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White House Suggests Tariff on Mexico to Pay for Wall; Trump Hosts First Meeting with World Leader. Aired 9-9:15a ET

Aired January 27, 2017 - 09:00   ET

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

[09:00:00] CAROL COSTELLO, CNN ANCHOR: -- but tensions are rising with Mexico after its President canceled a White House meeting just moments ago, Trump tweeting out, quote, "Mexico has taken advantage of the U.S. for long enough. Massive trade deficits and little help on the very weak border, must change now," end quote.

CNN's Sara Murray is live at the White House on this busy morning. Good morning, Sara.

SARA MURRAY, CNN POLITICS REPORTER: Good morning, Carol. Well, Donald Trump will host its first world leader here at the White House today, the Prime Minister of the U.K., Theresa May.

You can see she already has stopped by Arlington this morning to lay a wreath there. Now, when she comes to the White House, it's going to be a very busy day. She and the President are going to meet. They're going to hold a press conference together, take questions from the press.

They're also going to have a working lunch. This will allow them to talk about potential trade deals going forward. And senior advisers also say they have sort of a common ground on how they came into office on sort of a wave of dissent from the people, kind of breaking through the political norms.

This is just the beginning of what is going to be a very busy day for Donald Trump. We're also expecting him to head to the Pentagon later today where he may sign some additional executive orders. It's also an opportunity for him to meet with his Secretary of Defense, James Mattis, and lay out some objectives for how he wants to defeat ISIS.

And he will dip his toe back into diplomacy tomorrow. Donald Trump is expected to have a phone call with Russian President Vladimir Putin. Obviously, this is a much rockier relationship than the one the U.S. enjoys with Britain.

Take a listen to how Donald Trump described what he knows about Putin and what he wants to see from that relationship.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't know Putin. But if we can get along with Russia, that's a great thing. It's good for Russia, it's good for us. We go out together and knock the hell out of ISIS because that's the real sickness. You know, the whole ISIS thing is a real sickness. But if we get

along with Russia and other countries, not just -- we should get along with everybody if we can. Now, in some cases, you won't be able to, but we got to try.

(END VIDEO CLIP)

MURRAY: Now, of course, Donald Trump defies political convention. He does not play by the normal rules, particularly when it comes to diplomacy, and we saw some of the fallout from that yesterday as we see these escalating tensions between the U.S. and Mexico.

Mexican President Pena Nieto officially called off the meeting that was scheduled next week with President Trump. Trump is insisting it was a mutual decision. Back to you, Carol.

COSTELLO: All right, Sara Murray reporting live from the White House. Thanks so much.

Tension, as Sara mentioned, already flaring with Mexico. And President Trump fueling the fire this morning with that other tweet I told you about, saying Mexico has been taking advantage of the United States for long enough.

Now, the White House is floating a major tax on imports from a bordering country, a 20 percent tariff. All of this after the Mexican President cancels his meeting with President Trump next week over demands that Mexico pay for Trump's border wall.

Joining me now to talk about that is CNN's Leyla Santiago --she's in Mexico City -- and CNN Chief Business Correspondent Christine Romans.

Leyla, I want to start with you in this latest tweet from Mr. Trump. Has it made its way to the President's office in Mexico?

LEYLA SANTIAGO, CNN CORRESPONDENT: You know, Carol, people are just waking up here in Mexico City. We're starting to see people get off the buses to go to work. Traffic is certainly picking up. And Trump is the talk of the town right now.

We still haven't heard response from President Enrique Pena Nieto, but let me just sort of give you a flavor of what the feeling is here just through the headlines that are coming out.

One says, "Mexico Llego Al Limite Con Ofensas De Trump." Let me translate that for you. It says Mexico has reached its limit with Trump's insults. Another one reads, "Desata Trump Crisis En Relacion Mexico-Estados Unido." That means, Trump has unleashed a crisis in the relationship with Mexico and the United States.

And I got to tell you, when we went to the stand where this was being sold, the gentleman there actually said to us, he's picking a fight with everybody. So it's a little feel of how people are reacting here.

But along with that stance, people are also sort of seeing that cancellation as a sense of pride, given what this relationship is like right now and what could come. A lot of Senators applauding the Mexican President.

And even former President Vicente Fox has said the President of Mexico made the right decision in canceling that meeting. He also said that he doesn't believe that Trump will start a trade war. Listen to this.

(BEGIN VIDEO CLIP)

VICENTE FOX, FORMER PRESIDENT OF MEXICO: I don't think he will do it because there's so much to lose for United States, starting with 10 million jobs where Mexico is accountable for U.S. citizens by what we import every year into Mexico, $250 billion U.S. dollars. So the first big loss to United States is 10 million U.S. workers' jobs, which he has promised to protect, and he's doing exactly the opposite.

(END VIDEO CLIP)

[09:05:12] SANTIAGO: All right. So what will happen today? Well, the Mexican President, Enrique Pena Nieto, is scheduled to meet with business leaders, Senators, and get the report from a delegation of top officials here that was in D.C. meeting with the White House this week.

And so I think, today, you'll hear even more reaction from not only the Mexican President but perhaps a lot of legislators here that will get a better idea of exactly what the delegation came back from Washington with their report, Carol.

COSTELLO: Oh, you're right about that. The fight has only just begun. OK. So thanks very much, Leyla.

Now to you, Christine. President Trump seem to float this idea of a 20 percent tariff or tax on imports to Mexico from the United States. Is he sticking with that or is he backing off?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know, it looks like they're backing off just a little bit. I mean, the White House late yesterday saying, no, look, this is one of the many things that we're considering. It's a point open for discussion.

But it is, you heard Leyla say, the talk of the town is Trump where she is. The talk of the town on Wall Street is this idea of a tariff here. And the idea that this would be a way to pay for a border wall, it just doesn't make sense.

And here's why. That wouldn't be Mexico paying. The person who pays the tariff is the importer of record. That is the American company that is buying the produce or buying the computer screens or buying the auto parts from Mexico and bringing it into the United States.

There are two things they can do with that cost. They can either eat it in their profit, not likely; or pass it on to consumers, highly likely. So you're talking about higher prices for produce, higher prices for computers, higher prices for cars. And that's what the big concern is here. You're also talking about the potential then that Mexico could put a

20 percent tariff on top of the things that the United States exports to Mexico, which is not an insignificant number of goods including agricultural products and including, well, car parts and cars as well. So that becomes something that leads to a trade war here.

So this is something a border wall that would be paid for by the American consumer and by American businesses, not by Mexico and the government of Mexico, Carol.

COSTELLO: So when we talk about trade war because, you know, we as journalists like to throw out that term, but what exactly does that mean to consumers, a trade war?

ROMAN: You know, it's a dangerous, very bad idea. I mean, many say that a trade war, putting tariffs on goods, is something that made the Great Depression longer and more protracted and worse, right?

That's where the United States looks at a country and says, we're going to put a 20 percent tariff on everything that you import. And then that country turns around and puts a tariff on the things that we export.

And suddenly, even now, in a very globalized world, you know, you've got things that are exported from Mexico. A car, for example, is exported from Mexico to the United States. Forty percent of the parts of that car, 40 percent of that car, actually started in the United States as something that was made by an American worker that was sent to Mexico and incorporated in that car.

So then you start to hurt each other. And those self-inflicted wounds hurt economic growth and actually cause job loss. So that's what you really want to avoid.

COSTELLO: All right. Christine Romans reporting live. I'm sure we'll be talking much more about this in the days to go. Thanks so much.

But let's talk about Mr. Trump's meeting with the British Prime Minister Theresa May now. With me now to talk about that, Nic Robertson, CNN international diplomatic editor. David Swerdlick is the assistant editor for "The Washington Post." Julian Zelizer is a historian and professor at Princeton University.

Welcome to all of you. All right. So Theresa May and Donald Trump are going to get together and talk, and then they're going to appear before reporters later on this afternoon. Each will take two questions.

And I just want to talk about the optics of this, Nic, because Theresa May is sort of the opposite of Trump, right? She's not flashy. She doesn't tweet. She was not in favor of Brexit, although she's stuck with it now. So what might that meeting be like between the two leaders?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: She joked on the plane on the way over with journalists that maybe opposites attract. This is a Prime Minister who is famous for wanting to know all the details, consider her options, consider and consult with those around her before she finally makes her decision. So, yes, this is somebody who, in many ways, would be the antithesis of President Trump, you know.

But what she's tried to do here, and we heard this from her yesterday, speaking at the Republican retreat, was really just detail how much Britain is in step with the United States in a world view. No longer interventionists, we only want to intervene where national interests are at stake, not for nation building.

So she's going to try and use the sort of, if you will, the common threads there, the shared blood and treasure that's been lost over the years in wars, and this commonality that Britain and the United States help build the future. So she's going to try and connect with --

COSTELLO: It's interesting you say that because --

[09:10:03] ROBERTSON: Yes.

COSTELLO: I just want to explain the pictures that my viewers were seeing. That was Theresa May at Arlington National Cemetery. She was placing a wreath at the Tomb of the Unknowns, and she was doing that precisely because of what you're saying, Nic.

ROBERTSON: Oh, absolutely. You know, yesterday, she spoke about it. But here she's putting those words into action, you know, British soldiers dying side by side since, you know, the special relationship between the United States and Britain were formed during the Second World War -- so much blood and treasure lost there, Iraq, Afghanistan, since -- and this idea we can work together in the future.

But, you know, this is how she wants to, if you will, persuade President Trump and the Republicans that they can do business with Britain. But she's also going to want to get in her view that NATO is still important, the U.N. is still important. We can change them, but let's not throw them away.

COSTELLO: OK. So along those lines, David, a question for you. So NATO and Vladimir Putin will surely be a hot topic as well, as Nic suggested. Trump is not a fan of NATO. Britain is. Trump is a fan of Putin, Britain is not. So how might that play?

DAVID SWERDLICK, ASSISTANT EDITOR, THE WASHINGTON POST: Yes, I think there's a couple of things going on here. One thing that they're not opposites, May and Trump, that they're both new in their roles, right, Carol? So they can make of this relationship what they want. They're starting with not quite a clean slate, but almost.

But in terms of some of the hard realities, I think Trump and May want to strike some accord on having a bilateral relationship, both in terms of foreign policy or, you know, diplomatic policy and trade. But Britain won't be out of the European Union, I believe, until 2019, so there's going to be some time it will take for that sort of component of their relationship to develop.

And then when you're talking about NATO, right, as you said, Britain is more in favor of keeping a robust NATO presence as an opposition to Russia's influence in eastern Europe.

And even though President Trump has said, over and over again, that certain NATO nations are not ponying up their share, their 2 percent of GDP that they're supposed to, for national defense, what has gone missing in this discussion is that President Obama brought that up over and over again. He brought it up in Germany last year. He brought it up in 2014 in Estonia. This is not an easy problem to solve for Trump or May or the alliance in general.

COSTELLO: All right. So, Julian, this will be, of course, Mr. Trump's first presser with a foreign leader. Reporters are allowed two questions apiece, as I've said. So how might that go, in light of, you know, during the run-up to the election, Mr. Trump met with the Mexican President and that did not go well?

JULIAN ZELIZER, PROFESSOR OF HISTORY AND PUBLIC AFFAIRS, PRINCETON UNIVERSITY: Right. I think there's two issues to look for.

The first is literally their personal interaction. As you said, they're very different in terms of their style. And in these press conferences, including the one you just mentioned, that style can become a problem for President Trump, and so we're going to see how they interact. This is, in part, about building a relationship.

The second issue is how much the press really goes after these points of tension. There are really serious points of tension over NATO, over Brexit, and, probably most important, over Russia. And that's partly why she's here.

And reporters who have been hearing, in the last few days, that this administration is launching a war against them, I think are going to be ready to ask some pretty difficult questions. So we'll see how much that comes out and shapes the presser.

COSTELLO: OK. So, Nic, I want to talk about Nigel Farage, right? He's the anti-immigrant British politician. He's been a thorn in the Prime Minister Theresa May's side.

Farage is a Trump fan. In fact, he met with Mr. Trump before May did, something that did not sit well with the British government. I asked Farage about that in November. Listen.

(BEGIN VIDEO CLIP)

COSTELLO: Well, here's the thing, and this is what critics say, you actually met and talked with Mr. Trump before the British Prime Minister did. They say that's not a great message to be sending to Britain's Prime Minister. What do you think?

NIGEL FARAGE, MEMBER OF THE EUROPEAN PARLIAMENT: Well, it's unfortunate, isn't it, that nearly the entire British government said derogatory things about Donald Trump and his team during the election campaign? So, you know, they're not getting off on a very good start. Whereas, you know, I said that while I didn't agree with every single thing that Mr. Trump said, I felt his direction of travel was absolutely right.

(END VIDEO CLIP)

COSTELLO: So, Nic, Farage is now a Fox News contributor and Trump is buddy-buddy with Fox. Will Farage play some kind of role?

ROBERTSON: He's absolutely not gone away. He went, after the Brexit vote which, again, he was the one that kind of helped lead the way on that. He retired from the leadership of his party.

There have been actually fistfights in the European Parliament between members of his party, in essence, around who should take over leadership. It's been a messy picture.

But Nigel Farage is not going away. He remains absolutely a current and very present speaker, not just with Fox, but he's also got his own chat show or radio talk show now in the U.K. So he's not gone away. But Theresa May absolutely would like to marginalize and eclipse him as much as possible.

[09:15:04] Will he remain a problem for Theresa May? He just applauded her speech last week on Brexit, the hard Brexit, if you will. So he's not gone away.

In this relationship with President Trump, Theresa May wants to be in the driving seat, should like Nigel Farage somewhere way behind in the back seat, somewhere way, way back behind economy, if you will, in the cheap seats at the back where he can't be heard.

That's probably not going to happen. He's a voice out there. In Britain, people are used to him, used to his views. But he's absolutely going to remain someone that President Trump can turn to if he chooses to get the temperature of the British feeling unvarnished by the sort of political spin, if you will, that Theresa May is putting on.

COSTELLO: Right.

ROBERTSON: Let's not forget, he went on the campaign trail with President Trump. He was the one -- you know, he feels Brexit, the vote itself actually energized and helped President Trump win the election here.

COSTELLO: Yes, and he also has a direct line to Steve Bannon. They're very close. So, it might be interesting.

Nic Robertson, thank you so much.

David and Julian, stay with me, because we have more things to talk about.

Still to come in the NEWSROOM, one week into his administration, President Trump is still talking about voter fraud. (COMMERCIAL BREAK)

[09:20:20] COSTELLO: President Trump expected to sign an executive action launching an investigation into unsubstantiated claims that millions of people voted illegally. Trump's apparent source for those accusations, he's a man named Gregg Phillips. He has a phone app and he was on NEW DAY this morning.

(BEGIN VIDEO CLIP)

GREGG PHILLIPS, FOUNDER, VOTESTAND: If we jumped out there with just our initial analysis rather than refining it and quality checking it, we'd be out there with accusing people that aren't committing felonies of felonies.

CHRIS CUOMO, CNN ANCHOR: How did you not do that in your first tweet just as a matter of fact? You said we know 3 million illegally voted. You already did that.

PHILLIPS: Right. We didn't name a soul. We didn't name a person.

CUOMO: Right, and you still haven't.

PHILLIPS: But we will.

CUOMO: Do you have the proof?

PHILLIPS: Yes.

CUOMO: Can I have it?

PHILLIPS: No.

CUOMO: Why?

PHILLIPS: We're not -- the rest of the tweets, there was a whole series of tweets, those were taken slightly out of context. But one of the key tweets that we have stuck with all along is we're going to release all this to the public. We're going to release our methodology. We're going to release the raw data. We're going to release our conclusions. We're going to release everything to the public.

CUOMO: When?

PHILLIPS: As soon as we get done with the checks.

(END VIDEO CLIP)

COSTELLO: OK. So, last hour, President Trump showing his support to that man, Gregg Phillips, and his team, saying he's looking forward to seeing those results whenever he chooses to release them. We don't know exactly when that will be.

With me now is David Swerdlick, CNN political commentator, and Julian Zelizer, historian and professor at Princeton University. OK, David, where do we start? Because I've talked to more than one

secretary of state.

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Right.

COSTELLO: There is just no widespread voter fraud in this nation. There just isn't. So, does this guy have some secret vaunt of information? Is he talking to secretaries of state across the nation? Because I've never heard of him. I've talked to many secretary of state.

SWERDLICK: Yes, Carol, I watched Chris Cuomo do that interview live in the prior hour. I would say I'm on the same page with you and Chris and with President Trump's team for that matter.

I, too, look forward to seeing the information that that organization, VoteStand, has to provide. And I they have something that suggests there are 3 or upwards of 3 million fraudulent votes in the 2016 election, I would anxiously want to see their data set.

Look, I think this is a distraction from what's going on this week, what's going on in the world. It's unfortunate. It suggests, you know, a credence to conspiracy theories being lent by the president of the United States.

I would just echo what my "Washington Post" colleague Dan Balz wrote earlier this week. You know, he's the most respected journalist in Washington and he wrote, paraphrasing, that the plausible explanations for President Trump giving credence to this theory are either that he wants to encourage distrust in our system or he wants to lay a predicate for potential future voter suppression laws, or he simply is someone who is willing to, without evidence, engage in speculation about voter fraud.

Either way --

COSTELLO: Well, perhaps, it's more about this Quinnipiac poll.

Quinnipiac put out this poll and President Trump's approval rating right now is 36 percent. You've got to believe that this voter fraud thing, Julian, is part of the reason the approval ratings are so abysmal.

JULIAN ZELIZER, HISTORIAN AND PROFESSOR, PRINCETON UNIVERSITY: Yes. Let's start by saying the voter fraud allegations are not true. There has been so many studies over the years including by the Bush White House that never could find what the allegations were, never could find what the allegations were and never confirmed any of this. It's not true now.

So, I don't know who this individual is. But we should remember that. It's not even relevant that the president has now broadcast him because it's based on nothing that we know of.

This is -- COSTELLO: But here's the point on that, Julian. It's relevant only

in light of this. So, this guy will put out these statistics. They may be bogus, they maybe not, who knows?

Even if they're bogus, President Trump will launch onto that and present it to his supporters and his 20 million Twitter followers as something that's true. He'll continue to say it's true. He'll continue to say it's true until he feels that it is, and that's a dangerous.

ZELIZER: That part is relevant. I meant the study itself and waiting for the data. It's very significant that he's putting this out there. And many Republicans believe it's true. That's what the polls are finding.

It's not just dangerous to creating questions about the legitimacy of the question or the election.

[09:25:02] But as David said, this is a setup for more voter ID laws have been taking place in the states for years now based on the allegations of voter fraud and have the effect of suppressing votes. That's where president Trump is going with this, it's very clear. So, the consequences are very serious and very significant.

COSTELLO: So, David, logic and reason and informed argument isn't working. So maybe lies will. Is that the new motto in this country?

SWERDLICK: You know, I'm going to have a little more optimism that we are going to, as the Trump era progresses, we're going to -- you know, we in the media, members of government, the body politic, are going to get their arms around this and realize that we have to deal from a common set of facts.

People have to -- people can disagree on outcomes, people can disagree on policies. People can fight hard for their positions, but we've got to find a way to come around to some common understanding of facts. Right now, we don't have that.

COSTELLO: David Swerdlick, Julian Zelizer, thanks so much.

Still to come in the NEWSROOM, Trump welcomes the British Prime Minister Theresa May to the White House. How this meeting could test some of his he most controversial foreign policy decisions, next.

(COMMERCIAL BREAK)