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Trump Floats 20 Percent Tax On Mexico Imports In Spat; Trump Blasts Mexico Over "Massive Trade Deficits"; Ex-Mexican President: We're Ready For A Trade War; Soon: Trump's First Face-To-Face Diplomacy Test. Aired 11-11:30a ET

Aired January 27, 2017 - 11:00   ET


KATE BOLDUAN, CNN ANCHOR: Hi, everybody. I'm Kate Bolduan. One week ago today we were standing on the National Mall as Donald Trump became President Donald Trump. He's now closing out his first week in office with several firsts.

His first time hosting a foreign leader. His first presidential news conference and tomorrow, his first official calls with the leaders of France, Germany, and Russia.

Just a short time from now, President Trump is going to be sitting down with British Prime Minister Theresa May before a joint news conference. We of course will bring that to you live.

BERMAN: In an ironic twist, the president's first visit with a foreign leader comes after his first snub by a foreign leader, which followed what is likely the first ever Twitter feud with a foreign leader. This morning the president kept at it again with Mexico over trade deficits and the border.

I want to start things off right now with CNN White House correspondent, Sara Murray. A lot going on today after a very busy week, Sara.

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: There is a lot going on today, John. We are expecting the British Prime Minister Theresa May to be arriving soon. This is really going to be the first sort of big test of Donald Trump behaves as president in these diplomatic situations. They'll meet privately and hold a press conference together. They'll have a working lunch.

This is one of a few of these diplomatic conversations he's going to be having over the next couple of days. Like you said, over the weekend, he's going to be talking to leaders from Germany, France, and also to Russian President Vladimir Putin.

Obviously, there will be a lot of attention paid to that conversation. Russia is a country that we have a much rockier relationship than we do with Britain. I've got to tell you, Donald Trump's diplomatic test is not off to the smoothest start.

We have seen heightened tensions between the U.S. and Mexico, and like you said a Twitter war between Donald Trump and the Mexican president who announced via Twitter that he is not going to be coming to the United States for his meeting with President Trump next week after all.

BOLDUAN: Also this week, Sara, the president signed a series of executive actions. Any more expected today? What do we know?

MURRAY: We are expecting a series of three additional executive actions today, after Donald Trump's meeting at the Pentagon. Now one of those is going to be the so-called extreme vetting for refugees. From what we have heard of this so far, it's supposed to be sort of a four-month ban on any refugees coming to the U.S. and then potentially longer term, much tighter bans on refugees coming from a couple of different countries.

Now this is not really the executive order is an opportunity for the Trump team to send the signal that he is taking his campaign pledges seriously, that they are moving at a breakneck pace in the White House.

So far today, in his first week before we get to these three this afternoon, Donald Trump has signed four different executive orders. At this point in his first week, President Obama had signed five, George W. Bush had signed none, and Bill Clinton had signed two. Like you said, more still coming today.

BERMAN: But who's counting?

BOLDUAN: Sara, great to see you. A lot going on over there. Sara will be very busy.

One issue more than likely to come up in today's news conference when President Trump stands next to Prime Minister Theresa May, is the standoff with Mexico over President Trump's promise border wall, specifically, how to pay for it.

Yesterday the White House floated the idea of a 20 percent tax on imports from Mexico, a proposal that was met with some pretty immediate backlash and then was walked back hours later by the White House. Now calling it just one option under consideration.

Joining us now is Richard Quest, editor-at-large of CNN Money and the host of CNN international's "QUEST MEANS BUSINESS" and Alexis Glick, CEO of GENYOUth and a former Wall Street executive. You're so excited, you can't even hold it together, Richard.

RICHARD QUEST, CNN MONEY EDITOR-AT-LARGE: Well, because we're going to be talking about border adjustment taxes.

BOLDUAN: I've fallen asleep already.

QUEST: Now this is the difference. It's best to anticipate the question when we're at this level. We are talking here about the difference between a straightforward tariff, which is just a charge put on goods crossing the border, any border, or particular goods, a border adjustment tax, which is usually done as a much greater part of a tax code.

One is a straight penal measure, the other is part of general taxation. The difference here between what Donald Trump seems to be suggesting, we don't really know --

BOLDUAN: That's the thing, we don't really know yet.

QUEST: But if you look at Republicans in Congress, they are looking at a border adjustment tax as a much greater rewriting of the U.S. corporate tax code.

BERMAN: Indeed, they would cut corporate sales tax, they would stop taxing exports, and so it would be part of something much bigger. But you're nodding your head.

ALEXIS GLICK, CEO OF GENYOUTH: Regardless of which way they go, the ramifications for the U.S. economy are really important. Let me just paint a picture for you. Number one, when you look at the cost of goods in the United States as a result of this, if we experience any trade war retaliation, OK, prices are going to rise. Volumes are going to decline.

So you're going to buy less efficient products from another partner and by the way, Mexico, our third largest trading partner, could decide to sell their products and build their trade partnerships with anyone else.

[11:05:12]So let me just say what that picture looks like. You're going to pay more for what you pay at the pump. You're going to pay more for what it costs to purchase a vehicle. You'll pay more for clothing, more for shoes.

And for corporate America, by the way, increased uncertainty, more trade disputes and at the end of the day, possible retaliation against U.S. companies. Not a pretty picture.

QUEST: It's best to keep talking and keep them out of it.

GLICK: Just the two of us.

BOLDUAN: Seriously.

QUEST: This is a very interesting point, because the one thing that the president and his economists have not fully described or explained --

GLICK: Is the details.

QUEST: -- is the details, and how you are going to avoid this higher cost at home.

BOLDUAN: Because remember, the beginning of this is how are we going to pay for the wall. So what you're suggesting is, if this is to be a penalty against Mexico, this actually could end up still being paid by American consumers.

QUEST: Whichever one of these.

GLICK: OK, wait, yes. The answer to your question is yes. It's not just six million jobs are influenced by our trade partnership with Mexico. It's 40 million U.S. jobs, when we look at trade as a whole. So it's not just the cost of goods rising for us, and the intended consequences on American consumers. I realize that some will say the U.S. dollar could rise.

BERMAN: That's what the people behind this say.

GLICK: But do you want to put the future of the U.S. economy in the hands of the currency markets?

QUEST: And he said, the president, anyway, the dollar is too strong and he wants to bring down the value of the dollar to help boost exports.

BERMAN: Different but related subject, the trade deficit, which is something that President Trump talks about all the time, it is a source of major concern for him. He throws around the term, Alexis, but what does it mean and what does it not mean?

GLICK: Well, when you look at the trade deficit, at the end of the day, what he's worried about is climbing out of an enormous pile of debt, right? And when we look at all of these trade partnerships right now, what he's trying to do is not only deal with the deficits and debt, but figure out how we could at some point get to a surplus.

I mean, even when they're looking at Mexico, they are valuing this specific case, this tariff story, as a trillion dollar value back to the U.S. economy over the next decade.

So I understand what Trump is trying to do, why they're looking at the deficits right now, the trade deficit with all these partners and the tax codes, but you cannot throw trial balloons until you start to get some details in place, until you've sat down with your advisers.

BOLDUAN: What if this is less of details, this is more of a threat to actually begin negotiations for broader renegotiating of trade deals? Donald Trump likes to throw out bold statements as a first bargaining position in a negotiation.

QUEST: This is government. This isn't a negotiation. You set out policy points. You let everybody know where you're coming from before you go into the negotiations.

BERMAN: You did. The question is, is that what we do now. President Trump has made clear he's doing things differently.

QUEST: You're going to see the results of that. That's what the point about this is. Theresa May and the White House, even amongst the relationship with Europe in the last 24 hours, my new best friend forever is Theresa May. Hollande is making comments saying European values. In a week, he has virtually destroyed the European relationship.

BERMAN: The last word.

GLICK: What about China? I mean, this is not just about the size of the deficit and the trade wars that are ensuing, but the consequences not only to those 40 million jobs that I talked about earlier, but you cannot throw trial balloons and say that this is a way to negotiate with your largest trade partners who own your assets.

BERMAN: All right, guys, to be continued. Richard Quest, Alexis Glick, thanks so much for being with us.

BOLDUAN: Our new co-anchors.

BERMAN: All right, here to weigh in right now, former Republican congressman from Michigan, chair once upon a time of the House Intelligence Committee, Pete Hoekstra. Congressman, thank you so much for being with us.

I want to play a little sound of what the former president of Mexico, Vicente Fox, said about this whole back and forth between President Trump and the new president of Mexico. Listen to this.


VICENTE FOX, FORMER MEXICAN PRESIDENT: We're at the very lowest point since the war between Mexico and the United States. Trump has brought back a very strong Mexican spirit. We're ready for the trade war. We're ready, of course, for not paying that wall.


[11:10:06]BERMAN: We're at the very lowest point since the war between Mexico and the United States, Congressman. Are you happy with the way things have turned out here?

PETE HOEKSTRA (R), FORMER MICHIGAN CONGRESSMAN: Well, I'm not happy with those types of comments, no. But I'm happy that we've got a president who is saying after 22 years we're going to go back and renegotiate NAFTA to make sure that it is fair to the workers of Michigan, Ohio, Pennsylvania, and Indiana.

I'm glad that we've got a president who is going to confront Mexico and say I'm sorry, the border -- we do need your help in terms of having a secure border. It is both an economic vulnerability to the United States and Mexico, and it's a national security vulnerability.

Donald Trump -- these are not new ideas, this is what Donald Trump campaigned on. This is what people in Michigan and the Midwest voted for. They expected him to do. If Mexico doesn't want to stand up and negotiate and work on these issues that the United States sees as a problem, yes, then we can hear what Vicente Fox has.

But the bottom line is, our president is saying, and our voters have said, NAFTA is not working for the United States, we don't believe it's working for the United States, and we have security issues.

BOLDUAN: But as you said, Donald Trump, yes, he absolutely did run on this, but also during the election, the president of Mexico made very clear that he said Mexico wasn't going to pay for it. So these positions were very well-known before voters went to the polls. What's your advice now, you said that the message is, we need your help, Mexico, these are national security issues, what's your advice then to President Trump? Because right now it doesn't sound like they're doing much talking at all.

HOEKSTRA: Well, they're going to have to break -- Mexico is going to have to come and negotiate, 75 percent of their exports come to the United States of America. We have this border with them that we want to secure. This will get done. It may not be a pretty process, but these are very, very tough issues and you expect that there's going to be difficulties. At the same time --

BERMAN: You're talking mostly about NAFTA and the trade issues, and those very well might be negotiated. It doesn't appear there will be much negotiation about who is going to pay for the wall, Mexico flat out says they won't do that.

Meanwhile, the Congress of the United States is making plans to pay for it itself with U.S. taxpayer dollars, somewhere between $12 billion and $15 billion, and as far as we know, no plans to offset those costs. What do you make of that?

HOEKSTRA: Well, I think when we negotiate with Mexico. It will be a comprehensive agreement. There may be different parts that get agreed to at different times. But I'm sure there will be one that talks about the construction of the wall and border security.

There will be one that talks about how that is paid for. There will be an issue on trade and when you put those altogether, I think that the issue of who pays for the wall will be addressed and will be clearly addressed.

But I don't think it's going to be, you know, singularly addressed that there's going to be a specific action that says, OK, we're getting a check from Mexico for $15 billion to pay for the wall. That's not going out.

BOLDUAN: But Congressman, are you comfortable that American taxpayers are going to foot the bill? I mean, you know, it has long been -- you were in Congress for many years. I covered Congress for a few years. I knew one thing when I was there, what you're going to hear from any Republican, any fiscal conservative is, if you want to spend something, it needs to be offset, in Capitol Hill jargon the pay as you go rule. Are you OK not paying as you go?

HOEKSTRA: Well, what you're going to do is you're going to come up with a budget, they do it every year. They'll have their priorities in terms of going through the appropriations process and what they pay for. And I think members Congress recognize that from a number of issues that the border needs to be secured, and they will figure out a way for paying for it.

BERMAN: We haven't heard anything. There were Republicans who wouldn't vote for Sandy funding, who don't seem to be complaining now about paying for the wall without offsets. HOEKSTRA: Well, you're going to take a look at -- you know, you're going to have corporate tax reform. You're going to have spending reductions on a significant scale and you're going to have reallocation of budget priorities. And I think within that reallocation, Donald Trump has made it clear where he wants to spend more money.

And I think where a number of Republicans, and interestingly enough, Democrats will want to spend money. Increasing defense is clearly a Republican priority. Border security is a Republican priority. Infrastructure is a Democrat priority.

And the president has talked about a $1 trillion program over a number of years. It's going to be a very interesting process, but this is the beginning point. Congress will work through these issues.

[11:15:02]BOLDUAN: Yes, and also a longstanding Republican priority is not adding to the deficit. So it's going to be very interesting --

HOEKSTRA: That is correct.

BOLDUAN: -- to see if Republicans will stand on that principle when it comes to these $12 billion to $15 billion for this wall.


BOLDUAN: Congressman, you only answered two of our questions, you have to come back. We have a lot more to discuss. Thank you so much.

HOEKSTRA: All right, sounds good, thank you.

BERMAN: He's smiling a lot because he knows he doesn't have to deal with the deficit because he's not in office right now. He knows how complicated it will be. Congressman, thanks so much.

Despite critics telling the president to make like frozen and let it go, new details this morning about how far the president went to prove his inauguration crowds were huge.

BOLDUAN: Plus, one of Donald Trump's top advisers telling me, John, and the rest of the media to keep our mouths shut, and asked to be quoted on this, the media is the opposition party now. Legendary journalist, Carl Bernstein, is joining us to offer his take on that position.

And moments ago, President Trump's new ambassador to the United Nations said to the nations of the world, if you have our backs, great, if you don't have our backs, we are taking names. The not so diplomatic message coming from one of the nations' top diplomats, that's next.



BERMAN: All right, in about an hour, President Trump holds his first presidential news conference. This follows his first presidential meeting with a foreign leader, British Prime Minister Theresa May. Tomorrow, he will speak by phone with French, German, and yes, Russian leaders.

BOLDUAN: Early this morning, Nikki Haley, the new U.S. ambassador to the United Nations, said, that the Trump administration plans to look at everything that's not working at the U.N. and fix it. Listen here to her message.


NIKKI HALEY, U.S. AMBASSADOR TO THE U.N.: Our goal, with the administration is to show value at the U.N. and the way that we'll show value is to show our strength, show our voice, have the backs of our allies, and make sure that our allies have our back as well.

For those that don't have our back, we're taking names. We will make points to respond to that accordingly, but this is a time of strength. This is a time of action. This is a time of getting things done.


BOLDUAN: Very strong words from the new U.N. ambassador to our nation's allies. Let's bring in right now CNN's chief international correspondent, host of CNN international's "Amanpour," Christiane Amanpour. Christiane, great to see you.

So those words, basically those basic three words, we're taking names, coming from the new U.N. ambassador. What's the impact of that message to the international community?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Was she talking about friends or was she talking about adversaries? If she's talking about Russia and President Putin, well, go ahead, take the names, because those are not allies in the United Nations Security Council, nor have they been over Syria or any other of the very important aspects of international law, such as big countries don't evade little countries, they don't annex them, all the stuff that Russia has done over the several years.

So if that's what she's talking about, presumably the rest of America's allies will agree. But I think that, yes, this is a very sort of disruptive moment. I know President Trump's supporters talk about the chaos candidate, the disruptive candidate, and the revolutionary candidate.

And Theresa May comes in at a time where that has been played out in public, where some of the so-called chaos and public diplomacy has resulted in the rupture of a meeting between the Mexican president, a friend, and Donald Trump. So, you know, a lot of moving pieces at the moment.

BERMAN: You know, Christiane, you just listed Russia as one of the countries. If we're taking names would be considered not a friend, well, tomorrow, President Trump speaks with Russian President Vladimir Putin and the issue of sanctions is on the table. Kellyanne Conway, senior counsel to President Trump, said today, yes, whether or not lifting sanctions is a possibility and that will be on the table in these discussions. You're reaction?

AMANPOUR: Well, look, that's an interesting thing from her. If it happens, that will be, you know, quite dramatic if that is put on the table in an initial call. We hear publicly from President Putin's spokesman, Dmitri Peskov, that they doubt actual nitty-gritty like that will be talked about tomorrow.

It is apparently, well, it is, the very first conversation between the two leaders since the election. And so it's apparently, according to the Russians, more of a get to know you, congratulations, lay the table and let's see how we can move forward.

But I think what's absolutely clear is that Theresa May there today is going to have a lot of challenges. Will she be able to put forth Britain's and Europe's perspective and, by the way, the entire U.S. intelligence and national security and foreign policy community that Russia at the moment poses the biggest existential threat to the United States and the west?

Will she be able to get that message ahead? Will she be able to persuade the president that NATO actually is something that has served to serve the United States and peaceful Europe for the last 70 years, where Russia wants to break it up?

BOLDUAN: So what are you most watching for, then? When they come out and speak to cameras and reporters, I think everyone is going to be parsing what their opening statements are and exactly how they answer the questions from Theresa May and from Donald Trump, to see if any of this progress has been made, as you're describing. What are you watching for the most this afternoon?

AMANPOUR: Well, I think you're going to see from Theresa May probably a lot of what she said yesterday in Philadelphia, at the GOP retreat. And her speech was a very robust one in terms of urging President Trump to take this historic moment and jointly lead the world.

In other words, continue America's historic role in the world. That is going to be a tough sell, because a week ago today, at his inauguration, he actually cast aside that cloak of leader of the free world, that cliche.

It doesn't apply anymore, by his own intent, he just wants trade relationships and things like that. So that will be interesting, whether he agrees to that. Also she will want to talk about the dangers of Russia.

Is he going to say anything about that? She's also going to want to hope that he will support publicly the continued integration of the E.U., which she will say is very important, despite the Brexit, that they are not looking for a breakup of the E.U., while Donald Trump has talked about predicting further breakup of the E.U.

[11:25:08]And she's going to, you know, talk about facing -- supporting NATO, obviously. So we'll see where there's alignment on that. And obviously the big overarching common goal is to attack the radical fundamentalists, ISIS and others who pose a terrorist threat. But of course, up until now, Russia has not been doing that.

BERMAN: We will see what happens today. We'll be watching alongside you. Christiane Amanpour, thanks so much.

BOLDUAN: So new this morning, one of Trump's first phone calls as president, not to a world leader, not to Congress, but to the director of the National Park Service. Why? Details on that, next.

BERMAN: And just one week after thousands of women filled Washington in protest, you're looking at live pictures right now, thousands more getting ready to march to speak out against abortion. You'll hear about the VIPs who will be joining them.