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Soon: Trump To Announce Sweeping New Tariffs At White House; Amazon Makes Last-Minute Bid For TikTok; Tesla Reports Largest Delivery Drop In Its History; Israel Moves To "Seize Large Areas" Of Gaza . Aired 3-4p ET
Aired April 02, 2025 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:09]
RICHARD QUEST, CNN HOST: One hour to go in Washington. That's on the left of your screen. One hour to go on Wall Street. Thats on the right of the
screen.
The action is on the left. The right is waiting and seeing and doing precious little while we get prepared for the main event of the day.
Minutes away from Donald Trump's tariff announcement in the Rose Garden. We'll be live in the White House very shortly.
A last ditch bid for TikTok, it comes from Amazon. Let's see how that succeeds.
And Tesla sees the biggest decline in sales in the company's history in the stock and the shares are up very sharply.
Greetings. An hour earlier than usual. We are live in New York for two hours tonight of QUEST MEANS BUSINESS. Wednesday, April the 2nd. I'm
Richard Quest on Liberation Day. I mean business.
(MUSIC)
QUEST: Good evening.
President Trump calls it Liberation Day. Other people call it tariff day. We call it a day to watch and wait.
Minutes from now, Donald Trump will announce new sweeping tariff policy at the White House. It's one of the biggest experiments in modern economic
history. And it will begin immediately from today.
The details are still unclear. The latest information that we have on Mr. Trump's thinking is, according to CNN, tariff rates will have a ceiling and
can be negotiated downward. So let's imagine you have a 20 percent tariff ceiling, a universal tariff coming into the United States. That's the
number that people are talking about. Friends and allies have been calling the president until right moments ago. He was still weighing options as
recently as Tuesday night.
Our senior White House reporter is Kevin Liptak. He's at the White House.
So, as I understand it, the way it works, you have a sort of a ceiling of a tariff of, say, 20 percent for everybody. And then you start the horse
trading, the negotiating down from that.
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yeah. That was the message that the Treasury Secretary Scott Bessent had for lawmakers when he was
meeting with them yesterday. But that was before the president had made up his mind. That was before this morning when he was receiving calls from all
of these advisers and friends and aides to talk through with him these various plans.
And so, this is a potential aspect of the tariff plan that we'll hear about in more detail in an hour. But we should note this idea that this will be a
ceiling on tariff rates, and that the countries will be able to negotiate them downward in some ways, contrast with what the president himself said,
which is that if countries apply their own retaliatory tariffs on the United States, that these rates would just go up.
And so, the question is, do you believe what Donald Trump has been saying, or do you believe what Scott Bessent has been telling lawmakers? It's all
just very unclear. And I think that just speaks to the fact that the president is leaving this until the 11th hour to make up his mind.
He's been hearing from a huge array of people with very different points of view on this. In the lead up, you have this on the one end.
QUEST: But, Kevin --
LIPTAK: Yeah, yeah.
QUEST: , I want to jump in here because the way -- whatever happens, if let's say you end up with a universal 20 percent and I know were
speculating but it's reasonable to go down this road, if we're talking about a 20 percent on top of the additive of the other 25 percent for
tariff cars and blah, blah, blah, it could take months to negotiate this down. So, these higher rates on a universal basis could come in immediately
and be with us for a while.
LIPTAK: Yeah. And the press secretary says that this will all take effect immediately, that essentially this will be the pressure point to bring
countries to the negotiating table to try and bring these rates down. And that's, you know, that's the plan. If that is the plan, then you can expect
these countries will be racing to the White House to try and lower their rates. Actually, you've already seen that happening. Just this week you saw
Israel remove its tariffs on American imports. You saw Vietnam remove some of its rate tariff rates on American imports.
So, you already see in some ways the threat of these high, high rates starting to work. But it will be much more complicated ordeal for -- for
many, many more countries as they try and get some relief from these tariffs.
QUEST: Have you got your calculator and a sharp pencil ready for the -- for when it all happens? We'll need all that. Good to see you.
Go ahead. Good to be busy. Good to see you. Yeah.
[15:05:00]
[15:05:00]
Kevin Liptak at the White House.
Now, the announcement will reverberate around the world. It's the tariff heard around the world. It's the tariff heard around the world. Some of the
U.S. closest trading partners aren't ruling out a response. You've got the U.K. and the E.U. say all options are on the table.
(BEGIN VIDEO CLIP)
KEIR STARMER, BRITISH PRIME MINISTER: Our decisions will always be guided by our national interest. And that's why we have prepared for all
eventualities. And we will rule nothing out.
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: Europe holds a lot of cards from trade to technology to the size of our market. But this strength
is also built on our readiness to take firm countermeasures if necessary. All instruments are on the table.
(END VIDEO CLIP)
QUEST: Anna Stewart with me.
So, all instruments are on the table. No one wants to use it. I guess the question is, at what point do they use it?
ANNA STEWART, CNN CORRESPONDENT: Well, a lot of it is wait and see. There are essentially, I guess, three ways you can respond to the tariffs this
evening.
One is diplomacy. And I think at its absolute extreme, we've seen this maybe from Israel, which has decided they will already remove all remaining
tariffs against U.S. products without actually having seen what will be announced liberation day at all.
Number two, of course, is retaliate in the strongest, strongest example we've had of this is perhaps from Canada with Prime Minister Mark Carney
saying that the relationship between the U.S. and Canada is over and they will respond forcefully. Of course, he is facing an election at the end of
the month, and then everyone else, I'd say, Richard, is in bucket number three, which is somewhere in the middle. Wait and see, but have a plan.
The U.K. is hoping to strike a trade deal. The E,U. is hoping it doesn't have to retaliate, E.U. being a great example. They did retaliate against
tariffs not so long ago in the last month, and then actually rolled back on that when they were forced with more threats of tariffs from the U.S.
president.
QUEST: Now, the E.U. is in an interesting position because they are probably the strongest bloc that can go head-to-head or toe-to-toe with the
U.S.
Listen to Pascal Lamy, former head of the WTO and a trade commissioner at the E.U.
(BEGIN VIDEO CLIP)
PASCAL LAMY, FORMER WTO DIRECTOR-GENERAL: The E.U. should negotiate with a gun in its pocket. That's the way the negotiation should take place -- in
order, in order for Trump and the U.S. to know that if they hit, we can hit in the same way. If he super hits, we can super hit in the same way.
(END VIDEO CLIP)
QUEST: That's fighting talk from Lamy. Nobody wants to antagonize the administration any further than necessary. But at the same time,
everybody's just working out what the best strategy is.
STEWART: Well, so far, I'd say we haven't seen President Trump respond well at all to any kind of retaliation. And the E.U. is a case in point.
They announced tariffs against things like bourbon and Levi's and Harley- Davidson motorbikes, amongst many others. And then as soon as U.S. President Donald Trump threatened alcohol, champagne, wine from the E.U.,
they actually delayed that.
So, I don't think that strategy necessarily works. But you're right. The E.U. is a bloc, is a powerful force. The question is, does the U.S.
president actually care? It depends what the U.S. president wants to achieve out of all of this, Richard, and I'm not sure anyone can really
agree on that.
QUEST: No. Whether it's the money or the change or the tariffs.
Anna, you'll be watching and you'll be back later.
Let's put this into deep perspective. Michael Froman -- Mike Froman is with me. Ambassador Froman, he was the U.S. trade representative from 2013 to
`17. Now the president of the Council on Foreign Relations.
Ambassador, it is good to see you. First of all, we're going to take this little bit by bit. We've got -- we've got time. So, we can do this.
We can't really overstate how significant this is because as far as I can remember, we've never seen anything like it in our lifetimes on this scale.
This shift in U.S. trade policy.
MIKE FROMAN, FORMER U.S. TRADE REPRESENTATIVE: I think that's right, Richard, although there's still uncertainty about what exactly is going to
be announced later today, whether it's going to apply to the whole world, and if so, at what percentage, or they'll apply to a select number of
countries where the trade deficit is particularly bad or how it relates to other tariffs that have been already announced, including on steel and
aluminum, on autos and on -- on other products.
So, but it is a very significant shift. It's a shift away from really 80 years of trade policy, where we've worked together with other countries to
reduce tariffs around the world. The tariffs -- U.S. tariffs used to be 8 percent back in the late `40s. They got down to 2 percent. Now they're back
at 8 percent and are going to go higher as early as this afternoon.
So, we're in a very different world. And one question will be how the rest of the world reacts to it, whether it's education or other bilateral means.
[15:10:04]
QUEST: So, before we get to -- to how they react, Donald Trump's message has been consistent. And I've sat through more than most people of his
press conferences and his musings in the Oval Office that the rest of the world has treated America unfairly, that Canada has been very unfair, the
E.U. has been unfair, unfair in the way it's treated. Everybody has eaten the U.S.'s lunch.
Now you have done these negotiations. Has the United States been treated unfairly by these other countries who've taken advantage of Uncle Sam?
FROMAN: Well, look, Richard, I think if you go back historically. In the aftermath of the Second World War, we made the decision, the U.S. made the
decision to open our markets, to help other countries recovering from the war, Europe, Japan, elsewhere, get access to their markets so they could
rebuild themselves. So, it was asymmetric at the beginning. And of course, on the defense perspective, the U.S. has largely provided the security
umbrella for our allies in Europe and -- and in Asia.
And that, I think, is what is motivating a lot of President Trump's perspective that we've been taking advantage of. Over the years, we've
negotiated greater openness, including through free trade agreements, including through multiple rounds of GATT and WTO negotiations, so that we
could get our products into other countries markets and level that playing field.
But the reality is our -- our tariffs are around 3 percent, so applied tariffs, and the rest of the world is around 7 percent. So, there is an
asymmetry. And the question is can, by through the threat of tariffs, the U.S. get the leverage necessary to reduce that asymmetry.
QUEST: Why -- so tell me then why was it not possible for people like you to negotiate a level playing field with a threat of if you don't do this,
we'll do -- we'll get nasty because people like me say to the administration, look, why didn't you negotiate it? Why have you got to
threaten it? Why have you got to go for a sort of a child in the corner? I'll hold my breath until you -- you give in type of mentality. But you
tell me the reality of it.
FROMAN: Well, I think since the mid-1980s, under the -- under the Reagan administration, initially we started negotiating free trade agreements with
Israel, with Canada. Then you had NAFTA, USMCA, you had a series of bilateral free trade agreements. And of course, you had the trans-pacific
partnership, which would have largely eliminated tariffs to the bulk of about 40 percent of the global economy, including the United States.
The Trump administration moved away from that. That would have in many respects created a reciprocal trade agreement, zero for zero, that our
tariffs would have gone to zero. Other countries would have.
QUEST: What -- what for you is the bigger problem? Is it the headline tariff number or is it the non-tariff barriers? Because in the America
first policy that the administration has just published on January the 20th, the instruction to treasury, to commerce, to USTR was very clear, go
after the headline number, but also go after the non-tariff barriers.
FROMAN: So tariffs get the bulk of the attention because they're -- they're easier to understand and they affect goods trades, agriculture,
manufacturing goods. But, of course, it's -- the trading relationships are much more complicated than that. And oftentimes the non-tariff barriers are
even more significant. They're hard to put a number around. It's hard to attribute a particular cost to a particular non-tariff barrier. Although
some have tried to do that.
And so, there tends to be more focus on tariffs, which are easier to understand than on the non-tariff barriers.
QUEST: Final question, sir. I realize I'm -- I'm getting you to do good duty tonight. But let's face it, you've -- you've studied this all your
professional career. This is meat and veg to you in many ways.
At the end of the day, if the plan is to change the terms of trade -- to bring -- forget the money and the revenue, that's, I think, a red herring
to bring production back, to reverse the industrial decline per se. How long does that take from your experience? How many years before you really
see an improvement in production?
FROMAN: Yes, I think that is exactly the right question, because I think we'll see individual announcements by companies saying were going to put
$100 billion into the U.S., or maybe even more into one sector or another, but it takes years to change production patterns, to change supply chains.
And I think that the Trump administration faces a very interesting challenge, which is that the cost of these tariffs are going to be felt by
everybody. And the ultimate benefits, if there are any, in terms of creating new jobs in manufacturing, are going to be enjoyed by very few,
and in quite a long period of time from now.
[15:15:00]
And that's a very difficult political economic situation to maintain.
QUEST: Ambassador, I'm so grateful that you had -- you're right, the right person to be speaking. And we'll talk again, of course, once we know the
details in the days ahead. Thank you, sir, for giving us time. Thank you.
FROMAN: Thanks for having me.
QUEST: Double dose of QUEST MEANS BUSINESS as we continue.
Tesla is reporting a big drop in deliveries in the U.S. and Europe, and the largest in the company's history.
(COMMERCIAL BREAK)
[15:18:00]
QUEST: Amazon has made a last minute bid for TikTok. Donald Trump's weighing the options for a deal to pull the app away from Chinese
ownership. Otherwise, it could face a ban in the U.S., and that could happen as soon as Saturday.
Our senior White House correspondent, Kayla Tausche, is in Washington.
So -- so now, let's dissect this piece by piece, if we may.
First of all, we've got to get the Chinese and TikTok itself to agree to be sold even before, you know, they agree that Amazon is the one to buy it. Do
we know where we stand on that side of the equation?
KAYLA TAUSCHE, CNN SENIOR WHITE HOUSE CORRESPONDENT: We don't. And it seems, Richard, from talking to my sources, that first, what the White
House wants to do is to find a deal that's agreeable in the U.S. and satisfies national security concerns here and can get President Trump on
board, then figuring out how to present that to President Xi Jinping in China and make it workable from ByteDance, the parent company's standpoint,
as well as for the Chinese communist party.
I the past, the hangups to a deal have been that China did not want to sell the app outright to lose out on the future profits from the app. But it
also didn't want to give away its valuable algorithm, which decides what TikTok users see. That algorithm is at the heart of some of the national
security concerns here in the U.S., so there's a question of how this deal will be structured to allay some of those concerns, whether or not some of
these investors or tech partners would essentially build a new algorithm here in the U.S. that would operate independently from that. We still don't
know, Richard.
QUEST: Okay. Now, Amazon -- do we know if Amazon is the only one in if anybody on the beach?
TAUSCHE: No. There are several interested parties. And in fact, Amazon has made this 11th hour offer via a letter to Vice President J.D. Vance, who's
running this process, as well as the commerce secretary, we've learned, but they're not taking it seriously because of how late in the game it's come
in. They've been working behind the scenes to try to assemble a consortium of investors that could include tech giant Oracle, whose founder, Larry
Ellison, is quite close to the Trump administration. The Blackstone Group, whose founder and longtime CEO Stephen Schwarzman is also close to the
Trump camp.
[15:20:04]
And then you have other investors like Andreessen Horowitz, the venture capital firm out of Silicon Valley, Silver Lake Partners, a tech focused
private equity firm. A lot of these companies have expressed their interest, and we've learned that the deal that is the leading contender
right now is actually an array of some of those investors buying a majority stake in TikTok, not an outright sale.
It's worth noting, Richard, I've also learned that Microsoft has submitted its interest, although it's hard to grasp exactly how serious that was and
whether it was a formal bid that was submitted.
QUEST: It's got plenty to run. I'm grateful for you. Thank you. Keep an eye on that for us.
TAUSCHE: Thank you.
QUEST: And come back when there's more.
Tesla -- to Tesla now, the biggest drop in deliveries in its history. Down sales 13 percent in the first quarter. In comparison, 50,000 fewer vehicles
to the same period last year. The European Automobile Manufacturers Association says European sales alone were off, best part of 50 percent 49
percent.
Joining me now, Matt Egan.
I mean, I guess it's not hard to see the reason why if you are sort of adverse to the president and the president's policies and Elon Musk's role
in government. But how damaging is it? It's a bit of a silly question that obviously if you lose 50 percent of your sales, it's damaging.
But you know what I mean. How long can Tesla continue this before they have to change something?
MATT EGAN, CNN REPORTER: Well, Richard, this is clearly a brand in crisis, right? Tesla is facing a real backlash. But that's not the entire story
here. Clearly, that is a factor when you're talking about a sales drop of 13 percent for a company that really had been posting consistently 20, 50,
100 percent sales increases. This is a notable drop in sales for this company.
And you mentioned the European numbers. Those are really telling, right? I mean, to see their sales through the first two months of the year plunged
by 49 percent when overall EV sales on the continent have been sharply higher. That says a lot right there.
I think part of the problem is that Elon Musk is Tesla, right? And Tesla is Elon Musk. But you have Musk -- he's now inextricably linked with President
Trump. And for maybe half the country in the United States at least, that might be a reason to buy a Tesla. But for the other half, maybe not so
much.
QUEST: Right. But -- but -- but there's also the investors in Tesla and other of the companies basically saying to Musk, hang on, you have a day
job, a day job for which you are being paid hundreds of millions of dollars. It's time to get back to the day job. Is that having any influence
at all?
EGAN: It's too soon to say. I think you're right, though. Theres two issues, right? Theres the backlash against Musk and the Tesla brand. But
then there's this distraction risk, right? Because if you have Elon Musk spending 110 percent of the time working on DOGE, I mean, how can he
possibly run Tesla, let alone the rest of his massive business empire?
Dan Ives, the Wedbush analyst, the outspoken Tesla bull, he has made a big point about just this distraction risk. He put out a tweet saying, look, we
knew that the numbers would be soft, but these numbers, he said, they were a disaster, really on every metric. And he said, yeah, refresh issues, but
brand crisis is key.
QUEST: Right.
EGAN: And the time has come for Musk. Fork in the road moment for Tesla.
Now, Richard, whether or not Musk is going to listen to that advice to focus more or only on his business interests remains, you know, that's an
open question at this point.
QUEST: Last question to you with tariffs. Today is tariff day. Tesla, Musk said last week at the weekend look, these tariffs will have a staggering
effect on Tesla, too. So it's not like Tesla is immune from what's taking place.
EGAN: Yeah, that's right. Listen, every single automaker is going to be impacted here. Although as you know there's relative winners and losers.
And because Tesla makes its cars in the United States and it's only really at risk when it comes to the auto part tariffs, which haven't kicked in
yet.
But yeah, Tesla is going to face an issue there as well when it comes to -- to costs, and it comes at a time when they have a lot more competition,
right? That's part of the story too, with the sales drop. It's the fact that they're facing competition from cheaper alternatives. In Europe and
China, they're facing a lot of competition from BYD.
And so, all of that is not going to help these the sales pressure that we've seen on this this company and obviously this is weighing on the stock
price as well. When you look at the trend in the last few months, it's dramatically lower than where it was -- Richard.
QUEST: Matt Egan, I'm grateful to you, sir. Thank you.
EGAN: Thanks.
QUEST: Let's stay with the auto industry now. The Mexico's president, Claudia Sheinbaum says even with President Trump's tariff announcement,
it's a -- it's a worldwide issue, not just affecting Mexico.
[15:25:00]
She went on to say that she will press ahead with her plan to strengthen Mexico's economy and not be negative.
Our Valeria Leon has more on how Mexico's carmakers are dealing with this uncertainty.
(BEGIN VIDEOTAPE)
VALERIA LEON, CNN CORRESPONDENT (voice-over): As the effect of a 25 percent tariff on steel and aluminum imports to the United States begins to
take its toll, uncertainty looms for workers in the assembly line of the Maindsteel manufacturing plant in the central Mexican state of
Aguascalientes.
EDUARDO SILVA, WORKER (through translator): It's a little worrying for us as suppliers, because there could even be staff cuts. We're worried,
because we don't know what will happen later.
LEON: The tariffs package, which went into effect on March 12th, was imposed by President Donald Trump, who claimed it would correct trade
imbalances and reactivate the domestic U.S. manufacturing industry.
According to the Mexican government, this measure is not justified, especially since the trade balance favors the United States in these
sectors.
With the tariffs now in place, the director of Maindsteel told CNN that the measure has already caused disruptions for this industry.
CUITLAHUAC PEREZ, PRESIDENT, MAINDSTEEL (through translator): We've had delays in export processes, because customs sometimes doesn't operate at
the border, waiting to see if tariffs will actually be enforced or not.
You can imagine the number of trucks that pass through the border every day. It affects us a lot.
LEON: Maindsteel exports 60 percent of its products to the United States. And although the automotive industry is its main source of revenue, it also
assembles a variety of products, including parts for machines for casinos in Las Vegas and New Orleans. But the consequences are still unclear.
ARMANDO AVILA MORENO, PRESIDENT, AGUASCALIENTES INDUSTRIAL CENTER (through translator): We still can't fully assess what the final impact could be.
What we do know is that, in the case of the United States, it has a very large deficit and is searching under every stone for where it can find the
missing funds.
So far, we can't know or calculate anything. What is very clear is that Mexico is heavily dependent on the automotive industry.
LEON: But tariffs on aluminum and steel are not the only concern for Mexican exports, especially since new tariffs on automotive products
shipped to the United States are set to take place on Wednesday, creating uncertainty in the automotive industry, as well.
Mexico is the seventh largest car producer in the world, with an annual production of 3.5 million vehicles, 76 percent of which are exported to the
U.S.
Aguascalientes is the Mexican state with the third highest number of automotive factories, which is why the state government says it has
prepared a program to assist workers that could be laid off as a result of the new tariffs.
ENRIQUE DE LA TORRE, SPOKESPERSON, GOVERNMENT OF AGUASCALIENTES, MEXICO (through translator): I would ask that here in Aguascalientes, we remain
calm, as everything necessary is being done to prevent the impact from causing unemployment.
With the tariffs on steel and aluminum already placing Mexico's manufacturing sector under severe strain, employees and industry leaders
are worried the new auto tariffs will mark a tipping point for Mexico's economy.
ALFONSO RAMIREZ, AUTO INDUSTRY WORKER (through translator): There is concern. We depend so much on trade from here to there, as well as from
there to here.
LEON: Valeria Leon, CNN, Mexico City.
(END VIDEOTAPE)
QUEST: As we continue, a familiar scene in Gaza. Palestinians running for their lives as more bombs are falling. In a moment, why Israel says it's
expanding its operation.
(COMMERCIAL BREAK)
[15:31:50]
QUEST: Thirty minutes ago, and we're likely to hear Donald Trump's plans to impose tariffs on some of the nation's largest trading partners. As soon
as the president speaks, we'll begin. We'll bring that to you.
The European Union says it should negotiate those tariffs in the words of one expert with a gun in its pocket. It's from the former head of the World
Trade Organization, Pascal Lamy. He says Europe has the firepower to respond, even if the United States moves against it.
(BEGIN VIDEO CLIP)
LAMY: The name of the game seems to be that Trump wants to build a tariff fence around the U.S., which is 13 percent of world imports, 1-3. Now the
impact of this, the economic impact of this is likely to be first and foremost for the U.S., who will suffer these tariffs because they will
raise domestic prices because contrary to what Mr. Trump believes or seems to believe, tariffs are not paid by the exporter but by the final consumer.
Now the rest of the world will also suffer because they will export less to the U.S. and it will take a bit of time for their exports. That won't go to
the U.S. to go elsewhere. So what? This is likely to be bad economic news.
QUEST: So, do you believe that the E.U. should retaliate tit for tat? Do you believe they should wait and see? What is the correct response when
somebody is tariffing you?
LAMY: Well, that's a very good question. Depends a bit on what are these tariffs' purpose. Is it to raise revenues for the U.S. budget. Is it to
shrink the budget deficit which would be bad. Is it to incentivize investment into the U.S.? Is it about fentanyl? It's about immigration. Or
is it or is it about a negotiation?
Now, the E.U. -- I'm not speaking for them anymore, as you know, but the E.U. should be where it is, which is open to a negotiation if the result of
this negotiation can be balanced but ready to retaliate in order to create the necessary balance of forces and the E.U. with the size of its market,
the depth of its market has a huge tariff, firepower if necessary.
QUEST: So, would you, in terms of future trends of trade? And we're hearing a lot of south, south trade. And I imagine and I know you believe,
that really the E.U. should now be looking to develop different markets, widen them, deepen them, for example, with China.
[15:35:03]
LAMY: Absolutely. This is correct, Richard. As I said, if Trump puts his tariff roughly 15 percent of world trade will be hit. But there's a good 85
percent that will remain open. And that can open more under the necessity to compensate for this loss of access to the U.S. market.
So -- and we've already seen that. You may have noticed today, for instance, that Japan, Korea and China have been starting to talk trade
together, which they haven't -- hadn't ever been done before. So yes, this is happening.
QUEST: What do you say? Donald Trump has threatened that he will penalize even more if, for instance, the E.U., the U.K. and Canada were to all gang
up on the United States? I mean, would you be in favor of that sort of reaction?
LAMY: I mean, we have -- we E.U., I'm not speaking for U.K., which is now a relatively medium sized country as well as Canada, and I can understand
they don't have the same firepower that the E.U. has. The E.U. should negotiate with a gun in its pocket. Thats the way the negotiation should
take place in order -- in order for Trump and the U.S. to know that if they hit, we can hit in the same way. If he super hits, we can super hit in the
same way. So, the issue is whatever sort of negotiation would be possible if -- if the game is about a negotiation as far as the E.U. is concerned,
it will happen only if the balance of forces is equal. And that's one of the few areas where E.U. has an international firepower, which is similar
and to some extent larger than the U.S.
(END VIDEO CLIP)
QUEST: Pascal Lamy talking to me last night.
Israel's defense minister says there will be a major expansion of the military's operation in Gaza. In a news statement, Israel's Minister Katz
said the expansion means, in his words, to crush and cleanse the area of terrorists and terror infrastructure while seizing large areas that will be
incorporated into Israel's security zone.
Israel's Prime Minister Benjamin Netanyahu says the pressure will continue until all Israeli hostages have been released.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): Last night in the Gaza Strip, we switched gears. The IDF is seizing territory,
striking the terrorists and destroying the infrastructure, because we are now dividing the strip and increasing the pressure step by step, so that
they will give us our hostages. And as long as they do not give them to us, the pressure will increase until they do.
(END VIDEO CLIP)
QUEST: Jeremy Diamond's with me. Jeremy is in Jerusalem. We are now a long way from any talk of a ceasefire, in a sense, being put back together
again. That seems in a different world. But what does happen? Israel is now hell-bent on escalating this whole thing.
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Yeah, that's exactly right, Richard. And over the course of the last few weeks, we have been watching
as the Israeli military has steadily escalated its ground operations in Gaza in a, you know, at the same time as it is also escalating its air
campaign in the Gaza Strip as well, striking everywhere from northern, the northern part of the strip, all the way down south.
What we saw previously was the Israeli military operating in northern Gaza, retaking that Netzarim Corridor, separating the northern part of the strip
from the southern part. But now they are also pushing in, in from the south and moving up north, taking over large swaths of territory in Rafah. That
large south southernmost city of the Gaza Strip.
And it seems that they intend to go all the way up to this corridor that effectively would split the southern part of the Gaza strip from the rest
of Gaza. That seems to be the intention here to very much perhaps replicate the kind of strategy that we've seen Israel play out in the northern part
of the strip, but this time in the south, and effectively squeezing not only Hamas militants, but also Palestinian civilians into a smaller section
of the central part of the Gaza strip.
Today, we've also seen a series of deadly airstrikes in conjunction with those ground moves. More than 60 people were killed, according to the
Palestinian ministry of health. That includes 19 people who were killed at a U.N. clinic in Jabalya, in the northern part of the Gaza Strip. Of those
19 people, nine of them were children, according to Palestinian civil defense.
[15:40:03]
The Israeli military, for its part, insists that there were Hamas terrorists operating from within that very same clinic -- Richard.
QUEST: So very difficult to see whilst everybody is else distracted on tariffs and this, that and the other. This just sort of rumbles on in a
depressing and sad way. And by the way, I mean, Israel currying favor with the U.S. administration. Even more favor, if you will, by sort of zeroing
all its tariffs. I mean, the, the U.S. and the Israel now seem to be lockstep on so many aspects of policy.
DIAMOND: Without about it -- without a doubt about it, Richard. And that's because the Israeli prime minister understands how much he needs President
Trump. And President Trump, for the time being, seems to be willing to give Netanyahu a very, very long leash. I mean, the disparity in the kind of
pressure that we were seeing from the Biden administration over Israels conduct in Gaza versus now with the Trump administration is truly night and
day.
And it's certainly something that the Israeli military is taking advantage of as it ramps up its offensive in Gaza, and also, of course, the Israeli
prime minister, always a very much a political animal, you know, taking advantage of this issue of -- of tariffs, zeroing out tariffs on American
goods coming into Israel as another way to make clear to Trump that he's -- his guy effectively, and he hopes that they can remain simpatico --
Richard.
QUEST: Jeremy -- Jeremy's in Jerusalem, grateful for you tonight, sir. Thank you.
And as for you and I, the countdown is underway. And U.S. trade partners around the world. Wherever you are watching tonight or in the morning, for
example, you're wanting to know what's going to happen. In 20 minutes or so, we'll get a good idea. Assuming he's on time. President Trump's calling
it Liberation Day. American importers may not feel quite so liberated. Some might even say shackled to the paperwork after the break.
(COMMERCIAL BREAK)
QUEST: If you're an American importer, then you may be about to see a lot more of this form. Have a look at it. I'll show it to you. It is the U.S.
Customs and Border Protection entry summary to three-page form. Sometimes it's even digital. These days, duties have to be paid within ten days of
cargoes being released, and that, of course, assumes you're a trusted trader. And they know who you are and you don't have to pay on the spot.
Dan Gardner is the president of Trade Facilitators Incorporated, a consulting firm specializing in logistics and trade compliances, with me
now, sir, in Mexico.
[15:45:09]
All right. Are you ready for this? Just how difficult is it going to be sorting through the spaghetti of different tariffs after today?
DAN GARDNER, PRESIDENT, TRADE FACILITATORS INC.: Good afternoon. Thank you for -- for having -- having me on. It's a pleasure.
It's already been difficult, Richard. And it will continue to get more difficult because you're dealing with multiple tariffs, layering of
tariffs. So, whereas the entry summary is the document that a U.S. importer uses to essentially clear goods through customs electronically, and carries
all of the details, who's the seller overseas, who's the importer in the U.S., the description of the product, the ten digit classification. Thats
all relevant information for a customs entry.
What it really is, is an invoice from U.S. Customs and Border Protection telling the importer how much they have to pay. You mentioned that that
ten-day grace period through automated clearinghouse. So, first of all, if anyone's looking for any better proof that the U.S. importer pays the
tariffs, you can stop looking because the entry summary is essentially an invoice from U.S. Customs and Border Protection to the importer.
So, we have multiple tariffs in play now depending on the country of origin, whether its steel or aluminum.
QUEST: Dan, Dan, can I interrupt you? Can I just interrupt you? Because one of the things that fascinates me is when you have a situation where a
tariff comes in on a Monday, is taken off on a Wednesday and might be altered by a Friday, how quickly does that happen in practice, as we used
to say at the dock -- at the dock gate?
GARDNER: Almost right away, Richard. So technically, the government has to publish a change in tariffs in the federal register, which is essentially
the newspaper of the federal government. So, right, right before we came on, for example, I got a news flash that tariffs on autos go to 25 percent
tomorrow, finished autos and auto parts or raw materials that went to making automobiles will be May 3rd. So that's one day to the next. And the
way customs who does a great job, by the way, of managing their software. It's called the automated commercial environment for both import and export
transactions. They can make that adjustment pretty quickly.
QUEST: But there are so many ships. There are so many different products. I'm just looking at my desk here, from paper cups to laptops to pens to
paper. There are so many products and I'm -- by the way, I've looked at the WTO's list of tariffs and I've seen how descriptive and complex it gets,
particularly when you talk about technical equipment, steel, aluminum, different grades, different qualities. And it must be a nightmare for you
over the next few days.
GARDNER: Yeah, well, like I said, it's been nightmarish. Leading up to today, but it's going to get more complex. So, when you talk about in the
U.S., it's called the harmonized tariff schedule. Thats the publication where importers go to see ultimately what they're going to have to pay in
tariffs. There are north of 17,000 different classifications in that document, that thousands of pages in the document. It's all online now, but
17,000 possible classifications.
So, for example, if President Trump's -- Trump decides to go with reciprocal tariffs, meaning whatever country charges us, were going to
charge them. You have to go through every country to determine what they charge for U.S. goods going into their import market and then go through
17,000 literally classifications to come up with the tariff for each country. Thats an administrative impossibility, Richard.
QUEST: So, this, in fact, while we've been talking, I've just been looking online at the harmonized tariff schedule. Revision, five live animal
products and blah, blah, blah, blah. Oh, my goodness. It's a well -- well, get that up online in a second or two. So, people can actually see exactly.
But finally, this idea of who pays. Now look, I'm exporting toys to the United States. I know that you, Dan, is going to have to pay us the
importer a tariff of, say, an extra 10 percent. So, I reduce my price to you by 10 percent so that I've eaten most of the tariff. That's one way of
doing it. And then you, of course, would either pass it on or you would eat it as well.
GARDNER: Fair statement. And that is indeed what went on during the Section 301 tariffs. The original Trump tariffs from 2018, which, by the
way, were exclusive to -- to China. So, what companies did and I was involved in this front line. So, I have direct experience with it, is that
the U.S. importer will go to the supplier overseas and ask them to take a haircut.
[15:50:07]
That's not a technical term, but that's the terminology that's used, which means reduce, reduce your price. That did happen for sure. Doesn't happen
in all instances. It depends on the product. The country of origin, the original sales price. Theres a bunch of factors there, but one must
recognize that that did happen the first time around. But you can only get so much blood out of a stone. So, after an importer --
QUEST: Last quick question, because we're running out of time when we hear from the president in about 12 minutes, what should I be listening for?
What will you be listening for from this administration? What number or what -- what specific are you listening for?
GARDNER: Yeah, I'm listening to the type of tariffs he's going to be putting in place. So, we talked a little bit about reciprocal tariffs. I'd
be shocked from an administrative perspective if they if they did that for the reasons already alluded to, I'm looking at a probably a universal
tariff on all countries, which is cumulative to any tariffs that are currently in place today.
The dirty 15 or whatever they're calling it now. Thats a possibility. But I'm thinking universal tariffs, if for only the reason that its
administratively easier to manage in that customs --
QUEST: Right.
GARDNER: -- ace system.
QUEST: Good to see you, sir. We'll talk more in the days ahead. I'm so grateful that you came on tonight and helped us understand. Even though I
realize it's a nightmare of a day or two for you. Thank you for taking time, Dan. Very appreciated.
Now, as we head towards the moment, a few moments left to trade on Wall Street. Interesting. When we came on air at the top of the hour, we were
just about even stevens. But look at the Dow Jones now, and you see that we are considerably higher, which means that it's starting to leak a little
bit of what people think is going to happen. And the market believes it's not going to be as bad as the worst-case scenario.
And the reason I say that is there have been some off the record briefings taking place over the last hour, and it's not surprising that that sort of
information does get out as to what the information is thinking of and where they may be going, and we'll take a break. QUEST MEANS BUSINESS in
just a moment.
(COMMERCIAL BREAK)
QUEST: Now, we'll continue to watch the markets as we expect President Trump to unveil his new tariff plans. Only moments from now.
[15:55:01]
That's the way -- that that's the way the Dow has gone. The -- that unease and nervousness in the morning and a rally then a sell off, not a sell off,
but a pause. And now we're quite strong as we expect the close as we get to the closing bell.
Look at the 30. I think this is going to tell us something a little bit. We've also got the -- the triple, the 30. There we go. Now you've got the
bank.
Amazon that might be on the back of TikTok, and their announcement. You've got home, Caterpillar big. Theres no real theme to it at the moment, except
you have value stocks, P&G, Verizon, Merck towards the end.
So, the market is preparing for things to be not as bad as they might be overall. And the triple stack, because we want to know where the
Magnificent Seven and how that might be affected. Well, you're seeing the best session of the day from the Nasdaq. Again, I would say it is more wait
and see, watch and wait to see.
The Rose Garden, the Rose Garden. Now where we are waiting for things to get underway. The president, along with his major members of the economic
policy, the -- I expect to see the Commerce Secretary Howard Lutnick, you'll get Scott Bessent, the treasury secretary. I'd also expect to see
the USTR.
Interesting to see if Elon Musk is with him tonight, but let me give you a quick, profitable thought. Think of it as a half time profitable thought,
as we wait for it.
We've tried to bring to you tonight the urgency and the monumental nature of what's taking place today, 80 years, if you will, of received wisdom on
tariffs and trade policy is about to be reversed. Now, whether it's a negotiating ploy or something just designed to raise revenue doesn't really
matter. The fact is that the U.S. is now about to go in a way that we've not seen since post-Second World War, and arguably since, of course, Smoot-
Hawley and McKinley and all of that in the last century.
So, we are moments away from the closing bell and the tariff events at the White House. Put it all together. I will promise you, the details of what's
announced as QUEST MEANS BUSINESS continues.
END
