U.S.-China Trade Tensions Rise Over Computer Chip Access; White House Predicts Vaccine This Year, Experts Skeptical; Sanofi CEO Summoned to Elysee, Says U.S. Gets Vaccine Priority; Trump Formally Announce Operation Warp Speed
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: A record drop for U.S. retail sales as the country looks to get reopening. And the CEO of French drug maker, Sanofi gets caught in a transatlantic row over access to a vaccine. Live from the world's financial capital in New York City. It's Friday, May 15th. I'm Julia Chatterley, in for Richard Quest, and this is QUEST MEANS BUSINESS. Good evening once again and welcome to the show. Great to be with you tonight. Even a pandemic can't prevent a flare up in the U.S.-China trade war, the Trump administration moving to restrict Huawei access to chip suppliers. Huawei has long been a flashpoint in the broader trade war news. This latest escalation though pushed down stocks earlier in the session. The Dow, as you can see has clawed its way back to unchanged, but companies like Boeing, Apple and Intel could be hurt if Beijing strikes back and those stocks remain solidly in the red. A tweet from the editor-in-chief of China's "Global Times" suggest those companies may have reason to worry. He says if the situation escalates further, China could quote, "activate the unreliable entity list to restrict or investigate U.S. companies such as Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes." "The Global Times" has a history of foreshadowing the Chinese government's moves. In the meantime, relations between Washington and Beijing have deteriorated as the Trump administration pins the blame for the pandemic on China. Although President Trump's top trade adviser told CNN he is not even thinking about the trade war right now, though he still have plenty of criticism for Beijing.</s>PETER NAVARRO, DIRECTOR OF THE OFFICE OF TRADE AND MANUFACTURING POLICY: China created that virus and they've inflicted trillions of dollars of damage on our economy and killed tens of thousands of Americans and now they want to steal our vaccines? I mean, come on.</s>CHATTERLEY: Peter Navarro there referring to fresh reports that China is launching cyberattacks to steal coronavirus vaccine and treatment research. All right, let's get some context on this. Joining us now, Max Baucus is former U.S. senator and former U.S. Ambassador to China. Ambassador, fantastic to have you with us. What do you make of these latest developments and the rhetoric that we see coming from the White House once again?</s>MAX BAUCUS FORMER U.S. AMBASSADOR TO CHINA: Well, there's short term and there's long term consideration here. Short term, obviously, an election coming up and China is not popular among American people. In fact, two thirds of Americans have an unfavorable view today of China. Add to that, there is a bit of a contest between President Trump and probably Vice President Joe Biden, who is tougher on China and these actions the administration is taking, let's say the recent Huawei rule give Trump a talking point that he is really tough on China thinking that might help him with the election and especially with his base. Frankly, longer term, I think it foreshadows some difficulties, because we have to remember that China is not going away. China will always be there. China's population is four times the size of ours. Its economy is going to be larger than ours in not too many years. We have to find a way to work with China. There's no getting around that. And so after the election, I hope there's a kind of a reset. We have a pause button that is pushed and we can figure out okay, how can we manage this relationship? Now it is true that we, Americans have some concerns about -- and legitimate concerns about our National Security. It's a very, very difficult issue to resolve that has to be addressed.</s>CHATTERLEY: So, how should it -- because it's not just Americans that are frustrated and concerned about information sharing in the light of this virus, you've picked on a number of issues. There is not a level playing field in dealing with China here, even on an economic basis. How do we level the playing field? And how do we handle China short term and long term because so far, what's been done has not worked?</s>BAUCUS: Well, and frankly, some of the things -- some actions the United States has taken have worked. I can give you some examples, particularly actions the United States took in the South China Sea to prevent China from going any farther. But the bottom line, we have to, as a country, hopefully be the world's leader. We could exercise more power if we do exercise leadership. We, as a country should sit down and develop a strategic longer-term plan toward China. We don't have one today. America is very ad hoc, very reactive to what China may do or not do. We need a longer-term strategic plan. How do we deal with China just as China has with the United States, I might add, and we develop the points, then we should say to China privately, here's what we can live with. Here's what we cannot live with.</s>BAUCUS: And if you cross the line, you will face immense repercussions, we won't tell you what they are, but it will ruin the day you made those decisions. You have to basically get China's respect, that's the only way I know we could do it because China in certain sense is a bully. And you've got to stand up firmly, confidently, so that you're not speaking down to China, not criticizing China, but just standing up yourself. That's the way you get respect from China.</s>CHATTERLEY: It's interesting you say that because the President's treatment of China is almost like you meet one bully by being a bully yourself. Your idea for a longer-term plan of how to tackle China, I think we both agree is not going to happen between now and a presidential election. How much worse could this relationship get over the coming months? To your point, there's plenty of frustration.</s>BAUCUS: It could get to even worse or dangerous point. All of these actions we're taking, well, some of them will push China to be much more self- sufficient, will push China to say, whoa, why are we staying with United States? But you know, it's not worth it. Our economies really aren't tied very much and that's very difficult to sever both for United States and for China. But long term, China could very well think, you know, just fed up with all this rhetoric in the U.S. We don't know what's coming next. So, let's develop our ties with other countries around the world. Let's see what they could do only in Asia and Africa and South America, but even more importantly, in Europe. So it's just that -- those are actions China could well take if we keep pushing them away.</s>CHATTERLEY: Yes, it's going to be interesting to see how this plays out during the pandemic in particular. It's a global frustration at this moment. Ambassador, fantastic to have you with us. Ambassador Max Baucus there.</s>BAUCUS: You bet, yes.</s>CHATTERLEY: Stay safe, sir.</s>BAUCUS: Thank you.</s>CHATTERLEY: All right, Donald Trump predicting the U.S. will have a coronavirus vaccine by the end of this year. He is calling a renewed effort, Operation Warp Speed and appointing a former GSK CEO to help lead the charge. Health experts caution, the President's timeline is highly ambitious. President Trump promised the U.S. would share any vaccine with the rest of the world.</s>DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Whoever gets it is going to be very proud to give it and develop it. They have developed it and we'll see what happens. We've got countries that are allies that are -- we have some countries, frankly, that aren't allies, where we're working very closely together. So, we're working together with many different countries. And again, we have no ego. We have no ego. Whoever gets it, we think it's great. We're going to work with them. They're going to work with us. Likewise, if we get it we're going to be working with them.</s>CHATTERLEY: Elizabeth Cohen is CNN's senior medical correspondent and joins us now. Elizabeth, great to have with us, because I want to be very precise about what the President was asked by our own Kaitlan Collins today, and that was whether we'd have a fully approved vaccine by yearend, and the President said we would. Talk to me about the probability and the likelihood and the ability of research analysts to get to that point by yearend.</s>ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: So, Julia, let's go back to this past January when Tony Fauci said -- Dr. Anthony Fauci -- at the NIH said, he hoped that we would have a vaccine within the next year to 18 months. So, by the end of this year is -- it's on the sooner and obviously -- of that span that Dr. Fauci gave, but it is within that span, and there's very few people in the world who know more about vaccines than Tony Fauci. So, we're going to put it right there. Now, that year to 18 months, many other experts have said, possible, but improbable. It just takes a while to do these vaccine trials. I thought, you know, you have to decide how much weight you're going to put into what President Trump says. He has been wrong about several things during this pandemic. He thought hydroxychloroquine was a great idea. That didn't turn out so well. So, let's talk -- let's think about the person who was at that press conference who does know a lot about vaccines and that is Dr. Slaoui. He is now the head of the vaccine effort and what he said is that he had more confidence than ever that we could deliver several hundred million doses of the vaccine by the end of the year. But that is different from having a fully approved, ready to go, let's start vaccinating the American public or the public in the world by then. That is a different thing saying we'll have the doses ready is different than saying we'll have an approved vaccine ready to go.</s>CHATTERLEY: Okay, so, yes, to your point, then, you can be vaccinating certain people, perhaps healthcare workers, for example, with a manufacturing at risk vaccine, but that's very different from having something that you can have the general public using. Is that the key here?</s>COHEN: Well, well the manufacturing and risk is a separate thing. I mean, you can start manufacturing really pretty much anytime you want.</s>COHEN: You can have a warehouse full of vaccine, that doesn't mean anything. All it means is you have the vaccine. It doesn't mean that it's been fully researched and fully studied and that we know that it's safe and effective. But to your point, Julia, about healthcare workers. What I've heard some people talk about is, you know, while we're doing these large scale clinical trials, which is thousands and thousands of people, maybe we'll invite healthcare workers to come in and get it, too, because they're at such high risk that maybe they'd be willing to be vaccinated early before the vaccine is proven. Remember before a vaccine is actually proven to be safe and effective. You don't know that it works, and you don't know that it's safe, but healthcare workers might be willing to take that risk because they are so close literally, to that virus. So, there is a difference between doing trials on thousands of people maybe or maybe not including healthcare workers and saying alright America, all right world, go to your doctor and you can get the vaccine. Those are two different things.</s>CHATTERLEY: Yes, we are just piling up the hurdles and jumping them all really fast in our efforts to get to a point where we can try and do something to address this them. There's a lot of hope behind these. I hope we're right. Elizabeth Cohen in Atlanta, great to have you with us, as always, thank you.</s>COHEN: Thank you.</s>CHATTERLEY: Political pressure is mounting in the C-suites of Pharma executives around the world. The CEO of France's Sanofi has been summoned to a meeting with Emmanuel Macron. In an interview, Paul Hudson appeared to suggest that the firm would prioritize the United States if it finds a vaccine because the U.S. government provided the initial funding. Cyril Vanier is in Paris with the details.</s>CYRIL VANIER, CNN CORRESPONDENT: Sanofi tried to deescalate its row with the French government saying it had been misinterpreted. The row started earlier this week when the CEO of Sanofi, Paul Hudson, was quoted as saying that the United States would be first in line to preorder any potential coronavirus vaccine that Sanofi might succeed in developing. As you can imagine, a French pharmaceutical giant saying it will prioritize the U.S. markets caused a furor here in France and President Emmanuel Macron summoned the Sanofi CEO, Mr. Hudson on Tuesday. They will be meeting at the Elysee Palace. Mr. Macron said that the coronavirus vaccine should be a common good available to all regardless of financial considerations. But even though Sanofi has softened its rhetoric, the substance of its argument remains the same. They argue that developing and fast tracking a coronavirus vaccine is a risky and financially costly endeavor and they want countries to share the financial risks. Now the U.S. has done that by putting tens of millions of dollars on the table earlier this year to help Sanofi with production costs. Europe and France for the moment have not. Cyril Vanier, CNN, Paris.</s>CHATTERLEY: All right, we're going to take a quick break here, but U.S. retail sales crushed by coronavirus in April. The sector collapsing at a historic rate. The question is what does recovery look like? We'll discuss after this.