.

The Secretary of State also making clear again and again and again that in his words, that the actions taken by the U.S. in the Straits would be

defensive, not offensive. And unless the Iranians -- they would only retaliate once the Iranians attacked them or went on the offensive against

them.

Nic Robertson is in Islamabad.

It was a very different type of news conference. It was certainly -- I mean, there was a lot of information thrown at us. I am not sure much of it

was new.

But you're the expert.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The big takeaway I thought kind of came at the end. You're right. It was -- a lot of it was

kind of repetitive, but this idea at the end that the way to -- the United States views the leadership in Iran and how to deal with them, the elected

officials are the ones that he thought perhaps had -- were most in touch with the population of the country. Those are the people, he said they are

dealing with -- The White House is dealing with in the talks. It was the clerics in the IRGC, the military types, the hardliners who are sort of out

of touch.

And he said, we absolutely have to put enough pressure on them to get them to change their position in the Strait of Hormuz, which is the IRGC Navy to

the point you were just mentioning about the possibility of a ship being struck in the Strait of Hormuz in the last hour or so. The IRGC Navy today

said that anyone that goes along with the United States' Project Freedom and tries to get out of the Strait of Hormuz without getting authorization

from Iran, was going to get targeted.

It is not clear what has happened yet, but what the Secretary of State went on to say there, apart from the sort of financial pressures to bring

pressure to bear on the Iranian leadership, to get them to conform to what the United States wants, surrender is how the Iranian President put it

before, and he was clearly not up for that.

Also involved, global diplomatic isolation. I think that's a phrase we haven't heard being bandied around by the administration lately. It does

very much appear that we are entering a much longer term phase of trying to pressure Iran to get to where they want -- global, international isolation.

All of these sanctions that the Secretary is talking about, that's going to also mean calling in allies to do the same. A new picture emerging here, I

think, Richard.

QUEST: But as I take what we've just heard and what you say, it doesn't sound like the U.S. is urging or ramping up to go back into fighting. It is

just prepared to wait it out, however painful. And, you know, the Secretary talked about the Iranians are up for quite a bit of pain, but no one's pain

is unlimited.

ROBERTSON: Yes, he did. And there was another thing that he said, I think he said that Operation Epic Fury, if I am correct, is over. The sort of the

bombarding of Iran is over.

[16:05:08]

We are into a different place now. Obviously, there is this whole question of the War Powers Act and the 60 days and a vote that would prevent or

allow the President to take the country deeper into war, and obviously, what we heard from The Pentagon today about this umbrella of protection

over the Strait of Hormuz that involved the 82nd Airborne, who were ready to parachute into any situation and potentially open the way for more

forces to follow on.

Notwithstanding all of that, the Secretary of State is painting a picture of a different phase here of building that pain, of trying, but the

patience of the U.S. electorate, the patience of the world, um, is now going to be tested against the patience and endurance of the hardliners in

Iran, that comes across.

We are in this for the long haul, it appears.

QUEST: Nic Robertson. I am grateful. Thank you.

Kevin is at The White House. Kevin Liptak, a brave new world, Mr. Liptak with the Secretary of State. It was robust. You've got to admit, he gave as

good as he got.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, and it was interesting to hear him talk, you know, at an extended length about the Iran War, just

given he has not been the public face of this conflict by any means. That has been occupied by Pete Hegseth or J.D. Vance or Steve Witkoff.

You know, even the diplomatic front has not been carried out by the man who is ostensibly America's top diplomat, Marco Rubio. And so it was

interesting to see him there parrying back and forth about the Iran War.

And I do think, you know, that comment that Nic pulled out was, I think, extremely notable when the Secretary of State said twice that the operation

is over, that Operation Epic Fury has now concluded and in his words, they have "achieved the objectives of that operation."

And it was significant because in the context of this question about what happens to Iran's nuclear material, you know, it is still buried far

underground. That was one of the objectives of the operation. You know, one of those four objectives was to ensure that Iran never obtained a nuclear

weapon. By Rubio's own admission, they are still in negotiations about the nuclear program.

And so, it is hard to see how he can claim that those objectives have been achieved, given that before the war began, they were in talks about the

nuclear program. Now that the war is over, they are still in talks about the nuclear program. And so it is a very curious comment from him and does

lead to the question of what happens if the President decides that he needs to start bombing again, if he thinks that Iran has broken the ceasefire, if

he thinks that the diplomacy has reached a dead end.

He seems to be sort of ruling that out, which I think is much further than we've heard any official go so far.

QUEST: It all begs the question, where are we tonight? I mean, its understanding what is likely to be next. Because if this is a wait and see,

a pressurization campaign or pressured campaign, if you will, that could take a lot longer because Iran seems to be in it for the long haul as well.

LIPTAK: And I think it is also evident that the President doesn't have a lot of time. You know, he is under political pressures that don't exist

inside of Iran, whether it is rising price of gas, whether it is the unpopularity just generally of this conflict. The President is operating on

a timetable that is so vastly different from what the Iranians have in the past demonstrated they are willing to endure when it comes to these

negotiations. And so it is an open question of where exactly that leaves us.

The other, I think, time pressure and this came up again and again in this briefing, is the President's trip to China next week. Remember, he did not

want to go to Beijing while this war was underway. That's why he delayed it from the beginning of April until now, under the expectation that this

would all be resolved by now.

Marco Rubio seemed to shrug all of that off, saying that, yes, this would be a topic of conversation with Xi Jinping, but I think it is clear that

the President does not want to go into this and have to explain to President Xi why the cost of gas, the cost of fertilizer, all of these

things that China relies upon that go through the Strait of Hormuz are now higher. That's going to be a very awkward conversation, I think, when he

shows up in Beijing next week.

QUEST: A last quick question, a bit -- I mean, no reporter was told that you're a failed hack or that you are, you know, useless and that, you know,

it must be -- it is sort of back to normal.

Do we know how they're going to do the other press briefings while Karoline Leavitt is off?

LIPTAK: Well, we may see Rubio again. We may see President Trump himself. We could see the Vice President J.D. Vance. The way it has been described

is essentially a rotation of some of the very senior members of the administration, which is always great to get them at the podium and to

question them directly.

Our understanding is that Karoline Leavitt will not be gone for very long. Remember when she had her first child when she was a campaign spokesman, I

think she was on was on television the day after she delivered her baby.

[16:10:11]

So she does not plan on a lengthy maternity leave, but at least in the, you know, days or weeks that she will be gone, it will be a rotation that we

expect, perhaps on the news of the day, perhaps on whatever The White House wants to be telegraphing on that particular moment.

So there should be some interesting briefings, I think, in the next few weeks.

QUEST: A brave new world indeed. Kevin, I am grateful. Thank you.

As Kevin was talking about, U.S. gas prices have soared. They are now averaging $4.48 a gallon, which is quite -- for Americans, that's

extraordinarily high. And of course, in other parts of the world, it is much higher, indeed.

In Mexico, it was closer to $5.15 when you do the conversion. In Chile, drivers are paying $6.06 after converting and in Brazil, the average right

now is the equivalent to $5.11, again, once you've done the necessary conversion.

The around the world, as you and I have talked about on so many occasions, depends on where you are in a variety of ways. So Germany says exports will

flatline because of the disruption. It was originally projecting slight growth.

Brazil's Central Bank is now saying inflation may already be higher, expecting higher price and on the flip side, China's green energy sector, a

real boost. Solar, battery and electric vehicles with record highs.

Now, keep in mind none of those countries are directly involved in the conflict.

With me, the former IMF chief economist, Gita Gopinath is with me. Gita, it is good to see you, up in Cambridge.

Now, the one thing that's not or that I am trying to understand through all of this, is how economies are adjusting, and as they adjust, what is the

downside? What are, if you like the collateral effects? What are we seeing?

GITA GOPINATH, FORMER IMF CHIEF ECONOMIST: Richard, I mean, firstly, there is, you know, serious damage to the global economy ongoing with every week

of this closure of the Strait of Hormuz and Project Freedom is certainly not letting many more ships go through the Strait.

So right now, if you look at the impact on the global economy, I think we are getting close to shaving off about a half a percentage point from

global growth, which would make it the first time in about five years that growth goes below three percent.

So there are real costs to the world economy with every week of this war that's going on now.

Now, yes different parts of the world are handling it differently. If you're an exporter like the U.S., you know, you suffer the inflation, but

otherwise it is less of a hit to your output.

But on the other hand, for many other countries, what they are relying on are the reserves that they have of oil and gas, including Europe and

including in China. But there is a bit of a race here right now between on the one hand, destruction of supply, which is what we are seeing on a daily

basis with the destruction of demand that's coming about with higher prices.

QUEST: So on the one hand, I mean, for many countries, though, it is just going to feel groggy and sluggish and sad in a sense. The U.S. isn't going

to go into recession, growth isn't going to go much below whatever. Europe may go a bit low, but again, it is just going to be slow growth.

I am thinking of those countries, developing nations, some parts of emerging markets where the effect will be much greater and possibly

recessionary in the extreme.

GOPINATH: Yes. So firstly, I do want us to keep in mind that this war is not over and we could very well be in a situation where we could have much

bigger price spikes and that pushes Europe into a recession. I think many things are still possible.

But in terms of countries that are already over the precipice, in a sense, countries like Sri Lanka, Bangladesh, Pakistan, these are countries that

with every dollar going up in terms of the price of energy and fuel, it is a huge hit to their economies.

We are barely coming out of crisis mode, and this is pushing them back into crisis. And of course, you have countries in Sub-Saharan Africa who are

suffering the impact of fertilizer prices going up, and therefore food prices going up

So the World Food Organization basically put out a number that said that if this keeps going on the way it is, we could have another 45 million people

entering food insecurity.

So yes, so I think this is real and much more painful for countries, people who live in developing countries, especially those importing fuel and

fertilizers and food.

QUEST: Is there a danger, Gita, that the developed world, the rich countries, the OECD, G7, G20, whatever, particularly -- when I say ignore

the plight of emerging, I don't mean it literally, but I just mean they don't give it enough attention.

[16:15:10]

It all just gets swept along because we are more concerned in the West with whatever we might be concerned with, and we are forgetting just how bad it

is getting in these other countries.

GOPINATH: I think it is usually plainly obvious how tough it gets for these countries. But, you know, the developed world seems to have taken a turn

away from helping many of these countries. We've seen a drying up of foreign aid, you know, U.S. being the latest entrant to that, but many

other countries also have stopped giving aid to these parts of the world. So, it is getting harder for them to get along when they keep getting hit

by these shocks that they didn't create that's just coming at them from outside.

QUEST: Monetary policy, just about impossible. Damned if you do, damned if you don't. It is very difficult now as to whether or not you sit on your

hands and look through the inflationary bubble that is building up or you deal with it.

What would you do?

GOPINATH: I would say that Central Banks are coming closer to the end of time, where they could say, well, we are just going to keep waiting and

watching to see how transitory this could be, because already inflation expectations have started drifting up in developed countries for the next

12 months and the next two years, they've started drifting up.

And so you do have to worry about it, so while, you know, a couple of weeks ago, you could say, well, we still have time, we can wait and see, I think

we are really nearing the end where it is going to become more difficult, which is why it is so important for this whole conflict to come to an end.

QUEST: If it came to an end tomorrow, we would still be feeling the effects in six months' time. Is that right?

GOPINATH: That is clearly correct. Yes, absolutely, yes.

QUEST: And how long -- and how long is this tail and how -- to sort of pull the analogy further than it should, how much will it wag?

GOPINATH: Right. So, I mean, right now, you know, based on inflation expectations in advanced economies, they've all drifted up by around 0.4

percentage points, 0.5 percentage points into 2027.

So that itself puts pressure on Central Banks in terms of not being able to cut interest rates, which otherwise I believe the U.S. would have done much

more readily in the absence of this conflict. But I also think there are other kinds of lasting impacts. One is -- you know, in terms of the

geopolitics, right? The disconnect or the decoupling that we are seeing between the U.S. and Europe, UAE pulling out of OPEC.

QUEST: Yes.

GOPINATH: I mean, these are breakdowns that are not -- we are not going back to the previous structure of the world, you know, prior to this

conflict.

QUEST: I am grateful, Gita. It is always good to see you. Thank you so much. Gita joining me from Massachusetts. Thank you.

Now, as we continue in tonight's program, we are going to be looking at two particular areas. We are going to be looking at fertilizers and what this

means for agriculture, because this is a major part of the issue and also the rising jet fuel, which is squeezing low cost carriers.

We've already seen Spirit go. Trump administration has abandoned, or at least not followed requests for help for low cost carriers. The head of the

association of value airlines, there is. He will be with me after the break.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[16:21:13]

QUEST: Spirit Airlines told a bankruptcy court today that it was the spike in jet fuel that left it no choice but to shut down for good. The Trump

administration declined last week to rescue Spirit, and it has now turned away other low-cost carriers squeezed by fuel costs as well.

The Association of Value Airlines, which represents the major budget carriers, had requested $2.5 billion in aid. The U.S. Transportation

Secretary, Sean Duffy, said this weekend they should try to tap the private market instead.

I am joined by Jonathon Freye, the executive director of the AVA. The reality is that offering support for value airlines. I understand they

bring down prices, I understand they support, if you will, the lower part of the market. But if they can't make money at it, they should go out of

business.

JONATHON FREYE, EXECUTIVE DIRECTOR, ASSOCIATION OF VALUE AIRLINES: Richard, I couldn't disagree more.

Our airlines, as you mentioned, are the single force in the industry that create price discipline across the country and across the industry.

QUEST: Except, if they -- you say they create price discipline, but they create price discipline in an unreal market that when prices go up, they

can't make a profit or they can't even stay in business.

So to the extent, why should they be given government aid?

FREYE: Richard, look, the model still works here in the United States when the market isn't distorted. The current cost environment that we are in

right now is a stress test on a sector that's already been under pressure.

And look, I think we are in a position of decades of bad public policy decisions that have brought us to where we are today.

You see it in the allocation of slots at the biggest airports. You see it in decisions about the utilization of airport infrastructure, about a tax

and fee structure that disproportionately burdens our travelers, our customers who are more price sensitive, perhaps, than those who regularly

travel on the high fare airlines.

And in a COVID era, you know, payroll support program that structurally favored, you know, the largest airlines with millions of dollars putting

them ahead of you know, the game, as travel returned after the pandemic.

QUEST: Are any of your other members in the U.S. -- are any of them in an existential crisis, would you say?

FREYE: Look, I think, Richard, our continued ability to deliver affordable airfare and keep communities connected, it does get more difficult the

longer the fuel crisis continues on.

QUEST: Right. But that's I don't want to -- I understand they are your members, but I guess what everybody is saying is who might be next? I don't

expect you to sort of answer that per se, but I do -- it would be helpful to know whether you believe any of the other value airlines is in extremis.

FREYE: Well, look, you know, Secretary Duffy recommended that, you know, our airlines look for private capital or capital on the private market. You

know, we are the disruptors. We are the startups in an industry that's been around for a very, very long time.

We operate with narrow margins in order to keep flights affordable for our customers. And the high-fare airlines, the Big Four have built decades of

collateral that provide them with much easier access to capital than many of our members can. They just have stronger balance sheets and a longer

credit history.

QUEST: So you think this crisis is of such a magnitude, bearing in mind that the government decided not to bail out Spirit. You know, the same

arguments was there.

[16:25:09]

Spirit, admittedly, was a much more difficult case. It was been in Chapter 11 twice, but do you think this current crisis of such a magnitude that the

normal rules of market economy should be interfered with?

FREYE: Well, Richard, you used a word there that I'd like to correct, this is not a bailout, and I should point out that after our CEOs were here in

Washington for a meeting with Secretary Duffy just a couple of weeks ago, we were asked by administration officials, tell us, you know, what it would

take to keep this sector competitive, and we submitted our list of suggestions to them, none of which deal with loans or funding that we feel

the department could initiate and that could truly improve the competitive environment here in the United States.

The program that you're asking about that we have been speaking with the federal government about is a shock absorber. It is temporary and targeted

relief only for fuel costs, and we think it is a program that, as we have sort of ideated, it would provide a double upside to the taxpayers.

It returns warrants to the government for an equity stake in the success of this industry. And all the while, of course, it keeps the communities that

we serve connected and it does so affordably.

QUEST: I am grateful, Jonathon, for you joining us tonight. Thank you, sir. I appreciate it.

For five decades, Wall Street has risen and fallen on the quarterly cycle. Those days could be about to come to an end. The SEC is looking to

eliminate the long held requirement. The Securities and Exchange Commission wants to instead give companies the option to share their financial results

just twice yearly, what in the old days, we used to call the Interim Reports, at least in the U.K., it was always known as interims as opposed

to quarterlies.

Allison Morrow is with me.

The quarterly has been well and truly and roundly condemned as encouraging short-termism. If the SEC goes ahead as it says it will and gets rid of the

mandatory requirement, do you think companies will abandon the quarterly in favor of the interim?

ALLISON MORROW, CNN BUSINESS SENIOR EDITOR: That is a great question, Richard.

I think it is pretty safe to assume that a lot of them will not abandon the quarterly model and here is why.

You mentioned, it is an option, not a mandate. So, it wouldn't be like everyone has to do it one way and companies have been doing it quarterly

every three months for almost 60 years, it has been required in the United States. And, you know, investors who are very powerful in this situation

are not inclined to enjoy less information.

There is a huge number of Wall Street firms who are saying, we don't want this, and are lobbying, you know, in Washington to try to get this changed

and trying to, like, convey to companies that they want more information, not less.

QUEST: Right, but isn't it -- I mean, you and I have covered this long enough, the absurdity of a company that misses by a penny on the quarterly

and the stock gets hammered and you know, the reason, you know, it is not long, blah, blah, blah, you know all of the things.

And indeed, the President himself has said the big difference between Japanese companies and American companies is they can take a long view

because they are not kneejerk worried about the quarterly.

MORROW: Yes, I think that's a fair criticism. And, you know, I think CEOs and investors alike share that criticism of the overfocus on, you know,

short-termism, as you said.

I don't know if there is a better model in the U.K. I was just reading that research shows about 50 percent of London listed companies end up reporting

quarterly anyway. There must be some advantage that they are getting out of it if they are going to keep doing it, too.

So the paperwork seems very annoying, I can sympathize with the CEOs on that.

QUEST: It is going to be fascinating, but just to confirm, the planners at the moment would not make it mandatory, but it is the option to continue,

so you could still do quarterly or you could do interims.

MORROW: That's the way I understood the SEC's announcement today, yes.

QUEST: Very good to have you. Thank you, as you're watching closely. Thank you.

MORROW: Thanks.

QUEST: Microsoft, Google and Elon Musk's xAI are letting the Trump administration vet their new A.I. models. U.S. officials will test their

platforms for national security risks before they release the public.

Washington has been spooked recently by early versions of Anthropic's new Mythos model and its potential cyber vulnerabilities.

Hadas is with me. They've made a huge piece of information about this. I mean, the Anthropic -- the ability to go into other people's software, find

the problems within it, exploit the weaknesses, which, as I understand it, is the big problem. It makes sense to have some form of check and balance

on that.

HADAS GOLD, CNN A.I. CORRESPONDENT: Yes, it does feel like the U.S. government is tiptoeing closer and closer towards some sort of government

oversight over these very powerful A.I. models. That's different than the light touch approach we've seen from the Trump administration so far, and a

lot of this is sparked by the fear that was caused by Anthropic Mythos -- Mythos, I am not quite sure which way to say it -- and other models, OpenAI

has its own very advanced models that have really spooked not only Washington, D.C. but also banks and utilities because of just far out there

capabilities when it comes to cybersecurity.

[16:30:34]

It is like having an army of tens of thousands of hackers who can work 24/7, who can find these bugs and exploit them at speeds and capabilities

we have never seen before. And that's why I think you're seeing places like the Commerce Department now get involved.

Now, I should note that in addition to Google and Microsoft and xAI --

QUEST: All right.

GOLD: -- Anthropic and OpenAI have actually already had agreements with the Commerce Department. So they're also part of this. And the Commerce

Department also revealed they've already tested 40 models, including some that have not been released yet.

QUEST: Do you think everyone was a bit shocked by the Anthropic Mythos or Mythos? In the sense that as suppose it was -- we knew this was coming at

some point in some shape or form or whatever. But when you're face to face with it, the reality is like a bucket of cold water on top of you.

GOLD: I think people have been surprised at the pace of rapid development for artificial intelligence, Richard. Think of what we were talking about

just two or three years ago and where we are now. And so things are developing so quickly that there is a lot of fear out there about what

these are capable of, especially if they get into the wrong hands, especially if they get into foreign adversaries' hands.

And that's why you're seeing companies like Anthropic and OpenAI be very selective over who is getting the early access to these models so they can

play with them, work with them, test with them, understand how they work and understand how to build up their own defenses. Keep in mind, these

models are good for both hacking, but they also can be good for cybersecurity defense.

QUEST: The only issue really in terms of the regulator is the motive of the regulation. And if the motive is considered to be less than pure as it was

in some cases with Anthropic and the way in which it interacted with the Pentagon and other government entities, then you've got a problem with LLMs

being put up for review.

GOLD: Yes. And I think that's -- it's really interesting to see how the White House is evolving on this. We have reporting that -- "The New York

Times" first reported, but we can confirm that the White House is now working on convening sort of a working group with cybersecurity experts, as

well as some of these A.I. companies to figure out, is there and should there be some sort of government review of these A.I. models before they

are released.

It's really interesting to see all of this happening and really live time to see how the government is grappling with how and whether they should in

any way regulate these A.I. models because they want to be promoting these companies to develop and to get ahead as quickly as possible in the face of

a competitor like what's coming from China. But at the same time, they're starting to realize that this is one of the most powerful, capable

technologies out there. And there might need to be actually some government regulation involved.

QUEST: Hadas, I'm grateful. Thank you for joining us. Thank you.

In a moment, so we've talked about oil and what it means, but really what's happening with the Strait of Hormuz as well, fertilizer as well. Well,

after the break, where does the farmers' Almanac say we should be planting? If you're planting now, how bad is the fact you may not get your hands on

fertilizer, or it may be simply too expensive? We'll talk in a moment.

(COMMERCIAL BREAK)

[16:36:37]

QUEST: In Europe and the U.S. it's mid-spring and farmers are sowing crops for the next harvest. So the farmers' Almanac for Virginia, well, you've

been planting your onions between March and July. Your potatoes are in the ground just about now. And the melons are a bit late between April and

July, according to the planting schedule. Your spring wheat should be going in about now.

But of course your planting season has been upended by the crisis. Supply chains, the nightmare because you can't get your fertilizer. Take your

ordinary corn farmer. Fertilizer shortages have driven the price up 26 percent, and then you use various machines to use diesel, which has gone up

48 percent. On top of that, there's a drought in the heart of the planting season.

John Boyd Jr. is the founder and president of the National Black Farmers Association.

It's never easy for farmers, I have to say, John, but it's particularly difficult at the moment. How much of a difference do you think not, and

forgive my ignorance, because although I grew up next to a farm, how much fertilizer after at the beginning of the season, do you keep using it

throughout the season? How difficult is it going to be?

JOHN BOYD JR., PRESIDENT, NATIONAL BLACK FARMERS ASSOCIATION: Well, it's difficult right now because fertilizer really isn't readily available. And

the agriculture secretary noted about a month ago that farmers had already purchased their fertilizer, which is clearly not true. I don't have

fertilizer. Fertilizer is the first step in the process and planning. So farmers apply fertilizer to all of their fields so that they can have the

maximum harvest.

Fertilizer is up about 30 percent since the Iran war started, and that really hurt American farmers because it increased the price to about

anywhere between $140 a ton to $200 a ton for the good fertilizer. Farmers, you know, we just simply wasn't prepared to pay such a drastic increase.

QUEST: Right.

BOYD: Then you have diesel, you know, diesel fuel has risen, you know, through the roof. Again, those are two costs that farmers have to have.

QUEST: OK. Listen to the secretary of state giving -- Marco Rubio talking about fertilizer at today's news conference.

(BEGIN VIDEO CLIP)

MARCO RUBIO, SECRETARY OF STATE: Understand this. This is a favor to the world because it's their ships that are stranded. It's their fuel supplies

that are stranded. By the way, it's their humanitarian -- there's humanitarian aid destined for different countries in the world that's

stranded in the Persian Gulf right now. It's the fertilizer that they need for their food and crops that's stranded in the Persian, not our

fertilizer, their fertilizer. So --

(END VIDEO CLIP)

QUEST: Sir, is there a shortage of fertilizer in the United States, or is it just a question of the price that has to be paid for it?

BOYD: It's both of them. Firstly, the high cost of fertilizer is really astronomical that the farmers have to pay such an increase for the war and,

two, the fertilizer isn't really readily available. You have to order it from local dealers. And that's the way farmers do business. We do business

within about one hours driving time of our farming operations.

[16:40:00]

So this isn't rocket science. And when you call your local dealer and they say, hey, Boyd, I don't have the fertilizer readily available, that creates

a real big problem for farmers that depend on fertilizer.

QUEST: OK. Now give me an idea. Without fertilizer or using less, you know, rationing it, if you will, what would you expect the reduction percentage

wise of a crop to be?

BOYD: Well, you're going to lose a lot of money like that because that's what the fertilizer is for. It makes for a maximum harvest. So farmers have

a little margin of error to make a profit. And with the tariffs and all of this stuff compiled on us, it's been very, very difficult. We have 200

farmers that are facing foreclosure right now within the next 90 days because of the tariffs and the war and all of this stuff.

And the government should put a halt on farm foreclosures in this country based on this. This was a really a manmade disaster for farmers by the

administration. We shouldn't be losing our farms, you know, while we're sitting here trying to figure out what we're doing with fertilizer and

diesel fuel and tariffs. So this is a really, really difficult time in America's history for America's farmers.

People that are watching this, they need to reach out and support America's farmers right now. And like I said, these farmers should not -- these are

generational farmers that are going under while the administration figure out, you know, what they're going to do on oil prices, diesel fuel prices,

fertilizer prices. All of these things are ripple effect for America's farmers.

QUEST: Will it ultimately mean consumers have to pay more in the shops?

BOYD: Yes. The people who are going to hurt are the American consumers. Those are the persons that are going to pay because corn, wheat and

soybeans are three commodities that are used for just about everything. Corn flakes, cooking oil, all of these things, bread that we eat, that we

take for granted for that is so have -- has been in abundance for so long in America. You're going to start seeing a lot of food shortages in this

country because farmers just simply can't afford the high input costs that it's costing us to get out in the fields and produce food that we've been

producing so very, very long for cheap and be hard to do.

QUEST: I'm grateful to you, John. Thank you for talking to us tonight. We'll check in with you as the planting season continues.

BOYD: Thank you.

QUEST: The surreal experience of all of this. Here we are talking about oil prices, fertilizer, and look at the market on the triple stack. The Nasdaq

gains 1 percent to close at a new record high. The S&P 500 at a record 0.8 percent. The Dow is up 356 percent. Square that circle if you can. When you

look, Caterpillars gained even more. You get the idea of how the markets are looking at the moment. It is a tricky market indeed.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. In a

moment, "CONNECTING AFRICA."

(COMMERCIAL BREAK)

[16:46:13]

(CONNECTING AFRICA)

END