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Quest Means Business
Shinzo Abe Heads for Trump Tower; Yellen Vows to Serve Full Term; Mexico Launches Trump Contingency Plan; Trump Meets with Cabinet Contenders; Mitt Romney May Join Trumps Cabinet; Trump Supporters Threaten Pepsi Boycott; Claims of Conflict of Interest Surround Trump. Aired 4-5p ET
Aired November 17, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] PAULA NEWTON, CNN ANCHOR: So, the Dow bounces back, but only just. I don't you to expect any records from me today. Trading has come
to an end on Wall Street. It's Thursday, November 17th. Tonight, Mr. Trump will see you now. Japan's Prime Minister is on his way to Trump
Tower.
No transition needed at the Federal Reserve. Janet Yellen tells Congress I'm staying. And in case of emergency, raise rates. Mexico launches its
Trump contingency plan. I'm Paula Newton and this is QUEST MEANS BUSINESS.
Tonight, on two different continents, two elected U.S. presidents are spelling out their visions of the world to their foreign peers and they
could not be more different. Here in New York, we're waiting for Donald Trump to welcome the Japanese Prime Minister, Shinzo Abe to Trump Tower.
The first foreign leader to visit the President-elect.
Now while in Berlin, meantime, Barack Obama has held a sometimes-emotional news conference with German Chancellor, Angela Merkel with both leaders
warning of a break down in democracy. Now together these men and women represent three of the four largest economies in the world. Today's
meeting in New York it looks like Donald Trump's first major test as President-elect, putting him face to face with a Prime Minister of a key
U.S. ally. Shinzo Abe has flown to New York specifically to meet with Donald Trump and Trump is widely expected to tone down that tough talk that
featured so prominently during his campaign.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT-ELECT: Japan where they're sending in millions of automobiles all the time and we get nothing out of it. I'm
going to take jobs back and bring them back into the country.
Wouldn't you wrath in a certain sense have Japan have nuclear weapons when North Korea has nuclear weapons, and they do have them. They absolutely
have them.
There won't be any more tariffs with Japan or if there will we're going to do it the opposite way to them. All I have to do is say that's all right,
you want to charge a tariff of 38 percent to Nebraska for its beef, then were going to charge you a tariff of 38 percent tariff when you sell your
cars to the United States. It's a very simple plan.
(END VIDEO CLIP)
NEWTON: OK, will he continues that type of rhetoric right there at Trump Tower. That is a live picture as we await, as we said, that meeting
between Trump and Shinzo Abe. We expect that in about an hour. Now the meeting itself is of course, highly unusual and it is a break with
protocol. The U.S. State Department wasn't involved in planning a meeting. One Japanese official even says there has been a lot of confusion. When
they get talking, Trump and Mr. Abe have plenty to discuss though. First the future of a long-standing security alliance. Trump suggested that
Japan should pay more for the upkeep of U.S. troops in the country.
Abe is also expected to seek clarification on the Nuclear Nonproliferation Treaty. Trump has previously said that Japan should acquire nuclear
weapons to counter the threat from a nuclear North Korea. And another contentious issue here, the Transpacific Partnership which includes Japan
and it of course, appears to be dead. Trump promised to get rid of it.
Shinzo Abe says he wants to work with Donald Trump and it all comes down to trust. Let's bring in John Roos. He is the former U.S. ambassador to
Japan and he joins is now from Stanford. Sir, when we talk about this meeting, I don't think is an exaggeration to say it is a break from
protocol. You and I both know that it actually takes a lot to even make a cup of tea at foreign affairs in Japan let alone this meeting. Why do you
think Shinzo Abe got in there first, so quickly, and as I said, is really stirring up his own diplomatic corridors at home?
JOHN ROOS, FORMER U.S. AMBASSADOR TO JAPAN: I think Prime Minister Abe being the first foreign leading to visit President-elect Trump. It sees
this as an incredibly important meeting. First of all, obviously the two leaders need to develop trust between them. But your prologue to our
conversation today showed and demonstrated that there's a lot of anxiety in Japan about a lot of the statements that President-elect Trump made during
the course of the campaign.
He has to reassure the Prime Minister, President-elect Trump, that he believes in the fundamental value of the U.S./Japan alliance that has been
responsible for peace and stability in that region of the world, post-World War II. And that every president has endorsed and supported it. And
President-elect Trump needs to make it absolutely clear that he believes in the fundamentals of that alliance.
[16:05:00] NEWTON: And you know there's no indication that he won't. In fact, Japanese officials have been saying, look, everything they hear from
the transition team says, look, don't believe everything you hear from that campaign. Having said that, if you look at this relationship, is Shinzo
Abe going in there with a more realistic proposition in front of him? With everything we've talked about, especially when it comes to Japan,
relationship with China and how the U.S. features into all of that.
ROOS: I think that one of the things that Prime Minister Abe needs to do, in a diplomatic way, is to educate the President-elect of the value of the
alliance. And I think that will be part of his agenda here. He needs to explain to the President-elect that forward deployed troops of the United
States and Japan are not only there to protect Japan, but they're there for the United States interest. To maintain peace and stability in an area
where in the 21st century half of the world's economy will be located.
We have a strong reason for being there. And you heard that President- elect Trump talked about Japan needing to step up more economically in pain for our forward deployed presence there. Well, he needs to explain to Mr.
Trump that Japan pays for over half of the expenses with regards to the troops there. In fact, it would be more expensive for our troops to come
back to the United States. And again, they serve our interests there. He needs to explain to the President-elect -- in your prologue, they talked
about President-elect Trump making comments about Japan stealing jobs from the United States. Well, the reverse is true. Japan has created a million
jobs here in the United States and the trade tensions could end up jeopardizing those jobs. You made reference to the nuclear umbrella and
President-elect Trump saying that Japan maybe should develop nuclear weapons. Well, that's very destabilizing and creates a lot of anxiety not
only in Japan...
NEWTON: But Mr. Roos what you're describing is a lot of what Japan has heard from old governments. This is a new government. This is a new
president, a new government. I think the explain willing go in the opposite direction. And if I may, what is the one thing that Donald Trump
has said in the campaign that you're thinking to yourself, if he goes through it, it will be disastrous for a strategic policy in Asia.
ROOS: well, the one thing that would be absolutely disastrous -- there are number of things -- but the one thing is calling for, or implying, and I
know he's tried to walk that back, that Japan and South Korea should obtain nuclear weapons. Because that would cause massive instability and an arms
race in that region of the world.
NEWTON: That's pretty blunt right there and we will leave it there. As I said, I still think that Donald Trump is going to stick to his guns and
have a fairly blunt economic conversation if not with other things. Such an interesting meeting as we await it to happen. Mr. Roos, I hope you come
back to talk to us about this relationship.
ROOS: I would be delighted to. Thank you.
QUEST: Now from East to West alliances are a corner stone of U.S., foreign policy. In Berlin, today, a meeting of minds of sorts. President Obama
and his closest ally really, Germany's Chancellor Angela Merkel stressed the important of the Transatlantic alliance. Talking of a relationship
that must not be taken for granted.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: If that voice is absent, or if that voice is divided, we will be living in a meaner, harsher, more troubled world. And
we have to remember that.
ANGELA MERKEL, GERMAN CHANCELLOR (through translator): There are a lot of people who are looking for simplistic solutions, who are sort of preaching
policies of -- well, very unfriendly policies and we have them here in Europe, too. We have them here in Germany, too.
(END VIDEO CLIP)
QUEST: Now, both leaders remarks perhaps not so thinly veiled attack on their worldview of the U.S. President-elect Trump. Mr. Obama and Mrs.
Merkel defending globalization and warning there that their two countries are at a cross roads. CNN's Michelle Kosinski, has had a front row seat
there in Berlin while all of this was going on. I mean, there was definitely some bittersweet there. And it almost seemed like nostalgia.
Does any of it amount to anything. Do you really think there was any insight there that President Barack Obama could provide to Angela Merkel
about the road ahead in the next few months?
MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Not really moving forward. Only on NATO. I mean, there was this one nugget that came out of
Donald Trump's meeting with President Obama about a week ago, it was that he did expressed a commitment to NATO and maintaining the values there and
the relationships. That is one thing that president Obama can share with European leaders and that is one of the big things they're worried about.
So, that's a positive.
Beyond that though is where it gets really murky really quickly. And we're talking about all kinds of major world problems that they've been working
on for years together. The Iran nuclear deal, the fight against ISIS, the refugee crisis that has resulted, the Paris climate deal. No one really
knows, other than Trump and his most inner circle, if they even know that yet, where those initiatives are going from here if anywhere at all.
That's caused a lot of anxiety. So, what we're hearing from the president most recently on this, is not a lot of optimistic and reassurance, but a
lot of dark sounding warnings.
He warned Donald Trump, in most cases without saying his name, but talk about slogans aren't governing. Soundbites are not the same as policies.
You have to make sure you stick to core democratic values including freedom of speech and freedom of religion. Make sure there are checks and balances
on government. He also warned voters saying you can't be complacent. You have to vote. You can't take the democratic way of life for granted. As
well as warning the world and saying that if you let populism and crude nationalism, as he put it, divide societies, then you're going to get a
meaner world like we heard there.
I think it was very telling, Paula, that when he was asked about optimism, as was Chancellor Merkel, the most they could muster was for Angela Merkel,
she said she was keeping an open mind. Well, that's not usually what you say for an incoming leader for your closest ally. You would normally say
I'm looking forward to continuing these initiatives together. I'm looking forward to working with him. No, she said she's keeping an open mind.
President Obama said he has a cautious optimism. But it wasn't based on any qualities that Donald Trump possesses. He said it was because the job
itself forces you to focus and demands seriousness. Paula.
NEWTON: Right, Michelle Kosinski, there following the president, as I said, a nostalgic tour for him laced with many, many warnings. Michelle
Kosinski there live from Berlin. Appreciate lt.
Now, she ask here to say. That's what the Fed Chief told lawmakers on Capitol Hill. Janet Yellen also gave a clue about interest rates. We'll
show you what investors made of it, that's next.
(COMMERCIAL BREAK)
NEWTON: Janet Yellen and Donald Trump are going to have to get used to each other for the next couple of years. The Fed chair told lawmakers on
Capitol Hill today that she's not going anywhere. Yellen says she will serve out her term which is now due to end in 2018.
[16:15:00] She says an interest rate rise is likely going to happen relatively soon. When it comes to future of the U.S. economy under
president Trump, Yellen points out that the Fed is watching and waiting just like everyone else.
(BEGIN VIDEO CLIP)
JANET YELLEN, CHAIR, U.S. FEDERAL RESERVE: We don't know what's going to happen. There's a great deal of uncertainty. Right now, I've tried to
offer you my assessment of where policy is and what policy response appreciate in the months ahead, given my current assessment. We will be
watching the decisions that Congress makes and updating our economic outlook as the policy landscape becomes clearer and taking into account
those shifts in the economic outlook for the appropriate stance of policy.
(END VIDEO CLIP)
NEWTON: Now the NASDAQ and the S&P moved higher on Yellen's congressional testimony. As you can see, as did the Dow. But it did hold back a bit
because of shares of Walmart and Cisco that took a tumble. We have a lot of ground to cover here with our Paul La Monica live here from New York.
OK, first things first. Janet Yellen saying that this is going to happen relatively soon, this interest rate rise. Nod, nod, wink, wink. This
normally would have been a seismic shift for the market and yet.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: I think many investors had pretty much now expected that the Fed will raise rates in December. Keep
in mind the reaction to Trump's win was not what everyone was predicting. All of the doom and gloom, stocked were going to tumble. It happened for a
few hours with futures last Tuesday night and now we've had this nice rally since then. So, market stability is something the Fed pays a lot of
attention to. As long as things remain like this, I think the Fed definitely has the green light to raise rates in December. And it sort of
ironic, Trump was criticizing her for not raising rates. He's now going to get a Fed that will probably hike a couple of times in 2017. So, depending
on what happens to the markets, you might be careful what you wish for.
NEWTON: Everyone has been saying that as well. Janet Yellen today on the Hill just saying, I'm here. I'm here until the end of my term in 2018.
Donald Trump hasn't said you're fired, but he has at times said, look, yes, maybe I might want someone else in there. Do you think the Fed will stick
even more aggressively to absolutely independent stand? Because Donald Trump accuses them of being quite political.
LA MONICA: Yellen has obviously, said that the Fed is apolitical and that is something that all of her predecessors have said as well. I think right
now was going to be interesting is that Trump is probably going to be relatively happy with what the Fed does going forward. If he is serious
about wanting rates to go higher, I think Janet Yellen is about to deliver. When we get to 2018, that's still a long time away, there are a couple
questions come into play. Does Yellen want to retire and go off into the proverbial sunset? Does she want to stick around? And if she does, there
is historical precedent for Presidents being of a different party than their Fed chair and they've gotten along. We saw it with Obama and Ben
Bernanke. We have seen it with Bill Clinton and Alan Greenspan. I don't think Trump has to make a move if the Fed is still boosting the economy and
the stock market during his first year and a half as president.
NEWTON: Yes, definitely taking a wait and see on that one. JPMorgan, you know, it's been so interesting to see the run up in financials in general
on this Trump rally, and yet quite a slap on the resist for JPMorgan today.
LA MONICA: Yes, I think it is appropriate to say it is a slap on the wrist. It is a fine, less than $300 million for some of the things that
JPMorgan did to may be curry favor with Chinese officials. Obviously, China is a big growth opportunity for all financials and Wall Street firms.
I think right now, JPMorgan Chase, pretty much every bank not named Wells Fargo is going up because of a hope and expectation that rates are going to
climb for the foreseeable future. And with J.P. Morgan Chase the bigger issue may not be this fine in China. Who will be at CEO if Jamie Dimon is
rumored, may wind up getting an offer from Donald Trump to be Treasury Secretary.
NEWTON: It's incredible, the intersection really right now of the markets and that Trump transition. Paul, I know you continue to follow it all. I
really appreciate it.
LA MONICA: Thank you.
NEWTON: The head of the Minneapolis Fed has a big goal. He wants the financial system to be strong enough that if banks make mistakes they can't
bring down the U.S. economy. Neel Kashkari, who will sit on the Fed's rate setting committee just next year, says big banks are still too big to fail.
And he told our Maggie Lake why he wants to make banks behave more cautiously.
(BEGIN VIDEOTAPE)
NEEL KASHKARI, PRESIDENT, FEDERAL RESERVE BANK OF MINNEAPOLIS: We've estimated that there's still a 67 percent chance -- it used to be an 84
percent chance, it's been reduced, but still a 67 percent chance of another financial crisis in the future. To me that's way too high.
[16:20:03] We need to take more action to make our financial system safer.
MAGGIE LAKE, CNN CORRESPONDENT: You put forth this plan. You're suggesting doubling capital requirements. New taxes on hedge funds,
regulating the shadow banking sector. What is the ultimate goal here? What are you trying to change?
KASHKARI: I want our financial system to be safe enough that they can make mistakes and not bring down the whole U.S. economy and not require a
taxpayer bailout. Other industries can do it. You see it all of the time. If Boeing announces a new plane that they're going to build, there's a
pretty good chance that there will be a cost overrun. There's going to be delays. Big businesses do make mistakes. They need to be allowed to. But
when Boeing runs into trouble they don't bring down the whole U.S. economy. In 2008, main street got hurt when Wall Street made a mistake. That needs
to end.
LAKE: So, you're saying they should be allowed to take risks. They should just be adequately prepared for it. Which they're not.
KASHKARI: Correct. So, this is like a buffer against losses in case they make a mistake. And the thing is, every 50 years, every 30 years, every 80
years, the country is being hit with huge crisis that that devastate Main Street. That's not fair.
Lake: But this industry is connected in a way that maybe some of these other private sector companies are not. So already you hear the critics
saying, that means you'll have even less lending. It's going to hurt the economy. You can't put on these kinds of handcuffs for it to work.
KASHKARI: Well, there's no free lunch. Safety isn't free. Just like we protect ourselves from terrorism. We pay for that with more law
enforcement, more metal detectors. Safety isn't free. We have to decide how much safety we want and what were prepared to pay for it. And whether
or not we want to clean up after a crisis, like we did in 2008, or prevent them. I think we're way better off preventing crisis.
LAKE: You could almost hear the collective gasp on Wall Street when you unveiled this. They are anticipating with President-elect Donald Trump in
office, who advocates for less regulation, that we are going to roll back what's there, not add on, an aggressive plan like yours. Are you afraid of
starting a war with the President-elect? I'm serious when I say that.
KASHKARI: Our jobs are to identify risks where we see them and propose rational solutions to them. I think there is bipartisan consensus that we
need to address the too big to fail problem. And if we do that we can relax regulations on the small banks that are not too big to fail. And let
them get back to the business of lending. But we can't just pretend that the biggest banks are safe when they're not.
LAKE: Did you float is past some of the biggest bank heads before you recommended it? Because I sort of heard what Jamie Dimond had to say about
regulation. I can't think that he would be too favorable to this kind of thing.
KASHKARI: No, they've resisted us every step of the way.
LAKE: Why is that?
KASHKARI: Because they like their status. They want to be big. They want the taxpayer support of knowing that if they get into trouble the taxpayers
have no choice but to step in. So, I understand their position. Our job at the Federal Reserve is to look out for the economy. To look out for all
of the American people. I would be doing my job if I wasn't speaking out.
LAKE: If someone were to -- if they were to adopt your plan, or doubt parts of it, does that fundamentally change what the banking sector means?
Does that turn it into a utility? Is that what banks should be to any economy, to any society?
KASHKARI: I think our banking system -- and if we adopted our plan -- it'll be less concentrated. We'll have more midsize banks. More small
banks. There'll be more democracy in banking so to speak. Instead of having a few giant banks at the heart of our economy, let's have a lot of
banks around the country participate in lending.
LAKE: You're a pragmatist. Having spent time in Washington. Do you think this have a chance in hell of happening?
KASHKARI: I do.
Lake THAT: What gives you that confidence?
KASHKARI: because I've heard from people on both sides of the aisle, who say we need to address too big to fail and we need to relax regulations on
the small banks. But I actually think there is common ground from here for both sides.
(END VIDEOTAPE)
NEWTON: And will see. It certainly an influential voice to hear from.
Now meantime, Mexico's Central Bank announced a rate hike just a short time ago, by half a percentage point to 5.25 percent. Is trying to support the
peso, of course, which tumbled last week following Donald Trump election. Here's how the Mexican currency has fared against the U.S. dollar since the
start of the year. Now if you turn the graph around, you will see a cliff, which is basically what it feels like in Mexico. And let's be
clear, Trump unnerved investors by promises to renegotiate or scrap the North American Free Trade Agreement. CNN's Nick Parker is in Mexico City
for us. What's interesting here is that markets actually think they could have raised rates by much more. Why didn't they?
NICK PARKER, CNN CORRESPONDENT: That is certainly an interesting point. The markets have been holding out for something like 75 basis point rise at
the very least. But it seems there was some level of caution that the Mexican Central Bank was laboring under. Particularly, I think they
overall wanted to leave some ammunition still in their belts, so to speak.
[16:25:00] You were just discussing with Paul La Monica the potential rise of the U.S. interest rates of the United States. I think Mexico needs to
stay competitive in terms of rates of return on their own assets. I think also the other thing is that they really don't know at this stage which of
Donald Trump's policies he's going to enact and to what degree. So, I think they are certainly waiting to see how both of those factors pan out
at this stage.
NEWTON: Yes, a wall, ripping up NAFTA, renegotiating NAFTA, a lot to mull over there. Have things settled down in Mexico? I know the elected Trump
was really a huge seismic shift there in terms of the way they were thinking politically and economically going forward. Have things settle
down or are they really looking at how they're exposed here and have grave concerns still?
PARKER: Yes, this is a famous quote that is often bandied around with regard to Mexico, which is, "Poor Mexico. So far from God, and so close to
the United States." Which is one that was credited to a 19th century Mexican president. I think they are certainly experiencing reverberations
from the U.S. presidential election. There is certainly a somber mood I think amongst investors, as well is on the street here in Mexico City.
So, today's rate hike was really designed to try and encounter the major implications stemming from the weakened peso. Which was number one,
inflation. The cost of imported goods has spiraled sharply as the peso rebounds against these very, very low levels that we last saw in `94 and
`95. And the other thing is a real concern about capital flight. If you're a fixed income investor that's holding Mexican bonds, you would have
lost value on your investment.
So, the central bank is obviously, pretty concerned there could be a large- scale selloff of Mexican assets. Particularly with the Fed potentially, as I mentioned, raising rates next month. So, the central bank has acted
today and we're seeing 50 basis points. The markets are disappointed. Directly after that was announced the peso continues to depreciate, some
one percent. So, we will have to see what they may be doing next month, the central bank and whether the markets will be happier then.
NEWTON: In terms of actual sensitivity in the first 100 days, is there a sense that look, one word from Donald Trump and we have our defenses up.
What are they doing to really try? I mean, they say this is one of their plans. What do they really have in terms of an arsenal?
PARKER: I mean, at this this stage, the finance minister says they're going to fast track some of the reforms that were already been underway.
But really, the major kind of bazooka that they have is the monetary policy that the bank of Mexico has been laying out. So, I think it's something
that they're going to have to unravel over the coming months. And just to see, as I mentioned, just which of the pledges that Donald Trump made, and
you look at the relationship between Mexico and United States, you know, the states is Mexico's biggest trading partner. Accounting for some 80
percent of its exports, and last year remittances -- that's the money that is paid by Mexicans living in the United States -- exceed oil revenues for
the first time. So, any that Trump makes would certainly be extremely felt here.
NEWTON: Even the whiff of one announcement. That means this country is hypersensitive to anything going on in those first hundred days. Our Nick
Parker there'll live from Mexico City. Appreciate it.
Now, a pair of Fortune 500 CEOs are paying court to the President-elect and they're not alone. It's a who's who of cabinet contenders making their way
to Trump Tower today. We'll show you who's on the list.
[16:30:00] (COMMERCIAL BREAK)
NEWTON: Hello, I'm Paula Newton, coming up in the next half hour of QUEST MEANS BUSINESS. Two big-name CEOs had to Trump Tower as the transition
team continues to try and build its cabinet. And Pepsi could be facing a boycott over something it's chief executive never said. And before that
this is CNN and on this network the news always comes first. .
U.S. President, Barack Obama continues his final overseas trip as president in Berlin. At a news conference, earlier, he said he has encouraged
President-elect Donald Trump to moderate his rhetoric once he officially takes office. It's something Trump has indicated he is willing to do.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: He ran an extraordinarily unconventional campaign and it resulted in the biggest political upset in perhaps modern
political history, American history. And that means that he now has to transition to governance. And what I said to him was that what may work in
generating enthusiasm or passion during elections, it may be different than what will work in in terms of unifying the country and gaining the trust
even of those who didn't support him.
(END VIDEO CLIP)
NEWTON: Moscow meantime, claims President Vladimir Putin and Trump talk by phone about the "unsatisfactory cooperation between the U.S. and Russia on
Syria." That word from a Russian broadcaster TAS, a Kremlin aid is quoted as saying that Russia sees a chance to normalize the work on Syria with the
U.S. President-elect.
In Syria, meantime, a third day of relentless government air strikes on Aleppo has killed at least 45 people and left dozens injured. That's
according to activists inside that city. Report saying more than 40 air strikes hit rebel held Eastern neighbors. One resident sadly reflected,
planes are now more common than birds and there are more bombs than rain.
In Washington, America's Director of National Intelligence says he will resign on the day Donald Trump becomes president. James Clapper has served
in military intelligence roles for more than 50 years and says he has never seen the range of threats he does now.
Police in Kosovo says they terror attacks planned by ISIS leaders in Syria. Nineteen people have been arrested. Most of them Kosovo nationals.
Authorities say ISIS was organizing synchronized attacks. One targeting Israel's national football team and a match with Albania last weekend.
FIFA says that has begun disciplinary proceedings against the football associations of England and Scotland after their players wore black
armbands with poppies on them during a World Cup qualifying match on Remembrance Day. International football rules ban political, personal and
religious slogans and images.
Japan's Shinzo Abe is not the only dignitary heading to Trump Tower today.
[16:35:00] Trump says his transition team is meeting candidates for job in his government. Among them, FedEx CEO, Fred Smith, and Safra Catz, the co-
CEO of Oracle. CNN's Stephen Collinson joining me now from Washington. Before we get to America Inc. on the doorstep of Trump Tower, Mitt Romney,
another American business person, hell freezing over comes to mind. CNN sources now saying, he will be there on the weekend at Trump Tower, and may
be considered for a cabinet job.
STEPHEN COLLINSON, CNN SENIOR ENTERPRISE REPORTER: Yes, Paula, it is incredible really. Mitt Romney was the most prominent never Trumper. He
said that Trump was a con man. He said that if he was to become president we would see trickle down racism in the United States. Donald Trump was
just as uncomplimentary towards Mitt Romney saying he choked during the 2012 election and he should've beaten President Barack Obama.
So, I think this is very interesting development. It is difficult to know how much of this is spin. If it is a sign of Donald Trump showing he is
bringing the party together, or if he is really considering someone like Mitt Romney perhaps for a position like Secretary of State, for instance.
That would be a signal, I think to the rest of the world not least the United States. But Donald Trump will perhaps be a more conventional
president than some of us think he might be and that his campaign would suggest.
At the same time, it seems very difficult that Mitt Romney, who is an internationalist. Who prizes U.S. alliances. Who warned in the 2012
campaign that Vladimir Putin and Russia were the number one national security threats to the United States, could ever sit well in a Donald
Trump cabinet given what he said about Putin and U.S. alliances. But it is a fascinating occurrence, and I think it will show the kind of turmoil --
we just don't know what the Donald Trump presidency is going to be like.
NEWTON: And he is keeping everyone guessing with that. When we talk about America Inc. and the CEO's being there. Do you think this could be the
first White House where corporate America actually does have good access to the president? Not that presidents haven't before, but the fact that they
will actual I will be there, not just advising on policy, but being the architects of policy there in the White House?
COLLINSON: Yes, it is very interesting, Donald Trump clearly feels very comfortable with these CEOs, with the people of big business. These are
people that he's been around his entire life. But at the same time, he ran this campaign as an outsider, as an insurgent. Giving voice to people in
the Midwest, who some people would argue, have actually been dispossessed by the turn of the economy and the profits that have been made. The less
equal economy over the last few years.
So, it's definitely possible that he's going to have these big business titans inside his cabinet. He said on the campaign trail repeatedly that
he was going to get the best people, and in Donald Trump's mind the best people are some of these big business people. You know, there have been
past White Houses, as you say, where corporate figures have been very important. Robert Reuben, for example, a big Wall Street banker was a key
figure in the Clinton administration. Hank Paulson was Treasury Secretary for President George W. Bush. But I think given Donald Trump's
background, given his expertise, it would be very surprising if don't see a big business figure perhaps taking treasury or a post like commerce
secretary job.
NEWTON: Yes, it's interesting that his finance and banking. These are really the titans of America in terms of the kind of industries that is
looking towards. You raise a good point about the promises that Donald Trump made on the campaign and some of that he aimed squarely at a target
that some of the companies. Ford is just one. There is also Carrier and he said don't you dare take jobs out of the United States because I will
hit you hard. How do you think that will go over? If he intends to try and bring these American companies on-site. He doesn't want to go to war
with them clearly?
COLLINSON: No, and that's what I mean by a balancing act. Sooner or later, the promises that Donald Trump, as you suggest on the campaign
trail, are going to come home to roost. Is he going to stop the massive tariffs on Chinese imports, for example? That would be something that
wouldn't sit well with many in the corporate world. What's he going to do with Mexico? These are the big issues that Donald Trump has staked out.
He's positioned himself as the champion of the American worker. Yet you have this conflict with Wall Street and the corporate world. Sooner or
later he's going to have to deliver on this balancing act one way or the other
NEWTON: It will be interesting to continue to watch this and you will be watching with us, thanks so much, Stephen, appreciate it.
[16:40:00] Hundreds of American companies, including Starbucks and Nike have written an open letter to Donald Trump urging him not to pull out of
the fight against global warning. Now nearly a year after the landmark climate change agreement and Paris, leaders are meeting again in Morocco
and environmentalists are worried about Trump's intentions. Isa Soares has more.
(BEGIN VIDEOTAPE)
ISA SOARES, CNN CORRESPONDENT (voice-over): Trump is not a name leaders want to discuss here. But among the diplomacy and the smiles, they're
quietly sweating over his skepticism on climate change. And there is no avoiding it.
UNIDENTIFIED FEMALE: You comment on the election of President-elect Trump in the United States?
BAN KI-MOON, UN SECRETARY GENERAL: I'm sure that he will understand this. He will listen. And he will evaluate. His campaign remarks.
SOARES: The fear here is that the President-elect could undo the historic climate change agreement signed by nearly 200 countries last year in Paris.
UNIDENTIFIED MALE: We're a little bit worried, but we acknowledge the fact that your system of legislation may not allow him to undo all the gains
from the successful Paris agreement.
UNIDENTIFIED FEMALE: There's momentum with or without the U.S.
SOARES: They are reason to worry. The President-elect has called climate change a hoax created by and for the Chinese in order to make U.S.
manufacturing noncompetitive. He even hinted at cancelling the Paris agreement and reviving the U.S. coal and gas industry.
SOARES (on camera): In legal terms U.S. President-elect Donald Trump, cannot pull out of the Paris agreement. He would have to trigger Article
28. That's a provision within the actual agreement, and that could take as many as four years by which point his term will have ended. But there is a
quicker and faster way if he does want out and that is simply to ignore the commitments set in place by U.S. President Barack Obama.
SOARES (voice-over): U.S. Secretary of State John Kerry wants to avoid this at all costs.
JOHN KERRY, U.S. SECRETARY OF STATE: No one has a right to make decisions that affect billions of people based on solely ideology or without proper
input.
SOARES: Europe, too, is pushing for their side sounding alarm bells and calling on Trump to stick to the accord.
MIGUEL ARIAS CANETE, EUROPEAN COMMISSIONER, CLIMATE ACTION AND ENERGY: We need the United States on board and we will do any effort to have them on
board. And to convince them that this is a win-win policy.
SOARES: Whilst many at the conference are optimistic that the President- elect will change his mind, some of his supporters here are hoping he doesn't budge.
UNIDENTIFIED MALE: We stand in solidarity with President-elect Trump, and this is going to be the first step toward doing it. This is our shredding
of the document.
SOARES: Isa Soares, CNN, Marrakesh, Morocco.
(END VIDEOTAPE)
NEWTON: Now another example of people believing stories on one of those fake news websites, and it is leaving Donald Trump supporters to threaten a
very real boycott of Pepsi products. That's next.
(COMMERCIAL BREAK)
NEWTON: Supporters of President-elect Trump are threatening to boycott Pepsi for a comment its CEO never made. A fake news website claimed
company head, Indra Nooyi, told Trump supporters to take their business elsewhere. While she says she never said that, she did speak out against
ugly rhetoric used during the campaign. Pepsi is the latest company to face trouble after phony reports. Our CNN media correspondent, Brian
Stelter, joint is now. You know Brian, you warned about this before the election, even a few weeks before the election, and you told people to be
careful.
[16:45:00] This is a real-world example of these fake news stories, just insidious and people just take them as truth.
BRIAN STELTER, CNNMONEY SENIOR MEDIA CORRESPONDENT: Yes, and it affects more than just campaigns, more than just elections. This latest example
about a publicly traded company. This is one of the world's best-known companies, Pepsi, in the crosshairs because of this claim that somehow the
CEO is anti-Trump and told Trump supporters not to bother buying Pepsi products.
Now, that was just kind of made up out of the whole cloth. The only grain of truth was the Pepsi CEO was quoted saying that, yes, some of her
employees were upset that Clinton lost and Trump won. Well, that's true in every company of course. So, that one grain of truth was spun into this
big old lie all across right wing and fringe news websites. The reality here is these sites are just fake. Some of them are half true half false.
Some are just all the way falls. But it's very hard to tell sometimes on the web and these things spread on Facebook and twitter very virally.
NEWTON: Yes, and in spreading, in terms of the falsehoods that they spread, it's dangerous even to the company's bottom line. Really, you
don't know what customers are going to think about it. There have been some reports out there, Brian, I don't know if it is true or not, that a
very large percentage of information on social media about the election was fake. Are you beginning to have a look at exactly how much material people
were getting that came from fake websites?
STELTER: Yes, researchers are now looking at this Facebook CEO, Mark Zuckerberg said that less than one percent of the content that people see
on Facebook is fake news. Meaning purposely deceptive false information. He says the vast majority of the links you see on your Facebook feed are
authentic. But a lot of people want to know where he is getting that data from. Because Facebook is pretty much a black box. It's hard to know
exactly where they're getting that sense. BuzzFeed did a really important study earlier this week. Looking at the last three months of the election.
And found that the biggest fake news stories on some of these ridiculous sites were actually shared more widely than real news stories from outlets
like CNN and BuzzFeed.
So, what it was finding was that people were more interested in the fake news. They were more attracted to it, than they were to the real news.
Why? Well, because these stories appeal to peoples base emotions. If it's a pro Trump anti-Clinton story and you're already anti-Clinton, you're
going to want to share that story even if it turns out not to be true. I think the reality here is, these stories, when there's fake news on your
social media feed, these stories are only as powerful as we let them be collectively. If we share them, if we link to them, then they get more
powerful. If we as users of the web, users of Facebook, don't share them, don't believe them, well then, these articles, these sites will eventually
wither away.
NEWTON: Yes, and unfortunately sometimes they have an effect on stock prices and votes. Our Brian Stelter, thanks so much. Appreciate it.
Now the hangover and the headaches from this election, of course, they're not over. And coming up, he has not taken office, but already Trump's
presidency could be facing a crisis. We'll explain in just a few minutes, but first, our new series India 20 under 40 where we feature some of the
most successful people haven't even reached the big 4-0.
(BEGIN VIDEOTAPE)
RAHUL SHARMA, COFOUNDER, MICROMAX: Micromax mission since the begin has been to democratize technology power and hand off has many people in this
country. My name is Rahul Sharma, 40 years old, cofounder of Micromax. The tenth largest tech brand in the world. Micromax was cofounded by four
of us, four founders, all college friends. And similarly, when I was traveling and indeed I would see people with these chargers and on top of
it was written pay 25 Rupees to charge your phone. T because people were not having power in their homes. So, they were coming out and pain money
to charge their phones. And that's how we got this idea that why, you know, why there are no phones which can offer long battery life?
When we started selling the phones with this one month offer, and in the first ten days, we made some 10,000 phones and all those 10,000 phones got
polished off from the shelves. And that was the aha moment we realized that there was a massive, massive potential in this country. As of now we
are the 10th largest brand in the world. In the next five years, we want to be in the top five in the world and that's where were working on. We
have also expanded in countries outside of India.
[16:50:00] Success to me is when you identify a complex problem and then come up with a solution for that. So, for us we have been able to connect
more and more people in this country. Because India was growing so slow in terms of connectivity to the Internet. The biggest surprise for me in this
whole journey is how the requirement changes operating within six months on the consumer side. Consumer is always looking for something new, and you
should also be quick enough to identify and understand that, and then come up with a solution. So, I think that is one thing that has surprised us.
And is also challenging and is also exciting. Which keeps us on our toes every day.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
NEWTON: Vice president-elect, Mike Pence is telling lawmakers in Washington, "buckle up" for the start of the Trump presidency. Now, Pence
arrived for a meeting with Republican members of Congress just this morning. He said the administration plans to hit the ground running
outlining an ambitious plan for the first 100 to 200 days. And that includes repealing Obamacare and cutting taxes. However, some lawyers say
Congress should buckle up for a very different reason. A possible constitutional crisis because of the conflicts of interest facing Donald
Trump. CNN's Cristina Alesci has more.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Place your left hand on the bible and raise your right hand and repeat after me.
CRISTINA ALESCI, CNNMONEY CORRESPONDENT (voice-over): The president is sworn to preserve, protect, and defend the constitution.
GEORGE BUSH, U.S. PRESIDENT: So, help me God.
BILL CLINTON, U.S. PRESIDENT: So, help me God.
GEORGE W. BUSH, U.S. PRESIDENT: So, help me God.
ALESCI: But conflicts of interest between Donald Trump businesses and his presidency could spark a constitutional crisis. How? President Trump
could run afoul of an obscure section of the Constitution. The Emoluments Clause.
RICHARD PAINTER, FORMER CHIEF WHITE HOUSE ETHICS LAWYER: That's been in there ever since the founding of the country and could lead to a very
serious constitutional crisis if there were to be an accusation.
ALESCI: It bars officials from accepting payments and gifts of any kind from any King, Prince or foreign State.
DONALD TRUMP, U.S. PRESIDENT - ELECT: I just sold an apartment for $15 million to somebody from China. Am I supposed to dislike him?
ALESCI: What we do know is that his business relationships span the globe and foreign governments could play a big role in private companies in
places like China, and Dubai and Russia. And there are even questions stateside. According to the "New York Times", the Trump organization is
partly on the hook for a $950 million mortgage. One of the lenders, the Bank of China, which the Chinese government controls.
TRUMP: You know where their United States headquarters is located? In this building. In Trump Tower. I love China.
ALESCI: So, could a mortgage be considered a gift under the Emoluments Clause?
PAINTER: A bank loan from example, the Bank of China, if that loan is to be renegotiated. The question is going to come up, is it an arm's length
transaction or is it not?
[16:55:00] ALESCI: A lender, for example, could sweeten the deal by reducing the collateral or lowering the interest rate.
NORMAN EISEN, FORMER SPECIAL COUNSEL TO OBAMA FOR ETHICS: Imagine the following situation. You have a large foreign government that has a
government owned enterprise that government decides that it's going to put an extra $100 million bonus in a contract. That would be a violence even
if Mr. Trump didn't ask for it.
ALESCI: Trump's solution is to have his kids run his business.
UNIDENTIFIED MALE: The children Don, Ivanka, Eric, they're really intelligent. They're really qualified.
ALESCI: But ethics lawyers say that is not a fix.
PAINTER: That won't solve the emoluments clause problem. The question of whether or not you're getting a gift from a foreign government or the
foreign government controls company or not, you can't just say it is a gift to a blind trust run by my son. I don't think that's going to fly at all.
ALESCI: It may in fact fly for now. Simply because Trump will be a Republican president with the GOP controlled Congress.
PAUL RYAN, U.S. HOUSE SPEAKER: Welcome to the dawn of a new unified Republican government.
ALESCI: But that might not always be the case.
PAINTER: If the Democrats ever got control of the House or the Senate --
CHARLES SCHUMER, U.S. SENATE DEMOCRAT LEADER: We'll go toe to toe against the President-elect whenever our values or the progress we made is under
assault.
PAINTER: It could lead to a very serious situation in an attempt at may be added in impeachment.
(END VIDEOTAPE)
NEWTON: OK. We want to fill in details of a story we told you about earlier. Now it has been confirmed that Mitt Romney, yes, the Republican
candidate from 2012, who lost to Barack Obama, will be at Trump tower apparently this weekend. But here's was interesting, our own CNN's Jamie
Gangel reports that is in fact, going to talk to Donald Trump about possibly becoming the Secretary of State. Her source says that Romney is
meeting with Trump to discuss the possibility. That he is looking forward to perhaps serving in his government. That he wants to be in this role.
Wants to, again, serve in that capacity. And that he says -- this Republican source told our Jamie Gangel -- that Mitt Romney meeting there
and possibly discussing this position shows that Donald Trump is looking at others for his administration. And that is QUEST MEANS BUSINESS. I'm
Paula Newton, and we'll see you again tomorrow.
END
