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QUEST MEANS BUSINESS

Brittan's Theresa May and Donald Trump Hail Meet at the White House; Trump, Pena Nieto Talk Over the Phone, Discuss Border Wall; Trumps Wants 20 Percent Tariff on Mexican Imports; Aired 4-5p ET

Aired January 27, 2017 - 00:00:00   ET

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


[16:00:00] RICHARD QUEST, CNN HOST: Went down. And all the petty jolly, still over 20,000. But the Dow has given back some ground. And the man

with the gavel does the necessary business. I think you can call that a bravado gavel, which brought trading to a close. It's all finished on

Friday, January the 27th.

A special relationship renewed. Donald Trump and Theresa May pledge to build a strong partnership.

A special relationship strained. Donald Trump says America's ties with Mexico cannot stay the same.

And a special relationship at risk. Theresa May is risking her relationship with European allies if she cozies up too much to Donald

Trump.

I'm Richard Quest. Back in New York. Where I mean business.

Good evening, the wealth of news just keeps coming and the events we will be bringing to you during the course of this hour.

You're looking at live pictures. Donald Trump is expected to sign two executive orders in this hour. He's at the Pentagon at the moment, where

he's been with General Mattis. The two orders he's expected -- maybe even three orders, but we certainly believe that one of them will be to limit

the flow of refugees into the United States and the second will be to implement what Mr. Trump calls extreme vetting of those immigrants and

refugees.

We'll be bringing those details to you and anything that the president says live during the course of the hour.

What is clear in the course of the day is that first impressions count in any relationship. And Donald Trump's first meeting with a world leader has

done no harm to this special relationship between the United States and Great Britain. After weeks of speculation, Mr. Trump's meeting with the

British prime minister, Theresa May, was one of warm wishes and promises of closer ties to come.

Now both leaders repeatedly paid tribute to the so-called special relationship between them. In fact, I think the phrase was used five or

six times in the press conference. Theresa May used it nine times in her speech to Republican leadership yesterday.

The president said he knew very quickly that he would get on with Mrs. May. The prime minister also confirmed that the president had accepted an

invitation from the Queen, and would make a state visit to the United Kingdom later this year.

Both leaders made it clear that their personal relationship would become just as warm as the relationship between the two countries themselves.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I can tell you that I think we're going to get along very well. You know, it's interesting, because I

am a people person. I think you are also, Theresa. And I can often tell how I get along with somebody very early, and I believe we're going to have

a fantastic relationship.

THERESA MAY, BRITISH PRIME MINISTER: We are discussing how we can establish trade negotiation agreement, take forward immediate high-level

talks, lay the groundwork for U.K.-U.S. trade agreement, and identify the practical steps we can take now, in order to enable companies in both

countries to trade and do business with one another more easily. And I'm convinced that a trade deal between the U.S. and UK is in the national

interest of both countries and will cement the crucial relationship that exists between us, particularly as the UK leaves the European Union and

reaches out to the world.

(END VIDEO CLIP)

QUEST: Our diplomatic editor, our international editor, Nic Robertson is in Washington.

With a title like that, Nic, I'm surprised you're getting any sleep these days. There are so many international diplomatic issues. Let's get --

let's chew over what happened today. I thought as I watched, it was only 18 minutes, the news conference. One of the shortest anyone can remember,

but I thought we saw a very good example of a president who's not a politician, often off-message, but careful and considerate, and prime

minister who was determined to throttle her message at every available opportunity.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Oh, absolutely. And I mean, this is a president who's used to playing a role on TV and he was

very presidential in his demeanor. It certainly surprised a lot of people here that he was able to carry off with such dignity, this meeting with

Theresa May, this 18-minute public part of it. But the very least, a lot at stake. You know, we've seen the way in just over the past 24 hours, the

way he's dealt with this relationship with the Mexican president, but if his relationship with Theresa May had blown up over something that they'd

mutually disagreed with there in that room, then that would have been all of it dead.

[16:05:06] That gamble that Theresa May took, coming to the United States, and his position, as well, with future leaders coming to visit him. No,

this was a very, very diplomatic Donald Trump, as we haven't seen him before. And to your point, that this is worrying people in Europe, not for

nothing that the French president and the German chancellor met in Paris, hours before this meeting in the Oval Office took place to send their

message that Europe is worried about how far they're cozying up. So if Europe Brexits here in Britain right now, you have absolutely no doubt

given Theresa May's message last week and this meeting now today she is very, very clear she is unhitching Britain's wagon from Europe and hitching

it to the United States.

QUEST: Right. Now, on that point, Francois Hollande says -- talked about challenges and difficulties. And Hollande specifically said that we will

deal with them with European values. And as seen from the European point of view. Even Angela Merkel talked about external and internal challenges.

And, Nic, are the Europeans worried?

ROBERTSON: The brand of internationalism and the branded message of pro- Brexit ambivalent to the EU, predicting more countries exiting the European Union, and therefore opening the door to in France and Germany's case, and

Hollande's soon, as well, elections this year, opening the door to perhaps more populist messages. Anything, and we saw Marine Le Pen just last week

go to Germany along with Geert Wilders from Holland, and they would -- and the message there essentially how much good Donald Trump's presidency is

doing them and their message.

So for the Europeans, you know, Europe's way of doing business, Europe's political scene, Trump, in a way, by embracing Brexit, it stands to upset

that very, very delicate apple cart at this time. And that's something that really worries them. It worries them personally because they're going

into elections.

QUEST: Right.

ROBERTSON: And Hollande is out of the running anyway. But there's a worry.

QUEST: Now finally, the UK, as you know better than most, is paranoiacally obsessed by the special relationship. Theresa May referred to it nine

times in her speech. I counted it in the press conference about five or six times. Will they be going back to Downing Street tonight, as they're

going on the red eye plane to London tonight. Will they be pleased with what they got?

ROBERTSON: Well, if they were flying back to London tonight, I think they would be. They've got a tough schedule ahead of them. Theresa May is off

to Ankara and she'll be meeting with President Erdogan there in the coming hours. But yes, in essence, to the point you're saying here, yes, they

have ticked the boxes that they wanted to tick. Yes, they know they're going to come into criticism and they were going to get criticism anyway

for taking this path.

It is a gamble, that's going to take time for it to play out. The invitation given by the Queen to Donald Trump to visit the UK, a state

visit.

QUEST: Yes.

ROBERTSON: huge plus for him. His mother, let's not forget, is British. He's from the Isle of Lewis in Scotland. That's very, very important for

him.

QUEST: Right.

ROBERTSON: And certainly he's talked about it. And it was -- the Queen was very important for his mother. So you know, yes, Theresa May, in a

way, and she was able to stand up there and say, he agrees with me 100 percent. You know, we're behind NATO. Those moments are really plus,

plus, plus for Teresa May going back. But it is a political gamble. Let's not forget Tony Blair and George Bush before going into the war in Iraq.

He wanted a second run at the U.N. He didn't get it. His political career ultimately was tarnished by that relationship, and that belief that

hitching his wagon to the Bush presidency is -- that he can somehow direct the wagon.

At the moment, Theresa May seems to have it her way. It's a long road.

QUEST: Dust off your white coat and tails or your white tie and tails for that state banquet. Good to see you, Nic Robertson, in Washington tonight.

I'm getting London and Washington mixed up.

Singing off the same hymnal, that's how Professor Ted Malloch describes that first meeting. Speaking to me a moment or two ago before we came on

air, he told the special relationship remains very meaningful for both leaders.

(BEGIN VIDEOTAPE)

TED MALLOCH, PROFESSOR, UNIVERSITY OF READING: It was absolutely a fantastic first date. And I think we could now use the term very special

relationship. They seem to be holding hands. Everything was choreographed perfectly right down to the color of her dress and his tie. I guess I

would even use a religious metaphor. They were seemingly singing off at the same hymnal.

QUEST: Except, of course, the prime minister did have to -- not force, but push the president to basically admit that he was 100 percent behind NATO.

MALLOCH: Well, I think he has come out now, probably with her persuasion, and that of General Mattis and others around him, and come to the

conclusion that NATO is very important to the Transatlantic alliance and relationship looking forward.

[16:10:05] It may need to be reengineered for the 21st century. It needs to focus on the next war, not the last war. It looks at terrorism and

cybersecurity. I thought it was also very meaningful that she said she would not only take up the cause of burden sharing, but she would try to

convince some of her European friends.

QUEST: Talking of European friends, we saw a different point of view coming today from a news conference that was held by Francois Hollande and

Angela Merkel, particularly Mr. Hollande, who said that they would view their dealings with the president, President Trump, through European

values. Thus suggesting that they are different to his.

MALLOCH: Well, indeed, a socialist president who's on the way out has very different values, probably, than an American president who is not only free

market, an entrepreneurial orientation, but is certainly on the conservative side of the political spectrum.

QUEST: Do you see -- how do you factor in Prime Minister May and her relationship with Donald Trump by how his relationship will now move

forward with the European Union. Bearing in mind that it's no secret that -- he said, he said bluntly, he's a fan of Brexit, and previously, he said,

you know, the EU's days are numbered.

MALLOCH: Well, he, I think, reinforced both of those sentiments today. He's an excited, enthusiastic proponent of Brexit. He was -- actually, the

day before, he said, when he was in Scotland, and he remains so, even to this day. So to some extent, I think he's suggesting that the British

example, and even the special relationship and the trade relationship that will ensue with the United States, could provide another path.

QUEST: Finally, do you think Theresa May got what she needed to get from this visit?

MALLOCH: I think she really did well. They got off perfectly. They will have this opportunity for a trade, bilateral that is very important to her

and to the U.S. They got what they wanted on the future of the security agreement and NATO itself and most importantly, Donald Trump is coming back

to London for a state visit, probably as early as June. I'm told through inside channels, he's also agreed to speak reciprocally to the Conservative

Party Conference in the fall.

(END VIDEOTAPE)

QUEST: Which means there'll be a lot of Transatlantic travel over the next few months.

Coming up also in this hour, we're going to hear from Nick Clegg, who was the deputy prime minister in David Cameron's coalition government. Mr.

Clegg is going to sound the alarm about diving into a new deep special relationship.

The earnings season is upon us and we'll test the Trump era's optimism in the markets. UBS' annual profits nearly half, it says Donald Trump would

boost well for management. The CEO has described it as a turning point.

American Airlines' quarterly profits were down, which beat estimates. Meanwhile the CEO of Qantas, Alan Joyce, has said that they may re-apply to

coordinate for anti-trust immunity and joint venture with American Airlines. The Obama administration's Justice Department rejected that plan

even though they do have other joint ventures between the two airlines.

The market surge in the U.S. was halted as the investors digested earnings. The Dow and the S&P were lower by Nasdaq e-data small gain which took it to

the record. And also interestingly, let's not forget those GDP numbers the world has seen during the course of the day.

Mexico and the question of tariffs. When is a tariff not a tariff when it's a tax? And what's the difference? And of course the crucial issue

relates to how it appears to Mexicans, after the break.

(COMMERCIAL BREAK)

[16:16:26] QUEST: U.S. trade, Donald Trump is vowing overhaul relations with Mexico. Mexican president Enrique Pena Nieto spoke to Mr. Trump for

more than an hour a day after canceling his visit to Washington. Both Mexico and the U.S. described the talks as constructive, according to the

Mexican account, both leaders agreed to make no more public statements about a border wall, where the White House made no such reference to any

such agreement. Though he did not mention the wall at the news conference, Mr. Trump said the relationship could not stay the same.

(BEGIN VIDEO CLIP)

TRUMP: We are going to be working on a fair relationship and a new relationship. But the United States cannot continue to lose vast amounts

of business, vast amounts of companies, and millions and millions of people, losing their jobs. That won't happen with me. We're no longer

going to be the country that doesn't know what it's doing.

(END VIDEO CLIP)

QUEST: Now, the president, once again, said that renegotiation would benefit both countries. Mexico, after all, is the third largest supplier

of goods to the United States. A large part of that is cars and machinery. Over a quarter trillion dollars worth of goods were exported from Mexico

last year.

Earl Anthony Wayne is the former U.S. ambassador to Mexico and joins me now.

So from your understanding, the two leaders spoke, but no amount of casual phone conversations is going to be able to paper over what is some very

deep disagreements on matters of pride and principle.

EARL ANTHONY WAYNE, FORMER U. AMBASSADOR TO MEXICO: Certainly true, that the public exchanges over the past several days have been damaging to the

relationship. Certainly in Mexico, it touched on a very deep sense of national self-respect. But at the same time, there were very technical and

solid talks going on between officials. And both sides understand that this economic relationship is terribly important to both countries. It's a

million dollars of trade per minute that crosses that border. And if you looked at the U.S. exports to Mexico, you would have seen a number of the

same products.

QUEST: From your experience as most recent ambassador, or certainly, a recent ambassador to Mexico, how fragile is the economic relationship in

the sense that it's not going to take much saber rattling? We've already seen it, the peso has gone down. But it won't be long before jobs are lost

and Mexico is facing an economic crisis, if this isn't resolved.

WAYNE: Certainly, it's in Mexico's interests to get by this crisis. But I want to underscore that it's in both countries' interests. There are 4.9

million U.S. jobs that depend upon our sales to Mexico. They are our second largest client in the world. A lot of these are manufacturing, but

Mexico is also the third largest buyer of agricultural products from the United States. So there's a lot at stake in these talks.

QUEST: Right. Right. So -- and we've heard the talk about this border tax. Now whether it's a border tax or some sort of border adjustment tax,

which will be slightly different since it will be offset by lower tax rates, or a tariff.

[16:20:10] From your experience, how damaging would it be if the U.S. unilaterally imposed any form of tax or tariff on goods imported from

Mexico?

WAYNE: Well, the first thing it would do would increase prices for U.S. consumers. The second element would be how they impose this tariff or tax,

and would that violate world trade rules. And if they did so, would Mexico be forced or be led to retaliate, which could be very costly for those U.S.

exporters of machinery and other products but also of agricultural goods?

QUEST: Ambassador, good to see you, sir. Thank you.

WAYNE: Thank you very much.

QUEST: Now Alejandro Ramirez is the chief executive of Cinepolis, one of the world's biggest theater companies. He's been critical of Donald

Trump's policies with Mexico.

Good to see you, sir. Thank you for joining us from Mexico City. So, whether we like it or not, the volume has gone up, the threats of being

made and now how worried are you?

ALEJANDRO RAMIREZ, CEO, CINEPOLIS: Well, we're really concerned. There's a lot anxiety among the Mexican business community. Already, the

ambassador mentioned that we're the second largest importer of U.S. goods. We import, actually, twice as much as China does, and we actually import

more than the UK, Germany, France, Japan, and Italy combined. So we're a huge client of the U.S., for U.S. both consumer goods and capital goods.

And for instance, you know, the main staple of the Mexican diet is corn. Half of the corn that we consume in Mexico comes from the Midwest, from the

U.S., from Iowa, Kansas, and Missouri. In fact, I run movie theaters throughout Latin America and we consume corn from the Midwest. I also

consume cheese for my nachos in the movie theaters from Wisconsin. And of course, all the projectors and screens and lenses and servers come from the

U.S.

QUEST: Right.

RAMIREZ: So we're really concerned that if a trade war begins, and we go to pre-NAFTA tariff levels, for instance, it would be cheaper for us to

source our corn from Argentina rather than from the United States.

QUEST: But, to the core -- let's be blunt here. To the core accusation that Mexico has taken unreasonable benefits of the United States under

NAFTA, do you -- do you accept that a renegotiation or an amendment to a 20-year-old treaty might be a good idea?

RAMIREZ: No, I definitely think that there are areas of the trade agreement that can be modernized because there are full areas of the

economy that did not exist 22 years ago. So for instance electronic commerce. I think that's a new chapter that should be included. Things

that have to do with intellectual property rights. I think that's also something that should be included. But I think with the idea in mind that,

you know, that value chains of North America are highly integrated, and it's very hard to say this is a Mexican, an American, or a Canadian

product.

QUEST: Right.

RAMIREZ: There are things that are just North American. You know, an automobile from Mexico that is exported to the U.S. includes 40 percent of

American auto parts. So, I mean, you can say it's Mexican because it was assembled at the end in Mexico, but 40 percent of American parts with

intellectual property from the U.S. and an American brand. So it's more of a North American car.

QUEST: OK, but --

RAMIREZ: And I think this integration has allowed North America to compete.

QUEST: Do you get the feeling, though, that fundamentally, this president is spoiling for a fight and it's really going to be up to President Pena

Nieto, whether or not he's going to give him that fight?

RAMIREZ: Well, to be honest, it's very early to tell, but I think that negotiations will continue. I think our negotiators are coming back today

from Washington, or minister of foreign affairs and our minister of trade. And I think they will bring us the news, because I think the internal

conversations between, you know, the White House officials and, you know, the trade representatives of the U.S. and our delegation, I think that the

talks were in good terms.

I think it's the thing of the wall that -- you know, I think, that spoiled a little bit of the -- you know, the dialogue that was on the way, and the

visit of the president, but I think in terms of the trade itself, I think the negotiations are on their way in good terms.

QUEST: Good to see you, sir. Thank you. Thank you very much.

RAMIREZ: Thank you.

QUEST: Thank you for joining us.

Now Donald Trump says Mexico has beaten the United States to a pulp on trade. According to the White House and Mexican government, there was no

mention of the latest White House plan to put pressure on Mexico, which is a possible 20 percent border tariff or tax on Mexican exports.

[16:25:08] One of the key exports was the avocado. Now this one here, have a look. There you are. It says here, from Mexico, it says. Now the

avocado, because it's such an important export, it would take a look here, let's imagine that the -- that the current system, the avocado exported

from Mexico goes north of the border and it costs $1 in your basket. Now the U.S. government charges 20 percent tariff. Well, who pays that? Who

pays that 20 percent tariff? Not in Mexico, it's still costing. But at the border, it goes up as a 20 percent tariff, goes on to the price of the

avocado, now it costs $1.20. Supermarkets raise prices to cover the costs.

The American government would get the extra money if it's a straightforward tariff. Not so much so if it's a tax because that will be offset by lower

corporate tax rates. The American consumers would pay more and the American producers, arguably, could become more productive.

Heather Long is with me. Heather, what it really comes down to -- I mean, I don't know whether you like avocado, but it really does come down to

something as basic as who's going to bear the cost.

HEATHER LONG, CNN MONEY SENIOR ECONOMY WRITER: That's right. That's exactly right. And in this case, if it's a tariff, that's going to be

borne by you and I. Me. It's going to be borne by the American consumer every time we go to the store. And a lot of people aren't going to like

that. That's not going to make Trump very popular.

QUEST: But he must have factored that in.

LONG: Right. And I think if you're a Trump supporter, what you're looking at here is you're saying, he's a master negotiator, and what he's trying to

bet on right now is that Mexico has more to lose than the United States does, right? Because Mexico is trading more towards us and exporting from

their country into ours, than we are, the opposite way, and as we've already noted, the Mexican peso has been getting killed since the election.

And so Mexico is hurting more right now than the United States is. So is this his way of trying to get some concessions, trying to bring them to the

negotiating table?

QUEST: But what would -- OK, let's forget tariffs and taxes, and there's a difference, but it's Friday afternoon, and I don't think either of us have

got the stamina for a border adjustment tax discussion.

LONG: Well, I'll just say one thing about that.

QUEST: Go.

LONG: We get so focused on what Trump's doing, what he's saying, what he's tweeting. Right? But he is not the supreme master of the universe, no

matter what he likes to think. He needs Congress to go along with him. And the most important comments that were made today were actually by the

House Speaker Paul Ryan. So his -- is he going to play ball on this or not? And just minutes before you went on air, Paul Ryan came out and says,

he supports the wall, the building of a wall, he said, that's a national security priority. But he didn't say a tariff to fund it, right? He did

not support Trump's idea of how to fund it. He seems to think there's other ways to do it. So there's a difference there.

QUEST: So what is the end game? Assuming it's a negotiation, let's assume it's a negotiating tactic to bludgeon the Mexicans. What does a revised

NAFTA look like that rebalances towards the U.S. favor? I mean, this is what is not known. What is it he wants in a NAFTA deal?

LONG: Well, right, Trump is not exactly going out and giving us the bullet points of what he wants.

QUEST: Yes.

LONG: But it seems from the big picture perspective, certainly what his supporters want is they don't want the trade -- you know, they don't want

us to run a trade deficit anymore with Mexico. So they want the U.S. and Mexico to more or less have the same amount of goods, the same amount of

money going across that border. If that happens, that theoretically should grow the United States. It should grow businesses. Now whether it grows

jobs here, that's a bigger question.

QUEST: Because, of course, I'm -- you know, that ultimately, if those jobs move back across the border, this argument that they will invariably be

high -- that they will raise the price of consumer goods, is that a valid argument?

LONG: If those jobs come back?

QUEST: Yes.

LONG: Potentially, but what if those jobs go to robots? So those jobs that came back to the United States may not go to humans, if they're

automated and they go to robots, that may not be -- and we pay more, but that's not giving anybody a job here in the United States.

QUEST: Have a good weekend.

LONG: You too.

QUEST: Border adjustment taxes will be on your reading. Hey, give me back my avocado. My dinner.

Donald Trump and Theresa May have drawn plenty of comparisons with the Reagan-Thatcher relationship. Whether they're replicate the `80s parable

is still unknown.

When we come return, former deputy prime minister Nick Clegg warns about becoming too close. Go on, you have it.

(COMMERCIAL BREAK)

[16:32:13] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When Britain's Former Deputy's Prime Minister

is warning Theresa May is risking her relationship with Europe as she cozies up to Donald Trump.

And General Mattis is being sworn in as Secretary of Defense. We're waiting for Donald Trump who's expected to sign an order of extreme vetting

on refugees. You're going to see that live when it happens.

As we continue tonight, this is CNN. And here, the news will always come first.

Britain's Prime Minister, Theresa May, says Donald Trump will make a state visit to the U.K. later this year. The Prime Minister was speaking at the

White House, where she became the first foreign leader to meet Mr. Trump since he became President. At the news conference, Mrs. May voiced her

support for sanctions against Russia, while Mr. Trump said it was too early to talk about them. Also at the news conference, President Trump

reaffirmed his support for the use of torture on terror suspects, saying he believes it is an effective interrogation method. However, the President

says his Defense Secretary disagrees with him and he'll defer to the Secretary on the matter.

President Trump said he's had a very, very friendly phone call with Mexico's President, Enrique Pena Nieto, had canceled a trip to Washington

over the president's proposal to build a wall between the two countries and have Mexico pay for it. Despite the new dialogue, Mr. Trump says he will

continue to maintain a tough stance on trade with America's southern neighbor.

The British Prime Minister, Theresa May, took a huge risk when she agreed to be the first foreign leader to meet Donald Trump at the White House.

The potential rewards were enormous, but so was the downside if it went wrong. Not least of which because she risked alienating her European

Partners. Britain is still a member of the European Union, of course, at least for the next two years. Nick Clegg is the Former Deputy Prime

Minister and has warned that the risk she's running is a serious one, by cozying up to Donald Trump.

NICK CLEGG, FORMER BRITISH DEPUTY PRIME MINISTER: Remember, the United Kingdom is tectonically, sort of, doomed if they would have put it that way

to be a European country. We are on this side of the Atlantic, not the other. We're not the 51st State of The United States. And so, she needs

to be quite careful about how it is perceived to be rushing off to stand alongside Donald Trump --

QUEST: Right.

CLEGG: While snubbing or offending quite a lot of her closest neighbors in Europe and appearing -- appearing at least to seek to agree with him more

than with them. And that, of course, is again, very, very different to the role of previous British Prime Ministers have played, where they've tried

to play a much more even-handed balancing trick between their European obligations and their American affiliations.

[16:35:14] QUEST: That was on display this morning. If you compare what the Prime Minister said about shared values and an Angela Merkel

relationship with Francois Hollande's comments this morning, that you may have seen, where he talks about the U.S. -- Europe will have to have a

relationship with the U.S., based on European values, and goals. This isn't going to end well, is it?

CLEGG: I think you got to understand that for lots of European leaders, Europe is a crowded, patch work continent with lots of middle-sized or

small countries, jostling together, which a continent -- which is engulfed in the most horrendous, bloody conflicts humanity has known in the last

century. And for Europeans, and including for British governments, at least until now, there is a -- there has always been an incredibly

heartfelt view that the way in order to -- that the best way to secure stability and peace for future generations --

QUEST: Let's go to the Pentagon straight away.

TRUMP: James Mattis, now Secretary Mattis. Secretary Mattis has devoted his life to serving his country. He's a man of honor, a man of devotion,

and a man of total action. He likes action. He is the right man at the right time, and he will do us all very, very proud. I'm honored to stand

here today among so many patriots. You are the backbone of this country, you are the spirit of this nation, in every sense.

The men and women of the United States military are the greatest force for justice and peace and goodness that have ever walked the face of this

earth. Your legacy exists everywhere in the world today. Where people are more free, more prosperous, and more secure because of the United States of

America. And you have earned and ensured for our children the glorious birthright of freedom bestowed upon us by God.

We stand today in the Hall of Heroes, great heroes, a testament to the undying courage of those who wear our nation's uniform and who have

received the highest distinction, the Medal of Honor. This is a sacred hall; the soul of our nation lives between these walls. These walls tell

the story of those intrepid Americans who gave everything, risked everything, and fought with everything they had to save their fellow

warriors, and warriors they are, believe me. Warriors they are. And to save our wondrous liberties and to save this God-blessed land.

They shed their blood and poured out the love from their hearts to protect our home. We are in awe of their valor, tremendous valor. And we pledge

our dedication to every single family serving our country and our flag.

That is why today, I am signing two Executive Actions to ensure the sacrifices of our military are supported by the actions of our government

and they will always be supported by the actions of our government, believe me. First, I'm signing an Executive Action to begin a great rebuilding of

the armed services of the United States. Developing a plan for new planes, new ships, new resources, and new tools for our men and women in uniform.

And I'm very proud to be doing that. As we prepare our budget request for Congress, and I think Congress is going to be very happy to see it, our

military strength will be questioned by no one but neither will our dedication to peace. We do want peace.

Secondly, I'm establishing new vetting measures to keep radical Islamic terrorists out of the United States of America. We don't want them here.

We want to assure that we are not admitting into our country the very threats our soldiers are fighting overseas. We only want to admit those

into our country who will support our country, and love deeply our people.

We will never forget the lessons of 9/11, nor the heroes who lost their lives at the Pentagon. They were the best of us. We will honor them not

only with our words, but with our actions, and that's what we're doing today.

I am privileged to be here with you. And I promise that our administration will always have your back. We will always be with you. And I just want

to thank you very much. And I want to just extend a very special congratulations to a great man, and that's Secretary Mattis. And I think

he's going to lead us so brilliantly. He's a tremendous soldier, always has been. He's a general's general. Every general that I spoke to, they

just -- I won't say that they all said he's our favorite, but they did. He's our favorite. He's a special, special man. So I want to bless him

and God bless you and God bless America. And Secretary Mattis, I have no doubt you're going to do an outstanding job. And thank you very much for

accepting this responsibility. OK.

[16:42:07] QUEST: We're going to listen if he says anything --

TRUMP: This is the rebuilding of the United States on Order. That's a big one.

QUEST: What he's saying there is the first executive order on the great rebuilding of what he describes as the great rebuilding of the United

States Armed Services. New planes, new tanks, new resources. This is the first Executive Order. The very saw-like signature.

TRUMP: Secretary Mattis, thank you.

QUEST: And he signs it and gives it to Secretary Mattis. What he describes as a very special, special man, a brilliant man, who will do an

outstanding job. Remember, Secretary Mattis had to receive a special waiver from Congress and signed by the United States, the very first action

that President Trump did, because he hadn't been out of the military sufficient amount of time. Let's see if we can hear what he's saying now.

TRUMP: -- of the nation from foreign terrorists entering into the United States. We all know what that means. Protecting the nation from foreign

terrorists entering into the United States. Big stuff.

QUEST: This is the big one. This is the Executive Action on extreme vetting.

TRUMP: I want to thank everybody. You know, many great heroes, many great warriors. I take tremendous respect for you all. Thank you so much.

QUEST: Taking no questions so far. He's at the Pentagon. And I think -- Steven Collinson is with me. Steven (INAUDIBLE) for CNN. Whilst we watch

these pictures, let's be prepared -- oh look, he's going back to the microphone.

Is he going to stop? No. He's going to head out. Steven, bear with me while we just see the president out. What he described in front of the

Sacred Hall, for the fallen of the United States, the fallen of the Armed Forces. Steven Collinson with me. A very, very different composure,

reading from a speech, proper prose, than we saw when he stood in front of the Wall Of The Fallen at the Memorial Wall, at the CIA.

STEVEN COLLINSON, CNN POLITICS, SENIOR POLITICAL REPORTER: That's right, Richard. That speech last Saturday, one of his first public acts as

President Of The United States went down very poorly, indeed. It distracted from the start of the Trump Administration. It was severely

criticized by many ex-CIA officers. It's very unusual actually, you see that many former covert officers come out on televisions and criticize the

president of the United States. I guess we can put this down to the White House learning. After all, it's a very tough job to become the President

of The United States, but a lot of people thought that in that CIA speech, Donald Trump should have shown much more deference to the fallen of the

Intelligence Services. I guess he's learned, this time, that that's not the way it's done on these occasions.

[16:45:17] QUEST: But what was fascinating here -- and we'll get to what he means by extreme vetting in just a second, what was interesting is, he

read a speech. He read his remarks. I have to say, his speech writers, I don't think yet, have found his voice, because you could tell when he

extemporizes, it is different to how his speech is written. But they were taking no chances today.

COLLINSON: That's right and I think we saw a similar demeanor from Donald Trump in the press conference with the British Prime Minister Theresa May,

a few hours ago. There he was sober and cautious and subdued. I think the White House, after a very rocky week, is taking caring that there are no

many controversies that blow up, at least this week, and Donald Trump is trying to sort of master the ceremonial aspects of the presidency. I have

always thought that this is going to be one of the most difficult transitions for Donald Trump. He's such a spontaneous, flamboyant,

character. The presidency comes with certain expectations of decorum, protocol and behavior. And I think that's going to be a little bit

difficult to Donald Trump to get his head around.

QUEST: Let's turn to policy. Two executive orders, the great rebuilding of the armed forces, and sounds good, planes, tanks, new resources. But

that requires congress. He can't do that on his own.

COLLINSON: Right. And we don't know exactly how he's going to pay for it. Donald Trump has said he's going to vastly expand the military, protect

entitlements, like health care for the elderly, retirement for the elderly. He's going to also preside over massive tax cuts, which is going to cut

revenues. At some point, there becomes a question of where the rubber hits the road and how do you pay for all of this? That's something that's going

to get crunched up on congress. And let's not forget, the Republicans have recently come out and said they're going to provide Donald Trump with $12

to $15 billion for the border wall, which he said Mexico is going to pay for. It looks like U.S. taxpayers are going to pay for. So, without

driving up the deficit, it's very difficult to see how all of this gets paid for.

QUEST: I haven't -- I don't have in front of me yet. It's not on the White House website, the actual wording of the Executive Orders, but how

does he -- how are they going to get over this idea of extreme vetting? To avoid Islam more and more, they describe as Islamist terrorists?

COLLINSON: Well, that's one thing we've noticed this week, is that the White House is not really good at actually telling you exactly what Donald

Trump is signing before he signs it, so we know what's in it. We understand what it does, as it halts refugee entries for several months,

and halts visas for the residents of a number of Middle Eastern and African countries, places like Iraq, Somalia, Sudan, Syria. What we don't know is

how long that's going to be and what they're going to do is put in a -- put in a system for what he calls extreme vetting. That looks like it's going

to be asking people who want to come to the United States, for most countries, for family background and even religious information. Now, a

lot of people think that actually contravenes the U.S. Constitution, because you're putting up a religious test. And that is against the

constitution. That part of it is going to be very controversial. And I think we'll probably see a lot of legal challenges to it.

QUEST: Steven, thank you for coming up so promptly as soon as we saw the president. We appreciate it. Thank you.

COLLINSON: Thanks.

QUEST: When we have more information over the evening, we'll bring it to you.

A week is a long time in politics. I think it was Harold Wilson, the British Prime Minister, who said that. And there can be no denying Donald

Trump has filled it to the brim. We'll look back on what he achieved over the past seven days.

(COMMERCIAL BREAK)

QUEST: So the resolute desk, the president, oh, Jared Kushner, they're all standing there, as he signs Executive Orders. Well, at the Pentagon, the

president just signed two Executive Orders on immigration today, including extreme vetting. You just saw it live on the program. He's also signed

orders on upgrading the military residence -- readiness and on a visit to the Pentagon. As we come to the end of the first week, let's keep an eye

on what's been promised and what's been achieved.

So, OK, and I'll go on this side. On the question of building -- let's (INAUDIBLE) actually have done. He certainly said he's going to -- he

signed an Executive Order on building up the border wall. He has started the process of discussions. He hasn't had even an executive order yet.

So, we'll give -- he withdraws from the TPP, he's absolutely done that one. He's restarted the oil pipelines, he's absolutely done that one.

Restricted refugees, that just we've seen in the last hour. Repeal and replace Obamacare, yet. Reform taxes, not yet. Rebuild infrastructure,

nah.

OK so, what we're going to do is we'll give that -- he's sort of hinted at that one in one of the first ones. He's had discussions with that on that

one. And he started the process of rebuilding infrastructure. This one, he hasn't done anything on reforming taxes. So, where you see -- where you

see a tick, that, of course, means he's actually done something. A question mark means he's played around with it, and a cross means he's

absolutely done nothing.

Tim Naftali is the Presidential Historian and Author. He served as Director of The Nixon Presidential Library, now the Director of New York's

universities, tell me in live. What do you make of it?

TIM NAFTALI, NIXON PRESIDENTIAL LIBRARY FORMER DIRECTOR: I make of it, it's one for the record books. We have never seen this many executive

orders issued by a president in history. Ronald Reagan, who promised a revolution, all right, he promised a revolution in 1981, he took days for

his very first Executive Order. One gets the impression that Donald Trump not only wants to show that he's a man of action, by the way, he keeps

repeating that. He repeated it at the Pentagon. But he also, I think, wants to set the tone for Congress.

He's been reading and listening to people say that the Congressional Republican Leadership is going to really dictate what his administration

does. And I think he's saying to them, no, I'm going to force you to do what I want you to do and I'm going to get my people to remind you of what

I promised them I would do. So, I think he's trying to set the agenda very fast.

QUEST: But so far, all that I outlined, clearly, he promised all of it. One can't criticize him in any way for doing that which he went to the

country on.

NAFTALI: Yes, but this is -- Richard, this is the key -- this is why this week has been so fascinating. If you think about how people come to become

president, they emerge from a policy community. They have think tanks that produce policy briefing books, that when they issue a statement about a new

law, it's already been looked at and vetted and discussed by the left or the right, depending on which party they represent.

Some of Trump's ideas are fringe ideas, that the Republican Party has never embraced and that no republican think tank has ever embraced. That's why

we had the issue with Mexico this week. He couldn't get -- of course, he couldn't get the Mexicans to pay for the wall. So out comes this fringe

idea that he's going to institute a 20 percent tax on Mexican imports. And nobody vetted it. And of course, he didn't even realize that most of that

money would be paid by American consumers.

QUEST: How -- OK, except, with your vast experience of seeing the presidential transitions and studying it, and I'm choosing the words

carefully here --

NAFTALI: It's all right.

QUEST: Because the way I'm going to put it is a pejorative to begin with and therefore, could often be -- I could be described as being biased in

the question, but how damaging is it to govern as he's governing? Is it damaging at all?

NAFTALI: Well, it's damaging if it affects markets and if it damages --

QUEST: They're going up!

NAFTALI: Right now, they're going up. They're going -- well I'm -- that's not my business, OK. I'm not in the market business. That's your

business.

QUEST: All right.

NAFTALI: But maybe they're going up because of the assumption that Congress will pass an infrastructure -- a set of infrastructure bills. And

it's not clear they will but let's leave that aside. If this damages our ability to work with our closest allies -- we're here to take -- Prime

Minister May, make clear that Great Britain's decision, or United Kingdom's position on Russia, is that they have to accept the Minsk Agreement before

sanctions are removed. If the United States actually starts to act on Donald Trump's protectionism --

QUEST: Right.

NAFTALI: Really act on it, as opposed to just bloviating, there could be effects on currencies, on markets, and our basic security relationships

with our closest allies. So, that would be damaging.

[16:55:50] QUEST: You've got a busy four years ahead of you, Sir.

NAFTALI: We all do.

QUEST: Yes, I had forgotten about that. I've got another card somewhere around here. 30 percent taxes.

NAFTALI: Oh no, no, keep it! You don't want to spend it. Is that from Mexico?

QUEST: It is from Mexico.

NAFTALI: Well then, it will be more expensive soon.

UNIDENTIFIED VOICE: Pause for break, thank you.

(COMMERCIAL BREAK)

QUEST: So cars will become more expensive. Tonight's profitable moment. If there is a border tax across the Mexican border, cars will become more

expensive and things like Mexican avocados will also become more expensive. The problem is, we don't really know what the policy is. And as we come to

the end of the first week, maybe the only thing we can say, with any form of confidence is that, this is an avocado. Have a good weekend. And

that's "QUEST MEANS BUSINESS" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable! We'll be

together again on Monday.

END