♪♪ >>> HELLO EVERYONE, AND WELCOME TO "AMANPOUR & COMPANY."

HERE'S WHAT'S COMING UP.

COULD CHAOS FROM TRUMP'S TRADE WAR CAUSE A MAJOR GLOBAL REALIGNMENT?

I ASKED KURT CAMPBELL, ARCHITECT OF U.S./CHINA POLICY UNDER PRESIDENTS OBAMA AND BIDEN.

>>> THEN A STATE OF RAGE.

A NEW DOCUMENTARY LOOKS AT HOW PALESTINIAN AND ISRAELI CHILDREN ARE IMPACTED BY OCCUPATION ON THE WEST BANK.

>>> AND MICHEL MARTIN SPEAKS TO TWO AMERICAN ENTREPRENEURS ABOUT HOW TARIFFS DISRUPT THEIR BUSINESS AND THEIR LIVES.

♪♪ >>> AMANPOUR & COMPANY IS MADE POSSIBLE BY THE ANDERSON FAMILY ENDOWMENT, CANDACE KING WE'RE, THE SYLVIA A.

-- THE FAMILY FOUNDATION OF LAYLA AND MICKY STRAUSS, MARK J. BLESHNER, SETON J. MELVIN, THE PETER G. PETERSON AND JOAN GANTZ FUND, CHARLES ROSENBLUM, KUENG AND PATRICIA YUEN, BARBARA HOPE ZUCKERBERG, JEFFREY KATZ, AND BETH ROGERS, AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU.

THANK YOU.

>>> WELCOME TO THE PROGRAM, EVERYONE.

I'M CHRISTIANE AMANPOUR IN LONDON.

THIS STARK WARNING ON TARIFFS FROM THE U.S. FEDERAL RESERVE JEROME POWELL SENT STOCKS TUMBLING TODAY.

>> THE LEVEL OF TARIFF INCREASES ANNOUNCED SO FAR IS SIGNIFICANTLY LARGER THAN ANTICIPATED, AND THE SAME IS LIKELY TO BE TRUE OF THE ECONOMIC EFFECTS, WHICH WILL INCLUDE HIGHER INFLATION AND SLOWER GROWTH.

BOTH SURVEY AND MARKET-BASED MEASURES OF NEAR-TERM INFLATION EXPECTATIONS HAVE MOVED UP SIGNIFICANTLY, WITH SURVEY PARTICIPANTS POINTING TO TARIFFS.

>> THIS KIND OF INTERVENTION IS RARE FROM A FED CHIEF, AND TRUMP WAS QUICK TO ATTACK THE MESSENGER.

POWELL'S TERMINATION CANNOT COME FAST ENOUGH, HE POSTS.

COUNTRIES AROUND THE WORLD ARE ASKING A FUNDAMENTAL QUESTION, IS IT IN OUR BEST INTEREST TO ALIGN MORE CLOSELY WITH CHINA OR WITH THE UNITED STATES?

"THE WALL STREET JOURNAL" REPORTS THE TRUMP TEAM LED BY THE TREASURY SECRETARY, SCOTT BESSENT, IS USING TARIFF NEGOTIATIONS TO PRESSURE ALLIES TO LIMIT TRADE WITH CHINA, WHILE CHINA SEEMS TO POSITION ITSELF AS A FORCE FOR STABILITY AND PEEL BUSINESS AWAY FROM THE UNITED STATES.

CHINA MAY BE PUSHING ON AN OPEN DOOR, AS ECONOMIST MARK BLYTHE TELLS "THE NEW YORK TIMES," THE WHOLE WORLD HAS DECIDED THAT THE U.S. GOVERNMENT HAS NO IDEA WHAT IT'S DOING.

KURT CAMPBELL, HEAD -- THROUGH MULTIPLE ADMINISTRATIONS AND DEPUTY SECRETARY OF STATE UNDER JOE BIDEN.

HE JOINS US NOW FOR HIS FIRST INTERVIEW SINCE LEAVING GOVERNMENT.

KURT CAMPBELL, WELCOME BACK TO OUR PROGRAM.

IT'S A LONG TIME SINCE WE'VE SPOKEN.

SO, WHAT DO YOU THINK ABOUT THIS BIG STRATEGIC PICTURE THAT THE TRUMP ADMINISTRATION APPEARS TO BE THINKING ABOUT AS REPORTED BY "THE NEW YORK TIMES" TO GATHER ITS TRADING PARTNERS AND ESSENTIALLY -- I DON'T KNOW WHAT THE RIGHT WORD IS -- GANG UP OR ISOLATE CHINA OR MAKE IT COME TO THE NEGOTIATING TABLE.

WHAT DO YOU THINK?

IS THAT A POSSIBILITY?

>> CHRISTIANE, FIRST OF ALL, IT'S GREAT TO BE WITH YOU.

THANK YOU SO MUCH FOR HAVING ME BACK ON THE PROGRAM.

THANKS FOR RAISING THE PRESSURE MY FIRST INTERVIEW, BUT I'LL DO MY BEST NOT TO LET THE SIDE DOWN.

LOOK, THE FIRST QUESTION THAT EVERY GOVERNMENT OR REPRESENTATIVE ASKS ME IS, DOES THE TRUMP TEAM HAVE A LARGER PLAN, A, SORT OF, STRATEGIC APPROACH?

AND I THINK IT IS FAIR TO SAY IN MANY OF THESE CIRCUMSTANCES, THEY'RE, SORT OF, PLAYING IT AS IT GOES.

I'M NOT SURE THEY HAD ORIGINALLY DECIDED THAT PART OF THE NEGOTIATING PLAN WITHOUT ALLIES AND PARTNERS WOULD BE TO PRESSURE THEM ABOUT THEIR TRADE OR THEIR ECONOMIC RELATIONS WITH CHINA.

MOST OF THE FOCUS, AS YOU KNOW, HAVE BEEN ABOUT THE BILATERAL RELATIONSHIPS BETWEEN THESE COUNTRIES AND THE UNITED STATES AND TRADE IMBALANCES THERE.

AND SO I THINK THESE NEGOTIATIONS THAT ARE JUST BEGINNING, I DO WANT TO UNDERSCORE THE IDEA THAT YOU CAN COMPLETE 90 NEGOTIATIONS OR EVEN 10 OR 15 IN 90 DAYS IS JUST REMARKABLY CHALLENGING.

SOME OF THE NEGOTIATIONS THAT WE'VE HAD ON TRADE WITH COUNTRIES AND PARTNERS LIKE WITH JAPAN, CHRISTIANE, THE SO-CALLED SII TALKED, THE STRATEGIC IMPEDIMENT TALKS OF THE 1980s AND 1990s, LOOKED AT WHY IT WAS DIFFICULT FOR AMERICAN EXPORTERS TO PENETRATE THE CLOSED JAPANESE MARKET.

THOSE NEGOTIATIONS WENT ON FOR YEARS.

NOW, I THINK THERE IS SOME INCENTIVE TO MOVE MORE QUICKLY NOW.

BUT AT THE BASE OF THIS IS THAT UNFORTUNATELY, MANY OF THE COUNTRIES THAT WE WOULD COUNT AS OUR CLOSEST PARTNERS RIGHT NOW, JAPAN, SOUTH KOREA, EUROPE, AUSTRALIA, THEY'RE ALL FEELING THE HEAT.

AND THEY HAVE AS MANY QUESTIONS NOW ABOUT WASHINGTON AS THEY DO ABOUT BEIJING.

AND THAT'S NOT IN OUR STRATEGIC INTERESTS.

>> OKAY.

BUT IN TERMS OF THE QUESTION ABOUT THE TRUMP ADMINISTRATION'S APPARENT STRATEGY, YES, YOU SAY THAT -- AND WE'VE SEEN THEM PUNISH ALLIES AS WELL AS ADVERSARIES WITH THESE TARIFFS.

WE'VE GOT THE ITALIAN PRIME MINISTER IN THE WHITE HOUSE TODAY TALKING ON BEHALF OF EUROPE.

BUT IS IT A SMART IDEA TO GET TRADING PARTNERS TO -- I USE THE WORD "GANG UP," BUT I'M NOT SURE WHAT THE RIGHT WORD IS -- AGAINST CHINA, AND FORCE CHINA -- BECAUSE CHINA SEEMS TO BE DOING THE SAME THING.

IT'S GOING AROUND TO ITS ALLIES IN THE REGION AND REACHING OUT TO EU, SEEMING TO DO THE SAME THING, SAYING, COME TO US.

WE'LL BE TRADING PARTNERS IN THIS CLIMATE.

>> CHRISTIANE, I THINK THERE'S SOME CRITICAL ISSUES IN WHICH COORDINATION AND CLOSE ALIGNMENT BETWEEN UNITED STATES AND PARTNERS IS ESSENTIAL.

TECHNOLOGY, ADVANCED AREAS LIKE A.I., QUANTUM COMPUTING, SYNTHETIC BIOLOGY, YOU COULD GO DOWN THE LIST.

I THINK THOSE AREAS REQUIRE MUCH CLOSER ENGAGEMENT BETWEEN THE UNITED STATES AND ITS PARTNERS NOT ONLY TO ADVANCE CERTAIN TECHNOLOGIES BUT TO RESTRICT THE FLOW OF CERTAIN TECHNOLOGIES TO CHINA.

I THINK THOSE ARE APPROPRIATE AREAS OF ENGAGEMENT, AND THERE ARE OTHER STRATEGIC ELEMENTS, STRATEGIC MINERALS AND THE LIKE, WHERE ORGANIZATION OF THE PARTNERS IS ESSENTIAL.

BUT TO GO BEYOND THAT, TO SORT OF A NORMAL FLOW OF ECONOMIC INTERCOURSE, CONSUMER GOODS AND THE LIKE, I THINK THAT'S GOING TO BE HARDER TO GET COUNTRIES AND PARTNERS TO RESTRICT THOSE INVESTMENTS AND ENGAGEMENTS.

SO, THE TRUTH IS, CHRISTIANE, THEY ARE TALKING ABOUT TRYING TO GET COUNTRIES TO WORK WITH UNITED STATES, BUT WE DON'T KNOW WHAT THE TERMS ARE.

WE DON'T KNOW THE SUBJECT AREAS.

SO, WE'RE WAITING TO SEE WHAT THE INITIAL DISCUSSIONS WITH JAPAN, WITH ITALY, AND OTHER COUNTRIES, WHAT IS THE FRAMING FOR WHAT THE ADMINISTRATION IS SEEKING IN THESE BILATERAL TALKS?

AND IN TRUTH, I WILL TELL YOU QUIETLY MOST OF THE COUNTRIES THAT GO INTO THESE TALKS FIND THEMSELVES, SORT OF, WAITING TO HEAR AT THE TABLE WHAT THE UNITED STATES IS PROPOSING.

>> SO, IT'S ALL KIND OF A SURPRISE TO THEM AS WELL.

CHINA HAS BEEN VERY DEFIANT PUBLICLY.

THERE'S NO DOUBT ABOUT THAT.

PRESIDENT XI HIMSELF HAS SAID THING, THE FOREIGN MINISTRY HAS SPOKEN, AND ALSO INDEPENDENT ANALYSTS AND EXPERTS WITH OBVIOUSLY CLOSE GOVERNMENT TIES.

VICTOR GOU, WHO RUNS A THINK TANK IN BEIJING, HE'S BEEN QUITE ROBUST ON WHAT HE'S SAYING.

THIS IS HIS LATEST ON THE ISSUE.

>> AT THIS MOMENT OF TRUTH AGAIN, WE ARE MOBILIZING ALL DOMESTIC -- TRY TO ACCOMMODATE WHATEVER THAT COULD NOT BE SOLD TO THE U.S. MARKET WHILE EXPLORING ALL THE POSSIBLE OVERSEAS MARKET TO MAKE UP FOR WHATEVER BUSINESS LOST IN THE U.S. MARKET.

SO, EVENTUALLY I THINK WE ARE FACED WITH A POSSIBLE SITUATION WHERE TRADE BETWEEN CHINA AND THE UNITED STATES WILL GRIND TO A HALT.

AND CHINA AND U.S., ECONOMICALLY SPEAKING, IT WILL HAVE DECOUPLING.

BUT WHAT WILL BE THE CONSEQUENCE?

THAT WILL NOT MAKE AMERICA STRONGER OR GREATER.

THAT WILL MAKE THE UNITED STATES PROBABLY MORE MISERABLE.

>> KURT CAMPBELL, HE'S RAISING THE REAL THREAT OF A COMPLETE DECOUPLING.

YOU, YOU KNOW, HAVE, SORT OF, TREADED A HARDLINE STANCE IN TERMS OF UNDER THE OBAMA ADMINISTRATION, THE BIDEN ADMINISTRATION, WITH TRYING TO DEAL WITH CHINA.

DEMOCRATS AND REPUBLICANS HAVE A FAIRLY SIMILAR VIEW ON WHAT ECONOMIC THREAT CHINA POSES AND EVEN MILITARY THREAT.

HOW BAD WOULD DECOUPLING BE?

>> WELL, CHRISTIANE, I DO NOT THINK EITHER CHINA OR THE UNITED STATES ARE PREPARED FOR A FULL DECOUPLING.

AND I THINK THE ART OF THE DEAL HERE IS TO FIND WHAT ELEMENTS OF COMMERCE ARE UNOBJECTIONABLE AND THAT YOU WOULD WANT THOSE TO CONTINUE AND PEOPLE-TO-PEOPLE ENGAGEMENTS SO THAT THERE'S APPROPRIATE ECONOMIC AND COMMERCIAL INTERACTION BETWEEN UNITED STATES AND CHINA.

AND RESTRICT THOSE AREAS THAT HAVE TRUE NATIONAL SECURITY SIGNIFICANCE.

I THINK THE POINT THAT YOU'RE GETTING AT, CHRISTIANE, IS THIS, THAT THERE ARE NO TWO COUNTRIES TODAY THAT ARE FRANKLY MORE INTERDEPENDENT THAN UNITED STATES AND CHINA ACROSS EVERY POSSIBLE VECTOR, MANUFACTURING, FINANCE -- LOOK AT HOW MANY TREASURIES THE CHINESE HOLD IN AMERICAN DOLLARS.

BUT AT THE SAME TIME THAT THERE IS THIS DEEP INTEGRATION THAT HAS BEEN BUILT UP OVER DECADES, AGAIN IN EVERYTHING, IN PHARMACEUTICALS, IN MANUFACTURING, IN AGRICULTURE, AT THE SAME TIME, BOTH COUNTRIES ARE DEEPLY UNCOMFORTABLE WITH THAT INTERDEPENDENCE AND ARE SEEKING TO EASE IT IN VARIOUS WAYS.

BUT THAT PROCESS TAKES TIME.

IT IS CHALLENGING, GIVEN, YOU KNOW, THE MUTUAL VULNERABILITY.

SO, I THINK WHAT'S HAPPENING RIGHT NOW, I DO NOT BELIEVE EITHER CHINA NOR THE UNITED STATES SEEKS A FULL-OUT ECONOMIC CRISIS.

BUT I ALSO THINK THAT NEITHER SIDE KNOWS HOW TO CLIMB DOWN RIGHT NOW, HOW TO CREATE THE VENUES FOR APPROPRIATE DIALOGUE.

I THINK WE KNOW IN THE LAST COUPLE OF DAYS THE UNITED STATES, YOU KNOW, TOLD CHINA THAT PRESIDENT TRUMP WOULD BE PREPARED TO ACCEPT A CALL FROM PRESIDENT XI.

THAT'S A HARD WAY TO GET DIALOGUE STARTED JUST AT THE VERY TOP WITH NO CLEAR PARAMETERS ABOUT WHAT EITHER SIDE WOULD DISCUSS.

SO, I THINK THE KEY IS TO FIND THOSE LINES OF COMMUNICATION THAT ALLOW FOR FEELING EACH OTHER OUT IN TERMS OF WHAT'S POSSIBLE AND THEN BUILD TOWARDS MORE HIGH-LEVEL ENGAGEMENT.

I THINK THAT'S THE CHALLENGE RIGHT NOW.

IT'S NOT CLEAR THAT EITHER SIDE IS PREPARED TO TAKE THOSE STEPS, STEPS THAT ARE FRANKLY ESSENTIAL FOR THE GLOBAL ECONOMY.

>> SO, AS IF THE GLOBAL ECONOMY WASN'T IMPORTANT ENOUGH, THERE'S ANOTHER HUGE MACRO PICTURE AS WELL, AND THAT IS INCREASINGLY BEING TALKED ABOUT OVERSEAS FOR SURE.

WHO'S GOING TO LEAD THE WORLD ORDER, THE NEXT WORLD ORDER THAT COMES OUT OF THIS?

WE HEAR REPORTS FROM CHINA, EVEN SOME FROM RUSSIA, WHO SEEM TO BE THRILLED THAT THE UNITED STATES SEEMS TO BE SHOOTING ITSELF IN THE HEAD AND POTENTIALLY, CERTAINLY FROM A CONSERVATIVE BRITISH PRIME MINISTER WHO SAYS ANY SORT OF COZYING UP WITH THESE ADVERSARIES AND DISTANCING FROM ALLIES JUST MADE XI AND PUTIN, QUOTE, DANCE A JIG.

AND THEY THINK THAT THEY ARE -- OR AT LEAST CERTAINLY CHINA, WHICH IS THE BIG HEGEMON, WILL REPLACE AMERICAN LEADERSHIP.

THEY SEE THE DECLINE OF AMERICA.

THEY'RE ONLY TOO EAGER TO FACILITATE IT.

YOU'VE WRITTEN WASHINGTON WOULD BE PARTICULARLY UNRISE TO GO INTO LOWERING THE COMPLEX GLOBAL COMPETITION BY RETREATING TO A SPHERE OF INFLUENCE IN THE WESTERN HEMISPHERE, THE UNITED STATES WOULD CEDE THE REST OF THE WORLD TO A GLOBALLY ENGAGED CHINA.

DISCUSS.

>> CHRISTIANE, LOOK, LET ME JUST SAY THAT I THINK OVER THE COURSE OF THE LAST SEVERAL YEARS, IT WAS CHINA'S OVERREACH.

IT WAS XI'S TENDENCY TO USE HARD POWER WITH NEIGHBORING COUNTRIES AND OTHER PLAYERS ON THE INTERNATIONAL STAGE THAT FRANKLY ALIENATED SOME OF CHINA'S NATURALLY INTERLOCKETERS.

AND I THINK IT WAS UNITED STATES THAT TRIED TO BUILD ALLIES AND PARTNERSHIPS IN INNOVATIVE NEW GATHERINGS LIKE THE QUAD.

I THINK THE HOPE IS AND THE BELIEF IS THAT THE CHALLENGES ARE SO ENORMOUS THAT THE UNITED STATES IS BETTER OFF WORKING CLOSELY WITH ALLIES AND PARTNERS.

AND FRANKLY I PUT EUROPE FIRST AND FOREMOST IN THAT EVERYTHING THAT THE UNITED STATES HAS EVER DONE OF SIGNIFICANCE ON THE GLOBAL STAGE WE'VE DONE WITH EUROPE.

BUT ALSO THE CONNECTIONS BETWEEN EUROPE AND THE INDO-PACIFIC, JAPAN, AUSTRALIA, SOUTH KOREA, INCREASINGLY INDIA, THESE COUNTRIES I THINK WANT TO PARTNER WITH THE UNITED STATES.

IT HAS UNDENIABLY BECOME MORE DIFFICULT UNDER PRESIDENT TRUMP.

AND THE HOPE IS -- AND LOOK, THERE ARE STILL LOTS OF ISSUES THAT ARE YET TO BE WORKED OUT IN THE TRUMP ADMINISTRATION.

AND THERE ARE A NUMBER OF TRADITIONAL REPUBLICANS WHO BELIEVE FUNDAMENTALLY THAT STRONG ALLIES AND PARTNERS IS THE KEY INGREDIENT IN SUSTAINING AMERICAN POWER IN A COMPLEX AND INCREASINGLY CHALLENGING WORLD.

NOW, I DON'T KNOW WHERE THE TRUMP ADMINISTRATION WILL ULTIMATELY LAND.

AND LIKE YOU, I'M TROUBLED BY SOME OF THE LANGUAGE WE HEAR COMING OUT OF WASHINGTON ABOUT EUROPE.

BUT THE HOPE IS WITH MORE ENGAGEMENT, MORE DIALOGUE WITH ALLIES AND PARTNERS, THEY WILL UNDERSTAND THE STAKES AND THE STRATEGIC SIGNIFICANCE THAT THE UNITED STATES CANNOT AFFORD, CHRISTIANE, TO GO IT ALONE.

WE DON'T HAVE THE POWER, WE DON'T HAVE THE CAPACITY.

WE DON'T HAVE THE MARKETS.

AND SO THIS NEXT SIX- TO EIGHT-MONTH PERIOD FOR THE ADMINISTRATION FRANKLY IS GOING TO BE CENTRAL, AS THEY CONDUCT ALL THESE NEGOTIATIONS AND TRY TO POSITION THEMSELVES GLOBALLY.

I WILL SAY -- AND AGAIN, WE ALL HAVE AN INTEREST IN A DEGREE OF SUCCESS HERE.

I AM STRUCK AT HOW MANY ACTORS INTERNATIONALLY AND DOMESTICALLY THE TRUMP ADMINISTRATION IS REACHING OUT AGAINST AS OPPOSED TO TRYING TO BRING ON BOARD.

>> WELL, LOOK, I MEAN, YOU KNOW, AS A EUROPEAN, IT'S HARD TO HEAR THAT WE'RE PATHETIC AND FREE LOADERS AND ALL THE REST, GIVEN THE AMOUNT OF COOPERATION THAT EUROPE HAS HAD OVER THE DECADES WITH U.S.

SO, ON THE DIPLOMATIC SIDE -- AND YOU WERE DEPUTY SECRETARY OF STATE, AND YOU SEE THAT THE SECRETARY OF STATE RUBIO IS TALKING ABOUT, OR AT LEAST THERE ARE REPORTS, THAT THE ADMINISTRATION IS LOOKING TO CLOSE NEARLY 30 EMBASSIES AND CONSULATES AROUND THE WORLD.

RUBIO AP -- I JUST WANT TO PLAY THIS INTERESTING SOUND BITE FROM JAMES MATTIS, FORMER GENERAL WHO WAS TRUMP'S FIRST DEFENSE SECRETARY.

HE SAID YEARS BEFORE HE WAS IN THE TRUMP ADMINISTRATION THAT IT WAS ABOUT DIPLOMACY VERSUS THE MILITARY.

TAKE A LISTEN.

>> IF YOU DON'T FUND THE STATE DEPARTMENT FULLY, THEN I NEED TO BUY MORE AMMUNITION ULTIMATELY.

RATIO.

THE MORE THAT WE PUT INTO THE STATE DEPARTMENT'S DIPLOMACY, HOPEFULLY THE LESS WE HAVE TO PUT IN A MILITARY BUDGET, AS WE DEAL WITH THE OUTCOME OF AN APPARENT AMERICAN WITHDRAWAL FROM THE INTERNATIONAL SCENE.

>> SO, RIGHT NOW RUBIO AND OTHERS, THE SPECIAL ENVOY ARE IN PARIS MEETING PRESIDENT MACRON AND BASICALLY TRYING TO, YOU KNOW, DISCUSS THE WHOLE -- WELL, MANY THINGS, I'M SURE, BUT ALSO THE UKRAINE/RUSSIA SITUATION.

SO, WHEN YOU SEE HOW MANY DIPLOMATIC CRISES AND CHALLENGES EXIST ON THE HORIZON RIGHT NOW, WHAT DO YOU THINK WOULD HAPPEN IF THAT NUMBER -- WE DON'T KNOW WHERE -- OF EMBASSIES AND STAFFING AND VARIOUS CONSULATES ARE CUT BACK?

>> LOOK, CHRISTIANE, THOSE REPORTS AFFECT TO ME AND CONCERN ME MORE THAN JUST ABOUT ANYTHING ELSE.

LIKE YOU'VE INDICATED, I'VE HAD THE HONOR OF SERVING A COUPLE OF DIFFERENT TIMES AT THE STATE DEPARTMENT.

THESE ARE SOME OF THOSE PATRIOTIC, TREMENDOUSLY DETERMINED AND DEDICATED INDIVIDUALS I'VE EVER WORKED WITH.

AND THE IDEA SOMEHOW THAT THIS AGENCY IS NOT WORKING TO SUPPORT AMERICAN INTERESTS AND HAS TO BE TAMED OR CUT BACK, I JUST THINK IS JUST FLAT WRONG.

AND I WORRY THAT THE KINDS OF CUTS THAT ARE BEING DISCUSSED WOULD, YOU KNOW, POSE JUST A DEVASTATING HIT TO AN INSTITUTION THAT ALWAYS STRUGGLES, I THINK AS YOU KNOW, FINANCIALLY.

IF YOU LOOK AT THE VARIOUS BUREAUCRACIES, CHRISTIANE, THE PENTAGON REALLY IS AN INSTITUTION AND OUR INTELLIGENCE AGENCIES ALMOST ON STEROIDS.

THEY HAVE A LOT OF SUPPORT, BIPARTISAN.

THE STATE DEPARTMENT, WE DO HAVE OUR SUPPORTERS ON CAPITOL HILL.

BUT ALMOST ALWAYS ITS BUDGETS ARE A LITTLE BIT ON LIFE SUPPORT IN COMPARISON.

AND SO IT ALWAYS STRUGGLES, AND I THINK THE MOST RECENT REPORTS OF CUTTING WAY BACK IN AFRICA AND EUROPE ARE NOT GOING TO BE IN AMERICAN STRATEGIC INTERESTS.

MY HOPE WILL BE THAT DETERMINED BIPARTISAN ACTORS ON CAPITOL HILL AND ELSEWHERE WILL MAKE CLEAR THAT THESE ARE NOT SIMPLY DECISIONS THAT THE EXECUTIVE BRANCH CAN TAKE AND THAT THERE ARE OTHER AGENCIES AND ACTORS THAT HAVE A SAY IN THESE DECISIONS.

AND I THINK YOU'RE BEGINNING TO SEE KEY VOICES ON CAPITOL HILL SPEAK UP ABOUT SUSTAINING AMERICAN PURPOSE INTERNATIONALLY.

>> OKAY.

SO, THAT BRINGS ME TO A LITTLE BIT OF SOMETHING THAT SENATOR LISA MURKOWSKI SAID THAT HAS GONE VIRAL.

BECAUSE YOU'RE TALKING ABOUT PEOPLE SPEAKING UP.

MANY PEOPLE SAY IT HAS TO BE REPUBLICANS.

MARCO RUBIO AS A SENATOR WAS MUCH MORE TRADITIONAL REPUBLICAN WHEN IT CAME TO FOREIGN POLICY THAN HE IS NOW AS THE TRUMP SECRETARY OF STATE.

HERE'S LISA MURKOWSKI TALKING ABOUT THE DIFFICULTY OF SPEAKING UP, ESPECIALLY IF YOU'RE A REPUBLICAN.

HERE.

>> WE ARE -- TIME AND A PLACE WHERE I DON'T KNOW -- I CERTAINLY DO NOT -- I HAVE NEVER BEEN HERE BEFORE.

AND I'LL TELL YOU, I'M -- I'M OFTEN TIMES VERY ANXIOUS ABOUT USING MY VOICE BECAUSE RETALIATION IS REAL.

AND IT'S NOT RIGHT.

>> WELL, HOW -- WHAT'S YOUR GUT REACTION TO THAT?

>> I MEAN, IT CONCERNS ME ABOUT THE AMERICAN SYSTEM.

AND I CAN TELL YOU THAT, YOU KNOW, I SPEND A LOT OF TIME IN MY PREVIOUS INCARNATION AT THE WHITE HOUSE AND THE STATE DEPARTMENT MEETING WITH KEY PARTNERS ON BOTH SIDES OF THE AISLE, CHRISTIANE, UP ON CAPITOL HILL, IN THE SENATE AND THE HOUSE, TALKING ABOUT AMERICAN PURSUITS INTERNATIONALLY.

I DIDN'T FIND ANY OF THOSE GUYS LACKING IN COURAGE OR HAVING ANY HESITATION ABOUT BEING DIRECT WITH ME.

AND I JUST -- I THINK MAINTAINING THAT VOICE IS GOING TO BE CENTRAL.

I WOULD ALSO JUST UNDERSCORE -- AND THIS IS SOMETHING THAT I DON'T THINK IS AS WELL APPRECIATED.

MUCH OF WHAT WE'VE DONE WITH ALLIES AND PARTNERS, REALLY THE TOPICS THAT YOU'RE DISCUSSING, ARE CHINA PLAY, HOW WE'VE ENGAGED ALLIES AND PARTNERS, HAS HAD A REMARKABLE AMOUNT OF BIPARTISAN SUPPORT OVER THE LAST FOUR OR FIVE YEARS.

TRUE ENGAGEMENTS ON BOTH SIDES OF THE AISLE ON TECHNOLOGY POLICY, ON EFFORTS THAT WE'VE TRIED TO DO IN TERMS OF, AGAIN, WORKING WITH ALLIES AND PARTNERS -- STRATEGICALLY AND DIPLOMATICALLY.

INCREASINGLY, THE TRUMP APPROACH IS SOMEWHAT DIFFERENT THAN BOTH THE DEMOCRATIC AND REPUBLICAN APPROACHES.

AND THE HOPE WILL BE OVER TIME WHERE THERE ARE GROWING CONCERNS -- AND I AGREE WITH SENATOR MURKOWSKI, WHO I THINK DOES A FINE JOB NOT ONLY REPRESENTING ALASKA'S INTERESTS BUT HELPING US THINK PARTICULARLY ABOUT OUR RESPONSIBILITIES IN THE INDO-PACIFIC.

I DO BELIEVE BEHIND CLOSED DOORS THAT ARE PEOPLE THAT ARE FEELING THAT THEY HAVE TO SPEAK OUT MORE, AND I THINK WE'RE SEEING SIGNS OF THAT.

I CANNOT BELIEVE THE AMERICAN SYSTEM IS FACING A SITUATION ACCOMPLISHED SENATOR LIKE SENATOR MURKOWSKI FEELS FEAR TO SPEAK OUT.

THAT'S NOT SOMETHING THAT WE CAN BE COMFORTABLE WITH.

>> SHE SAYS SHE WILL CONTINUE TO.

KURT CAMPBELL, THANK YOU VERY MUCH INDEED FOR JOINING US.

>>> NOW TO THE CRISIS IN THE MIDDLE EAST, WHERE ISRAEL'S BAN ON HUMANITARIAN AID IN GAZA LEAVES CHILDREN MALNOURISHED AND CLEAN WATER SCARCE.

DEFENSE MINISTER ISRAEL KATZ HAS SAID THE SIEGE WILL NOT BE LIFTED BECAUSE IT IS, QUOTE, ONE OF THE MAIN PRESSURE LEVERS PREVENTING HAMAS FROM USING IT AS A TOOL WITH THE POPULATION.

JUST TO NOTE, IT WAS SIMILAR TALK OF STARVATION OF GAZA CIVILIANS WHO LANDED THE -- WITH AN INDICTMENT FROM THE INTERNATIONAL CRIMINAL COURT.

TODAY WITH GAZANS IN RUBBLE, ISRAELI FORCES ARE TARGETING TENTS, CARRYING OUT DEADLY AIR STRIKES ON DISPLACEMENT CAMPS IN THE NORTH AND THE SOUTH.

ISRAEL IS APPLYING SO-CALLED GAZA TACTICS IN THE OCCUPIED WEST BANK.

THE U.N. REPORTS ALMOST 1,000 PALESTINIANS WERE KILLED THERE SINCE OCTOBER 7th.

THE HAMAS ATTACK THERE.

A LARGE SCALE MILITARY OPERATION HAS LEFT THOUSANDS MORE HOMELESS.

A NEW DOCUMENTARY CALLED "A STATE OF RAGE," AIMS TO PUT A HUMAN FACE ON ALL OF THIS THROUGH THE EYES OF CHILDREN ON BOTH SIDES OF THE CONFLICT.

HERE'S A BIT OF THE TRAILER.

[ SPEAKING IN A NON-ENGLISH LANGUAGE ] >> THE DIRECTOR JOINS US NOW.

YOU'RE IN ECUADOR.

WE'LL TALK ABOUT WHY IN A SECOND.

BUT YOU ARE, YOU KNOW, IN YOUR -- CONTINUING YOUR PROGRAM OF EXPLORING THE WORLD THROUGH THE EYES AND THE EXPERIENCES OF CHILDREN.

SO, TELL ME WHAT DREW YOU TO THE ONE THAT WE'RE TALKING ABOUT, "STATE OF RAGE."

BASICALLY I'LL JUST PUT IT OUT, JANA AND -- ARE TWO 10-YEAR-OLD REFUGEES AND TWO SISTERS.

AND YOU FOCUS A LOT ON THE OLDER ONE.

IT'S REALLY INTERESTING TO SEE IT FROM BOTH SIDES.

HOW DO YOU CHOOSE THEM?

WHAT BROUGHT YOU TO THIS PLACE?

>> WELL, THANK YOU FOR HAVING ME, CHRISTIANE.

IT WAS, I THINK, WOULD BE FAIR TO SAY IT'S ONE OF THE MOST DIFFICULT AND COMPLICATED FILMS OF MY CAREER.

WHEN OCTOBER 7th HAPPENED, THE TERRIBLE ATTACK, I WAS HERE WORKING ON MY FILM I'M DOING NOW.

AND I IMMEDIATELY THOUGHT, I NEED TO GO TO ISRAEL.

AND I ARRIVED, I THINK, ON OCTOBER 25th, 15 DAYS AFTER THE ATTACK.

AND I NEED TO DECIDE WHAT TO DO.

-- ALREADY IN THE COUNTRY GAINING ACCESS TO HOSTAGE FAMILIES.

I THOUGHT, OKAY, I'M NOT ABLE TO GO TO GAZA.

I'M GOING TO LOOK INTO THE OTHER -- INTO THE WEST BANK, WHERE NOBODY'S LOOKING.

AND I THINK IF THIS COUNTRY, THESE TWO PEOPLE, WANT TO HAVE SOMETHING CALLED A FUTURE, THEY NEED TO FIND A WAY OF COEXISTENCE.

I SAID, OKAY, LET'S GO LOOK INTO THE MOST EXTREME PARTS IN THE WEST BANK, WHICH IS THE THREE AREAS WHICH ARE CONTROLLED BY THE SO-CALLED ARMED RESISTANCE AGAINST OCCUPATION, WHICH IS REFUGEE CAMPS.

AND I DECIDED TO GO LOOK INTO JANINE FOR DIFFERENT REASONS.

IT'S SMALL ENOUGH TO BE ABLE TO WALK AROUND.

AND I QUICKLY MET JANA AND HER FAMILY.

HER FATHER IS SOMEBODY WHO'S AFRAID THAT THE -- ESPECIALLY HIS SON -- IS PICKING UP ARMS.

AND YOU HAVE THIS LOVING GRANDMA.

AND THEY'RE LIVING AMONGST THE OTHER 20,000 PEOPLE WITHIN THIS REFUGEE CAMP SURROUNDED BY FUNERALS EVERY DAY, DEMONSTRATIONS, IN THE CONTEXT OF PAIN, HATE, AND RAGE.

ON THE OTHER SIDE, I DECIDED, OKAY -- I QUICKLY SAID, OKAY, I NEED TO LOOK AS WELL ON THE MOST EXTREME PART OF THE SCALE OF THE ISRAELI POPULATION.

IT IS MUCH HARDER TO GAIN ACCESS, AND IT TOOK ME A WHILE UNTIL I GOT TO -- WHERE I MET -- >> I JUST WANT TO INTERRUPT YOU BECAUSE I WANT TO PLAY SOME OF YOUR SOUND BITES THAT YOU GOT FROM THEM.

IT'S ACTUALLY BOTH EXTRAORDINARY FAMILIES, AND THE SETTER FAMILY, THE FATHER, RABBI SHABBAT WAS KILLED IN A TERROR ATTACK IN THE WEST BANK IN 2018.

AND YOU TALKED TO THE DAUGHTER AND THE MOTHER.

LET'S TALK ABOUT THE KIDS FIRST.

HERE IS WHAT THE OLDEST SISTER, THE OLDEST DAUGHTER OF THIS RABBI WHO WAS KILLED, TELLS YOU ABOUT OCTOBER 7th AND HOW THAT AFFECTED HER.

HERE'S WHAT SHE SAYS.

[ SPEAKING IN A NON-ENGLISH LANGUAGE ] >>> EXTREMELY UPSET, EXTREMELY ANGRY, HATE-FILLED, FEAR-FILLED.

NOW I'M GOING TO PLAY THE YOUNG GIRL ON THE PALESTINIAN SIDE WHO SHE'S THERE STANDING ON RUBBLE, THE SISTERS, I THINK THEY'RE SISTERS, THEY ARE BASICALLY STANDING IN FRONT OF A POSTER OF A DEAD PALESTINIAN MILITANT.

HERE'S WHAT ONE OF THEM SAYS.

[ SPEAKING IN A NON-ENGLISH LANGUAGE ] >> WOW.

I MEAN BOTH OF THEM ARE SO POWERFUL, BOTH THE ISRAELI AND THE PALESTINIAN KIDS WHO YOU PROFILE, ARE SO POWERFUL.

I GUESS IT'S VERY DARK.

DID YOU SEE ANYTHING OTHER THAN THAT -- ANYTHING ELSE FROM THOSE KIDS?

WAS THERE ANY HOPE?

OR DO YOU THINK IT'S BAKED IN?

>> LOOK, IT'S A DARK FILM.

I REALLY TRIED TO LOOK FOR THE LIGHT IN THE DARKNESS, FOR HOPE.

AND I'VE BEEN STRUGGLING.

I WENT BACK AND FORTH OVER A YEAR TRYING TO SEE IF THERE WAS SOMETHING BEYOND HATE, BEYOND RAGE.

I TRIED TO USE THE WORD RAGE, HOPING THERE IS STILL -- YEAH, WAY -- THE KEY MESSAGE IS A SIMPLE MESSAGE.

IT NEEDS TO STOP NOW BECAUSE OTHERWISE THE SCALE OF THIS VIOLENCE IS GOING FURTHER AND FURTHER BECAUSE THAT'S WHAT -- IT'S INTERESTING THAT BOTH FAMILIES REALIZE THAT THIS YOUNG GENERATION IS JUST BECOMING MORE RADICALIZED.

AND NONE OF THOSE TWO PAIR, TWO OF THEM, CHOSE WHERE TO BE BORN, AND YET THEY ARE SHAPED BY THE CONTEXT WHERE THEY LIVE IN.

AND IN A VERY UNBALANCED CONFLICT, WE IS ARE TO REALLY UNDERSTAND THAT IT'S NOT A BALANCED SITUATION.

IT'S AN UNBALANCED CONFLICT.

ONE OF THESE GROUPS ARE OCCUPIED AND NOT ABLE TO CHOOSE ANYTHING.

AND THE OTHERS ARE ABLE TO CHOOSE AND DELIBERATELY CHOOSE WHERE TO LIVE.

BUT I THINK FOR ME IT WAS VERY IMPORTANT TO SAY, I'M NOT COMPARING VICTIMHOODS.

I'M NOT COMPARING THE TWO REALITIES.

WHAT I DO COMPARE AND WHAT I TRY TO SHOW IS THE MECHANISM OF THIS ANGER, THE MECHANISM OF VOCALIZATION THROUGH THE EYES OF GIRLS, NOT BOYS, AGAIN, SOMETHING I DELIBERATELY TRIED TO LOOK FOR BECAUSE OTHERWISE YOU WOULD IMMEDIATELY SAY, WELL, WHY SHOULD I CARE BECAUSE THESE BOYS ARE GOING TO BECOME THE NEXT TERRORISTS.

>> THAT'S SO INTERESTING.

>> YEAH, YEAH, THE VIOLENCE AS WELL.

>> THAT WAS REALLY INTERESTING TO SEE THOSE GIRLS AND ALSO THE MOTHER, AS YOU SAY, THE ISRAELI MOTHER, WHO SAYS -- OR YOU SAY -- THAT SHE'S AN IMMIGRANT FROM PARIS.

AND SHE'S BEEN THINKING SINCE OCTOBER 7th MORE AND MORE, AS SHE SAYS IN THE FILM, ABOUT THE ENVIRONMENT IN WHICH SHE'S RAISING HER KIDS.

AND HERE SHE'S TALKING IN YOUR FILM ABOUT WHAT'S KIND OF CHANGING HER THOUGHT PROCESS.

TAKE A LISTEN.

[ SPEAKING IN A NON-ENGLISH LANGUAGE ] >> IT'S REALLY INTERESTING BECAUSE IT'S VERY INTROSPECTIVE AND SHE BECOMES MORE AND MORE INTROSPECTIVE, VERY DIFFERENT TO THE TONE OF HER YOUNG 16-YEAR-OLD DAUGHTER.

I FOUND THAT REALLY AN INTERESTING OBSERVATION BECAUSE THE PARENTS CAN SEE WHAT'S HAPPENING AND HOW THEIR KIDS OR THE NEXT GENERATIONS WILL BE RADICALIZED ONE WAY OR THE OTHER.

>> ABSOLUTELY.

IT'S AN EXTRAORDINARY CHARACTER.

THE GRANDMOTHER ON THE PALESTINIAN SIDE, FOR ME IT WAS THE DEMAND OF DEHUMANIZATION, ESPECIALLY THE -- SOMETHING I WAS NOT PREPARED FOR AND DID NOT EXPECT.

SHE SURPRISED ME.

THAT'S WHY I PICKED HER.

I THOUGHT TO PICK SOMEBODY WHO'S ABSOLUTELY WITHOUT LIMITS RADICALIZED, WHAT'S THE POINT?

I WAS LOOKING FOR SOMETHING THAT JUST GIVES AN ARC OF DEVELOPMENT.

ALTHOUGH IT'S OBVIOUSLY NAIVE TO THINK THAT THERE IS SOMETHING WHICH CHANGES FROM ONE DAY TO THE OTHER.

BUT IT'S A PROCESS.

AND I THINK THAT'S WHAT I TRIED AND THAT'S WHY I STRUGGLED TO FIND A LANDING POINT.

I REDUCED IT TO THIS VERY, VERY, VERY SIMPLE MESSAGE OF ENOUGH IS ENOUGH.

>> AS YOU MENTIONED ON THE PALESTINE SIDE, THE FATHER OF THE BOY, THE BROTHER OF THESE TWO GIRLS, WAS VERY CONCERNED THAT HE SHOULDN'T, THIS YOUNG BOY, GROW UP AS A MILITANT OR A THING LIKE THAT.

AND THE GRANDMOTHER, AS YOU POINT OUT, WAS INCREDIBLY LOVING AND TRYING TO SHIELD THE GIRLS.

WHAT -- YOU KNOW, YOU DO ANOTHER FILM ON KIDS IN ECUADOR.

YOU'VE DONE KIDS UNDER THE TALIBAN AND ELSEWHERE.

WHAT IS THE COMMON THREAD?

WHAT ARE YOU FINDING IN ECUADOR RIGHT NOW?

WHAT DID YOU FIND, YOU KNOW, IN AFGHANISTAN?

>> WELL, WHAT I'M TRYING TO DO IS ALWAYS TRYING TO FIND THIS MICROCOSM, BIGGER CONTEXT THROUGH THE STRONG CHARACTERS I'M ABLE TO GAIN ACCESS TO.

HERE IN ECUADOR, I'M IN A COUNTRY WHICH USED TO BE THE SAFEST PLACE IN LATIN AMERICA, ONE OF THE SAFEST COUNTRIES IN LATIN AMERICA.

SINCE COVID, IT BECAME THE MOST DANGEROUS COUNTRY IN LATIN AMERICA.

I'M FAMILIAR WITH THIS COUNTRY, AND WE DO HAVE NOW A NEW PRESIDENT, WHO IS LIKELY TRYING TO FIGHT VIOLENCE WITH EVEN MORE VIOLENCE.

AND I'M HERE RIGHT NOW, WHICH SHOWS HOW FAR CAN OUR COUNTRY GO IN THEIR QUEST TO FIGHT EVIL.

AND I THINK THAT'S WHERE IT STARTS, AGAIN, TO BECOME VERY UNIVERSAL.

THROUGH THE CHILDREN, OBVIOUSLY IT'S THE NEXT GENERATION.

WE'RE IN TIMES WHERE EVERYTHING IS SO DIVIDED, SO POLARIZED.

AND I THINK THE LACK OF DIALOGUE JUST FUELS THE CAPACITY OF WE PUT OURSELVES IN THE SHOES OF THE OTHER.

AND THIS JUST CREATES THIS SPLIT MORE AND MORE AND MORE.

AND I THINK FINALLY THIS KIND OF STRONG CHARACTER IN CHILDREN, OBVIOUSLY SOMETHING WHICH IS AWE CHALLENGING AND SOMETIMES EFFECTIVE.

>> VERY EFFECTIVE.

AND THE WHOLE IDEA OF BEING ABLE TO SEE THE STORY OF THE OTHER, ESPECIALLY THROUGH CHILDREN'S EYES, IS FUNDAMENTAL.

WE LOOK FORWARD TO YOUR ECUADOR FILM.

AND THANK YOU SO MUCH FOR JOINING US.

>> THANK YOU SO MUCH.

>>> NOW, AS WE HAVE BEEN DISCUSSING, PRESIDENT TRUMP'S TARIFFS ARE PROMPTING RADICAL CHANGES FOR AMERICAN BUSINESS OWNERS, LIKE DEBBIE RAY MULLIN, THE FOUNDER OF A COFFEE COMPANY -- VIETNAM AND -- WHO OWNS A CLOTHING BRAND WHICH RELIES ON OVERSEAS FACTORIES.

THEY SPEAK NOW TO MICHELLE MARTIN ABOUT WHAT THIS HAS DONE TO THEM.

>> THANKS, CHRISTIANE.

THANK YOU BOTH SO MUCH FOR JOINING US.

>> THANK YOU FOR HAVING ME.

>> THANK YOU SO MUCH.

>> SO, THE REASON WE CALLED YOU BOTH IS THAT YOU HAVE BEEN AFFECTED BY THESE PROMISED/THREATENED TARIFFS.

BOTH OF YOU ARE ENTREPRENEURS.

BOTH OF YOUR BUSINESSES ARE ESTABLISHED.

SO, BEFORE WE GET INTO THAT, WHY DON'T WE START BY TELLING US WHY YOU'RE IN THE BUSINESS THAT YOU'RE IN.

DEBBIE, WHY DON'T YOU START?

>> IT STARTED IT AS THE FIRST PREMIUM VIETNAMESE COFFEE COMPANY.

MY MOM IS FROM VIETNAM, AND I'M REALLY PASSIONATE ABOUT ALL THINGS VIETNAMESE CUISINE AND THINK THAT VIETNAMESE COFFEE, THE SECOND LARGEST COFFEE PRODUCER IN THE WORLD, WAS REALLY NOT SEEN IN THE U.S. MARKET AND WANTED TO ELEVATE VIETNAMESE COFFEE.

>> YOU HAD A MISSION.

IT WAS ABOUT THE COFFEE BUT IT WAS ALSO ABOUT WHAT YOU COULD DO THROUGH THE COFFEE COMPANY.

>> EXACTLY.

I WORKED AT THE WORLD BANK, FOCUSED ON INTERNATIONAL DEVELOPMENT AND HOW TO BRING BETTER ECONOMIC OPPORTUNITIES TO VIETNAM.

>> SARAH, WHAT ABOUT YOU?

YOU ALSO HAVE A STORY YOU SHARED ON YOUR WEBSITE ABOUT WHY YOU STARTED YOUR BUSINESS.

>> YES.

I STARTED BY BUSINESS BACK IN 2013.

I MYSELF ACTUALLY DON'T COME FROM THE FASHION WORLD, BUT I WAS A MANAGEMENT CONSULTANT.

I FOUND IT VERY HARD TO FIND GOOD, PRACTICAL, BUT FASHIONABLE CLOTHING FOR PROFESSIONAL WOMEN.

WOMEN ON AVERAGE SPEND TWO MORE WEEKS PER YEAR GETTING READY FOR WORK VERSUS MEN, AND I REALLY WANTED TO TACKLE THAT CHALLENGE.

I WAS PARTNERED WITH MY COFOUNDER, NAKAMURA, WHO CAME FROM A HIGH-END FASHION BACKGROUND, AND OUR GOAL HAS BEEN TO PROVIDE LUXURIOUS FABRICS AND CLOTHING TO HARD-WORKING PROFESSIONAL WOMEN.

>> SO, DEBBIE, COFFEE ISN'T REALLY GROWN IN THE UNITED STATES, IS IT?

IN HAWAII, RIGHT?

>> A FRACTION OF WHAT U.S. CONSUMES IN TERMS OF COFFEE CONSUMPTION.

>> BUT YOU COULDN'T HAVE THE KIND OF COFFEE COMPANY YOU HAVE WITHOUT SOURCING IT FROM VIETNAM, RIGHT?

>> ABSOLUTELY NOT.

>> OKAY.

SO, HOW DID YOU -- WHEN YOU FIRST HEARD VIETNAM WAS ON THE SCHEDULE FOR TARIFFS, AND IN FACT VIETNAM WAS ONE OF THE COUNTRIES THAT WAS ORIGINALLY SUPPOSED TO BE HIT WITH ONE OF THE HIGHEST TARIFFS AT 46%, DO YOU REMEMBER WHAT WENT THROUGH YOUR MIND?

>> JUST COMPLETE SHOCK TO BE HONEST.

AS I'M SURE YOU'RE AWARE, WE'VE BEEN SUFFERING THROUGH A COFFEE CRISIS FOR THE PAST YEAR AND A HALF.

AND WITH DOUBLE COFFEE PRICES, ALREADY HAVING TO ADJUST THE BUSINESS TO THAT HAS BEEN A COMPLETE WHIRLWIND.

SO, I THINK WE WERE PARTICULARLY SURPRISED NOT ONLY BECAUSE IT'S COFFEE, WHICH THE U.S.

PRIMARILY DOESN'T GROW, BUT ALSO VIETNAM REALLY DOES ADMIRE TRUMP AND HAS BEEN REALLY WILLING TO CONCEDE TO WHATEVER DEMANDS THAT HE WANTS.

THEY ARE REALLY COOPERATIVE WITH HIM.

SO, I THINK THAT WE WENT INTO THE TARIFF, THE IDEA OF TARIFFS BEING RELATIVELY A LOWER POSSIBILITY FOR VIETNAM AND FOR COFFEE.

AND SO I THINK WE WERE REALLY SHOCKED TO BE ON THE HIGHER END OF WHAT THEY WERE.

>> WHAT WOULD THIS DO -- IF 46% TARIFFS WERE TO HOLD, WHAT WOULD THAT -- HOW WOULD YOU ABSORB THAT?

I MEAN, WHAT WOULD YOU DO?

>> HONESTLY, THE DIRECT TO CONSUMER BUSINESS SIDE IS A LITTLE BIT EASIER.

PEOPLE ARE COMING THROUGH A WEBSITE.

YOU CAN INSTANTLY CHANGE YOUR PRICES TO ACCOMMODATE THESE CHANGES.

THE HARDEST PART IS THAT HALF OF OUR BUSINESS TODAY IS ACTUALLY IN RETAILERS, WHERE IT TAKES A MINIMUM OF SIX MONTHS FOR US TO DO A PRICE CHANGE, AND ALSO WE HAVE NO IDEA WHAT THAT'S GOING TO DO WITH OUR POSITION WITH THESE CLIENTS.

AND I THINK THAT'S WHAT'S REALLY HARD, VIETNAM, THE KIND OF COFFEE WE GROW IS MUCH EASIER TO GROW.

IT'S MUCH EASIER TO GROW ORGANICALLY.

THERE'S A LOT OF ADVANTAGES OF WHAT WE'RE DOING FOR THE COFFEE SPACE TO MAKE IT MORE SUSTAINABLE AND AFFORDABLE FOR ORGANIC COFFEE.

AND IT'S REALLY INCREDIBLE HOW MUCH WORK IS BEING COMPLETELY BASICALLY LEVELLED FROM THESE TARIFFS IN TERMS OF OUR ABILITY TO MAKE AFFORDABLE, ORGANIC, GREAT-TASTING COFFEE, NO LONGER APPLIES WITH THESE TARIFFS IF THEY WERE TO COME THROUGH.

>> I WANT TO COME BACK MORE TO YOUR MISSION WITH THIS.

YOU SAY ON YOUR WEBSITE YOU PAY THESE FARMERS TWICE WHAT THE MARKET RATE IS.

AND WHY IS THAT?

>> YEAH.

IT'S ALSO JUST BECAUSE THE KIND OF COFFEE THAT VIETNAM GROWS IS ROBUSTA COFFEE, WHICH HAS NOT BEEN TREATED AS WELL IN ITS PROCESSING AND CULTIVATION.

WE'VE PROVEN IF YOU PUT MORE CARE INTO THE PROCESSING AND THE WAY IT'S GROWN, IT CAN CREATE A DELICIOUS CUP OF COFFEE.

AND NOT ONLY THAT, IT CAN MAKE IT MUCH MORE SUSTAINABLE THROUGH ORGANIC FARMING BECAUSE IT'S SO MUCH MORE PEST RESISTANT.

WHAT'S HARD IS WE'VE DONE A LOT OF INVESTMENT INTO THE FARMS, INTO THE PROCESSING, INTO THE MANUFACTURING TO MAKE ORGANIC AND THE GRADE OF COFFEE THAT WE HAVE POSSIBLE ON THE PREMISE THAT IT WILL BE MUCH CHEAPER IN THE LONG-TERM FOR OUR CUSTOMERS TO HAVE ORGANIC COFFEE.

AND THE TARIFFS ERODE THOSE SAVINGS, RIGHT?

SO, NO LONGER ARE WE GOING TO BE A COMPETITIVE PRODUCT WITH WHAT WE'VE BEEN WORKING ON FOR THE LAST SEVERAL YEARS.

>> SO, LET'S GO TO YOU.

YOU'RE A NEW YORK-BASED COMPANY.

YOU KNOW, NEW YORK USED TO BE -- IT'S STILL A FASHION CAPITAL.

BUT A LOT OF FASHION, SHOES, CLOTHES, ARE MANUFACTURED IN CHINA.

WHY IS THAT?

>> WHEN WE STARTED OUR BUSINESS, WE DID MANUFACTURE IN THE GARMENT DISTRICT RIGHT HERE IN NEW YORK CITY.

AND EVEN COMPARED TO WHEN I STARTED THE BUSINESS IN 2013, THE GARMENT DISTRICT HAS SHRUNKEN DRAMATICALLY.

WE MANUFACTURE A LOT OF OUR CLOTHES UNTIL 2017 IN NEW YORK CITY.

AND REALLY AS THE BUSINESS GREW, WHICH WAS WONDERFUL, WE HAD NO CHOICE ACTUALLY BUT TO LEAVE A LOT OF OUR PARTNERS IN NEW YORK CITY.

AND AT THE SAME TIME THEY WERE ALSO LOSING BUSINESS.

SO, THEY WERE STARTING TO SHUT DOWN.

SO, I WANT TO SAY SINCE 2018, WE'VE BEEN MOSTLY 100%, YOU KNOW, MANUFACTURING OVERSEAS.

CHINA HAS BEEN JUST AN AMAZING SOURCE OF MANUFACTURING.

THEIR SKILL LEVEL IS SO HIGH.

THE CRAFTSMANSHIP.

IT TAKES REALLY GENERATIONS TO CREATE GOOD SEWERS.

EVERYONE THINKS THAT CLOTHING, SOME OF IT MUST BE AUTOMATED.

AND YES THERE IS SOME MACHINERY INVOLVED.

BUT EVERY SINGLE THING YOU ARE WEARING, SOMEONE IS SITTING BEHIND A SEWING MACHINE PUTTING THOSE PIECES OF FABRIC TOGETHER.

AND THAT'S NOT JUST A SKILL YOU CAN DEVELOP OVERNIGHT.

YOU KNOW, EVEN SOME OF THE BEST SEWERS IN NEW YORK CITY WHO REMAIN, THEY'RE IN THEIR 70s AND THEY DON'T HAVE ANYONE TO PASS IT DOWN TO.

SO, I THINK CHINA DOES HAVE THEIR CRAFTSMANSHIP, THEY HAVE THAT LEVEL OF SKILL.

AND HONESTLY WHEN WE MOVE SOME OF OUR MANUFACTURING OUT FROM NEW YORK CITY TO CHINA, WE WERE SURPRISED BY THE LEVEL OF QUALITY WE WERE GETTING.

>> THE ARGUMENT THE ADMINISTRATION IS MAKING IS THAT THE WHOLE POINT OF THIS, THEY SAY, IS TO RE-SHORE THESE INDUSTRIES.

HOW LONG WOULD IT TAKE FROM YOUR EXPERIENCE TO RE-SHORE YOUR OPERATION, ASSUMING IT COULD BE DONE IN A WAY THAT YOU COULD SUSTAIN YOUR BUSINESS?

>> IT'S OBVIOUSLY NOT IMPOSSIBLE.

IT WOULD TAKE A TON OF INFRASTRUCTURE FROM THE GOVERNMENT.

BUT EVEN THE FACTORY SPACES YOU SEE IN THE GARMENT DISTRICT ARE TINY COMPARED TO THE TENS OF THOUSANDS OF SQUARE FOOTAGE THAT YOU HAVE IN FACTORIES IN CHINA, IN VIETNAM.

AND THEN YOU'VE GOT GENERATIONS OF SEWERS TRAINING THE NEXT GENERATION.

SO, OF COURSE ALL OF THIS IS POSSIBLE.

IT WOULD TAKE ENORMOUS RESOURCES.

AND ALSO WE NEED TO THINK ABOUT HOW WE ACTUALLY, YOU KNOW, TRANSPORT THOSE GOODS.

SO, THAT'S INFRASTRUCTURE AGAIN AT A DIFFERENT SCALE.

DO WE HAVE THE TANKER SHIPS TO GET THINGS OVER FROM, I DON'T KNOW, NEW YORK TO DIFFERENT PARTS OF THE COUNTRY OR TRAINS?

IT'S KIND OF -- YOU KNOW, I'M NOT AN ECONOMIST, BUT TO ME THAT SOUNDS LIKE A LOT MORE MONEY.

>> IF THE TARIFFS ARE -- HOLD, WHAT DO YOU DO?

>> IT HAS BEEN TOTAL CHAOS WITH OUR PARTNERS BOTH IN VIETNAM AND CHINA, BUT SPECIFICALLY IN CHINA.

MY MAY COLLECTION HAS 90% EVAPORATED OVERNIGHT BECAUSE WE CANNOT AFFORD TO BRING IN GOODS FROM CHINA.

>> WOW.

WAIT, LET ME UNDERSTAND THIS.

YOU LITERALLY HAVE A COLLECTION THAT YOU CANNOT AFFORD TO BRING IN?

>> CORRECT.

AND FROM A CASH FLOW PERSPECTIVE, TOO -- I THINK THAT'S THE OTHER THING PEOPLE DON'T QUITE UNDERSTAND WHEN THEY SAY, WELL, JUST RAISE PRICES.

YES, OF COURSE, WE COULD RAISE PRICES, AND YOU KNOW, EVENTUALLY PERHAPS THE CUSTOMERS WILL COVER THE COST OF THE TARIFF.

BUT IF YOU THINK ABOUT THE DUTY THAT IS ACTUALLY THE TARIFFS THAT WE HAVE TO PAY THE GOVERNMENT, WE PAY IT OUT THE MOMENT OUR GOODS HIT THE UNITED STATES BORDER.

SO, FROM A CASH PERSPECTIVE, THAT'S AN OUTLAY THAT WE ARE MAKING TO THE U.S. GOVERNMENT.

AND WITHOUT CERTAINTY THAT THE CUSTOMER IS ACTUALLY GOING TO BE WILLING TO TAKE ON THOSE PRICE INCREASES.

>> DEBBIE, YOU WERE SAYING ONE OF YOUR INTENTIONS WAS TO IMPROVE STANDARDS OF LIVING IN VIETNAM BUT ALSO TO IMPROVE THE QUALITY OF THE PRODUCT.

AND IN SO DOING, YOU KNOW, IMPROVE PEOPLE'S LIVES.

WHAT ARE YOU SAYING TO THE FARMERS THAT YOU WORK WITH?

>> I MEAN, I HAVEN'T HAD A CHANCE TO TALK TO THE FARMERS DIRECTLY, BUT I'VE TALKED TO -- WE COORDINATE WITH THE AMAZING CO-OPS IN VIETNAM.

AND TALKING TO THEIR LEADERSHIP, I MEAN, I THINK THEY'RE INCREDIBLY STRESSED OUT.

I THINK THIS IS SOMETHING -- THEY SEE VIETNAM AND VIETNAMESE COFFEE BECOMING THIS REALLY EXCITING SPACE IN THE U.S. AND HOW THAT'S A HUGE OPPORTUNITY FOR THEM TO HAVE ACCESS TO MUCH HIGHER RATES IF THEY'RE ABLE TO CULTIVATE THEIR COFFEE A CERTAIN WAY.

IT'S AGAIN, A REALLY WONDERFUL THING FOR THEIR FARMS TO BE ABLE TO ELIMINATE CHEMICAL PESTICIDES AND FERTILIZERS AND GET A PREMIUM FOR THE EFFORT IN THE U.S. MARKET.

AND I THINK EVERYBODY IS JUST REALLY SITTING ON THE EDGE OF THEIR SEAT WANTING TO SEE WHAT IS THE NUMBER GOING TO BE?

YOU KNOW, IS IT GOING TO BE 10, AND IT GOING TO BE 46?

IS IT GOING TO BE ZERO BECAUSE COFFEE BECOMES EXEMPT?

WE REALLY HAVE NO IDEA WHAT'S GOING TO HAPPEN AND KNOW THAT WHAT WE'RE FACING IS NOT BEING TAKEN INTO ACCOUNT IN THIS TRADE WAR.

SO WE HAVE TO BE ABLE TO PLAN WHATEVER IT IS THAT HAPPENS TO THE BUSINESSES.

>> SARAH, IF YOU CAN'T AFFORD TO BRING THESE GOODS IN, WHAT'S GOING TO HAPPEN TO THE COMPANY?

>> THAT'S A REALLY GOOD QUESTION.

HONESTLY I HAVE BEEN GRAPPLING WITH JUST WHAT THE REALITY LOOKS LIKE FOR MY BUSINESS.

YOU KNOW, I THINK IN TIMES OF CHAOS, THE ADVICE THAT I'VE GOTTEN IS MOVE SLOW.

AND I THINK RIGHT NOW THINGS ARE CHANGING SO RAPIDLY.

YOU KNOW, ONE MOMENT IT'S 47%.

THE NEXT MOMENT, IT'S 150%.

I DON'T ACTUALLY KNOW WHAT THIS MEANS.

I'M JUST TRYING TO TAKE IT ONE STEP AT A TIME.

YOU KNOW, WE ARE RAISING PRICES.

WE KNOW THAT WE ARE DOING THAT.

I HAVE ALREADY CUT COSTS, AND I WILL PROBABLY HAVE TO CUT SOME MORE.

I AM REJIGGERING ENTIRE COLLECTIONS.

IN THE OFFICE NEXT DOOR I'VE GOT PORTUGUESE PARTNERS I'M TRYING TO WOO BECAUSE THE TARIFFS IN PORTUGAL ARE GOING TO BE BETTER THAN THE TARIFFS IN CHINA.

IT IS A COMPLETE UPHEAVAL.

I HOPE MY BUSINESS SURVIVES.

IN FACT, I SHOULD SAY, I KNOW MY BUSINESS WILL SURVIVE.

YOU KNOW, COVID WAS ONE OF THOSE MOMENTS WHERE IT WAS SO DEVASTATING, AND I DIDN'T KNOW IF WE WOULD MAKE IT THROUGH, AND SOMEHOW WE MAGICALLY -- WE MAGICALLY DID THROUGH THE TEAM'S EXCEPTIONALLY HARD WORK.

AND IT IS ONE OF THOSE MOMENTS AGAIN WHERE I'M LOOKING AT MY TEAM AND I'M SAYING TO THEM, IT'S GOING TO BE ANOTHER HARD, GOSH, TWO, THREE YEARS.

WILL YOU FIGHT THIS WITH ME?

SO, THAT'S WHAT WE'RE FACING RIGHT NOW.

>> JUST A FEW DAYS AGO, THE ADMINISTRATION DECIDED TO EXEMPT CERTAIN PRODUCTS FROM THESE TARIFFS, MAINLY, YOU KNOW, ELECTRONICS.

SARAH, WHEN YOU HEARD THAT, WHAT WENT THROUGH YOUR MIND?

DID YOU FEEL -- DID YOU FEEL SOME KIND OF WAY ABOUT THAT, LIKE, WHY THAT AND NOT THIS?

>> I MEAN, MY HONEST REACTION WAS I FELT ANGRY.

YOU KNOW, I THINK PEOPLE WITH DIRECT ACCESS TO THE WHITE HOUSE AND PEOPLE WHO HAVE THE ABILITY TO LOBBY, THEY WILL GET SPECIAL PRIVILEGES AND ADVANTAGES THAT SMALL BUSINESSES LIKE MYSELF WON'T.

YOU KNOW, WE ARE A SMALL, SMALL BUSINESS IN THE CONTEXT OF THE U.S. ECONOMY.

BUT I THINK IT'S ALSO IMPORTANT TO REMEMBER U.S. SMALL BUSINESSES MAKE UP 45% OF THE COUNTRY'S GDP.

WE ARE NOT THE ONES MAKING ELECTRONICS.

WE ARE THE ONES MAKING CLOTHING, MAKING COFFEE, ENGAGING IN AGRICULTURE.

AND WE'RE A REALLY, REALLY IMPORTANT PART OF THE U.S. ECONOMY.

BUT WE ARE NOT CAPABLE OF ACTUALLY MAKING, I THINK, OUR VOICES HEARD IN A WAY THAT THE U.S. GOVERNMENT WILL UNDERSTAND.

>> DEBBIE, WHAT ABOUT YOU?

>> I ECHO EVERYTHING SARAH SAYS, AND I THINK THAT ADDITIONALLY, YOU KNOW, I WORK IN FOOD AND BEVERAGE AND I KNOW HOW MUCH THE HYPER-INFLATION THAT AMERICANS HAVE EXPERIENCED HAS BEEN SO, SO DETRIMENTAL TO THEIR EVERYDAY LIFE, AND I THINK THAT THESE TARIFFS ARE GOING TO JUST EXACERBATE THAT SO MUCH, WHETHER IT'S FOR THE RAW GOODS OR THE PACKAGING OR SO MUCH OF THE STUFF THAT THE U.S. IS NOT PREPARED TO BE ABLE TO MAKE EVERYTHING THAT AMERICANS HAVE BECOME ACCUSTOMED TO CONSUMING.

AND TO BE DOING THIS, ESPECIALLY ON TOP OF THE COFFEE CRISIS, I THINK, IS SOMETHING THAT IS JUST REALLY HURTING.

ESPECIALLY A LOT OF COFFEE ARE SMALL BUSINESSES.

THERE ARE SO MANY COFFEE SMALL BUSINESSES OUT THERE AND HOW WE'VE ALREADY BEEN SUFFERING FROM CLIMATE CHANGE, FROM A LOT OF THE THINGS THAT ARE AFFECTING OUR MARKET, AND THAT THESE TARIFFS ARE JUST GOING TO MAKE THINGS SO MUCH HARDER FOR US SMALLER PLAYERS IN THE MARKET.

>> THE PRESIDENT THEORY OF THE CASE IS THAT SHORT-TERM PAIN FOR LONG-TERM GAIN.

SO, DEBBIE, IN YOUR CASE, THERE'S REALLY NO WAY YOU CAN -- YOU CAN'T RE-SHORE THE COFFEE BUSINESS.

>> I'M NOT GOING TO BUY FARMLAND HERE AND PLANT TREES AND WAIT FOR THEM TO HARVEST FIVE YEARS LATER.

I DON'T THINK THAT'S SOMETHING THAT THE U.S. IS IN A POSITION TO EVEN DO.

I THINK IT'S BEEN -- IT'S ONE OF THESE THINGS WHERE IT FEELS LIKE IT COULD BE -- LIKE SARAH SAID, I THINK WE'RE JUST TRYING TO SEE WHAT IT IS BECAUSE THERE ARE LEVELS OF TARIFFS WHICH IS JUST LETHAL TO BUSINESSES, TO SMALL BUSINESSES, WHETHER THAT'S CASH FLOW OR IF THAT'S JUST BECAUSE YOUR CUSTOMERS OR GROCERY STORES ARE GOING TO DROP YOU BECAUSE YOU'RE GOING TO SAY YOU'RE GOING TO HAVE TO INCREASE PRICES BY 40%.

I CAN'T THINK OF A RETAILER WHO WOULD POSSIBLY LET YOU DO SOMETHING LIKE THAT REGARDLESS OF WHAT THE MACRO ENVIRONMENT IS.

AND I THINK THIS IS JUST SOMETHING THAT IS -- IT'S JUST SOMETHING WE'RE JUST COLLATERAL DAMAGE TO AN ARGUMENT OR A STRATEGY THAT LIKE YOU SAID, THE LONG-TERM GAME FOR WHO?

AND I'M REALLY NOT SURE WHO THAT IS.

IT IS GOING TO BE THOSE WHO HAVE THE MONEY TO LOBBY FOR PROTECTIONS AGAINST THESE TARIFFS.

AND IT'S JUST SOMETHING THAT DOESN'T TOTALLY MAKE SENSE FROM WHERE I'M SITTING TODAY.

>> AND SARAH, IS THERE ANY LONG-TERM GAIN THAT YOU CAN ENVISION HERE?

>> NO.

AND, YOU KNOW, I THINK WE WILL FIND A WAY.

WE WILL SURVIVE THIS.

BUT I THINK -- I'M WONDERING AT WHAT COST.

THAT'S REALLY THE MAIN QUESTION RUNNING THROUGH MY HEAD RIGHT NOW.

I THINK ONE OF THE THINGS THAT BUSINESSES -- YOU KNOW, ANY BUSINESS OWNER WILL TELL YOU THAT UNPREDICTABILITY IS THE ENEMY OF BUSINESS GROWTH.

AND I THINK WHAT WE ARE ASKING FOR IS REALLY COMMUNICATION WITH A LOT OF ADVANCED NOTICE AND A LOT OF FIRM COMMUNICATION.

A LOT OF THESE CHALLENGES COULD BE OVERCOME.

THERE ARE WAYS THAT WE CAN GET AROUND IT WITH ADVANCED NOTICE.

BUT I THINK RIGHT NOW THAT IS WHAT FEELS IS LACKING.

WE DON'T KNOW WHAT TO EXPECT.

EVERY DAY IS SOMETHING DIFFERENT.

>> DEBBIE RAY MULLIN AND SARAH LaFLEUR, THANK YOU BOTH SO MUCH FOR SPEAKING WITH US.

>> THANK YOU SO MUCH.

>> AND THAT'S IT FOR OUR PROGRAM TONIGHT.

IF YOU WANT TO FIND OUT WHAT'S COMING UP EVERY NIGHT, SIGN UP FOR OUR NEWSLETTER AT PBS.ORG/AMANPOUR.

THANK YOU FOR WATCHING, AND GOOD-BYE FROM LONDON.