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Quest Means Business
Trump's Executive Orders Loom Large Over Davos; Trump Presidency Brings New Challenges For Global Leaders; Trump To Announce AI Infrastructure Investment; Zelenskyy Urges European Unity As Trump Returns To Office; Interview With Nicolai Tangen Of Norges Bank IM; Interview With Klaus Schwab Of The World Economic Forum. Aired 4-5p ET
Aired January 21, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:10]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street.
The first trading day of the Trump administration. It was a holiday yesterday. The Dow is up some 500 points, give or take, a rallying session
for the market. Hit the gavel. Trading is over. That's the markets on the day and these are the stories we are following for you.
European leaders here in Davos are warning there could be an economic race to the bottom.
In Washington, AI leaders will be at the White House. A massive $500 billion infrastructure project on the cards.
And tonight, the head of the Norwegian Sovereign Wealth Fund, the largest, says he has got 15 percent productivity gains, all from AI.
We are live in Davos on Tuesday, January the 21st. I am Richard Quest with Clint, what a fine specimen you are, Clint and myself together, we mean
business.
Good evening.
There is a chill that is descending on Davos and it is not from the snow flurries sweeping across the Swiss Alps. Why? Well, as you can tell, there
aren't any snow flurries tonight. In fact, it all looks very dark behind me, because without the snow here in Davos, that's what you end up with. It
hasn't -- there is a snow base, but anyway, we will talk more about snow weather and everything later on.
The flurries of course are coming from the executive orders at the White House. Donald Trump has signed more than 60 executive orders during his
first hours as president, and they are repudiating major global institutions.
Mr. Trump has pulled the US out of the WHO, the World Health Organization, the Paris Climate Accords and the OECD's plan for a global minimum tax.
By the way, that was something that the US had put forward, and that was the very thing that the US had rammed down the throats of other countries.
Now, Donald Trump is also vowing tariffs against the two biggest US trading partners, Canada and Mexico. What the North America Free Trade Agreement
has to do with that, I am not quite sure.
But there is no getting away around it. This week's World Economic Forum will be all about President Trump. So, we are asking the leaders gathered
here for a single word that they believe will sum up the next four years. One word that's going to do it.
Tonight, you're going to hear from the governor of the French Central Bank. You'll hear from Professor Klaus Schwab. He is the chief -- he is of
course, the head of WEF and the chief executive of Norges Bank Investment Management, the world's single largest investor.
European leaders so far seem ready to work with the Trump administration. We've had two top leaders here speaking in Davos. The German Chancellor
Olaf Scholz, said the US remains a vital ally and that he intends to keep it that way.
The president of the European Commission, Ursula von der Leyen, she emphasized cooperation when she gave her remarks.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: We will need to work together to avoid a global race to the bottom, because it is in no one's
interest to break the bonds of the global economy. Rather, we need to modernize the rules to sustain our ability to produce mutual gain for our
citizens.
(END VIDEO CLIP)
QUEST: Now, Suzanne Lynch is the author of POLITICO's "Global Playbook."
I am not sure I approve not wearing a coat.
SUZANNE LYNCH, AUTHOR, POLITICO'S "GLOBAL PLAYBOOK": I have quietly in the corner there.
QUEST: I know, but I have a policy on this program. I follow my guest's lead, and I didn't realize that you had surreptitiously removed your coat.
Well, I am not taking this off.
LYNCH: I won't comment on your snowshoes. We will keep that very private.
QUEST: Good to see you. Good to see you.
LYNCH: You, too. You, too.
QUEST: How are you?
LYNCH: Good. Good to be back here. Yes, back at Davos.
QUEST: Yes. Now, what do you make of it? Von der Leyen's speech, I mean, she focused on Russia. She focused on all of those things. But I sort of
feel she missed the point in a way.
LYNCH: Yes. She didn't mention Donald Trump. I mean, today was about political reaction, I think, to what happened over the previous 24 hours.
So we had the speech by Ursula von der Leyen, the head of the European Commission.
You know, she talked about kind of the need to calm things down when it comes to global trade. She tried to champion Europe, skillfully overseeing
the big problems Europe has in terms of competitiveness.
[16:05:10]
And she also talked about the commitment to the Paris Climate Accord, but never really took on the --
QUEST: But when I watched her, and then even with Olaf Scholz, it is almost as if the elephant in the living room and they should have been coming out,
sort of, I would have argued, saying, listen, we hear what Mr. Trump says. We are not going to be bullied or bowed, but there was none of that.
LYNCH: Yes. There was not. I mean, I think that has been the policy of Europe since the election last November, not to antagonize Donald Trump.
Olaf Scholz used the phrase "cool heads," we need cool heads to deal with the US president, and so they seem to be taking this softly -- soft
approach. Now, the big question is, what are they saying behind-the-scenes? But publicly, they're not prepared to call him out.
QUEST: Is it one of those things they actually don't -- I mean, they may have a plan, but here they have a bull in a China shop on the other side of
the Atlantic, and they -- Rana Foroohar, writing in the FT, put it beautifully, they're all about process. The third committee of the second
directorate of the 13th meeting will have the council meeting, which the commission will -- you know how it goes. You live that life.
LYNCH: Well, I do when I am in brussels, and you are right. And the other problem, of course, is that France and Germany are quite weak at the
moment. Olaf Scholz was speaking today, he is facing the political fight of his life in an election next month. So what will be interesting is will
Donald Trump want to talk to other people in Europe? Viktor Orban, Giorgia Meloni, the Italian leader, more right-wing politicians that he sees the
world the same way.
QUEST: What about Zelenskyy's speech? I went into the Conference Center to see it and hear it, because I wanted to feel it as much as I did. It was
coruscating in the way he basically said to Europe, no one is thinking about you on the other side of the Atlantic. You're making yourself
irrelevant.
LYNCH: Yes. It was interesting, in this speech, we were all waiting to see what would his first reaction be to the installation of Trump in the White
House.
QUEST: Yes.
LYNCH: And in fact, he turned his attention to Europe. He took on Europe, he railed against their defense spending, saying that people, you know, are
not noticing them, as you say. So it was an interesting rhetorical twist by him.
Of course, is he speaking to an audience of one? This is the big question. Is he just deciding he needs to get the Trump administration on side? The
US matters when it comes to what happens next in Ukraine.
QUEST: There are two Davoses this year. There are the financiers, love what they are seeing; and there are the social policy people who are worried. I
need you to choose a color.
LYNCH: Green.
QUEST: Of course. Come over here.
The next four years in one word. Now if you look at certain areas, it is divisive, deregulation. Its division, blah-blah. But some people are saying
-- that's Klaus Schwab; others are saying growth, self-confidence, unpredictable.
Have a word and write it on. What word would you say?
Turbulence. Very interesting. Turbulence. Thank you very much.
LYNCH: Thank you, Richard.
QUEST: We will speak to you more as the week wears on. Thank you.
Now, the Bank of France Governor says Donald Trump is the spark that Europe needs to get its house in order. Last year's Draghi Report laid out three
ways to boost growth. Firstly, closing the innovation gap with the US and China. Secondly, a plan for decarbonization and competitiveness. And of
course, then increasing security and reducing dependencies.
The report, you ask anybody, I am sure if they asked you, it would be, "Ah, Draghi. Draghi. Oh yes. Draghi." It's a clarion call. But now of course the
challenge is actually doing something about it.
The Banque de France Governor Francois Villeroy De Galhau says Europe is up to the task.
(BEGIN VIDEOTAPE)
FRANCOIS VILLEROY DE GALHAU, BANQUE DE FRANCE GOVERNOR: The new US economic agenda probably increases uncertainty for the global economy everywhere. So
tariffs are not a good news for global growth. They are not a good use for inflation in the US, but we will see.
Are they a threat? Will they be a reality? We should obviously negotiate, speak with our allies. But may I insist on one thing? There is a domestic
agenda of Mr. Trump, including deregulation, including being more favorable for growth. We should have our domestic agenda on the European side, and
this is what President von der Leyen spoke about this morning in Davos.
The economic destiny of Europe is not in American hands, it is in our own ones.
QUEST: Exactly. But the ability of the Europeans to chart their destiny and chart the execution of that, the history is not good. The institutions are
not built for speedy reaction.
DE GALHAU: It depends, if I may. If you look at history, I agree about the two last decades. There has been a long sleep of Europe. There had been
several crises, including COVID.
[16:10:10]
But if you look in a more distant past, look at what was called Euro- sclerosis 30 years ago, and Europe answered with the single market. Jacques Delors and with its single currency, the euro and then we were able to
deliver each time for Europe to wake up from these too long sleep.
QUEST: You will have read President Lagarde's speech to the Bankers Conference last year. Market reform, single market reform, market openness,
market access.
DE GALHAU: I couldn't agree more.
QUEST: But it has not happened, and you've all been saying this for so long. The difference now is you have an economy in the United States that
is going to become more aggressive and going on steroids, and you're still flailing around talking about implementing the Draghi Report, but not
actually getting on with it.
DE GALHAU: Look, Richard, some quarters ago, it did not exist even in the political speeches. Now, it is a political priority. But I agree, it takes
time. These are structural reforms. It is one reason more to start this year and this year is decisive for the European growth agenda.
QUEST: What needs to happen to get Europe to act more efficiently?
DE GALHAU: If I may sum up the Draghi Report, we have to multiply size by muscle by speed. Size: This is the internal market. We should integrate
more. It is too divided. Muscle: It is a financial muscle. We spoke about the saving and investment union. We have significant private savings in
Europe. And speed: This is more innovation and less bureaucracy.
QUEST: I hear you beautifully, Governor.
DE GALHAU: Which is already something, Richard.
QUEST: How do you do it? We've heard this before.
DE GALHAU: No, no, no, no. You haven't heard it before because Europe was focused on domestic crisis. Now, we have this threat on our innovation
capacity and it is time again to push for a significant European innovation agenda and we have the recipes.
May I insist on one thing on the Draghi and Letter Report. They have no fiscal costs. You can add to that if wished, public investment Eurobonds,
but it is a different part. The structural agenda, as we did with the single market and the single currency 30 years ago, we must do it now, and
I think there is a much clearer political will if, by the way, Mr. Trump's agenda has one use for Europe, it is this wake-up call.
] QUEST: What word would you use to describe as you see it the next four years?
DE GALHAU: I think it is an American lesson and a European necessity. Self- confidence.
QUEST: Go on.
Now, that I was not expecting.
DE GALHAU: Yes. I am lucky to surprise you. So this is a powerful US lesson, and this is probably the decisive US advantage.
QUEST: And that is what the next four years is going to be. The summing it up, self-confidence. Excellent.
DE GALHAU: It is at least my wish and my hope at the start of this New Year.
QUEST: Thank you, sir. I am grateful.
DE GALHAU: Thank you.
(END VIDEOTAPE)
QUEST: There we have the governor of the Bank of France.
Donald Trump is promising four years of radical change. I explored the challenges that lie ahead for global leaders through a game of ice hockey.
Well, actually, mini golf, next. It was pathetic, but great fun nonetheless. I even hit the cameraman.
(COMMERCIAL BREAK)
[16:16:32]
QUEST: Welcome back.
Look at that. I mean it is beautiful with twinkly lights, but there is no snow. Well there is snow sort of, but they haven't had a decent dump of
snow for some weeks. And as a result, the trees aren't covered.
It is actually below freezing here. Minus ten, I am told in Celsius. And here the way of life, the best way to warm up in this sort of cold weather,
playing a little ice hockey. Well, mini ice hockey in the case. They've got a new little gimmick up on the promenade. You can play ice hockey, sort of
like a miniature golf. It was perfect for the short course in town.
And when you take the Trump administration, the issues of WEF and a little bit of ice hockey, put them all together and you learn about how leaders of
the world are planning to tend to reach goals.
(BEGIN VIDEOTAPE)
QUEST: Yes. It's a wrist movement, isn't it? As opposed to a golf swing. Right.
So this mini course, it is all about ice hockey. It is perfect to exhibit the problems facing the global economy in the new era of the Trump
administration. So here we go.
This one, of course, is tariffs. Lots of tariffs. And there's many different countries that could be tariffed and that is going to be the goal
of economic growth. So let's see, can we do it?
Pull it back, and one and we've hit a tariff. Two-three and, oh, another tariff. The problem with tariffs is once you have got into the mess of
tariffs, you can't get out of them as you can see from this.
Do I go this way? But I've got no leverage, look. No leverage. Or do I go this way and I have to go back? This is very difficult.
Oh so close and yes, we have beaten the tariff war. Let's go to Greenland. This is Greenland.
Now you see the problem. European Union, Denmark, Greenland. The first thing we've got to do is get over this. So the temptation here is to give a
good solid whack. You ready? Oh. Hey. After the Panama Canal, this looks like the Panama Canal. We are going to have one go.
Yes. I got through. Whatever happens, the challenges over the next four years are not going to be easy. But we will get there.
You ready at the other end? Did it come out at great speed?
UNIDENTIFIED MALE: Yes, it hit me.
QUEST: Did it hit you?
UNIDENTIFIED MALE: Yes.
QUEST: I think global politics is easier than this actually. This is way too difficult.
(END VIDEOTAPE)
QUEST: A man who knows what a cold weather, at least, and he helped heat up, makes equipment that heats up. Joe Kaeser, the chairman of the
Supervisory Board of Siemens Energy. He joins me now.
Good to see you, sir.
JOE KAESER, CHAIRMAN OF THE SUPERVISORY BOARD, SIEMENS ENERGY: Richard, how are you?
QUEST: Good to see you.
KAESER: Good to see you.
QUEST: You're used to the cold weather, aren't you?
KAESER: Oh, pretty much so. And if not, you know, I wear a coat. So I am fine.
QUEST: Sensible.
KAESER: Sensible, exactly.
[16:20:01]
QUEST: What's your biggest worry now? Now into a new environment where we know that energy and companies like yourselves, the provision of energy
equipment, you're the ones that are going to in some shape or form, feel the effects of these policies?
KAESER: Well, I mean, you know, Siemens Energy is a global company, so we are all over the world and we sell our products to customers, not to
governments, which I think is very important.
QUEST: It is, but do you not see the relationship between how policies from government will then trickle down to the way customers respond to it?
KAESER: They certainly do. They certainly do.
But, you know, in terms of the energy space, this is where everything starts. Without energy, there is no artificial intelligence; without
energy, there is no computing; without energy, there is no microelectronics. Without energy, there is actually no decent life.
So I think we are at a very sweet spot in --
QUEST: Providing you've got the right mix of energy and that's the big debate. I mean, this idea of drill, baby, drill and the whole debate over
what is -- pulling out of Paris, all of these sort of things.
But do you believe that we are too obsessed, perhaps with the one country?
KAESER: I believe the world is well advised now to think about the opportunities, which are all around the world. I mean, the United States is
the most relevant, you know, the most impactful economy in the world, obviously. So we need to go look and see what happens there.
But there is the Middle East, which is booming. I tell you, booming. The Middle East is a mediator between the power forces -- China, the United
States and the sleepy Europe. So think about where the opportunities are.
Remember the gold rush? You know, who got rich in the gold rush? It was not the ones who were finding the gold. It were the ones who were providing the
shovels. So we need to find, you know, we need to find the shovels. And that is, I think, is the opportunity really.
QUEST: But I've got to pick up on your word then, "Sleepy Europe."
KAESER: Yes.
QUEST: And you're, of course, Germany and you're a global company, Germany is in trouble. I mean, it is not in crisis or catastrophe, but it is in a
political crisis. And we now know, of course, major German manufacturers are laying off workers, and that is having an effect.
KAESER: It does have an effect. And see, we don't have a real government at this time, but that's a concern, but it is also an opportunity because you
can start from scratch. And I'll tell you something, if you have listened to the new global leader, to President Trump yesterday, you could actually
take a lot from that.
But one of the things you better take is, you better get your act together now, because otherwise people are not waiting for you. And that's the
message to Germany: Get your act together, because nobody -- people look at Germany, but they are not waiting for Germany. And the same is true for
Europe.
QUEST: That was the message of Zelenskyy today, by the way, that was exactly the message of President Zelenskyy.
KAESER: The master of the obvious.
QUEST: You know, in a sense, get your act together because nobody is waiting. But that's the message of the Draghi Report into competitiveness.
KAESER: Draghi Report today is a piece of paper and I have been listening to Madame President today referring to the Draghi Paper like 10 times in a
row. The point is, the paper will always remain a paper unless it is being executed. Right? So execution is the play of the European Union and this is
what makes the difference.
QUEST: Sir, sir --
KAESER: Execute.
QUEST: Sir, you are preaching to the converted on this program.
KAESER: No kidding.
QUEST: We say, I have been banging on about the Draghi Report and how, you know, everybody is using it as a panacea, the Draghi Report.
KAESER: Execute.
QUEST: Get on with it.
KAESER: Get on with it. Execute. Lead by example and then people will follow. But if people don't know where to go, nobody is moving.
QUEST: Choose your color.
KAESER: Well, you know, I've been CFO and a CEO, so I like writing in black ink.
QUEST: All right. One word that you think is going to best describe the next four years. Please? You can either sign on or write your own.
KAESER: Yes, I know, I will write my own. But you know, I am German, right? So I need to be native. I need to be --
QUEST: You're going to write in German?
KAESER: I need to be a patriot, right?
QUEST: Oh, dear.
KAESER: Sure.
QUEST: Now I am worried.
KAESER: Look. It is exactly what I write.
QUEST: Now, I am worried. Here we go. What?
KAESER: So it is in German. It says, Zeitenwende.
QUEST: Zeitenwende.
KAESER: Zeitenwende, it says "times are changing."
QUEST: Thank you, sir, I am very glad to have you.
KAESER: Thank you.
QUEST: Thank you very much.
KAESER: Thank you very much.
QUEST: Thank you very much indeed. There we go.
The pronunciation is Zeit--
KAESER: Zeitenwende.
QUEST: Zeitenwende.
KAESER: Zeitenwende.
QUEST: Times they are --
KAESER: Times are changing.
QUEST: Thank you, sir. I'm very grateful. Thank you.
KAESER: And it better be a part of it. Thank you.
QUEST: We will have a lot more zeitenwende as the program continues, because times are a changing. Donald Trump is wasting no time with his own
zeitenwende. We will explain his latest moves and what they mean in just a moment.
It is QUEST MEANS BUSINESS live in Davos and you can see we are off to the races.
(COMMERCIAL BREAK)
QUEST: Hello, I am Richard Quest. There is a lot more QUEST MEANS BUSINESS from WEF in just a moment. But before we get to anymore, I need to update
you with the news because this is CNN, and on this network, the news always comes first.
Dozens of people have been killed after a fire broke out at a ski resort in Turkey. Some people tried jumping out of the windows to escape from the
blaze, or they rappelled down by tying bedsheets together. An investigation is underway and the Turkish president has declared Wednesday to be a day of
mourning.
Israel's military chief-of-staff is resigning over the October 7th attack by Hamas. Lieutenant General Herzi Halevi says he will step down in March.
His resignation, that is said in his words, "Under my command, the IDF failed its mission to protect the citizens of Israel."
He is the highest profile official to step down as a result of October 7th.
The former US Senator Marco Rubio has now been sworn in as the United States new Secretary of State. Vice President Vance administered the Oath
of Office. Mr. Rubio was unanimously confirmed by his former Senate colleagues. He is the first high level Cabinet pick to be seated in the
Trump administration.
Dozens of Democratic states and cities are challenging Donald Trump's bid to end automatic birthright citizenship. The lawsuits now allege that
Monday's executive order goes against the 14th Amendment. The case could make the first major Supreme Court showdown of President Trump's second
term.
[16:30:30]
Any moment now, Donald Trump is expected to announce a massive private sector investment in artificial intelligence infrastructure, A.I.
infrastructure, according to sources. Now, the tech CEOs, including Sam Altman of OpenAI, are set to appear next to the president when he announces
the move.
A.I. leaders have been sounding the alarm that more data centers are needed to power A.I. ambitions over the coming years, and the president and the
tech center, obviously as you're well aware, have been cozying up in recent weeks. Those powerful tech businessmen who were at yesterday's
inauguration, prime pole position.
Clare Duffy is in New York. Jeff Zeleny is at the White House.
We start with you, Jeff, as to what are we expecting, this infrastructure? What are they going to do?
JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, look, President Trump is a bit behind. He's actually still meeting with
congressional leaders here. So we're not sure when this announcement will be. But the reality is President Trump wants to talk about infrastructure.
He's eager to sort of get his hand in on his bit of the infrastructure work. You'll remember when he was president some eight years ago, it
actually became a bit of a punchline. Every week was infrastructure week, and nothing really got done.
Of course, during the Biden administration years, infrastructure was one of the biggest accomplishments, a bipartisan accomplishment. So now that's
where this story begins. This is going to be an infrastructure announcement in artificial intelligence. Excuse me. And it is going to also focus on
energy sector and the data centers, as you said. So we do not know exactly who will be next to the president when he makes this announcement.
We don't know what the announcement is. They call it massive. We will see. But that's where this is for now -- Richard. Excuse me.
QUEST: Right. OK. No, please. Please. Yes. Have a -- Claire, I think of infrastructure, I think of roads. I think of bridges. I think of building
things. We're talking about a different type of infrastructure here, though, aren't we? And arguably the last administration did do quite a lot
on this. So what is the role the A.I. is are playing here?
CLARE DUFFY, CNN BUSINESS WRITER: Yes. Richard, what we're talking about here is A.I. data centers and the chips, the water, the electricity that
are needed to fuel those data centers. A.I. leaders, especially OpenAI CEO Sam Altman, have really been banging this drum for the last year plus, that
the U.S. needs to invest more in A.I. infrastructure on U.S. soil in order to stay ahead of China in the A.I. arms race. Because remember, artificial
intelligence is set to, you know, have huge implications for everything from economic growth to military technology.
And Sam Altman has said that the U.S. needs to ensure that the building is happening here so that the U.S. technology becomes really the standard and
not Chinese A.I. technology. So what a source tells me to expect here is that OpenAI, Oracle and SoftBank are set to partner on this A.I.
infrastructure investment. This project called Stargate, you know, could see up to $500 billion invested over the next few years in growing this
A.I. infrastructure because currently the demands on our electricity grid, the demands on existing data centers are really straining the existing
infrastructure and more needs to be built, and really quickly if we are going to keep up with the pace of development in artificial intelligence.
QUEST: So, Jeff, we're looking for -- I know it's so early. I mean, the man has barely found his way back in, but we're looking for strands. We're
looking for way forwards. Here at Davos, they're just sort of shellshocked, some of them, and others are just delighted at the prospect of what's going
to be coming their way, and the speed with which everything is taking place is breathtaking, Jeff Zeleny.
ZELENY: It is in terms of executive orders, but that is sort of the easy part of the job. A lot of these were already written up during this
transition period. They've had, you know, two and a half months to sort of get this going. But the question here is the legislative speed. I mean, the
big pieces of the Trump agenda and the Republican agenda -- he's meeting right now as we speak with Speaker Mike Johnson from the House, Senate
majority leader John Thune from the Senate -- that is going to really show the governing potential. So that is where the biggest items of the agenda
are going to come.
[16:35:05]
But one thing is so different this time, Richard, from eight years ago, when President Trump himself went to Davos, you know, the new president, of
course, he knows what he's doing in some respects, in terms of what he wants to do, but also look at all those tech leaders that you were talking
about who were rushing up to him. I mean, look at the ones who were in the rotunda around him. There's no sense of the resistance that there was eight
years ago.
There's much more cooperation. People want to get on board because they know it's good for business. There's been this rash of corporations writing
checks. Obviously, that's what has been going on here. But now that the inauguration is over and they're trying to actually accomplish some things,
we'll see. But there is no doubt this White House is open for business. And business leaders are rushing to it.
QUEST: I'm grateful to you. I think actually today I do believe Clare and probably you, Jeff, you have colder weather than I have here in Davos. I
certainly don't have any snow on the ground, or at least not on trees. Good to see you both. Thank you. Keep warm.
Now with Donald Trump back in the office, Ukraine's President Zelenskyy says Europe must learn to take care of itself. It was a powerful speech
when the president spoke. He says Europe can't assume the U.S. will always have its back.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: When we in Europe look at the United States as our ally, it's clear they are an indispensable ally. In
times of war everyone worries, will the United States stay with them? And every ally worry about that. But does anyone in the United States worry
that Europe might abandon them someday, might stop being their ally? The answer is no.
(END VIDEO CLIP)
QUEST: Now the new Secretary of State Marco Rubio says Moscow and Kyiv must both make concessions in order to end the war. He did acknowledge that
Moscow was the aggressor.
Nick Paton Walsh is in Kyiv.
Nick, you know, Marco Rubio, who's a complete realist on all of this, he says it's not as if it's a choice between good and bad when it's an obvious
choice. Here, there's no good answers. There's only bad answers and preferred bad answers. He's right, isn't he?
NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: Yes. Look, I mean, saying that both sides have to give something is the nature
of negotiation that we are clearly going to see. But I think what has stood out over the last 24 hours, Richard, is through a campaign the Trump
administration to be had tried to suggest that they might reconsider aid, that they couldn't always guarantee the staunch support of the Biden
administration towards Ukraine.
And Trump didn't mention Ukraine or Russia in his inauguration speech. But when asked by reporters, he did appear to have a pretty fluent grasp of
some of the key issues here and remarkably laid very clearly at Vladimir Putin's door the economic damage that he's doing to Russia, saying that he
knew Volodymyr Zelenskyy of Ukraine wanted a deal. He didn't know if Putin wanted a deal, but Putin should take a deal because he was, quote,
"destroying Russia" through this war, pointing out the damage being done by inflation to his own economy and saying, you know, like many had at the
start of the war that he thought it would take a week but now it's edging into the fourth year of this particular conflict.
So it was interesting to see Trump have the grasp of the key issues, choosing to put key pressure on the Kremlin head, a man who he'd been
accused in his first term of being too cozy with, frankly. And I think that cast the Trump administration's path in trying to negotiate a way around
this conflict or to calm this conflict into a very different light than we saw 24 hours ago. And then, too, Ukraine's President Volodymyr Zelenskyy,
where you are in Davos, remarkable to take the stage and essentially echo what Trump had said a matter of hours earlier, calling on Europe to spend 5
percent of its GDP on defense and also suggesting in similar terms Trump had said, look, there's an ocean between the U.S. and the Ukraine conflict.
Zelenskyy said there's no ocean between Europe and Russia. This is your problem. You need to define your own defense and security here. And as you
heard there, too, you can't always imagine that the U.S. is going to stick by you forever. Americans don't always really care exactly where Europe is
going to land in terms of its security. So remarkable to see these two positions emerge so fast in the Trump administration. And I think they have
a very complex path ahead in terms of working out what peace would indeed look like.
And you have to still be wary of both the Kremlin's cynicism in negotiations and how they often use peace talks to try and pursue their
military goals, but also to how Trump may not always have the same focus as we saw earlier on last night, Richard.
[16:40:00]
QUEST: Yes, before I let you go, Nick, is the weather as bad as it looks behind you? It looks absolutely atrocious there.
PATON WALSH: Yes. Look, there's been a horrific fog that's enveloped this city. And I think that's possibly without wishing to be too into pathetic
fallacy here, like a reflection of how concerned many Ukrainians are to exactly what the Trump administration means. They've talked about slowing
aid. They've talked about how, you know, at one point, Trump said he might let Putin get away with whatever he wanted if NATO didn't step up to the
plate and spend more on defense.
There's a lot of hope here that you hear from people. They talk a very positive game about Trump. But I think beneath it all, there are people on
the front line from Ukraine dying in a horrific rate, Russia advancing and deep uncertainty as to where they go next.
QUEST: All right. Nick, I'm grateful for you tonight in Kyiv. Thank you.
And in just a moment on QUEST MEANS BUSINESS, we'll be talking to the chief executive of Norway's sovereign wealth fund. He tells me he expects Donald
Trump will be a positive for the markets in the short term. And he's warning longer term effects are highly uncertain. And he made me wear a
hat.
(COMMERCIAL BREAK)
QUEST: So Wall Street closed higher on President Trump's first full day in office. The Dow is up 538 points. It's now back above 44,000. The market of
course is encouraged that the president has not yet followed through on his tariff threats.
But let's not be quite so pessimistic. There's the whole question of things being more positive. Now as for the chief executive of the Norway's
sovereign wealth fund, he says some of the policies will be very good for business.
I spoke to Nicolai Tangen earlier. He runs a $1.6 trillion fund. I promise you it's the largest. He says the long term outlook is clouded.
[16:45:00]
(BEGIN VIDEOTAPE)
NICOLAI TANGEN, CEO, NORGES BANK IM: Well, a lot of uncertainty, of course, because we don't know how all this is going to pan out. And there are just
so many ways to look at it. So of course, some of the kind of social things, we think those and the climate related changes, some of those we
think are not positive.
Now in the short term for the market itself, just the financial market, we think the positive that you roll back potentially some of the regulations.
You can see clearly there is a bit more of animal spirit coming out. And we saw that already back in November. I was in New York. I interviewed more
than 50 CEOs, and nine out of 10 thought that business was going to be better.
Then the question, of course, is, longer term, what's going to happen with inflation and so on. And that's the big uncertainty.
QUEST: You see, that's exactly the point here. You've got two groups of people in Davos.
TANGEN: Yes.
QUEST: You've got the bankers, the financiers and the E.U.'s. And they are all, yes, great, we're off to the races. And then you've got the NGOs, the
social welfare and the social policy people who are looking like they've been hit over the head with a piece of wet fish.
TANGEN: Yes. Well, they have.
QUEST: Well, where are you?
TANGEN: Well, I'm kind of thinking both. You know, on the one hand, negative for the climate, negative for a lot of those type of issues. But
if you just look at purely financial sector, probably positive in the short term and long term, we don't know what the effect is going to be. And we
also, of course, are invested in Europe, which is on the receiving end of tariffs. And that's not very positive.
QUEST: So let's talk then about where you do see change, where you do see the necessity to make alterations and change. Where would it be?
TANGEN: Well, I actually think that in a world which is increasingly, you know, uncertain and unpredictable, you need to try to do the opposite as
everybody else. If something is very hot and overbought, you should sell it. If something seems to be avoided and is very cheap, you should buy it.
And so I think in this environment you just really need to do the opposite of everybody else.
QUEST: You're a contrarian.
TANGEN: We're trying to be.
QUEST: So when we've talked before, you mentioned about A.I.
TANGEN: Yes.
QUEST: And the use of A.I. You've really gone for it. Hell for leather. Are you using it in investment decisions? How are you using it?
TANGEN: Well, less in investment decision, more in trying to reduce our trading costs by predicting what we're going to buy and sell going forward.
And so we can internalize more of that. And then we try to make everything we do more efficient. Quite interestingly, a bit more than a year ago, I
asked Sam Altman of OpenAI, hey, how much do you think we can improve our productivity? And he said, 20 percent.
Now before Christmas, we asked 650 out of over 700 colleagues, how much has generative A.I. improved your productivity? The average 15 percent, 15
percent.
QUEST: How do you measure it?
TANGEN: Well, that was people assessing it themselves.
QUEST: Right.
TANGEN: Are some people exaggerating? Probably. Are some people underreporting? Probably. I think 15 percent is for sure a very high
number.
QUEST: Europe could be on the thrust of these policies and changes. Everybody keeps talking about the Draghi report, which you will be very
familiar -- will you be familiar with.
TANGEN: Yes.
QUEST: Everyone is talking about the Draghi report, but they're not going to do anything about the Draghi report.
TANGEN: That's correct.
QUEST: And it's a real worry in a sense, isn't it.
TANGEN: Yes.
QUEST: Do you have any hope that they'll get their act together?
TANGEN: Not a lot of hope because what you need to make change is a real crisis. And the countries where they have really changed in Europe has been
Ireland. They had a crisis. Greece, they had a crisis. The Baltic States, they had a crisis. Now there is no real crisis in Europe.
QUEST: You don't see the political crisis in Germany, border --
TANGEN: I don't think it's -- it's weak. I don't think -- I don't see it as an economic crisis.
QUEST: Right. Right. It's time to choose a color. What color are you going for? What word you like?
TANGEN: I would say unpredictable. Because that's what it is.
QUEST: With an exclamation.
TANGEN: With an exclamation. Because it's very, very unpredictable.
QUEST: It's very unpredictable.
TANGEN: Because I think everything can happen.
QUEST: Good, bad or indifferent? Or all?
TANGEN: All. Very wide, very wide potential outcome.
QUEST: Do you welcome unpredictability? Do you welcome uncertainty? Because that creates opportunities.
TANGEN: For sure.
QUEST: But your fund doesn't really do that, does it? Because it's long term.
TANGEN: It's very long term. Now I kind of like volatility. I think that gives opportunity for people who think differently. So, of course, one
should be careful what one wishes for. But you know, a bit of volatility is good.
(END VIDEOTAPE)
QUEST: The head of the Norwegian sovereign wealth fund. Which one of these belongs to Klaus Schwab, the founder of the World Economic Forum? Well,
you'll find out after the break when he tells me the leaders here need to reimagine the world order in the age of Donald Trump.
(BEGIN VIDEO CLIP)
KLAUS SCHWAB, EXECUTIVE CHAIRMAN, WORLD ECONOMIC FORUM: Post-World War II order, which we built 70 years ago, does not function anymore.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:52:31]
QUEST: The World Economic Forum is in its 55th year, and I've been to about half of the meetings. The mastermind behind it all, Klaus Schwab, said it's
just a great coincidence that today's meetings are taking place in the same week as the inauguration. The conversations, though, here are more pressing
than ever.
(BEGIN VIDEOTAPE)
SCHWAB: People have to draw conclusions. They have to develop their own strategies. And I think that's the right place. You do it best in
interacting with as many people as possible.
QUEST: Do you see -- absolutely. I think this whole week will be responding in a sense. But in a way, what's happening in the new Trump administration
is frankly a repudiation of much of what the Davos agenda has been.
SCHWAB: No. Not at all. So Davos agenda has always been collaboration and to have a platform. And today we are in a situation where I think President
Trump is redefining the balance between global and national objectives. We still will have a need to work together on a global level, and we still
need even more platforms like the World Economic Forum to have the interaction which we need to address all the issues we have.
QUEST: Completely agree. There's no substitute for collaboratively addressing the issues, but there is a reversal of the agenda that people
here have long accepted. One of globalization, one of DEI, all these issues which the U.S. now seems to want to go in the opposite direction,
protectionism.
Can you remember a time when tariffs on such a scale would have been addressed or discussed?
SCHWAB: Not at all, but we will first have to see what the concrete measures will be. And Davos will be certainly a place to look already at
the conclusion, what it means. But I think the essential point is, look, the post-World War II order, which we built 70 years ago, does not function
anymore. And we need new approaches. Whether this is the right approach will have to be seen. But we need new approaches.
[16:55:01]
And those new approaches are very much also co-determined by business. So to bring all the stakeholders together, business, governments, civil
society, young generation, that's what you need to look at the future again with what I call constructive optimism, which means the future is not
happening by itself. The future should still give us optimism because we have the technological means to create a better future, but we have to
construct together this future.
QUEST: Is it possible to construct a future together when one of the parties seems hell bent on pulling it apart, the United States at the
moment?
SCHWAB: I would not necessarily subscribe to this notion --
QUEST: You can be more blunt, sir.
SCHWAB: No, no.
(LAUGHTER)
QUEST: You can tell me. You can tell me that you don't agree and I'm wrong.
SCHWAB: No, no, no, we don't know. We don't know. That's the situation. That's the situation. And you have to remind the world continuously that's
what we are doing here, that certain issues, everybody is better off if we work together.
QUEST: Finally, a word, we're looking for a single word that you think is going to best describe -- I won't say define. Best describe the next four
years.
SCHWAB: Coherence.
QUEST: What?
SCHWAB: Coherence.
QUEST: What do you mean?
SCHWAB: Which means that we are different parts of a puzzle but actually we belong together.
(END VIDEOTAPE)
QUEST: There's the word from Klaus Schwab.
We've had an embarrassment of riches on tonight's show. And tomorrow, another spectacular lineup. Top leaders in banking and tech. Brian Moynihan
of BOE, Marc Benioff, Gary Cohn, the Dutch prime minister, and my dear friend from the World Trade Organization, Ngozi Okonjo-Iweala.
They'll all be with me here live because that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in Davos. Whatever you're up to in the hours
ahead, I hope it's profitable. We have a bell.
(COMMERCIAL BREAK)
JAKE TAPPER, CNN ANCHOR: To go the family members of one of those American hostages is here to share their message. But let's start with Trump's
today. His first full day in office. Just moments from now, the president could make a major announcement on artificial intelligence and
infrastructure.
END