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The Brief with Jim Sciutto
CNN International: Lula Wins Brazil's Election in Surprise Victory; Venezuelan Opposition Leader Machado Returns from Exile; U.S. Justice Department Charges James Comey for Third Time; Reuters: u.s. and Canada Working on Deal to Ease Tariffs; DOJ Demand to Set Aside 20,000 California Mail Ballots Blocked; Israel to Hold First National Vote Since October 7 Attack. Aired 6-7p ET
Aired October 26, 2026 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[18:00:00]
PAULA NEWTON, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world. I'm Paula Newton in New York. You are watching "The
Brief."
Just ahead this hour, a surprise victory in Brazil. President Lula da Silva is re-elected after a historic runoff. His opponent, Flavio Bolsonaro, is
rejecting the results. Venezuelan opposition leader Maria Corina Machado returns home to Caracas. We speak to a former minister about what it means
for the country. And the Ballon d'Or ceremony presented by France football turns 70, and it's taking place in London for the very first time.
We are following multiple elections across the globe. There are only eight days until the U.S. midterms. Polls will open in just a few hours from now
in Israel. And voters have already spoken out in Serbia and Brazil. And we do start there in Brazil.
Scenes of jubilation, and I will say some shock as well, after Luiz Inacio Lula da Silva won an unprecedented fourth term as president. In Sunday's
runoff, he overturned a deficit in the first round, something no president has done since Brazil returned to democracy in 1985. And he's thanking
young people specifically for helping to make it happen. Listen.
(BEGIN VIDEO CLIP)
LUIZ INACIO LULA DA SILVA, BRAZILIAN PRESIDENT (through translator): Thank the people who coordinated our campaign and the parties that joined us. But
I wanted to thank the Brazilian people for the generosity they have shown me for so long. And in the second round, I want to thank Brazil's young
people for their generosity and taking to the streets they took to the streets to defend democracy.
(END VIDEO CLIP)
NEWTON: Now, Lula da Silva's opponent is refusing to accept the results. Flavio Bolsonaro is the son of former president Jair Bolsonaro, currently
under house arrest. The younger Bolsonaro says Brazil's federal police asked him to turn in his passports after he visited his father. Flavio
Bolsonaro says he will comply and denies planning to leave the country. Earlier, he said he would ask a court to annul the election.
(BEGIN VIDEO CLIP)
FLAVIO BOLSONARO, BRAZILIAN PRESIDENTIAL CANDIDATE (through translator): We will take legal action. We will ask for this election to be annulled.
This had never happened in Brazil's history. What happened today was not normal. In fact, it was unacceptable.
(END VIDEO CLIP)
NEWTON: CNN Brazil's Mariana Janjacomo joins us now. And what a result. It's fair to say a lot of people were shocked. I watched the live results.
Bolsonaro's party, they registered a lot of shock. And at Lula's, it seemed more like relief. I'm wondering why the surprise with everyone? And what do
you think contributed to Lula's victory here? How much did it have to do with this digital army that he pulled out at the last minute?
MARIANA JANJACOMO, CNN BRASIL CORRESPONDENT: A lot of it has to do with the digital army, Paula. It was a big mobilization online, an online
mobilization. And what happened, Paula, is that Lula became the first Brazilian president since 1989 that lost a first round, to finish second in
a first round, and then win the presidency after the runoff. So, that was the shock. That was the surprise.
He finished the first round with two million votes behind the opponent, Flavio Bolsonaro. And now, he got 4 million votes more. And then a lot of
it has to do with Lula's army. That was the WhatsApp channel created with over 10 million people. It was created by Andre Janones, who is a
congressman in Brazil, a big Lula ally.
And on that channel, he would send text messages, videos that people should spread out on their social media. And the whole strategy, Paula, was to try
to unite both the right and the left wing in Brazil and try to frame Bolsonarismo, the movement associated with the ideas tied to the Bolsonaro
family, as something else, something more extreme, a little bit similar to what happens here in the United States, when some Republicans say that
Trumpism doesn't really say anything about Republicans, doesn't represent Republicans. So that was the strategy. So, it was a strategy aimed first at
young people.
[18:05:00]
But also, I should add that older people also played a big role in this election because they went to the polls. They went to the polls with their
kids, with their grandkids. There are lots of videos on social media circulating right now of people, like older people, with mobility issues
being helped by their kids, by their grandkids, to go to the poll sites. So, there was this huge online mobilization that turned into real action in
the real world.
NEWTON: Mariana, we don't have a lot of time left, but Flavio Bolsonaro was asked to turn in his passports. There is some controversy about the
election. He has big backers, where you are in Washington with the Trump administration. What more are we learning about why this happened?
JANJACOMO: Flavio Bolsonaro is being investigated by Money Laundering and Brazil. And right now, Alexandre de Moraes, the judge of the Supreme Court,
just ordered his passports to be confiscated. And he said he would comply with the order, but that he saw this as an act of intimidation. As you
said, Paula, of course, he's been trying to get closer to the Trump administration.
But Trump himself was asked right now about the elections right this afternoon before going to Mississippi. And he said that he thought the
elections in Brazil were rigged, but at the same time that he really likes Lula and that he gets along well with the president of Brazil.
NEWTON: Yes, it is interesting. He is now willing to make deals with Lula. And it must be said, they have had cordial relations, a long meeting, one
long meeting in Washington and apparently some good phone calls ever since. We'll continue to keep an eye on it. Mariana, grateful to you for your
reporting from Washington.
Now, as we were just saying, Lula da Silva's come from behind victory triggered a sudden and dramatic reaction from global investors. The
country's benchmark stock index finished Monday's session down almost 14 percent. Trading had to be suspended because of the intense volatility as
well. The dollar also spiked against the Brazilian real. The real suffering one of its largest daily declines on record. Brazilian bond yields shot up
as well.
Now, markets had been pricing in an expected win from Bolsonaro, who had been, in fact, favored given what the polls were saying. He is the one who,
of course, is more fiscally conservative. Analysts say one of Lula da Silva's largest challenges in his next term will be to appoint a finance
minister deemed credible by investors.
Nur Cristiani joins me now. She is the head of Latin America Investment Strategy at JPMorgan Private Bank. Really good to have you on the program,
given your expertise in Latin America.
So, this was a surprise to many, but most importantly, the markets, right, including the prediction markets that got it all wrong. So, what now? We
talked about fiscal policy. Lula just made his job a lot tougher in the last few weeks of the election because he made all of these promises which
will demand more money from the budget.
NUR CRISTIANI, LATIN AMERICA INVESTMENT STRATEGY, JPMORGAN PRIVATE BANK: Right. And we'll have to see how many of those he actually follows through.
But the more important thing, I think, is right now, of course, the market reaction has been astounding. This was by far not the best-case scenario or
not what was priced in by any asset class.
Although I do have to say that to some extent, the currency was already starting to show some signs of it. And the reason why I'm saying that is
because one of the things in which we have the highest conviction is that the central bank is going to have a much tougher job ahead cutting rates.
And what this means is that there's carry for longer when it comes to the Brazilian real. Even in the face of possibly the Fed hiking rates at some
point into next year, the carry trade still lives for the Brazilian real. So, the reaction that we saw today, to some extent, might be tempered.
And the other part that we need to acknowledge is that whether he, whether the new administration is able to pull through the series of promises or
the series of intentions to continue spending to support growth, the reality is that there's still going to be some gasoline, some gasoline
behind domestic consumption.
So, to some extent, seems like the outlook for domestic activity could be better supported in the current scenario versus the previous base case
scenario. Now, the real question is whether this is going to be sustainable or not.
NEWTON: But you're saying that, look, right now, Brazilian equities do not look like a good bet. Why do you say that?
CRISTIANI: Yes, because when we talk -- so one thing is to talk about the currency. Another one is to talk about growth. But the reality is that
there is no catalyst for the equity market. There is no catalyst for companies. And even though valuations are extremely attractive, Brazil, and
especially with the pullback that we saw today, Brazil is amongst the cheapest markets in the end.
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There is no expectations that earnings are going to rebound significantly and there is going to be more appetite for foreign (INAUDIBLE) into the
index.
And especially, keeping in mind, that one of the biggest drivers that we were anticipating for equities next year into 2027 was that with lower
rates, lower local rates, the retail, the domestic -- the Brazilian retail investor would flow back into the equity market, and that's unlikely to
happen. So, there -- once again, great little catalysts for equity.
NEWTON: Now, there may be opportunities for Lula to change that equation. As we said, you know, the finance minister is a crucial appointment, more
perhaps than usual. We'll see if he picks a compromise candidate. But there is also this issue of institutional risk, right? You've heard so many
people talking about the fact that they want to know that the courts, the rule of law, that their investments are safe. Do you think there's a lot
that he can do just in the next few months to really shore up that confidence?
CRISTIANI: That is going to be challenging. We do not have high expectations that it's -- that the situation around the perception of rule
of law is going to change anytime soon.
NEWTON: In terms of the opportunities, though, going forward and we took, you know, resting it squarely on the shoulders of trade. I mean, look, we
just had our reporters say that Donald Trump is kind of being a bit magnanimous, right? Saying I wanted Bolsonaro to win. The elections were
rigged. But, hey, I like Lula. We have the G20 coming up in China. Lula has worked very hard on really trying to diversify his trade away from the
United States. That doesn't mean he won't make deals from the United States.
Is there an opportunity in the next month even, given it's in China, given he can do a bilateral with Trump, he can do a bilateral with Xi and really
place Brazil really, I would say, in its proper place in South America, right? Given, you know, over 200 million people and such a diverse economy.
CRISTIANI: Absolutely. And the one thing that you also need to consider is the vast amount of natural resources. Beyond the possibility of a political
swing back into the right, the fact that you will have U.S. eyes coming back to Latin America, the fact that we have a unique bargaining position,
and I'm talking about Latin America as a region, we have this unique position in which the trade balance for the majority of the countries in
South America is now more tilted towards China than what it is to the U.S., that doesn't change. The map doesn't really change.
And one other important point is that we need to consider that this is probably the last period that the incumbent is going to be able to sustain.
So, that means that there's a legacy to be considered. There's definitely going to be some compromises across the board from both the U.S. and
possibly from the Brazilian government in order to make sure that they foster trade, but with terms that might be a little bit more advantageous
to Brazil than would have probably been considered in the past. So once again, not all is lost.
NEWTON: Yes, the legacy point is a very good one, especially since he thanked the younger voters. And we know so many of those younger voters
want a much more vibrant Brazilian economy than they've got on their hands right now. Nur, so great to speak with you. Thanks so much. Appreciate it.
CRISTIANI: Thank you so much for the time.
NEWTON: Now, for the first time in more than 10 months, Nobel Peace Prize laureate and opposition leader Maria Corina Machado is back in Venezuela.
She returned from exile and was welcomed by cheering supporters. Her homecoming could put pressure on interim leader Delcy Rodriguez, who's been
backed by the Trump administration since the U.S. captured Nicolas Maduro in January.
Now, Machado has called for elections in Venezuela by next July and has indicated she would again try and run for president. Ahead, we speak with
former Venezuelan Minister Ricardo Hausmann about what Machado's return means for Venezuela and the United States.
Right now, though, we do have some breaking news into CNN. The U.S. Justice Department has charged James Comey for a third time. He is charged with
leaking a sensitive national security document in October 2016 while leading the FBI. Comey just responded online.
(BEGIN VIDEO CLIP)
JAMES COMEY, FORMER FBI DIRECTOR: Well, they're back again. It would almost be funny if it weren't such an appalling abuse of the Department of
Justice, one that we cannot become numb to. Nothing's changed with me. I'm still innocent. I'm still not afraid of these people. And I still believe
in the independent federal judiciary.
And I'm still lucky to have an amazing family and an incredible group of lawyers. And we'll stand up in court and fight the latest and whatever
comes after this. The next couple of years are going to be hard for all of us. It's really important that we stand straight and keep the faith in
America.
(END VIDEO CLIP)
Katelyn Polantz joins me now. Katelyn, I'm not sure how much this was foreseen, or did it really come out of the blue?
KATELYN POLANTZ, CNN CRIME AND JUSTICE CORRESPONDENT: It really has come out of the blue, and actually, it was filed under seal, this criminal
charge or a pair of criminal charges against James Comey, the former FBI director.
[18:15:00]
It was filed by the Justice Department in the federal court in Washington, D.C. on October 5th, almost to the day, one day short of 10 years of an
alleged leak by Comey.
Now, Comey's legal team says that this is way too late to have a charge come back again against James Comey. They also say that this had been
previously investigated and that the Justice Department had determined not to charge Comey with any crime around an alleged leak made to The New York
Times on October 6th of 2016, when Comey was indeed the FBI director under Donald Trump, or I guess that was right before Trump took office.
But, Paula, in this case, what is happening now is that there is a new charge. James Comey is already fighting it in court, and the Justice
Department, they're telling a judge that they want a little bit more time to try and go to a federal grand jury for approval. The charge itself, or
the set of charges, this alleged leaking and conspiracy charge against Comey, that hasn't been presented to a grand jury or approved by a grand
jury and a judge yet.
This is just a charge that is on the books and a judge could be looking at. There's a lot more to come here. And also, recall, James Comey has faced
criminal indictment in federal courts twice now. Previously, the first time, after an allegation he made a false statement to Congress, that case
was dismissed by a judge last year.
And there is another case that he is still facing out in North Carolina, on the beaches of North Carolina, where the justice department alleged he
threatened the life of the president, Donald Trump, by posting a picture of seashells arranged on a beach to send a message. That case continues on,
and we are waiting to see what happens next there, as well as in the Washington, D.C. federal court, where James Comey faces a new set of
criminal charges.
NEWTON: Yes, a lot to follow there, and that charge that is still pending against him, the other one about the seashells on the beach, quite a
serious one. Katelyn Polantz, thanks so much for bringing it down for us. Appreciate it.
Now, a programming note for you. We are now streaming in the U.S., Canada and the U.K. You can watch the brief, have access to exclusive original
programming, read unlimited articles and more on the CNN app. To learn more, visit cnn.com/allaccess.
Now, it could be a November to remember for A.I. investors. Anthropic has filed paperwork to go public as early as next month in what could be the
largest IPO ever, what Anthropic's offering says about the state of the A.I. industry. That's next.
(COMMERCIAL BREAK)
[18:20:00]
NEWTON: And welcome back in today's business breakout. U.S. stocks finished Monday's session with across the board gains. Tech stocks rallied
after A.I. giant Anthropic publicly filed paperwork for its upcoming IPO. It could begin selling shares as soon as next month.
Anthropic is set to become the first frontier A.I. firm to go public. It could also be the largest IPO on record. The company said in today's filing
that revenue grew by 1,300 percent in the first six months of this year to more than $16 billion. It remains, however, a money losing company. And
that's important with an overall net loss of some $80 billion for 2026 so far. There is an accounting issue, though, on that.
Other A.I.-focused firms are also racing to raise new cash. Meta has announced plans to sell $95 billion worth of stock to help fund its A.I.
buildout. SpaceX says it's borrowed an additional $40 billion to pay for A.I. chips. Elon Musk also warned over the weekend that standalone Neo
cloud firms like CoreWeave will have a harder time raising money in the debt markets going forward. He warns they will suffer, quote, "Guppy level
death and consolidation."
Jacob Ward joins me now. He is a technology journalist and the founder of the website RipCurrent.com. I'm not sure what you know about guppies, but
I'd be willing to bet you know a lot about what's coming in the A.I. shakeout. You know, newsflash here. Guppies are notoriously difficult to
keep alive.
In terms of Anthropic, you point out, look, it generates a lot of revenue, but that's normal. But in terms of an IPO, it's also spending a lot of
money. This is what's interesting here. The Compute and Data Center bill, you say, will be anywhere from seven hundred and eighty to eight hundred
and ten billion. How nervous should that make us about this A.I. trade?
JACOB WARD, TECHNOLOGY JOURNALIST: Yes. Well, Paula, it's important to note here that it is hard to do complete estimates here because the most of
the S1 in the key numbers is still blank. They're going to file probably an amendment to this later in November.
But yes, the estimate here is that their commitments and this is literally not just debt obligations. This is like stuff they have signed on paper is
that they have to spend anywhere from $780 to probably something like $810 billion to get the compute and the data centers and the chips that they're
going to need. And that means if I'm doing my math correctly, right, that this I mean, this astronomical growth in revenue that we've seen so far.
Amazing. Very cool.
That pace can't continue. If they kept going like that, they would literally out earn the world economy by 2029. So, it's not that kind of
math. They're going to have to somehow make, however, as much money as, say, Meta made in 2024, about one $165 billion just to kind of keep up with
that debt over the next few years. And that is an incredibly tall order. So, I think investors are going to be looking at that gulf.
They're also going to be looking at the weirdness of this whole sector in which the vendors and the customers just keep passing the same money back
and forth. You've got NVIDIA and Amazon and Microsoft and Meta investing in Anthropic even as Anthropic buys stuff from them, that kind of vendor
financing. It's like the back in camp where everybody sits on each other's lap until somebody falls over and everybody falls over.
That's the nightmare scenario here that I think investors are going to be worried about. And then this prospectus, the filing that they put out this
morning lists all kinds of headwinds, right, the lawsuits they face, the ongoing feud they have with the Department of War and they keep pointing
out they don't really know how this technology works and that it may in fact get worse over time in a way that they wouldn't even figure out until
after the fact. That's the weirdness of A.I. So, this is -- I've been covering this stuff for a long time. This is by far the weirdest and most
interesting S1 I've ever read.
NEWTON: Yes. You say it's weird. And yet so many of us have been confronted with this, you know, going rogue by A.I. Anthropic is just one
example. Should anybody be comfortable with this, especially when you have, you know, you point out that Claude is now writing 90 percent of the code
for Anthropic, closing the loop, so to speak, as you say.
Should any of us be comfortable with that? And I am having huge problems, I've got to be honest with you, about them calling it a model or them
calling it A.I. No, no, no, Anthropic, it's you. And talk to the lawyers, because you already have liability here.
WARD: Yes, it's very interesting. I mean, you know, inside this prospectus is very circular logic. There's stuff like there's a whole section about
just how incredibly effective Anthropic's products have been at finding and exploiting cybersecurity vulnerabilities, right. It's great at very scary
stuff, according to this prospectus.
[18:25:00]
But as a result, they say that's going to make it incredibly useful to customers who need it to defend themselves against that stuff. There's a
slight, you know, shopkeeper paying the guy to stop breaking his windows kind of quality to that, that I feel pretty weird about.
And then, you know, as you point out, right, this thing that they have always sort of said is kind of like a separate entity that has kind of a
mind of its own. It makes decisions on its own. The agentic world we're in right now. That's a selling point on the one hand. On the other hand,
right, we just don't, I think, have the liability law to cover that kind of thing yet. If this was a company that was founded in Germany or, God
forbid, in China, those are countries that very seriously hold companies like this to account for that kind of stuff. But here in the U.S., there
just aren't those kinds of laws yet.
The last thing I'll say here, Paula, that I thought was really interesting was one of the the phrases that they use, and it comes from a Dario Amodei
essay from 2024, is a country of geniuses. They say they're going to be offering a country of geniuses to anybody who can pay for it. And man, I
was thinking about how India must feel about that, which until now has been the country of geniuses that you access through outsourcing.
You look at the upheaval that's going on there right now, and I just find myself thinking, you know, just how powerful, influential this company is
going to be and how many different parts of the globe this kind of thing is going to touch.
NEWTON: Yes. And perhaps genius is overrated in the main. I don't have a lot of time left, but I have to ask you about this. Apollo chief economist
Torsten Slok wrote a very sobering note saying that despite all the A.I. hype, it's delivered zero financial payoff to corporate America outside of
tech. What do you think of that?
WARD: I think the really interesting thing in that note is that he's sort of going just beyond the dollars and cents and connecting some stuff, some
anxiety that you and I have talked about many times to it. He says at one point, quote, "Perhaps most importantly, A.I. does not understand
accountability, trust, culture, unwritten rules, ethical tradeoffs or fairness, all of which shape reputational risk and ultimately drive revenue
growth and profit margins."
That is the worries that the ethicists and the academics and people like me have had combined with the monetary thinking of a guy like Torsten Slok. To
see him put all of that together suggests that we're really -- we're sharpening our thinking about this stuff pretty quickly, Paula.
NEWTON: Yes. And as I said, lawsuits and courts may help sharpen the thinking, as it were, sooner rather than later. So good to talk to you. And
you read the entire filing. And it's important to us with someone with your expertise weigh in. Really appreciate it.
WARD: Appreciate you.
NEWTON: Now, Venezuelan opposition leader Maria Corina Machado back in Venezuela. She returned home after nearly a year in exile. Supporters say
she will bring freedom and democracy in Venezuela. We'll dig into that coming up.
(COMMERCIAL BREAK)
[18:30:00]
NEWTON: And welcome back to "The Brief." I'm Paula Newton. Here are the international headlines we're watching today.
Brazilian President Luiz Inacio Lula da Silva has won a record fourth term in office, and capped an incredible comeback by the leftist leader, who
became the first candidate in decades to win the presidency after finishing as the runner-up in the initial round of voting. Rival Flavio Bolsonaro,
who lost by more than four million votes, is vowing to challenge the results.
Celebrations have been taking place in Serbia after longtime strongman Aleksandar Rucic conceded defeat to a student-led opposition movement. Tens
of thousands of people filled the streets of Belgrade after the nationalist leader's party lost parliamentary elections, ending 14 years of his rule.
It's a huge political shift, both at home and for the region. The defeat deprives Russia of another important ally in Europe.
Opposition leader Maria Corina Machado is back in Venezuela after more than 10 months in exile. Ecstatic supporters filled the streets to welcome her.
This is the first time the Nobel laureate has stepped foot in Venezuela since the U.S. removed Nicolas Maduro from power in January. She reportedly
says she is open to talks with Maduro's successor, interim leader, Delcy Rodriguez.
Ricardo Hausmann served as Venezuela's Minister of Planning and is the founder and faculty director of Harvard's Growth Lab. He is also the co-
author of the new book, "Canada After America: A Strategy for Prosperity in a Changed World." Ricardo Hausmann joins us now when we will get to that
book.
I have to ask you, though, about Venezuela first. So, Machado returns here. We know the kind of base support that she's always had. But can she really
exert influence here, especially when you have Marco Rubio being quite unequivocal in terms of promising anything to her or the opposition in
general?
RICARDO HAUSMANN, FORMER VENEZUELAN MINISTER OF PLANNING: Well, you know, Marco Rubio is not the emperor of the galaxy. There are 3 plus million
people in Venezuela and they have to have a say on their own future. The Constitution says that if the elected president is not present, you have to
call elections. It doesn't give an option.
But right now, we are violating the Constitution. They have to call elections if Venezuela is ever going to go to something looking like
constitutional rule. So, the only reason why Delcy Rodriguez is in power is because they have not called elections. If elections were called, Maria
Corina Machado would win by a bigger margin than FDR ever won or Pierre Trudeau or Peron or Charles de Gaulle or Churchill. The results of the 2024
election where she was not allowed to run and she put a stand in, he won by more than all these other political leaders.
So, Venezuela is a unified country that wants to change direction. There's a clear leadership. In the last election, the opposition won in 93 percent
of all municipalities and it won by 40 points. So, Venezuela has to be allowed to choose its leadership. It's not up to Marco Rubio to decide who
is Venezuelan.
NEWTON: Right, but is that in the interest of the Trump administration? The president just keeps saying how great Delcy Rodriguez is doing and yet
here we are months later and there are still no elections in Venezuela. What's going to tip that scale?
HAUSMANN: I think there are two forces in the U.S. One force says we want to invest in Venezuela but we want to do it in a government that has some
legitimacy, that has some constitutional basis.
[18:35:00]
So, they don't want to come in with this interim weird government. And then there are other people who would like to use this interim weird period to
make dirty deals, which is what they have been trying to do. The oil deal that they announced last month is as dirty as it can be, and the closer you
look at it, the dirtier it is. So, that's the kind of forces that have been delaying the return of Maria Corina Machado, preventing her to go back.
But I think something must have changed in the U.S. government, because they definitely allowed her to go back. They kind of told the government in
Venezuela not to bother her. And so, apparently, there's been a change of heart in the U.S. administration, or at least that one side of the U.S.
administration is now calling the shots more than the other side.
NEWTON: Yes.
HAUSMANN: But in any case, Venezuelans will get a say.
NEWTON: Yes. Perhaps Marco Rubio was listening to the Venezuelan diaspora, most likely in Florida. I have to leave that discussion there for now.
We do turn to Canada. Canadian Prime Minister Mark Carney says trade talks with the U.S. have now ramped up. The timing is noteworthy, ahead of course
the U.S. midterm elections. President Trump, we all know, is facing this record low approval ratings on inflation and the cost of living. Despite
that, he has imposed tariff after tariff after tariff.
So, you now the co-author of this new book, "Canada After America." What is the opportunity? Because you know, as well as I do, the reflexive thing is
to do business with America. It is culturally the closest in business context, in as many contexts as you want to say. So, what is the
opportunity? And I think, Professor Hausman, the challenge will be for Canadians to take up that opportunity.
HAUSMANN: Definitely. I mean, it's obvious that Canada's growth strategy was to deepen her integration with the U.S. And that happened since NAFTA
and even before NAFTA. And now, exports to the U.S. represent 20 percent of Canadian GDP, while U.S. exports to Canada represent 1 percent of U.S. GDP.
That puts Canada in a vulnerable situation if the U.S. wants to use it for that purpose.
So, what Canada has learned is that the U.S. can use that asymmetry to exploit it. And that is a very serious lesson that the country has gotten.
So, the country needs a strategy that maybe it trades with the U.S., but it's not as vulnerable or as reliant on the U.S. market. But in order to do
that, it cannot be trading the exact same things that it's currently exporting, because right now it's exporting a lot of cars and cars are an
industry that needs to be very tightly connected to its value chain. And the value chain that Canada is connected to is centered around Detroit.
So, cars are very vulnerable to U.S. tantrums. But other industries, such as pharma or aerospace, are not as vulnerable. If you don't sell in the
U.S., well, you can sell elsewhere. And if you can connect to value chains that are more distant from you, they don't have to be as tight as cars, but
these industries are very R&D intensive.
NEWTON: Mark Carney has been trying to diversify for sure. I only literally, I have 20 seconds left, but I have to ask you this question.
Canadian productivity, anemically low for years. You head up the growth lab at Harvard. What is the answer there?
HAUSMANN: Well, I mean, Canadian GDP per capita has gone from 90 percent of the U.S. to 70 percent or 75 percent of the U.S. But Canadian medium
incomes are at 95 percent of the U.S. and have not gone down. So, what Canada is missing is this very, very high productivity industries like, you
know, A.I. and so on, that makes the U.S. government, U.S. numbers and productivity higher. But Canada has a lot of strength that it needs to
build on. And we describe in the book how it can build on those strengths.
NEWTON: Got you. So appreciate your time on both countries. And we'll get your expertise in again. Thanks so much.
HAUSMANN: Thank you.
NEWTON: This just in to CNN, a federal appeals court has now rejected the Trump administration's attempt to force California to set aside votes from
thousands of alleged noncitizens. The Justice Department's lawsuit is part of an unprecedented effort to insert the federal government into how states
run their elections. The list included more than 20,000 people. And the Justice Department had previously announced that dozens of them had been
charged with illegal voting.
[18:40:00]
Coming up for us voters in Israel, prepare to head to the polls in a few hours from now. We'll have more on that after a break.
(COMMERCIAL BREAK)
NEWTON: Israel just hours away from holding its first national election since the Hamas-led attack on October 7th, 2023. The country's longest-
serving prime minister, Benjamin Netanyahu, and his right-wing coalition are seeking to stay in power. His main challenger, Gadi Eisenkot, leader of
the centrist Yashar Party. He rallied supporters in Tel Aviv ahead of Tuesday's vote. CNN's Jeremy Diamond has more now.
(BEGIN VIDEOTAPE)
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice-over): The candidates are making their final rounds. Campaign ads hang from buildings and over
highways. One of the most consequential elections in Israel's history, now just days away.
For the first time since the Hamas-led October 7th attacks and the three years of war that followed, Israelis are heading to the ballot box facing a
stark choice. To keep Benjamin Netanyahu in power or set the country on a new path. That path is being forged by Gadi Eisenkot. Once Israel's top
general under Netanyahu, he's now the candidate best positioned to unseat him.
According to the latest polling, Eisenkot's newly formed Yishar party is projected to win 23 seats, overtaking Netanyahu's Likud, now polling at 19
seats, down from the 32 it currently holds. But the 120-seat Knesset needs a 61-seat coalition to form a majority government. The change bloc parties
led by Eisenkot are projected to win 55 seats, while Netanyahu's right-wing governing coalition would win 51. The Arab political parties are on track
for 14 seats.
Those parties also want to see Netanyahu ousted, but a majority of Israelis oppose including them in a governing coalition. In recent polling, a
majority of Israelis say it's October 7th that will be front of mind as they vote, the first opportunity they've had to hold Netanyahu accountable
for the colossal security failure that took place on his watch. The Israeli prime minister has repeatedly refused to take responsibility, rejecting
calls to establish a state commission of inquiry akin to the U.S.'s 9/11 commission. Netanyahu has instead tried to turn voters' attention to how he
responded.
[18:45:00]
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: They all ganged up on us, to wipe us off the place of the earth. We delivered crippling blows to all of
them.
DIAMOND (voice-over): With a commitment to finish the job in Iran, President Trump endorsed Netanyahu, promising he will never let you down.
DONALD TRUMP, U.S. PRESIDENT: I think you're going to have a tremendous victory actually.
DIAMOND (voice-over): But in an election that's not going to be the last, and that centers on Israel's longest-serving prime minister, who is still
on trial for corruption and denies the allegations, Eisenkot cuts a stark contrast as a relative newcomer to politics and one vowing accountability.
GADI EISENKOT, YASHAR PARTY LEADER (through translator): Almost three years after the failure, Netanyahu and his government are still running
away from responsibility, still running away from the truth, and almost three years without a state commission of inquiry.
DIAMOND (voice-over): Eisenkot left the opposition to join Israel's war cabinet after October 7th. Two months later, his son was killed in combat
in Gaza.
EISENKOT (through translator): I promise to you that we will do everything to be worthy, in contributing to the right decisions for those who have
sacrificed.
DIAMOND (voice-over): That story has struck a chord with many Israelis.
DIAMOND: Gadi Eisenkot is far from the most charismatic candidate in this campaign, especially when you compare him to Benjamin Netanyahu. But people
here say that they are drawn to his message, that he is honest and that he's the man to unify this divided country.
DIAMOND (voice-over): That drew this former Netanyahu voter to Eisenkot's campaign.
YIGAL PEDAEL, EISENKOT VOTER: I think it's the time to unite all the people in Israel together. This is the time.
BOAZ HERMAN, EISENKOT VOTER: What Eisenkot brings is a feeling of solidarity. If Israel wants to exist, wants to be united again, and to keep
its brotherhood here as a society, Bibi has to go.
DIAMOND: And with both coalitions currently falling short of a majority, Eisenkot has said he is prepared to form a minority government if needed,
to avoid repeat elections and to get Netanyahu out of power.
Jeremy Diamond, CNN, Tel Aviv.
(END VIDEOTAPE)
NEWTON: Joining us now is former U.S. ambassador to Israel, Daniel Shapiro. He is also a distinguished fellow at the Atlantic Council, and it
is good to see you. I mean, look, many here on CNN have pointed out that Israelis remain deeply traumatized by October 7th. You know, how can we
best understand what it's like having to vote in an election right now?
DANIEL SHAPIRO, FORMER U.S. AMBASSADOR TO ISRAEL: Israelis are, from my experience in talking to them, including on a recent visit, very focused
inward. So much of what grabs the headlines internationally is the external conflicts, Gaza, Lebanon, Iran, Yemen. But Israelis are really looking at
those questions of leadership and accountability, this question of who bears responsibility for the failures that led to and on October 7th has
not been dealt with fully. That's why there's that focus on the State Commission of Inquiry.
Questions of burden sharing, who serves in the military, this question of whether an exemption for ultra-Orthodox Israelis from military service is
very much on the agenda. And the rule of law. There's a wave of crime in Arab communities in Israel. There's the Jewish extremists in the West Bank
terrorizing Palestinian civilians. So, these are very much internal questions that Israelis are asking about what kind of society they are,
they want to be, and who they want to reflect that in the leadership that they will choose.
NEWTON: Yes, a profound moment for this democracy, it has to be said. And so, if we try and game out what happens the day after the election, you
know, can a realistic coalition, when you have 10 polls that are miles apart on policy, can they come together without Netanyahu as leader?
SHAPIRO: It's challenging, for sure. Most of the polling suggests that the Eisenkot-led anti-Netanyahu bloc will not reach 61 seats. There is the
possibility of the minority government that was mentioned in the report, but even that would require some passive external support for the coalition
from Arab parties. There are two Arab parties that will likely make it into the Knesset, and perhaps one or even both of them might be needed. And so,
there's a lot of need to provide that support.
That's controversial among Jewish Israelis, although one of these Arab parties did serve in the previous government before Netanyahu's current
coalition. And it is an opportunity to make that declaration about Israeli society, that it's a society that includes 20 percent or slightly higher
Arab population. They should have the ability to contribute to and participate in governance.
[18:50:00]
Post-October 7th, that raises a lot of concerns for some people, but that may be part of the way forward and the only way to produce an alternative
leadership than the one that's governed with so much controversy for the last four years.
NEWTON: Yes. So, as well as, you know, the electoral complications that will come in the days after this vote, Iran and the fact that perhaps they
might be right back at it in terms of a war with Iran, I am wondering how Israelis might be taking that in.
SHAPIRO: There are a lot of indications that both Israel and the United States are preparing for an additional round of significant fighting with
Iran. Many Israelis feel dissatisfied that the earlier attempts to bring down the Iranian regime and definitively bring an end to the Iranian
nuclear program really were unsuccessful.
And of course, the U.S., which had promised that this would be a four-to- six-week campaign, were now close to eight months in, mired in keeping the Strait of Hormuz partially open and really nowhere close to bringing down
the Iranian regime and the nuclear program remains not fully addressed. So, there might be support for it. The real person who will decide that, of
course, is President Trump.
NEWTON: That's right.
SHAPIRO: He has the red light or green light --
NEWTON: Yes. And he --
SHAPIRO: -- when that war resumes.
NEWTON: Yes. And technically, he's not on the ballot. Daniel Shapiro, we have to leave it there for now. Thanks so much for being with us.
Appreciate it. And we will be right back after this.
(COMMERCIAL BREAK)
NEWTON: Tonight in London, some of the world's biggest football stars have been receiving awards for their individual achievements at the 70th annual
Ballon d'Or ceremony. Don Riddell monitoring for us. Apparently, you have some news.
DON RIDDELL, CNN WORLD SPORT: Yes, good to see you, Paula. And literally within the last few moments, breaking news, the Ballon d'Or winner has gone
to Harry Kane, the England captain, the Bayern Munich star who has had an absolutely phenomenal season. He scored 73 goals for club and country last
year.
And Kane is one of the most popular players in world football. He's been such a terrific striker and such a terrific role model for so long. And it
was felt by many as though this could be his last chance because when are you going to have another season like that, 73 goals? I think it was
probably very close, though. It was a head-to-head really between himself and Kylian Mbappe, who had a wonderful year with Real Madrid and France.
Mbappe was the leading scorer in La Liga and in the Champions League and in the World Cup, and he became the leading World Cup goal scorer in that
tournament this summer. But Kane has pipped him, so congratulations to Harry Kane, the Ballon d'Or winner at the age of 33.
Also, in the women's category, Alexia Putellas won her third Ballon d'Or, matching her Spanish compatriot Aitana Bonmati, who actually won the last
three in a row. Putellas had a sensational year last year, winning the quadruple with her club Barcelona. She actually now, of course, plays in
London with the London City Lionesses, but a terrific achievement for Alexia Putellas. And again, many, many congratulations to Harry Kane.
[18:55:00]
It literally just happened just as you were introducing me, Paula. So, we can now see video of Harry Kane getting up to receive his award. A very,
very popular winner. Of course, this ceremony is happening in London, where he grew up and where he played for so many years with Tottenham Hotspur, so
I think a lot of people will be very happy for him.
And if you're an Mbappe fan, he's still young. He will win it one day, I'm sure. And that's Harry Kane receiving his award from the OG Ronaldo, the
Brazilian legend, handing that award to Harry Kane. So, well played, Harry Kane. First English winner of this award since Michael Owen. A quarter of a
century ago now. Owen won it back in 2001, and it's the second time this evening that Kane has been on the stage because he also received the
Striker of the Year award earlier, and how could he not after scoring those 73 goals.
NEWTON: He does look happy, and of course, Kylian Mbappe there to congratulate him as well. And as you well point out, there is an age
difference between the two. He is there in London on home soil to get this award, and as you said, beloved by so many, not just in Britain but beyond.
Don Riddell for us. Thanks so much. We appreciate it.
And I want to thank you for your company. I'm Paula Newton in New York. You've been watching "The Brief." Stay with CNN for more news.
(COMMERCIAL BREAK)
[19:00:00]
END
