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Dow Hits 10th Straight Record High; Trump Host Executives at White House; Tillerson: U.S. and Mexico May Have Differences; Apple Defends LGBT Rights in Bathroom Debate; Bannon: TPP Withdrawal a Pivotal Moment in U.S. History. Aired 4-5p ET

Aired February 23, 2017 - 16:00:00   ET


[16:00:00] RICHARD QUEST, CNN ANCHOR: So, the closing bell rings on Wall Street. The Dow Jones up a mere 24 points, but those 24 points take the

Dow to a record high once again, the tenth record high in succession. Now the market, actually, that's more important -- oh, yes, there we are.

Finally got there, Madame, well done.

The important thing about today's gain, besides it being the tenth, is that we are now over 20,800 on the Dow. It is Thursday, it's the 23rd of


Ten out of ten, 20,800, the Dow's winning streak hits double figures. At the same time, Donald Trump is asking the country's manufacturers to make

America great again. And Silicon Valley takes a united stand over Trump's gender bathroom. We'll talk about that. I'm Richard Quest live in the

world's financial capital, where I mean business.

Good evening. So, the Dow Jones streak of records has now hit double digits. Ten sessions, and ten record closing highs. I want to show you.

Let's get straight to the big board and put this in perspective. There was a nasty moment just around 11:00 in the morning. We were down at the

exchange for Quest Express. Not entirely certain why the market just decided to go negative, but that was the moment that the rally was very

nearly stopped short. However, it continued throughout the course of the day, a little bit of choppiness in the earlier afternoon, right the way

through the close. Those gains, by the way, were up to 60 points at one stage, but those gains started to evaporate down towards the close.

The real session, of course, is the way the market is different. This is the way the Dow performed today. But take a look, this is since it's

performed sin February the 8th. It's been pretty much a straight line, with maybe a moment of pause. But look at the broader market. And you see

that today that was slightly different. The S&P 500 ekes out a small gain, right at the close, in the last few moments before trading, it was actually

negative. But right at the close, it just ekes out the very smallest of gains, not even one point.

The NASDAQ, the tech-heavy NASDAQ, that actually closes down by half a percent. And the interesting thing here is, if you look at the gains on

the Dow and the S&P, they're actually quite small in connection or correlation to the actual losses on the NASDAQ. Putting it into

perspective, back to the Dow Jones and you'll see it's climbed more than 700 points in the last ten sessions.

The last time we have ten days of gains is 2013. The last time you had ten days of records is 1987. Yes, that's correct. The same year that also saw

black Monday, when the Dow full the best part of 23 percent in a single day.

Tim Anderson's with me. Tim, I mean, I watched the market throughout the course of the day. We had the S&P down, we had the NASDAQ down, but the

Dow wanted to rise against some very, I would say, sizable headwinds.

TIM ANDERSON, MANAGING DIRECTOR, TJM INVESTMENTS: Yes, and you pretty much nailed everything that were the highlights today. I might also add that

the infrastructure stocks were quite week today. You had no comment on the potential for infrastructure spending program, from either the president or

the new treasury secretary and I think there was a little bit of chatter that that might be pushed off into 2018, although I'm sure that push comes

to shove, Trump would like to see that done this year along with the tax reform plan.

QUEST: OK, right, but, Tim, I'm trying -- I know at the market, you don't like to get hung up on a particularly level or a particular day or a

particular -- look, if we get to 14. Apparently 14 record highs, we have to go back to the 1890s for that. And but does this market have legs?

ANDERSON: Longer term, it feels like it does. We've had four consecutive weeks of all-time weekly highs, four consecutive weeks for both the S&P and


[16:05:03] That creates a very, very solid foundation underneath the market. That being said, we may very well be short-term a little

overextended. We could have a 4 percent pullback here and still be at Dow 20,000, S&P 500, 2,200, NASDAQ, 5,500, still above the breakout levels that

we went through toward the end of last year. And that pullback, if we got a pullback like of 3 or 4 percent, it would probably attract a lot of


QUEST: All right, Tim, we'll be at the exchange tomorrow. Thank you, sir, with the market once again at a record high.

There's so much news coming at the moment that it's often difficult just to prioritize. So, the market we went with, but also, the new U.S. Treasury

Secretary has vowed that the administration will pass tax reform by August. Now, it was an interview on CNBC where Steve Mnuchin said the

administration and congressional leaders broadly agree on what to do. GDP growth will accelerate to 3 percent a year, because of tax cuts and

deregulation, faster than both the Fed and Congressional, the CBO office had forecast.

Let's talk about this. Anthony Chan is the chief economist at Chase. Joining me tonight in the delights of Sarasota, Florida. Good to see you

there. Shame -- I'm sure you're enjoying some splendid weather down in Sarasota. But Anthony, when we look at what Steve Mnuchin said this

morning, tax cuts or a tax reform package by August, do you believe that's realistic?

ANTHONY CHAN, CHIEF ECONOMIST, CHASE: I think that there's a good possibility that they can make some progress towards that date. Does it

have to be exactly August? Well, we know that the administration has been giving dates and they've been missing some of those. Early on, they said

it would be in the first hundred days. The president said in two or three weeks, which would be by the state of the union address that some

phenomenal plan would come out. It's going to take a little bit longer. But I'm really not worried. As long as this plan is going to come out, I'm

not worried because the fundamentals continue to improve.

We know that this year the economy will grow faster than it did last year. We grew at 1.6 last year. We should grow this year around 2.2 percent. I

was impressed that Steve Mnuchin sort of talked down the possibility that we would immediately get to a 3 percent growth. He indicated it may be

until next year. That's primarily because it's going to take a little bit longer. But again, because we're not in a recession and that's the biggest

killer of bull markets and we're not slowing down, we're accelerating, we should not be worried. Yes, the financial markets, we will be a little

disappointed, because they thought this would be accelerated. And now they have to be a little disappointed. But again, curb that enthusiasm. It's


QUEST: All right, so the last time consistently the economy grew at over 3.2 to 3.4 to 3.6 percent was both in the Reagan administrations and in the

Clinton administrations, for different reasons. Here you're talking about getting to 3 percent by effectively juicing up the economy.

CHAN: Well, I don't have a problem juicing up or in fact stimulating the economy as long as there are going to be some improvements in productivity.

These reductions in regulations certainly will boost productivity to the extent that we bring some more jobs here, we make it a little easier for

companies to hire workers. We can, in fact, get faster economic growth. I don't think we'll get 3 or 4 percent anytime soon. I'm looking for no more

than 2.5 percent next year. But the point is, we are going to see a small acceleration of growth.

And for those people that are worried about the market, are we going to have a crash? We've now had 91 days, Richard, where the stock market, the

S&P 500 hasn't dropped by more than 1 percent. We've only had 17 times sips 1957. But a lot of people that are worried about that, I said, don't

worry too much, because out of those 17 times, on average, the market 30 days from now is up another 9/10 of 1 percent, 1.1 percent 60 days and even

2.7 percent 90 days afterward.

QUEST: Just so our viewers know that you're thinking and thinking at JPMorgan Chase, when the Fed said yesterday "fairly soon" for the next rate

rise, what do you interpret "fairly soon"?

CHAN: I think that the Federal Reserve will probably raise rates before the middle of the year. Is it going to be March or is it going to be May?

My suspicion is, it's a little higher probability in May. Not a zero probability in March. In fact, the financial futures markets have been

increasing that probability. So, the Federal Reserve wants to raise rates this year. They certainly will raise rates a minimum of two times,

possibly as many as three times. But again, Richard, it's in an environment where the economy is getting better. It's OK to raise rates in

that environment.

QUEST: I'm feeling your optimism, Anthony. I can feel your optimism coming from the Sunshine State.

CHAN: We have reason to be optimistic, because the fundamentals are actually improving.

[16:10:00] And right now, this year, I believe that the probability of a recession is no more than 10 or 15 percent. Cause for optimism.

QUEST: Good to see you, sir. Thank you so much, Anthony Chan in Sarasota, Florida.

Some of America's leading chief execs have lavished praise on Donald Trump and the president's appetite for meeting business chiefs, seemingly showing

no sign of abating. Today two of them showed a to the White House -- two dozen, I beg your pardon. Two of them? It was a listening session for

manufacturing executives and their focus on how to bring jobs back to the United States. Among the guest lists were the head of Dell, Ford, GE, J&J,

and the chief execs of Dow Chemical, who called Donald Trump one of the most business-friendly presidents in history.


ANDREW LIVERIS, CEO, THE DOW CHEMICAL COMPANY: It was very much a working session today, following a month ago, when we first met with the president.

Needless to say, we in the manufacturing sector, all the CEOs that were here today and in the last meetings are very encouraged by the pro-business

policies of President Trump and his cabinet. Some of us have said that this is probably the most pro-business administration since the founding


There is no question that the language of business is occurring here at the White House and we had the couple of hours we did. I think the working

groups, all of you are going to hear a little bit about each of them. The working groups are right down the sweet spots of bringing back

manufacturing jobs for the new century back to this country.


QUEST: The sweet spots of manufacturing while The President has made the C suite gatherings a regular feature at the White House. So, on January the

23rd, almost immediately after the inauguration, his business council. That's his big major advisers on business and corporate America. And he

had the labor leaders on the same day. The car makers GM, Ford, they arrived a day later. There's Mary Barra of GM.

Small business leaders, they were at the White House on January the 30th. Pharma, big pharma worried about drug prices, worried about the

administration, on January the 31st, Merck, they were there at the White House, pharmaceuticals.

Harley-Davidson, for some reason the president liked Harley Davidson. They were at the White House on February the 2nd. The aviation industry,

including all the big airlines, they arrived at the White House on February the 8th. The retailers were there earlier this week, on February the 15th.

And today, it was the manufacturers. The manufacturers, all the big ones, were there. In fact, if you take somebody like Jeffrey Immelt of GE or

Mark Fields of Ford. Some of these chief executives have now attended two or three of these meetings, either because they were part of a specific

group or because they were part of the business council or they were here today. There's Mark Fields, absolutely, Mark Fields I think has done three

of these meetings from Ford. And Lockheed Martin, Mrs. Houston sitting next to him. I asked the president and chief executive of the National

Association of Manufacturers, Jay Timmons, when you look at today's meeting, what did he hope to achieve.


JAY TIMMONS, PRESIDENT, NATIONAL ASSOCIATION OF MANUFACTURERS: Well, to talk about what will help the manufacturing economy grow, the best thing

about that meeting, it was like a meeting of the board of directors of the NAM. Our chairman, Dave Farr, from Emerson, was there, our former chair

Doug Oberhelman with Caterpillar was there. I had a ton of board members and a ton of members in there, and they were delivering the message about

how we need to be competitive in this country.

QUEST: But what is that message of competitiveness that they took?

TIMMONS: It's three very simple things. Tax reform, regulatory reform, infrastructure investment. We get those three things right, we get

investment right in this country and we grow jobs.

QUEST: But you're pushing at an open door with all three. The president was elected on deregulation, and that's already started. Tax reform, he

said this morning, is going to be coming up in the next month or so.

TIMMONS: And he talked about that ...

QUEST: Right, so why do you need to turn up and talk about it?

TIMMONS: Well, look, I think we've got to make sure Congress does its job, too. We can't do all of this alone. I'm sure, he like every president

would like to, but fact is he's got to have Congress. He's got to have the American people going in the same direction on all of these issues.

QUEST: The question of manufacturing and bringing jobs back. The experts say there are some jobs that just aren't coming back. That it's nonsense

to suggest that the U.S. is going to make certain goods they made 50 years ago, or 60 years ago. It's a high value, higher cost, higher production


TIMMONS: Any of those experts, so-called experts, who say a certain type of job isn't worth having, I completely reject.

QUEST: That's not what they say. They don't say it's not worth having. They say it's uneconomic to bring those jobs back.

TIMMONS: It absolutely is economical if we drive down the cost of doing business in this country.

[16:15:02] And those three things will help do that. If we get our tax system in the right place, we're paying the highest tax rate in the world

right now. Our regulatory burden, Richard, just to give you an example, $35,000. If you're a small manufacturer right now, $35,000 per employee,

per year in compliance costs. That is not sustainable. We've got to bring that down. If we can bring those costs down, we can bring investment and

jobs back to this country and create more.

QUEST: So, to the argument, and you know this better than anybody, that says, fine, you'll bring manufacturing back, but those jobs won't come

back, because it's automation that will kill the jobs.

TIMMONS: That's a really good question and here's what I have seen for -- in my all my time at the NAM, but I'll tell you yesterday we started our

2017 state of the manufacturing tour in Austin, Texas. And what I saw was this amazing amount of technology that's being utilized, creating robotics,

creating other technological advances in automation and that's where the jobs of the future are. They're different. They're not the same, they're


QUEST: So, you're agreeing with me that you're not necessarily -- the manufacturing jobs in the United States are not necessarily, not

necessarily in large scale going to be apparel or shoes or lower value goods. It's going to be an increase in the robotics.

TIMMONS: So, those types of products, the production of those can well be automated as well, right.

QUEST: But if you automate the jobs don't arrive.

TIMMONS: Somebody's got to build these robots, right. I saw them yesterday. I saw thousands of people at a facility. At an IT innovation

center and these companies are thirsty to get those folks into their facilities. It's different training requirements, obviously.

QUEST: There are 12 million manufacturing jobs.

TIMMONS: Right. We support about 18 million total jobs in this country.

QUEST: What do you want to see manufacturing get to?

TIMMONS: So, I think -- well, gosh, I -- the sky's the limit.

QUEST: You know what I mean.

TIMMONS: Give me any number, I'm happy to take it. But I think what we have to understand is modern manufacturing does require, to your point,

you're exactly right, modern manufacturing requires a different type of skill for the future. You've got to have kind of -- you've got to have

upscale workers for these upscale jobs. And that is part of our challenge. Training the workers of today with new skills, training the workers of

tomorrow with these futuristic skills.


QUEST: I've been writing about that in the CNNMoney newsletter, the question of manufacturing and all these meetings that the president's been

having, just go to Do subscribe. For several reasons, the newsletter arrives after the New York market has closed, before Asia

opens. It's your briefing before, it's your look ahead, and most important of all, my personal email address is on there as well. So, you can write

your thoughts direct to me.

When we come back after the break, top U.S. diplomat, Rex Tillerson, is in Mexico. We talked about that last night, but now the Secretary of State,

is his language more conciliatory? But at the same time, is there an element of agreeing to disagree? We'll talk about that. We're in Mexico

City after the break.


[16:20:24] QUEST: Some say challenges, others call those challenges opportunities. U.S. Secretary of State, Rex Tillerson, is striking a

diplomatic tone after talks with Mexico's Foreign Minister. Mr. Tillerson says he accepts there are tensions between the two countries amid friction

over immigration and trade.


REX TILLERSON, U.S. SECRETARY OF STATE: In our meetings, we jointly acknowledge that in a relationship filled with vibrant color colors, two

strong sovereign countries from time to time will have differences. We listened closely and carefully to each other, as we respectfully and

patiently raised our respective concerns.


QUEST: That's a very diplomatic way of saying there was almost blood on the carpet and they had to sweep up the broken glass. CNN's Leyla Santiago

joins us from Mexico City. First things first, when I was on "QUEST EXPRESS" earlier today, we had a two-minute warning. I ended up talking to

you for ages, because Tillerson didn't arrive. What happened?

LEYLA SANTIAGO, CNN CORRESPONDENT: That's true. We actually ended up waiting almost an hour and a half. They were late. And so, I brought that

up to the Foreign Minister's office here. I said, what was the holdup? Why the delay? And they actually said that their meeting was so

productive, they had so many things to discuss that that's why they were late in getting their statements to the media.

So now, what does that mean? Well, that means they actually had to cancel some other things on their itinerary. But Richard, I can tell you right

now, they are meeting with the Mexican President, Enrique Pena Nieto, at Los Pinos where the president lives. So, the discussion continues in maybe

a little bit more of a timely manner.

QUEST: So, let's dissect this. Nobody will disagree that the relationship on trade and economics between Mexico and the United States is huge and

critically important. But, as long as the future of NAFTA is uncertain and there's the question of the wall, they can't really make too much progress


SANTIAGO: And you know, Richard, the wall didn't even come up today. In the statements that Secretary Tillerson and Secretary Kelly made for the

press. The wall was not something that was discussed or who's going to pay f| it. But that is certainly a point of contention here. And when it

comes to free trade, we talk about $1.5 billion worth of trade on average every single day between the two countries, just this morning the economic

minister said, hey, if we have to go on to plan "b" with this renegotiation, we're looking at an eye for an eye here. Certainly, we're

seeing stronger reaction, just in the last two days. And that's interesting timing, given what we've heard on immigration policy out of the

White House.

QUEST: So, that same economics minister said to me last exactly similar things when he said, look, eye for an eye, we'll do what we need to do.

But you also have the Foreign Minister saying we're not bound by a sovereign decision from another sovereign country. And you've had them

basically saying that they reject this new -- or there is concern about this new muscular deportation policy, whilst, and this is the crucial part,

whilst the U.S. -- well, Kelly is saying, there's going to be no mass deportations. Which is it, Leyla?

SANTIAGO: We're going to have to wait for that one. But I will say that it was a clear message from Secretary Kelly, who came in and said, mass

deportations, not the case. And he actually took a moment, Richard, to sort of pause and say, let's everybody take a break and listen to this.

This is important. There is not a mass deportation order right now. And that's something that the Foreign Minister yesterday said will be the

number one priority. So, that's something that the Mexican Foreign Minister was waiting to hear and he got it. What actually happens? Your

guess is as good as mine. We'll have to wait and see.

QUEST: Good to see you, Leyla Santiago, who's been doing sterling work in Mexico City for us.

We continue with this theme of trade and manufacturers. Speaking at that manufacturers' meeting at the White House that we were talking about, the

president was philosophical about whether he would have good relations with Mexico.

[16:25:00] (BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: With Mexico, we have $70 billion in deficits, trade deficits. And it's unsustainable. We're not going to let

it happen. Can't let it happen. We'll have a good relationship with Mexico, I hope. And if we don't, we don't. But we can't let that happen.


QUEST: Similar sort of things that the president said about China. We hope to do a deal, and if we can't, we won't. Donald Trump is already

reviewing the amount of aid being given to Mexico. We've got a graphic showing you the number of departments that in some shape or form give aid

to Mexico. The State Department's provided more than $2 billion since 2008, mainly it's for security. But interesting that you've got the

Defense Department, the Labor Department, the Health and Human Services, you've got the Department of the Interior, Homeland Security, State Peace

Corps, USAID, onwards and upwards.

Jeffrey Davidow is the former U.S. ambassador to Mexico. He joins me now from San Diego, California. Ambassador, give me your gut feeling. That

meeting that's taken place today, I mean, you can dress it up however you like, but there's an elephant in the room that's called a wall. And

there's a renegotiation of your largest single trade treaty.

JEFFREY DAVIDOW, FORMER U.S. AMBASSADOR TO MEXICO: Look, it's very complicate, obviously. I'm somewhat encouraged by the meetings today,

because what we have with the visit of Tillerson and Kelly are quite frankly, we're bringing adults and serious people into the discussion. And

I think that's all to the good. Now, President Trump has modified some of his rhetoric. For instance, he has not talked about Mexico paying for the

wall now and in two or three weeks. But then again, this morning he referred to the deportations as a military enterprise. Sean Spicer later

said, well, he didn't mean "military" military, he meant military-like. But I think the more that we can get people like Tillerson and Kelly

involved, the greater the possibilities for serious discussion.

QUEST: We've talked about Mexico. I do want to quickly touch on Venezuela, where you also were in post there. There was a fascinating

letter in yesterday's "New York Times" by the Vice President of Venezuela, criticizing the fact he's been named as a drug kingpin and therefore

sanctioned. Are the wheels well and truly now off the Venezuelan wagon?

DAVIDOW: It certainly looks that way. But I think if you had asked me six months ago, I would have said the same thing. But the economy keeps going

downhill, things get worse and worse, the level of corruption in the government including narco trafficking seems to increase. So, are the

wheels off? I think so, or they certainly will be in a short time. But quite frankly, we've got to admit that we thought that a year ago, as well.

QUEST: And if you talk about the U.S.'s policy and what they then have to do to Venezuela, because it's a tricky one, isn't it? You want to be ready

for what might come, support any new government that might be put in place, but you don't want to promulgate or you don't want to be seen to instigate

and interfere in another country.

DAVIDOW: That's absolutely right. There's been a great consistency in U.S. policy from the time of George W. Bush through President Obama. We

haven't seen any exchanges yet, in which the United States has really kept out of the internal discussions and internal problems of Venezuela. We did

not want to give Chavez and later Maduro the excuse to blame all of their self-inflicted wounds on us.

QUEST: Ambassador, good to see you, sir. Thank you for joining us and putting it into perspective. Thank you.

DAVIDOW: Thank you.

QUEST: I think all the guests today got the memo. We all seem to be wearing red ties. European markets and the way they traded, have a quick

look. It was interesting, actually. It was banks and natural resources shares that dragged the euros later down. Barclays surrendered gains.

Barclays was actually down 2.6 percent after lower -- it made good money, but it wasn't as good as the market had been expected. The mining stocks

were down -- copper prices. The biggest losses were in Germany and in Frankfort.

If you look at, the front-page headline on "CNNMoney" is "Bannon speaks". And arguably, you say, what's the big deal? The big deal is that

the chief strategist rarely speaks in public. A few hours ago, he made up for lost time.

[16:30:00] And the mainstream media, that's us, got a good old bashing.


QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. When Steve Bannon calls the end of TPP one of the most

important moments in American history. And Apple leads the way as tech companies criticize the new White House directive on transgender bathrooms.

We'll have all of that after the news of course, the headlines. Because this is CNN and on this network, the news always comes first.

U.S. Secretary of Homeland Security has promised, in his words, no mass deportations. He was speaking during a news conference in Mexico, John

Kelly and Secretary of State, Rex Tillerson, are visiting Mexico to smooth relations. Mr. Kelly said the deportations will focus on criminals in the

U.S. and everything that's being done will be legal and according to human rights.

The Iraqi military is fighting to retake Mosul's airport. We're hearing conflicting reports about whether it's fully under their control. ISIS has

held the airport since 2014 and destroyed much of its infrastructure. Militants are still launching mortar fire in other attacks against Iraqi


Hundreds of French students shut down several schools in a protest against police brutality. The outrage is over police officers allegedly raping a

22-year-old man earlier this month. Demonstrators block their high schools and marched to express their anger.

And the Dow Jones closes at a record high, the tenth in a row, it was up nearly 35 points. The rally's been led by banks, techs, retailers,

industrials, just about anybody and everything. Shares of Goldman Sachs, J.P. Morgan Chase, Visa, Apple, Home Depot, and Boeing and Boeing are all

amongst the top performers.

Leicester City has sacked their manager, Claudio Ranieri, just nine months after he led them to the English premiere league title It's the first time

in the club's history. With 13 matches left, they're only a point above the relegation zone. The club said the Italian status has been the most

successful manager of all times, is without question. Arguably it is now.

The White House Chief Strategist, Steve Bannon, says Trump is maniacally focused on delivering what he promised in the election campaign. And that

is -- he's making a rare public appearance. It was a conservative CPAC in Maryland. Mr. Bannon laid out his vision of a world under Trump and spoke

repeatedly about what he calls the president's economic nationalist agenda. The former head of "Breitbart News" also took the opportunity, perhaps not

surprisingly, to criticize the media.

[16:35:00] STEVE BANNON, WHITE HOUSE CHIEF STRATEGIST: Just like they were dead wrong on the chaos of the campaign and just like they were dead wrong

in the chaos of the transition, they are absolutely dead wrong about what's going on today. Because we have a team that's just grinding it through on

what President Donald Trump promised the American people. And the mainstream media better understand something. All of those promises are

going to be implemented.

That's awesome.


QUEST: Gloria Borger is with me. Talking to the faithful there though, Gloria, talking to the faithful. What did you make -- what jumped out at

you on the economic front?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: What jumped out at me was that there are no apologies and miles to go. And Steve Bannon is the visionary

of this administration. He's Donald Trump's brain, although Donald Trump won't want to tell you that. And he has an agenda. And as he said, he is

sticking to it. And as Reince Priebus, who appeared with him and he's the Chief of Staff. He said, Steve Bannon is the one who reminds me of the

promises that Donald Trump made on the campaign trail and he is going to keep them. And so, when he talked about his priorities, he said three

things. national security and sovereignty. OK.


BORGER: Economic nationalism, which you've heard, and we can talk about the TPP. And deconstruction of what he calls the administrative state,

which means government, really. Which means the bureaucracy.

QUEST: So, in a sense, I don't mean this literally, and it's going to sound rather disrespectful to say it in such phrases, but is he the puppet

master pulling the strings? Or is it the other way around?

BORGER: Well, don't stay that to Donald Trump. Do not say that to Donald Trump, even though Steve Bannon was on the cover of "Time" magazine, don't

say that to Donald Trump. But he is the person whispering in his ear. And he does have his hand in every pot. He is parted of a strategic initiative

group on foreign policy. He is part of a domestic policy group. He now sits on the National Security Council, which is unheard of, to have a

political adviser sit in on that group with the Secretary of Defense and the Secretary of State.

QUEST: Let's talk about TPP. Let's listen to what Mr. Bannon said about TPP, which was actually, it was an easy get in the sense that we only had

to withdraw, but it was one of the earliest moves of the Trump administration.


BANNON: I think one of the most pivotal moments in modern American history was his immediate withdrawal from TPP, that got us out of a trade deal and

let our sovereignty come back to ourselves. The people -- the mainstream media don't get this, but we already work in consultation with the Hill.

People are starting to think through a whole raft of amazing and innovative bilateral relationships. Bilateral trading relationships with people that

will reposition America in the world is a fair-trading nation and start to bring jobs -- high value added manufacturing jobs back to the United States

of America.


BORGER: That was an easy win for the administration. As you know, Bernie Sanders wasn't for the TPP. Hillary Clinton in the end wasn't for the TPP.

Barack Obama seemed to be the only one who was.

QUEST: But Republicans generally, this is the -- this is the .

BORGER: They're for traders, Yes.

QUEST: . dilemma. This is the contradiction, whatever you want to call it. Republicans generally love free trade.

BORGER: Speaker of the House supported the TPP. And these are Republican, right? So -- but, he had the wind at his back on that one. But the word

that you hear Steve Bannon use constantly is sovereignty. America first. So, what he's trying to do -- and this applies to the EU as well, and this

is going to cause problems for Rex Tillerson -- is that America now wants to have bilateral trade deals. And if we have bilateral trade deals, what

happens to the countries we don't have deals with? And what happens to us, by the way, as a result? You know this better than I. It could hurt us,

as well. What happens if we start slapping tariffs, for example, on certain countries? That hurts our consumers, yes. But this is all part

and parcel of their thinking here.

QUEST: There's one area I haven't given you any warning about this, so forgive me.

BORGER: That's fine.

QUEST: But I watch the manufacturer's roundtable this morning.


QUEST: And there was Jared Kushner next to, on the right hand, the son-in- law next to President Trump. And before the cameras were switched off, the President sort of said, Jared Kushner will be leading the discussion and

leading the debate. And I thought it was foreign policy and Middle East. Where is this role on industrial policy?

BORGER: I think Jared Kushner's role is a good question and I think we don't really know the answer to it.

[16:40:00] He seems to be first among equals at the White House. He is part of the strategic initiatives group. He is clearly involved in

bringing in the CEOs. Now, the Commerce Secretary, Wilbur Ross, was there. But Jared is going to be a very important person in this administration.

The President trusts him. He was a loyal soldier during the campaign. He also happens to be his son-in-law. That puts other people in a very

difficult position, which is why we've always had anti-nepotism rules in this country.

QUEST: Final question for you. Bannon and Priebus kissed and made nice.

BORGER: Always.

QUEST: Metaphorically.


QUEST: Do you buy it?

BORGER: I think it's a marriage of convenience. At this point. Or an arranged marriage, let me put it this way. It's an arranged marriage.

They're equals inside the White House, and I think Priebus is the one who makes the trains run on time and Bannon is the ideas man. I think Priebus

is much more establishment and may disagree with Bannon, but the President is the decider and Priebus has to salute. Thank you. This was fun.

QUEST: Thank you.

We're very lucky to have Gloria here with us today.

Now, Steve Bannon says the Trump presidency signals a new political order in the United States. In Europe, there's uncertainty about how interpret

his remarks of Mr. Trump and how to react to them. CNN's Atika Shubert is reporting from Berlin.


ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Ever since President Trump's inauguration speech, uttering the phrase, "America

first" Germany and other allies have been struggling to find out what that will mean for them. German Chancellor, Angela Merkel, once enjoyed a close

relationship with U.S. President Barack Obama, one that other allies could only envy.

But now, the Chancellor finds that while President Donald Trump, "respects her as a leader," he told the local "Bild" newspaper that he finds her

refugee policy, "catastrophic."

She was one of the first leaders he called, a cordial conversation, but not a meeting of minds. She was the first world leader to tell him point-blank

that his immigration ban was wrong and in violation of international law.

Germany has sent ambassadors and emissaries to multiple administration officials hoping to glean where the administration is heading with Germany

and the European Union. In Munich, last week, Merkel received some assurances from Vice President Mike Pence. He attempted to reassure the EU

by publicly stating a commitment to NATO. But sources have told CNN a conversation between, presidential adviser, Steve Bannon and the German

Ambassador to the U.S. one week before Pence's visit sent a chilling countermeasure. The EU was, "A flawed institution and the United States

would be better off dealing with its European allies one by one."

A Trump administration official disputed that say, saying it was a quick meeting and a White House spokesperson described it as a quick hello.

German officials, including the Foreign Minister, have declined to comment, citing the private nature of the conversation. The EU is already under

pressure from Britain's impending departure from the EU. The last thing Merkel needs is a Trump administration tacitly supporting more members to

leave, especially when she faces her own elections in September.

(on camera): Now, there's been no official announcement on when exactly Chancellor Merkel will finally get the chance to meet President Trump face

to face. However, she is known for her meticulous analysis of political dilemmas, and all of these mixed messages will almost certainly be taken

into account. Atika Shubert, CNN, Berlin.


QUEST: Apple locking horns with the Trump administration for a second time. The first, of course, was when it condemned the travel ban. Now

it's denouncing the withdrawal of protections for transgender students, after the break.


QUEST: So, there's a new rift potentially developing between the White House and some of America's biggest tech companies. Google, Microsoft, for

instance, are strongly opposing the removal of federal protection for transgender students under the Trump administration. The White House says

the decision on what bathroom a transgender student can use in a public school. It's now a matter for individual states. Apple has disagreed.

The statement came out quite quickly. Let me read it.

"Apple believes everyone deserves a chance to thrive in an environment free from stigma and discrimination. We support efforts towards greater

acceptance, not less. And we strongly believe that transgender students should be treated as equals. We disagree with any effort to limit or

rescind their rights and protections."

Cristina is with me. I mean, another policy, Donald Trump, actually wasn't quite clear himself on this. But certainly, you know, the manifesto of the

Republican Party was very clear that they would rescind the Obama memorandum.

CRISTINA ALESCI, CNNMONEY CORRESPONDENT: That's right. And this is a new brand of corporate activism. Why? Because this issue of reducing

protections for transgender students does not impact their bottom lines directly. You remember when the anti- -- when the anti-gay laws, the

religious freedom laws came out in certain states and the backlash from corporate America that ensued, because those companies said that we won't

be able to hire gay people. They won't want to come to our state to work. They will potentially leave our companies, but this issue doesn't have a

direct impact.

QUEST: Right, but what -- but here's the problem I have. You've got companies like Apple and Microsoft, who have come out against the action.

But their customers is are in those states and are members of say for example, CPAC and others. So, those same customers that are using iPhone,

Windows, Outlook 365 and the like, and Google, are these companies not treading a funny line? Or do the consumers distinguish between them?

ALESCI: I think you hit the issue flatly on the head, because at the end of the day, it does impact their business, right? The consumers,

especially the younger customers, as well as the employees they're hoping to attract in technology, generally are more liberal and progressive. And

they want to buy products --

QUEST: But conservatives are also using iPhones and iPads. They are also using this. Those same conservatives will not be in favor of them going

out --

ALESCI: They are taking a little bit of a risk. You're right. They are going one step further than most other companies in America. In fact, the

statements today stand in stark contrast to the CEO, the manufacturing CEOs who met with Donald Trump today. If you watched that photo op, it was

amazing. Every CEO around the table was so polite and so grateful to be there today. And those manufacturers, those companies have a great deal to

lose by becoming politically minded in my kind of way, shape, or form. So, the tech industry, you're right, is taking a risk. It is out front on

these issues. But even still, they got their eye on the prize, which is younger consumers, younger employees, who will do their coding and who will

be responsible for the innovation going forward.

QUEST: You've got a very busy 3 1/2, 4 years ahead of you.


QUEST: Excellent. Good to have you, thank you once again for taking time, as always.

People are going gaga for "La Land." We're going to hear from the movies director, Damien Chazelle. As we look at "The Creators" after the break.

It's QUEST MEANS BUSINESS, live from New York.


QUEST: The lights, the music, the red carpet. For the first time in seven years, "The New York Times" is running a television advert. Now, this

advert focuses on the role of journalism in a world of fake news. "The Times" says it wants a high-profile moment to launch the campaign, so it's

chosen the Oscars.

As we look at the Oscars, which are this weekend and our "CREATORS" series, we've already heard from nominees including Dev Patel, Natalie Portman,

Ruth Nagar ahead of the Sunday awards. In today's episode of "CREATORS", we're going to hear from the director of "La La Land," that's Damien

Chazelle. We're going to ask and hear and discover what inspires you, sir, and what's next?


DAMIEN CHAZELLE, WRITER AND DIRECTOR, LA LA LAND, WHIPLASH: You're writing something, you start to feel like you're airing dirty laundry and you're

like, oh, god, I don't think I want anyone to see this, this side of myself, it's probably a sign it's worth doing.

"La La Land" was all about, on an emotional level, it was all about stuff that I had felt or lived through or I had experienced. That, I think, is

the best way to work, no matter what genre you're working in, to try to find what's personal.

When I was a kid, I made a lot of, you know, home movies. I would steal like my dad's camcorder and shoot stuff with friends. And I would make

those movies and watch Hollywood movies and I wouldn't be able to quite understand or fathom how those Hollywood movies were put together. I

couldn't quite figure out how to put the pieces together to make a big movie. It really just seemed to me like it must be so radically different

from what I'm doing with my friends here with this beat-up camcorder.

Then you realize actually is that it's not that different. No matter how many crew members or actors or performers or lights or whatever are on set,

it's still make believe. You know, it's still -- you're still basically working with a group of people and you're pointing the camera at something

and you're filming it and you're telling a story. That's what helps me wife Zen out a little bit, that it's just, it actually is that simple. My

composer and I got to meet Barbra Streisand at an early screening. It was awesome just kind of immediately getting questions from someone who

obviously knows musicals like the back of her hand and was just asking Justin, my composer, you know, what his process was for this song and this

piece of orchestration and this and asking me, you know, in terms of how we staged this or that. She immediately just wanted to talk. And of course,

the two of us probably made no sense in terms of what we were saying, because we were just sort of gob-smacked fans.

I think there's a reason why many of the greatest, most of the greatest love stories in history don't end with happily ever after. If you're

telling a story about love, love has to be bigger than the characters, actually. It has to be this kind of third character or this thing that

kind of lives on. And it can't just depend on the practicalities of whether the people are in the same place, at the same time, at the end.

[16:55:00] Their stories give you the sense that even if the relationship itself might be over, the love is not over, the love lasts, and I think

that's just a beautiful kind of thing.

Every art form needs to change in order to stay relevant and stay urgent. Ideally, you find some happy medium between honoring the past, but pushing

it forward. With a movie like this, my hope was to kind of take things that might have seemed dusty or like relics might have seemed outdated

tropes from older movies, might have seemed like they didn't apply to today, but try to reinvest them with a modern energy and put them in a

modern context and subvert them and add on to them and just try to extend that tradition. Not just kind of replicate, but try to actually -- try to

change them. That's how you keep an art form alive, whether it's jazz or movies or the musicals, specifically. That's what's important to me,

finding that combination of learning from the past, but pulling it into the future.


QUEST: Excellent stuff. And tomorrow, it's Lin-Manuel Miranda, the creative idea behind "Hamilton." "THE CREATORS," we will have another one

tomorrow and we will have a Profitable Moment after break.


QUEST: Tonight's Profitable Moment. All right it's just a number. Ten records in a row. Fourteen is the all-time high. The markets are at the

record, it's over 20,800. Yes, it's just a number and it's just a record, but the tension is palpable. You saw it, the Dow is up, the broader market

nearly didn't make it. The NASDAQ is down. It doesn't matter. We've got another market day tomorrow. 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. I'll see you tomorrow.