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CNN International: Israel Delays Cabinet Vote On Ceasefire- Hostage Deal; Treasury Nominee Scott Bessent Testifies Before Senate; Biden Warns Of Oligarchy, "Tech-Industrial Complex". Aired 3-4p ET

Aired January 16, 2025 - 15:00   ET

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

[15:00:38]

JIM SCIUTTO, CNN HOST: I'm Jim Sciutto in Washington. Thanks so much for joining me today on CNN NEWSROOM.

And let's get right to the news.

Hamas and Israel's ceasefire hostage deal is now hanging in the balance amid last minute disputes between the parties. Israel accusing Hamas of reneging on parts of that agreement. It delayed its crucial cabinet vote to approve the deal now to Friday. Hamas denies those allegations, saying it remains, quote, committed to the deal.

There are serious doubts among the Israeli Prime Minister Benjamin Netanyahu will be able to get key members of his cabinet to approve the terms. At his final press conference today, outgoing Secretary of State Antony Blinken said he is confident the agreement will be implemented as planned on Sunday.

(BEGIN VIDEO CLIP)

ANTONY BLINKEN, SECRETARY OF STATE: It's not exactly surprising that in a process, in a negotiation that has been this challenging and this fraught, you may get a loose end. We're tying up that loose end as we speak. I've been on the phone in one way or another all morning with Brett McGurk, with our Qatari friends, and I'm very confident that we -- this is moving forward. And we'll see the start of implementation of the agreement on Sunday.

(END VIDEO CLIP)

SCIUTTO: Every minute this deal is not in place, of course, is a matter of life and death for many in Gaza. In the past 24 hours, Israeli airstrikes have killed 81 Palestinians, including at least 18 children.

In Israel, protesters continue to gather in Tel Aviv demanding that the prime minister bring all the hostages home and quickly.

CNN's Bianna Golodryga is in Tel Aviv.

And, Bianna, I wonder, it's concerning to hear from Israeli officials. They say Hamas is reneging on parts of the agreement. Secretary Blinken, we heard there just then saying they were minor details. What's your sense? I mean, is there a chance that this deal blows up?

BIANNA GOLODRYGA, CNN SENIOR GLOBAL AFFAIRS ANALYST: Well, Jim, as you noted, there are constant hurdles that have been directed at this fragile deal, which we had reported was agreed to last night, only to have the prime minister accused Hamas of reneging on that deal today, thus delaying a cabinet vote. The latest information we have is that Israel will -- the government will be holding a cabinet vote tomorrow morning, which suggests that the deal will be passed. Now, whether all of the prime minister's coalition members will be part of that deal in vote, that's what's up in question right now.

As you noted, far right members of his government have threatened to resign, have been vocal in protest to the deal as it is formatted right now this morning. Bezalel Smotrich, the finance minister, said that he would resign after the implementation of the first phase of the deal if Israel does not go back in to Gaza and continue the fighting, which would essentially blow up the deal and not lead to phase two of the ceasefire hostage deal.

And just moments ago, we heard from the defense minister, I'm sorry, from the national security minister, Smotrich -- Ben-Gvir -- Itamar Ben-Gvir, who said that he would threaten to resign tomorrow if, in fact, the cabinet did vote to approve this deal. So we'll see if he follows through on that threat tomorrow. Nonetheless, the deal is expected to pass tomorrows vote and thus start to be implemented on Sunday, when we will see the cease fire begin Sunday. And the hostages, the 33 that are set to be released in the first phase of this deal on Sunday.

And the reporting right now suggests that three hostages, three female civilians would be released. And then in subsequent days, the female IDF soldiers a reminder that everyone is required to serve in the military here in Israel, they would be released one week after that.

So, as we have mentioned, this is a very tenuous moment here. These families have been waiting for 15 months for their loved ones to come home. We mentioned that of these families, seven hostages in Gaza right now are American citizens. Three are believed to still be alive. We heard from President Biden that he expects at least two of those hostages to be part of phase one of this deal, to be leaving Gaza and coming back to Israel.

[15:05:07]

I spoke with the brother of one of those American hostages, Keith Siegel, his older brother, spoke with me just an hour ago, Lee Siegel, and he, while expressing obviously, a lot of optimism about seeing his brother for the first time in 15 months, it's bittersweet for him and for the nation, as we've been reporting, because of those hostages that would be left behind.

Here's what he said.

(BEGIN VIDEO CLIP)

LEE SIEGEL, BROTHER OF KEITH SIEGEL WHO WILL BE RELEASED ON PHASE 1: Plus genuinely, until all 98 hostages are home, I have a part of me that there's a hole. Keith is going to fill a big, huge part of that hole for all of us, our entire family. But we all know that without 98 hostages coming home, something's missing. Israel is not able to get back into a routine of looking to the future where we're in recovery. They all need to be home.

(END VIDEO CLIP)

GOLODRYGA: Yeah. And that is something that we hear echoed from family members of hostages. Every time we speak with them, from countless Israelis also, who feel in this small country that those are their family members, those are their fellow citizens who still remain in Gaza. And this country, they say, cannot heal properly until they are brought home. As you know, Keith Siegel, his wife, Jim, Aviva, was also kidnapped, taken hostage with him on October 7th. She was released in last November's ceasefire and hostage deal, and she is expected to be at President-elect Trump's inauguration in Washington, D.C., on Monday.

SCIUTTO: Bianna Golodryga in Tel Aviv, thanks so much.

Well, back here in the U.S., Secretary of State Antony Blinken says he is confident that the ceasefire and hostage deal will go into effect Sunday. His statement comes as Israel, of course, as we mentioned, delayed a vote on the agreement.

Joining us now with more on the State Department view of this is CNN's Jennifer Hansler.

And I wonder, do they see these latest roadblocks as serious roadblocks or ones that can be overcome prior to Sunday?

JENNIFER HANSLER, CNN STATE DEPARTMENT REPORTER: Well, Jim, they really downplayed these latest roadblocks. They said that it is to be expected that there are loose ends in this process. This has been a long time coming. A lot of setbacks in the months and months of negotiations. So Blinken said that those loose ends were getting tied up as he was speaking to the press earlier today.

Now, Jim, he did not go into details about what exactly was causing this delay in the vote there in Israel. But he did express confidence that this vote would go through and that the implementation would begin on Sunday, as was announced yesterday. Now, Blinken again touted the ceasefire and hostage deal as a work of diplomacy that was done not only by the Biden administration, but also with the help of the incoming Trump administration.

He said that their collaboration was critical in getting this over the line. And this wasn't really about claiming credit as to whose victory or success it was. This was just about getting this deal in place. And, Jim, I asked him if he had any regrets about the way that this was negotiated over the past many months, whether he wishes they had been firmer on the red lines that they had put forward to the Israeli government on humanitarian aid and civilian harm within Gaza.

And Blinken was largely defensive about how they had gone about this. He said. It was a very complex situation. It was not only 1 or 2 players, but rather the entire atmosphere in Israel as well as in Gaza that they had to take into account as they were going through these negotiations, as well as their hope to prevent a wider war in the region.

And they said that it was American diplomacy and deterrence that had allowed them to avoid a larger conflict over the course of these negotiations.

Now, this was Blinken's last press conference as the top U.S. diplomat, Jim.

SCIUTTO: Yeah, quite a moment, quite a transition coming.

Jenny Hansler at the White House, thank you.

Let's go now to Liz Naftali, her then three year old great niece, Abigail Arden, was taken hostage by Hamas after her parents -- you can see them there -- were killed on October 7th. She was then released in the first ceasefire deal after being held by Hamas for some 51 days. Liz chronicled Abigail's story of survival in a new book called "Saving Abigail".

Thanks so much, Liz, for joining.

LIZ NAFTALI, GREAT-AUNT OF FIVE-YEAR-OLD FORMER HOSTAGE ABIGAIL: Thank you for having me.

SCIUTTO: First, I just want to ask, how is Abigail doing? Fifty-one days of detention is a long time, and I think people can often forget that the stress, the consequences from that last much longer.

NAFTALI: Exactly. I mean, Abigail was a hostage for 51 days. What that meant was that she was in a dark room with three other little kids that she knew, and a woman who she also knew.

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But they had no water, very little food, a piece of pita bread a day, no hygiene.

There were no games. There were no toys. They couldn't sing. They couldn't dance. They were silenced.

And then she was taken, kidnapped after her parents were murdered in front of her. And so this was how she spent 50 days. On the 51st day, she was released.

But what I think is really interesting is that her fourth birthday was as a hostage. Her fifth birthday was a free child, and we take for granted the beauty of a birthday. But her fifth birthday, which was a few months back, was really spectacular because here was a child who was able to enjoy and have friends and to do what we want all five year olds to do at their birthday.

SCIUTTO: Of course, of course. You have been in this position before, that other hostage families are in right now -- news of a deal to come, but no news yet for some of these families as to who's going to be included. Will their loved one be coming home? And sadly, a question for -- for some of the families, whether the loved ones are still alive.

I wonder if you could help explain just how painful and how stressful those moments can be.

NAFTALI: So I can tell you for 51 days, when we saw that Abigail wasn't on that first list, it was really painful. And yet at the same time, you know, there were other little kids and women coming out. So there was this momentum. There was this moment where we saw it was moving forward.

But every day waiting and then knowing that there was a deal and not knowing which day. And she was released on the third day. And I have to tell you that even though we knew she was on the list until we actually saw her in my nieces arms and her grandmothers arms, we didn't believe it.

So when you ask that, I think about these people for now, 400 and almost 70 days and what they're going through and knowing who's on the list, who's not, and keep in mind that no organization, no national international organization has been able to verify who's alive, who's dead. They haven't visited them in all this time. They have been forbidden from doing that.

So we don't know. And what I can just tell you is that people are just sitting, waiting and, and -- and its the most painful thing. And I just don't know how some of these people can just keep going, but they do because this is their loved one. And all they can do is fight for their return.

SCIUTTO: Yeah. No question.

The outlines of this particular deal, they've been on the table for months, really a three phase deal, initial release of a small number of hostages. It is possible it might even be likely that more hostages would be alive today if such a deal had been finalized earlier. And I wonder, who do you blame for how long it's taken to get to this point?

NAFTALI: Well, first, you're absolutely right. There have been too many delays and we've lost people. They've been killed. We see American Hersh Goldberg Polin who was executed with five young people at the end of August, and he was on a list to get out. And so that is just a heartbreaking story and one that is supposed to make us understand the urgency and the immediacy of making this deal happen, so we don't lose other people.

But what I will say is, let's -- I don't want to go to the blame game right now because the goal of all of us is to figure out how to make this work, and we have this moment where we have President Biden and what he and his team have been working on his administration for 15 months. And now we have incoming president Trump. And he was able to help push this over the finish line. And they are still coordinated and working together, their administrations. And so, right now, the goal is to start that process and to get out 98

people, seven Americans, and the other stuff we can deal with later. Right now, we have to save lives.

SCIUTTO: Yeah, that's the priority for sure. Liz Naftali, thanks so much for sharing your story and Abigail story as well.

NAFTALI: Yeah.

SCIUTTO: Well, here to discuss how we got to this agreement and what happens next, Efraim Halevy, former Mossad chief and former head of the Israeli National Security Council, thanks so much for joining Mr. Halevy. We appreciate you taking the time.

EFRAIM HALEVY, FORMER MOSSAD CHIEF: I'm honored to be interviewed by you.

SCIUTTO: I want to begin with this deal and how we got to this deal, because as I just mentioned to Liz Naftali there, the outlines of this deal have been offered, really going back to May, the Biden administrations framework. And its only now on Sunday, if all works out, that the deal comes through. What do you think got this across the finish line?

HALEVY: Well, I think it's premature to deal with the whole story, as it were, as it unfolded over a year and a half and not more because it went through many, many stages.

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This situation in which we had so many. Detainees, so many hostages in the hands of Hamas, but we also knew from experience that the number of people who were surviving was on the -- on the rise. And for various reasons, some of them domestic and others the prime minister, Netanyahu, did not want to move into a quick succession of negotiations which would lead to a quick exchange of prisoners and hostages and therefore, it took quite a long time until the prime minister reached the point when he believed that it was in his interest that this should come about as quick as possible.

SCIUTTO: Yeah.

HALEVY: I think that that is the one of the problems we had on the Israeli side.

SCIUTTO: Yeah.

HALEVY: On the other side, of course, we had the problem of the lack of information from the Hamas leadership on this issue.

SCIUTTO: On the -- on the Israeli side, Ruby Chen, whose son Itay was killed on October 7th, his remains still held by Hamas. He has told me, including on the air on CNN, that he believes that the Israeli prime minister did not prioritize hostages' lives, the lives of Israeli hostages in these negotiations. And I wonder if you agree with that criticism. HALEVY: The way the prime minister acted on this for many, many months

gives credence to what you've just been told. I was not at the table and didn't sit across the prime minister to hear it from himself. But I do know that the general feeling in Israel was that the prime minister, for reasons of his own, didn't want to move quickly on the bringing about a massive exchange after the first 100 had been released over a year ago.

SCIUTTO: There was a lot of speculation, questions about how Donald Trump will handle Israel and the situation with the Palestinians. He's appointed as U.S. ambassador. Mike Huckabee, a man who in the past has said there's no such thing as a West Bank. There's no such thing as an occupation. He denies that the Palestinians exist.

On the other hand, in these negotiations, there's been some reporting that Trump put pressure on Netanyahu to get this deal across, pressure that Biden was --was not able to. I wonder, what do you see this relationship as being like under Trump? Does he give Israel, give Netanyahu's government, more leeway, even perhaps as far as to annex the West Bank? Or do you see him putting -- putting limitations on Netanyahu's ambitions?

HALEVY: Well, President Trump has a history of the way he acted when he was president for the first term. He was the man who moved the American embassy to Jerusalem, which was something which, very for many years, people dreamed should have happened.

And obviously, when it came to the question of the West Bank and so forth, I think that the position of President Trump was not all that clear as to what would be the policy that the United States would adopt concerning the future of the West Bank. And would the United States support a Palestinian state or would it allow the Jewish -- long -- big number of settlers in the West Bank the possibility of having an annexation of the West Bank, together with Israel?

This is something we will know within quite a short time, I'm sure. But I think that this should not be connected to the hostage situation, which is a case in its own rights. And I think that when we ultimately we will come to -- shall we say -- look at the entire travail of this issue over a year and a half, obviously, the -- some of the -- these many, many months should be attributed to the -- the position that the prime minister maintained for a long time on the hostage issue.

[15:20:22]

SCIUTTO: Yeah. And sometimes in the face of great criticism from the hostage families.

Efraim Halevy, thanks so much for joining us and sharing your views.

HALEVY: Thank you.

SCIUTTO: Well, coming up, vowing an economic golden age and a gigantic middle class tax cut. We are following Trump's treasury secretary nominees, confirmation hearings and comments. That's coming up. (COMMERCIAL BREAK)

SCIUTTO: Welcome back. It's another busy day of confirmation hearings on Capitol Hill for Donald Trump's cabinet, including the president- elect's pick to run the Treasury Department. He is billionaire hedge fund manager Scott Bessent.

Bessent would be leading the team implementing Trump's tariffs, sanctions on Russia and China, and a top priority for Republicans extending the Trump tax cuts. Bessent said that last piece is essential.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY NOMINEE: And this is the single most important economic issue of the day. This is pass fail, that if we do not, the fix these tax cuts, if we do not renew and extend, then we will be facing an economic calamity. And as always, with financial instability that falls on the middle and working class people.

(END VIDEO CLIP)

SCIUTTO: Let's go now to CNN's business editor at large, Richard Quest, who's been following the hearing.

And, Richard -- Richard, economic calamity? I mean, the U.S. economy is quite strong. Economists, as I understand it, look at extending the tax cuts as inflationary. And to date, inflation has been the big problem here.

And my understanding is the tax cuts is that the majority of the benefits go to the wealthy, not to the middle class.

[15:25:14]

So was he speaking the truth there?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Well, it was a hyperbole. Calamity is not quite sure where the calamitous nature of it is, except arguably for the deficit, because by making the tax cuts permanent, it will add around $4 trillion to the long term federal deficit.

And of course, don't forget, although it did give a massive financial boost to the rich, that 2017 tax reform didn't help those -- those rich who live in, if you like, upper middle class in California, New York, Massachusetts, all those states which have very high levels of state and local income tax because the SALT, of course, was that the state and local income tax deduction was taken away.

The key points here from Bessent's testimony, number one, more sanctions against Russia, he says, to punish Russia. He's firmly on Trump's side with that. Number two, he does not believe that there should be massive reform in terms of, say, for example, or even a raising of the federal minimum wage stuck, as it has been since 2009. And finally, Jim, of course, an interesting side note, he said, this

is the third time that he has tried to enter public service, the first being to join the military, the second to be to joining the foreign service. And on those two previous occasions, the fact that he's gay counted against him and he was told to not bother. This time, he is the first Republican, openly gay Republican nominee to be going through the nomination process.

SCIUTTO: Yeah, that's remarkable that it took that long. Let's be frank. Let's talk about tariffs now because he was pressed by Democratic Senator Wyden on whether the costs of Trumps tariffs would be passed on to American consumers, which, as I understand economics and I'm not an expert. That's how it works. Bessent said the history of tariffs says no.

What do the facts say?

QUEST: It's just so difficult, Jim, because the precedent is clear. The history is clear that the cost does -- every study has shown the costs get passed on to the ultimate consumer. So people like myself are always bedeviled at trying to understand the nuance, the trap door, if you will, that Bessent and others use to justify and say, that's not true.

Traditional orthodox economics says raising tariffs eventually hits consumers. There are niceties and nuances that get around that, but we've never seen we are about to undergo an economic experiment, the like of which we've not seen since the Second World War, in terms of tariffing.

If the new president follows through, and I think he will on what he said, then this has never been seen before. We don't really know if it actually happens. As he says, what the result will be. But go to the textbooks and they will paint a rather gloomy picture of the outcome.

SCIUTTO: Yeah. Well, we know you'll be watching closely.

Richard Quest, thanks so much.

And do stick around next hour for more of his expertise. Of course on "QUEST MEANS BUSINESS".

President Joe Biden is saying his goodbyes. Earlier this hour, he visited the Pentagon for an outgoing commander in chief ceremony, the latest in a farewell tour that also included last nights prime time Oval Office address.

In those remarks, the president issued a dark warning about the increasing power of money in American politics.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy. I'm equally concerned about the potential rise of a tech industrial complex that could pose real dangers for our country, as well.

Americans are being buried under an avalanche of misinformation and disinformation, enabling the abuse of power.

(END VIDEO CLIP)

SCIUTTO: At Donald Trump's inauguration on Monday, the three richest Americans will be present. Elon Musk, now a member of the incoming administration, of course, Jeff Bezos and Mark Zuckerberg, in addition to a number of other prominent tech CEOs and billionaires.

Let's go now to CNN's senior White House correspondent, MJ Lee.

MJ, that was possibly the starkest warning about democracy we've heard from President Biden since Trump's win. Of course, prior to the election Biden talked a lot about a threat to democracy. Here, he's talking about the threat of an oligarchy, in effect.

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And yet -- well, certainly at the inauguration, we're going to see a celebration of America's wealthiest.

MJ LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yeah. And, Jim, this was a farewell address that I think stood out less because of its optimistic moments and tone of sort of forward looking hopefulness, and more because of the very dire warnings that he was giving about the direction that he believes America is headed in. You played some of the sound from last night, you know, he said that he was concerned about what he said was a dangerous concentration of power among a small group of the very wealthy and well-connected, and as you rightly noted, I mean, we are seeing this on full display with the incoming president.

You know, President Biden may not have been explicit in terms of naming specific people, but it was very, very clear. You know, the references he was making to the incoming president, but also the people that he is choosing to surround himself with. That full screen you just showed of the number of, you know, tech CEOs, these billionaires in the industry who have spent some of them a lot of time in recent weeks trying to court the former and incoming president and also are, you know, vying for roles in the administration looking for any ways to sway the new administration's policy decisions.

And that reference to the tech industrial complex is, of course, a recall to President Eisenhower's own farewell address when he talked about the threat of the military industrial complex. Now, put all of that aside, I totally agree with you that that was quite stark coming from the outgoing president. He did try to also inject some moments of optimism, including when he talked about and reflected on his own story, his unlikely path to getting to the White House, saying that, you know, he came from very modest means and the fact that somebody like him could become president, he said, was sort of the story of the American story and possibility.

He also took the opportunity, as is expected in a speech like this, to tick through some of his own accomplishments, accomplishments, you know, getting the country out of the COVID pandemic and the economic recovery and made sure that he reminded everyone, look, a lot of the work that I've done, its going to take a while before people actually feel it.

But, yeah, it was a very stark warning that he gave to the American people. And I think you made the really good point that it's not really a warning we've heard very often from this president post- election, though, it was a warning. We heard a lot before the election.

SCIUTTO: Well, we're talking about tax cuts prior, corporate and individual, and a lot of those folks on that inauguration stage, they're going to benefit if those tax cuts are extended.

MJ Lee at the White House, thanks so much.

Coming up, the United States neighbor to the north will too have a new leader soon. Canada's foreign minister, Melanie Joly, joins me next on her country's direction as it heads towards its own new elections and how it will work with Trump, particularly as he's threatening steep new tariffs.

(COMMERCIAL BREAK)

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SCIUTTO: We, of course, are just days away from the inauguration, and allies and adversaries alike are feeling the weight of Trump's aggressive global pressure campaign. Trump has repeatedly vowed to impose 25 percent tariffs on Canada, a U.S. ally and neighbor, on his first day in office, claiming he would use, quote, economic force even to annex Canada, doubling down on his vow to make it the 51st state. I can tell you, that's not going to happen.

Following Prime Minister Trudeau's resignation, our neighbor to the north faces a critical political transition of its own with the liberal party leadership vote to come on March 9th, and with that uncertainty about the country's economic path forward in the face of those Trump tariff threats,

Canada's foreign minister, Melanie Joly, is in Washington now to meet with key policymakers. And she joins me now.

Thanks so much, foreign minister, for taking the time.

MELANIE JOLY, CANADIAN FOREIGN MINISTER: Thank you, Jim. It's a pleasure to see you again and to be here with you.

SCIUTTO: So you're here in Washington to meet with lawmakers, including Republicans, to talk about this tariff threat. My first question is, this because sometimes people say, well, Trump, that's bluster. It's a extreme negotiating position. Then he moves towards the middle.

Do you believe these threats are legitimate? JOLY: Well, I think they're not legitimate, but I think we have to

take them seriously. Canada is a best friend to the United States. We're the biggest traded partner -- trading partner. We're a really good ally, and we want to engage.

We want this to be a win-win. And we know that the Trump administration wants to make sure that America, Canada and the U.S. together are this energy superpower. And we can be that together. But at the same time, we need to make sure that things are straight, that we know exactly what to expect.

President Trump, in his tweet back in December, said that he had concern about the northern border. And you know what? We've done -- we've taken seriously what he said. And we think it's a win-win.

We think we need to secure a border. Americans and you guys have a fentanyl crisis. We do, too, and we need to save lives together. So we came up with this really strong border plan, Jim, $1 billion worth of support. And it means more boots on the ground. It means also more drones, Black Hawk helicopters. You know, technology cameras. We need to make sure ultimately that the border is secure.

SCIUTTO: OK.

JOLY: And we've done that. Tom Homan, the new border czar even said publicly in different interviews that he thought that that was a good border plan. And so based on that, we believe that there should not be any tariffs.

SCIUTTO: Okay. So potential progress on the border issue.

JOLY: Yeah.

SCIUTTO: On the tariff issue, I noted Prime Minister Trudeau's comments yesterday regarding the threat of retaliation. And he said he says they will respond purposefully, forcefully and resolutely. Canada would.

What kind of retaliation are we talking about?

JOLY: Well, you know, first we don't want -- we want -- we don't want tariffs. We don't want any trade war. We're seeking peace.

We're pleading for peace because I think that we need to be stronger together to deal with the threat coming from other adversaries. And we need to, you know, make sure that if America wants to go toe to toe with China, we can be a very strong ally.

[15:40:05]

So let's not distract ourselves by, you know, ultimately, fighting ourselves.

SCIUTTO: Canada is a Pacific nation as well, of course.

JOLY: We are a Pacific nation. We're part of NATO anyways. We have so many things in common. We're the best neighbor you can ever have.

Now, at the same time, if Trump is going ahead with tariffs, he's starting a trade war. And, of course we will retaliate. And you know what will happen for all those watching us right now, this will be a Trump tariff tax on Americans because this will have an impact on jobs in many, many states, 35 states have Canada as the main export market.

And at the same time, we know that we can do a lot to make sure that ultimately, at the grocery store, at the pump, when it comes to heating costs, we can try to things -- to make sure that things are not as costly. But if we have 25 percent tariffs against us, of course we will retaliate. And of course that will translate into a tax on Americans.

SCIUTTO: Can you describe in any greater detail exactly how Canada would retaliate?

JOLY: Listen, we still want to make sure that we get to a deal without any tariffs. We think we can get there. We have the USMCA, which was, according to President Trump himself, the best deal ever signed by the American administration. We believe it was a win-win.

We believe that we were able to create jobs together, and we know that we have to continue to fight inflation. At the same time, we will continue to make sure that we fight back if there is a threat and everything is on the table.

SCIUTTO: The president -- incoming President Trump will often talk about the trade deficit that the U.S. has with Canada, a big portion of that is the U.S. buys a lot of oil from Canada, and you will hear from Canadian officials that they say Canada actually sells oil to U.S., to the U.S. at a discount.

We heard that from former Prime Minister Stephen Harper recently.

JOLY: Yeah, absolutely. Yeah.

SCIUTTO: Can you explain how exactly?

JOLY: Well, because we know that a lot of the refineries in Texas depend on Canadian oil. If it's not Canadian oil, it's Venezuela. So if it's not Canadian potash, it is actually from Russia. If it's not our uranium for our nuclear for -- for your nuclear, you know, centers and, and that are providing home heating, it's Russia.

So we can make sure that ultimately we do more together. That's why I was referring to an energy powerhouse. But if there is indeed a $40 billion more of a trade surplus, it's because Americans are buying much more of our energy. And indeed we're selling it at a discount.

If you get rid of energy, if you look at only goods, actually the Americans -- so the U.S. has a trade surplus of $50 billion with Canada.

So I really think that when it -- we don't want a trade war, it's a loss-loss situation. Jobs would be lost in America. There would be it would be costing more. Like I was saying at the pump to Americans and at a time where ultimately what Trump has been saying, what President- elect Trump has been saying is he wants to make sure that lives are more affordable here in your wonderful country, and we can help you to do that.

SCIUTTO: And, listen, he ran on inflation effectively.

I want to ask you before we go about Trump's repeated idea, proposal, if you want to call it that, that Canada become the 51st state.

Now, I know that's not going to happen. I've lived in Canada myself, and I know that polls show that the vast majority of Canadians have no interest in that. But let me ask you, as a native Canadian and the foreign minister representing the country, what's your response to that offer from the incoming U.S. president?

JOLY: We can be the best ally. We will never become a state, and we will never be a colony.

SCIUTTO: That's a straightforward answer.

JOLY: Indeed.

SCIUTTO: Prime Minister Joly -- well, Foreign Minister Joly -- oh, I do want to ask you before we go, because you were for a time considered a possibility to take over the leadership of the liberal party --

JOLYU: Yeah.

SCIUTTO: -- which would have put you on the path to being prime minister. You took your name out of the running. Can you tell us why?

JOLY: Well, I think that right now, Canadians are facing an existential threat. You know, when it comes to tariffs from President- elect Biden -- President-elect Trump. Sorry.

I asked -- I had to ask myself two questions. The first one, can I be the first woman leading the liberal party of Canada and therefore become prime minister? I said, yes, but can I leave my responsibilities of being the foreign minister at a crucial time in our relationship between the U.S. and Canada? No, and I can't do both.

So I decided to choose my country first. And that's exactly why I'm in Washington. And I'm talking to you, and I'm talking to Americans watching us.

[15:45:04]

SCIUTTO: Well, you -- I imagine you'll be quite busy.

JOLY: Yes.

SCIUTTO: Foreign Minister Joly, thanks very much for joining us. I understand it on your birthday as well.

JOLY: Yes. Thank you.

SCIUTTO: I appreciate it.

JOLY: Thank you.

SCIUTTO: Coming up, the fighting and deaths taking place since the news broke of the Israel-Hamas deal, a deal that actually does not take effect for a few more days, if it gets over the remaining hurdles.

(COMMERCIAL BREAK)

SCIUTTO: It is difficult mix of emotions for families in Gaza, celebrating the news of a ceasefire. One moment only to have loved ones killed. Hours later, the fighting goes on.

Paula Hancocks has more. We do want to warn you once again that viewers may find parts of this story disturbing.

(BEGIN VIDEOTAPE)

(CHANTING)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Celebrations erupted in Gaza as word spread that a ceasefire had been agreed and that the guns would fall silent. They are not silent yet. Dozens have been killed in Israeli strikes since the announcement was made.

Wake up, this brother says, the war is over. Wake up, Hala.

But the war is ending too late for his sister. This intimate moment, filmed just hours after leaders stood on stage announcing the deal. Also too late for many caught up in a barrage of Israeli airstrikes.

This is truly a tragedy, the spokesperson of the Gaza civil defense says. The Israeli occupation does not want this blood waterfall to stop, as bombing is continuing until this moment.

When asked about an increase in airstrikes, the IDF says it is continuing to dismantle Hamas military capabilities. Bodies are offloaded at the Al Ahli Baptist Hospital as well as the wounded. Children are once again among the victims -- a recurring theme of this bloody war.

[15:50:03]

We were sitting in our homes, this man says, when F-16 jets struck us, bringing the house down on top of us, around 15 people were killed. We're waiting for the truce, hoping those who are missing and displaced will return.

Rescuers pull bodies and survivors from under the rubble of a home with their bare hands in one Gaza city neighborhood. The director of the Al-Ahli Hospital accuses Israel of a, quote, desperate attempt to cause as much harm as possible, warning the hours before the ceasefire take hold are, quote, expected to be violent and painful for the people of Gaza. It would not be the first time we see an increase in violence in the hours and days before a ceasefire.

For the residents of Gaza, joy is mixed with fear that Sunday's truce is still a long way away.

Paula Hancocks, CNN, Abu Dhabi.

(END VIDEOTAPE)

SCIUTTO: Sadly, the bloodshed continues there.

Please do stay with us. We'll be right back.

(COMMERCIAL BREAK)

[15:53:48]

SCIUTTO: The people at TikTok are hearing a very loud clock tick- tocking. The popular app has just three days before it faces a ban in the U.S. The app, owned by the Chinese company ByteDance, could shut down completely for U.S. users come Sunday.

However, if TikTok's U.S. operations are sold or the Supreme Court overturns the ban, the app could then remain. That might be good news to the many American users who are rallying to the hashtag TikTok Refugees and looking for alternatives.

For the latest on what's happening, CNN's business writer Clare Duffy joins me now.

Are we seeing folks leave TikTok now or just kind of cover their bases?

CLARE DUFFY, CNN BUSINESS WRITER: I think it's the latter, Jim. I mean, people are really concerned. There's still so much uncertainty, even though were just about two days away from this ban deadline, people don't really know what is going to happen with this platform, so they want to make sure they have other options.

And we're seeing a bunch of those sort of TikTok clones rise to the top of the apple and Google App Stores this week. Three of the big ones I just want to touch on the biggest, the most popular this week is a platform called Rednote. This is a Chinese TikTok-like platform which short form videos, and we're seeing a lot of the Chinese users. They're welcoming American TikTok users, offering Mandarin lessons.

[15:55:05]

I want to play for you a clip that I think really captures the vibe on the platform this week.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: TikTok refugees, welcome to Xiaohongshu.

I know you probably don't understand Chinese, but there are five tips to help you make the most of this app. First, it's all about lifestyle. You can always find a better way to

live. And most comprehensive guide to everything.

And a lot of American users on that platform are outright expressing frustration with the U.S. government, essentially saying, if you're going to take away our TikTok, we're going to go ahead and find another Chinese platform to use. Another platform that we're seeing really surge in popularity is Lemon8. This is a sort of Pinterest-like platform that is actually owned by ByteDance, the parent company of TikTok.

And the company started pushing it in 2023, when conversations about a ban in the U.S. really started coming to the surface. Those platforms could potentially fall subject to the same law that is just about to ban TikTok. So they may not be around forever.

But there are American upstarts as well. You see there, Clapper. This is a TikTok clone that has gained 1.4 million users in just the past week alone. So we're really seeing this race to become the replacement for TikTok.

SCIUTTO: RedNote, the Chinese is for little red book, of course, a reference to Mao's "Little Red Book". Interesting name there.

Clare Duffy, thanks so much.

And thanks so much to all of you for joining me today. I'm Jim Sciutto in Washington.

"QUEST MEANS BUSINESS" is up next.