tv Power Lunch CNBC January 27, 2017 1:00pm-3:01pm EST
>> you have big drug stocks. >> amazon is -- >> the earnings volatility is about -- >> about 10% earnings volatility. it will be the same thing this time. >> final trade. give me a name. >> apple. i like it. >> netflix keep going. >> used up all our time right now. welcome to power lunch live from the white house. we are awaiting the first news conference between president donald trump and uk prime minister teresa may. this is the first visit by a foreign leader one week into the presidency of donald trump. we thought this was going to be the big event of the day but increasing it is the tensions between the united states and mexico. we just learned that there was an hour-long phone conversation
between president donald trump and the president of mexico. we are waiting to hear how that conversation went. >> amazingly despite questions about what will happen with the trade agreements and whether or not there will be a border tax the markets are pretty quiet digesting the news and staying close to record highs. >> we are noticing mexican stocks. actually doing fairly well. would you say that it is a positive sign that at least the two sides are speaking behind the scenes? >> i think that absolutely is a good sign. we are going to have peter navaro. he said the vix isn't looking like anybody is worried. the markets are signaling that perhaps they are less worried about the talk. >> as you pointed out before and we certainly thought about often over the past year the lesson has been when things happen our
immediate reaction is bad things are going to happen or whatever. it turns out that the market sometimes has gone against what the, quote, smart money would say and here may be yet another example. aidest the turmoil the markets seem to be stepping around it with reasonableness. >> let's bring in peter. good to have you here. >> let me quote the great quarterback aaron rodgers. relax. everything is going fine. we are getting off to a great start here in the first week of the administration. every little bit of ink that comes out of the pen of president trump creates thousands more jobs and markets are reacting strongly to this. the vix is relaxed. let's make the economy grow. >> if you watch all the cable pundentry talking about whether
there is a trade war coming with mexico. the president spoke for an hour with president of mexico this morning. can you give us any sense of how that phone call went? >> i can give you the sense that the strategic and economic relationship with mexico and canada in this hemisphere is important. it's a critical one. we believe that that relationship on both sides of our border can go forward in a very constructive way. the problem, though, and this is a problem we have a with a lot of countries is that we are running chronic and large trade defici deficits. one of the reasons is because of unequal treatment of income tax by wto. that is why a border adjustable tax is right front and center on the hill for sdrugz. somehow that has to be dealt with. the second problem is cheating by countries like china of steel and alum income into our
markets, putting people out of work in ohio and pennsylvania, west virginia. that has to be dealt with. and then more broadly what we need to focus on is rebuilding and reenergizing not just our manufacturing assembly plants here with logos like ford and gm but the supply chain to provide components so that we are not just assembling things with foreign components. >> you brought up the border adjustment tax at the cornerstone of house gop plan for corporate tax reform. you don't have to explain it to us because we have been talking about it for weeks on cnbc. what hasn't been clear to us is whether people in this building including the president himself support the border adjustment provision in the house gop plan. it sounds like you do. >> there is no question that we need a border adjustable tax of some kind, one that has to be flexible. for example, germany, one of the
worst actors in the international environment when it comes to the vat because what they have done is strategically raised that to 20% whereas japan's is much lower. they are sticking it to us. when they send bmw or porsche into our markets they basically reback to those manufacturers. it is like a subsidy. if we try to sell them to ford or chevy they slap on the vat. that is not going to happen under a trump administration. we will deal with that in some fashion. a lot of discussion about how to do it. >> is the president on board? >> the president is on board with the idea that wto and that problem was a huge problem. we campaigned on that for months that you can look at speech after speech. >> two weeks ago he said it was too complicated. >> this problem needs to be dealt with and we are having a lot of discussions about the best way to go forward with it. orion and kevin brady have a
bill that we might very well be able to work with well. there is a lot of discussion. it's early form. the principle to take away here is that we as an economy cannot succeed putting our people back to work in ohio and pennsylvania, michigan and indiana if those countries keep treating us unfairly with respect to that tax system. the only way to do that is by coming up with some system of border adjustable which is flexible. in other words, you can't treat germany the same as you do japan with respect to that specific issue. >> what about wilber ross, do they all like border adjustability? >> come here and explain to them. let them speak in their own words. they should speak in their own words. >> you can't give me an answer. >> i would never presume to speak for them, for anybody.
i am here sharing my view about what the problems we face are. if you look at the trade issues you have cheating. you have tax problems. you have diversionary dumping coming in with steel and aluminum. i will tell you what, we are going to get it done. we are going to create jobs for the american worker and keep our domestic manufacturing strong. >> my colleagues in the studio want to ask you questions. >> it is brian sullivan. is there a point at which you or the president or somebody will step in front of a microphone and look at the american people and say we are going to bring back jobs, we are going to bring back manufacturing but we -- >> we are going to bring back jobs and manufacturing. >> you are going to have to play more, pay more for everything you buy. wages may go up which is a good thing but you will be paying more. >> you have answered your own question. would you rather have cheap subsidized goods dumped into the
wal-mart and not have a job, not have your wages go up in 15 years or would you like to pay a little bit more, not much, a little bit more, have a job and have your wages going up? i think the american people are going to make that choice. >> i agree. we -- you got to stop using this inflation fear as a way to hold the people down on trade. >> nobody is trying to hold anybody down on trade. i talked about it a lot. >> brian agrees with you. no country that makes low cost goods and pays high wages. when does that gap close? if wages go up and prices go up you exist in the same sphere. is there a point at which there will have to be a moment of pain for wages to catch up in. >> no. we don't think the price effects are that substantial, to be honest.
we think that if we can get the economy growing -- it's not just about getting individual wages up. it's about getting all of people back to work. there are probably over 10 million people under employed or unemployed in this obama old economy that if we get them back to work, if we get growth there is just going to be a lot of ability to produce goods at lower prices, do them on home soil, create jobs and we'll be in this new world where we are prosperous again. we have been 15 years where the economy has been growing at two percent. we were at 3 pfl percent. china joined wto and got into the globalization world. we have sweat shops, pollution havens. this is what we are going to change here because president trump understands unless we deal with trade issue we don't deal with growth issue. unless we deal with growth issue we won't get prosperity back.
>> could there be side effects to border adjustability tax? there are some sectors like retailers one of the biggest employers by sectors and citi group is under analysis as to how much they just put out border adjustment tax saying it is a 68% hit to earnings for kohl's. a 62% hit to earnings for urban outfitters. can these retailers operate with that kind of hit to earnings and still maintain employment levels or is side effect perhaps side losses because of border adjustability tax? >> this is a false narrative. >> citi group has no credibility. you have goldman sachs, citi group, all of these -- peterson institute. i went through three months of this on the campaign trail. all they did was try to bury us
with garbage studies about the roof caving in and world falling apart. people in fort wayne know better. those tactors are just scare tactics that they can take on and just go crazy about trying to scare us. >> the customer is not the -- is the investor in the stock market who are watching the shares of retailers go down. in today's session we are seeing retailers go down. >> how do you like them apples. there are winners and losers. >> we have to cut you off. >> i will defer to my president. >> thanks, peter. thank you very much. i am honored to have prime minister teresa may here for our first official visit from a
foreign leader. this is our first visit. so great honor. the special relationship between our two countries has been one of the great forces in history for justice and for peace. by the way, my mother was born in scotland. today the united states renews our deep bond with britain, military, financial, cultural and political. we have one of the great bonds. we pledge our lasting support to this most special relationship. together america and the united kingdom are a beacon for prosperity and the rule of law. that is why the united states respects the sovereignty of the british people in their right of self-determination.
a free and independent britain is a blezing to the world and our relationship has never been stronger. both america and britain understand that governments must be responsive to every day working people that governments must represent their own citizens. madame prime minister, we look forward to working closely with you as we strengthen our mutual ties in commerce, business and foreign affairs. great days lie ahead for our two peoples and our two countries. on behalf of our nation i thank you for joining us here today as a really great honor. thank you very much. >> thank you very much, mr. president. can i start by saying that i am so pleased that i have been able to be here today and thank you for inviting me so soon after your inauguration. and i am delighted to be able to
congratulate you on what was a stunning election victory. as you say, the invitation is an indication that the strength and importance of the special relationship that exists between our two countries, a relationship based on the bonds of history, of family, kinship and common interests. in a further sign of the importance of that relationship i have today been able to convey her majesty the queen's hope that president trump and first lady would pay a state visit to the united kingdom later this year and i am delighted that the president has accepted that invitation. today we are discussing a lot of topics. the president mentioned foreign policy. we are discussing how we can work more closely together in order to take on and defeat the idelology of islamic extremism. we are making progress. we need to redouble our efforts.
today we are discussing how we can do this by deepening intelligence and security cooperation and critically by stepping up our efforts. we know we will not eradicate this threat until we defeat the ideology that lies behind it. our talks will be continuing later. i'm sure we will discuss other topics, syria and russia. on defense and security cooperation we are united in recognition of nato. today we have reaffirmed our unshakable commitment to this alliance. i didn't think you said you confirmed you are 100% behind nato. we are discussing the importance of nato continuing to ensure it is as equipped to fight terrorism and cyber war fare as it is to fight more conventional forms of war. and i have agreed to continue my efforts to encourage my fellow european leaders to deliver on commitments to spend 2% of gdp
on defense so burden is more fairly shared. only by investing properly in our defense we can ensure we are properly equipped to face challenges together. the president and i have mentioned future economic cooperation and trade. trade between our two countries is already worth over 150 billion pounds a year. u.s. is a single biggest source of investment in the uk. and the uk/u.s. defense relationship is the broadest, deepest and most advanced of any two countries sharing military hardware and expertise. i think the president and i are ambitious to build on this relationship in order to grow, provide high skilled, high paid jobs as a future for working people across america and across the uk. and so we are discussing how we can establish trade negotiation agreement, take forward immediate high level talks and
for the practical steps we can take now in order to enable to do trade and do business with one another more easily. i am convinced that a trade deal is in the national interest of both countries and will cement crucial relationship that exists between us as the uk leaves the european union and reaches out to the world. today's talks i think are a significant moment for president trump and i to build our relationship. i look forward to continuing to work with you as we deliver on promises of freedom and prosperity for all people of our respective countries. thank you. >> very nicely stated. steve holland. >> thank you. you are going to be speaking tomorrow with the russian president. what message would you like to convey to him? how close are you to lifting sanctions imposed on russia over the ukraine inkurgz. what do you expect in return?
do you foresee changes in british attitudes towards sanctions on russia? >> i hear a call was set up, steve. we'll see what happens as far as sanctions early talking about that but we look to have a great relationship with all countries. that won't necessarily happen. unfortunately probably won't happen with many countries. if we can have as we do with prime minister may and the relationship that we have all developed and in the short relationship that we have just developed just by being with each other, have lunch and we have really had some very interesting talks and productive talks. but if we can have a great relationship with russia and with china and with all countries i'm all for that. that would be a tremendous asset. no guarantees, but if we can that would be a positive, not a negative. >> we have as far as the uk is concerned on sanctions to russia
in relation to activities in ukraine we have been clear that we want to see the agreement fully implemented. we believe sanctions should continue until we see it fully implemented and have been continuing to argue that inside the european union. >> thank you very much. prime minister, you talked about where you agree, but you have also said you would be frank where you disagree with the president. can you tell us where in our talks you did disagree? and do you think that the president listened to what you had to say? mr. president -- see what she says. mr. president, you have said before that torture works. you have praised russia. you said you want to ban some muslims from coming to america. you suggested there should be pungzment for abortion. for many people in britain those
sound like alarming beliefs. what do you say to our viewers at home who are worried about some of your views and worried about you becoming the leader of the free world? >> this was your choice of the question? there goes that relationship. >> on the issue that you raised with me, can i confirm that the president, i have been listening to the president and the president has been listening to me. that is the point of having a conversation and a dialogue. we have been discussing a number of topics. we will carry on after this press conference meeting and discussing a number of other topics. and there will be times when we disagree and issues in which we disagree. the point of the special relationship is that we are able to have that open and frank discussion. so we are able to make that clear when it happens. but i am clear, also, that there are many issues on which the united kingdom and united states stand along side one another.
i think as i said yesterday in my speech that we rat a moment now where we can build a stronger special relationship where it will be in the interest of the uk and united states and wider world, as well. >> we have a great general who has just been appointed secretary of defense, general james mattis. he has stated publically that he does not necessarily believe in torture or waterboarding or however you want to define it, enhanced interrogation i guess would be words that a lot of people like to use. i don't necessarily agree, but i would tell you he will override because i am giving him that power. he is an expert. he is highly respected. he is the general's general. got through the senate very, very quickly which in this country is not easy, i will tell
you. and so i'm going to rely on him. i happen to feel that it does work. i have been open about that for a long period of time. but i am going with our leaders. and we're going to win with or without. i do disagree. as far as, again, putin and russia, i don't say good, bad or indifferent. i don't know the gentleman. i hope we have a fantastic relationship. that is possible and it is also possible that we won't. we will see what happens. i will be representing the american people very, very strongly, very forcefully. if we have a great relationship with russia and other countries and if we go after isis together which has to be stopped, that's an evil that has to be stopped, i will consider that a good thing, not a bad thing. how the relationship works out i won't be able to tell you that later. i have had many times where i
thought i would get along with people and i don't like them at all. and i have had some where i didn't think i would have much of a relationship and it turned out to be a great relationship. so we never know about those things. but i will tell you one thing, i will be representing the american people very strongly. thank you. how about john roberts? fox. >> mr. tpresident, thank you so much. my understanding that you had an hour long phone call with president of mexico. could we get an update on where the relationship is? what do you say to your critics who claim you have already soured the relationship with a very important u.s. ally? and madame prime minister, are you concerned about the state of relations between the united states and mexico?
>> well, i think the prime minister, first of all, has other things she is much more worried about than mexico and the united states relationship. i will say we had a very good call. i have been very strong on mexico. i have great respect for mexico. i love the mexican people. i work with the mexican people all the time. great relationships. but as you know mexico with the united states has outnegotiated us and beat us to a pulp through our past leaders. they have made us look foolish. we have a trade deficit of $60 billion with mexico. on top of that the border is soft and weak, drugs are pouring in. i'm not going to let that happen. general kelly is going to do a fantastic job at homeland security. as you know, we swore him in yesterday. we have a really, i think a very good relationship, the president and i. and we had a talk that lasted about an hour this morning.
and we are going to be working on a fair relationship and a new relationship. but the united states cannot continue to lose vast amounts of business, vast amounts of companies and millions and millions of people losing their jobs. that won't happen with me. we are no longer going to be the country that doesn't know what it is doing. and so we are going to renegotiate our trade deals and we are going to renegotiate other aspects of our relationship with mexico. and in the end i think it will be good for both countries. but it was a very, very friendly call. i think you will hear that from the president. i think you will hear that from the people of mexico that really represent him and represent him very well. i look forward to over the coming months we'll be negotiating and we'll see what happens. but i'm representing the people of the united states and i'm
going to represent them as somebody should represent them, na not how they have been represented in the past where we lose to every single country. >> as the president himself has said, the relationship with the united states with mexico is a matter for the united states and mexico. tom. you said you would help us with the brexit trade deal. you have said you would stand by us with nato. how can the british prime minister believe you because you have been known in the past to change your position on things? question to both of you, people are fascinated to know how you will get along with each other. you are so different. the brash tv extravert, have you found anything in common personally yet? >> i'm not as brash as you might think. i can tell you i think we will get along very well. interesting because i am a people person. i think you are, also.
i can often tell how i get along with somebody very early. i believe we will have a fantastic relationship. brexit, i don't change my position very much. if you go back and look my position on trade has been solid for many, many years since i was a very young person talking about how we were getting ripped off by the rest of the world. i never knew i would be in this position where we can actually do something about it. but we will be talking to your folks about brexit. brexit was an example of what was to come. i happen to be in scotland cutting a ribbon when brexit happened. and we had a vast amount of press there. and i said brexit -- this was the day before, you probably remember. i said brexit is going to happen. and i was scorned in the press for making that prediction. i was scorned. and i said i believe it is going to happen because people want to
know who is coming into their country and want to control their own trade and various other things. and low and behold the following day it happened. and the odds weren't looking good for me when i made that statement because as you know everybody thought it was not going to happen. i think brexit is going to be a wonderful thing for your country. i think when itireens out you will have your own identity and you are going to have the people that you want in your country and you are going to be able to make free trade deals without having somebody watching you and what you're doing. and i had a very bad experience. i had something when i was in my other world. i have something in another country and getting the approvals from europe was very, very tough. getting the approvals from the country was fast, easy and efficient. getting the approvals from the group, i call them the consortium, was very, very tough. i thought brexit, i think and i
think it will go down that it will end up being a fantastic thing for the united kingdom. i think in the end it will be a tremendous asset and not a tremendous liability. cephaljust on the question you asked me, tom. i think as the president himself has said i think we have already struck up a good relationship. you ask what we had in common. i think if you look at the approach that we are both taking, one of the things we have in common is that we want to put interests of ordinary working people right at the center stage. those people who, they are working long hours, they are doing their best for their families. sometimes they feel the odds are stacked against them. it is that interest in insuring that what we do, that the economies and governments actually work for ordinary working people, work for everyone in our countries i think we both share that. >> thank you very much. thank you very much.
>> there you have it. president trump, uk prime minister teresa may concluding -- you see john harwood setting up for the live shot. first meeting from foreign head of state occurring today the main topic of conversation was relationship between the united states and united kingdom. the second conversation was very much about the situation with mexico. now we have learned in the meantime that the mexican president says that the two have agreed to resolve differences on the wall in comprehensive discussions between the united states and mexico, this coming from mexican president's office and both have agreed to not discuss paying for the wall in public. you notice we didn't hear that phrase just now during this news conference. >> i think obviously there is a cooling of the rhetoric that got so heated yesterday both
officially and -- when the president tweets it's official rhetoric, as well. it sounds like this call was described by the president as friendly and a good call that went on for an hour and that the matter of the wall which has been so dominant in the conversation here in recent days will be part of a broader renegotiation and reappraisal of the bilateral relationship. i think if there is one thing that we have learned this week is that we need to get used to the idea that our relationships are now going to be much more bilateral and much less multi lateral which is the way the world has been going over the last 25 to 30 years and it will be one at a time and will do a trade deal with the united kingdom and with mexico and other countries, as well. and that the wall and the matter of nafta and trade.
>> discussing mexico he said we had a very good call. i love mexico. i love the mexican people. then he went on to say mexico has outnegotiated us. they have beaten us to a pulp. on the one hand he uses very nice commentary and then let's bring in john harwood, he is very tough on mexico at the same time. >> reporter: he was very tough on mexico. and you know, he -- the line he has consistently struck is that mexico has been taking advantage of the united states, that this was not an equivalent trading relationship and that he is gog to change it. question is how do you change it to the advantage of the united states without sparking a trade war? it sounds as if this phone call characterizes very friendly by president trump may be a step towards tamping down the idea that we will have a trade war. we will see where the tariff
discussion goes. he did not discuss that today at the news conference. they were emphasizing things that they agreed on, but watching tariff discussions, watching the nafta renegotiation, all of that is going to determine what is happening in the last 24 hours is a momentary rupture or challenge or if it is something more long lasting and significant. >> one other thing that stood out to me at the tail end of the news conference was the president's full throated endorsement of brexit saying brexit is a tremendous asset or going to be a tremendous asset for the united kingdom and not a liability and then got personal about the fact that he believes brexit is going to happen. he had been at a ribbon cutting on the day the vote happened. he even mused at personal experiences of getting approvals
on projects from the european union. i thought that was an interesting moment there where he reminisced and sort of told an anecdote about his own experiences in dealing with brussels and the consortiums. >> that is where you see the crossover of the business executive to the president where he draws on that experience from getting permitting when trying to do a real estate project. he is not the only one we heard from about the difficulties trying to get construction permits when it comes to other parts of the world, europe included, where the united states is one of the easier places to get business done. >> and also in political terms teresa may needs a vote in parliament to trigger the process of executing the brexit. perhaps this is an effort by
donald trump to give a boost to move that along. >> i will say this. it looks like a bit of healing with the mexican relationship from a financial perspective. when the comment was made or when cnbc ran the graphic on the bottom of the screen about the hour long phone call mexican stocks took off. they are pretty much gaining back all of what they lost yesterday. >> that doesn't surprise me. >> thank you very much. up next, you will hear from one of the leading figures in the brexit movement. why he is very optimistic about what he just heard from president trump. reaction from london when power lunch returns.
welcome back to "power lunch." reporters are streaming out of the east room where just concluded the news conference between oouk prime minister and president of the united states donald trump. what is the future of the relationship in terms of trade between the u.s. and the uk? let's bring in matthew elliot.
one of the people who organize the campaign which was successful and led to the possibility or the likelihood of brexit. good to have you here. you heard that news conference. what did you think? >> i was really heartened by the news conference for two reasons. first of all, repeated use of the term special relationship. i think i counted it being used five times in opening remarks. that is important to people in the uk especially during the referendum campaign we heard president obama saying if the uk voted to leave, if the uk voted for brexit would be sent to the back of the line for trade deals and there you had president trump saying the uk would be the front of the line, the front of the queue when it came to trade deals and second thing so important he is very committed to making a success of brexit. >> how soon can the u.s. and the
uk have a trade deal at this point? aren't there rules about the united kingdom when they are still a member of the european union which is still true? how will that work? >> you are quite right. at the moment part of european union's custom union so can't make our own trade deals at the moment. that doesn't stop us during prenegotiations, during early discussions scoping out how that trade deal might look once we leave the eu. i think both governments seem very keen to have discussions now. as soon as the uk leaves eu probably in two years time that trade deal is ready to go straight away. >> what is the view from across the pond about what is happening between the united states and mexico where the president of the united states continues to insist that mexico has to pay for a wall that he waupts to construct? we have heard now they agree that they are not going to
discuss that. what do you make of the way that has unfolded especially when you think about the uk having to negotiate with the united states? >> people in the uk are fascinated by how donald trump's presidency is unfolding, his very different style of being president, very different to presidents we have known, very different style much more public, much more open, much more confrontational in some ways using twitter, using tv and newspapers to communicate. it is very different. one thing i learn is not particularly to comment on dealings of other countries. i think the prime minister was correct not to intervene in that area. >> if i might, in the walk up to the brexit vote and the immediate after math, the london basically said brexit isn't going to happen. the rest of england said yes it is going to happen and it did
happen. and initially the london markets went down. the pound is obviously weaker. right now it is 1,200 points above where it was when brexit happened. how does the united kingdom feel about brexit today and what is the business climate? >> people feel very positive about the vote now. if you do opinion polling, about two thirds of people are pleased when britain voted to leave the eu even though only 52% devoted for it. like you said, we haven't seen the economic collapse that some people talk about. we are seeing stock market and record high. britain had the highest growth of all g-7 countries last year. we have seen very low levels of unemployment. generally businesses are optimistic about the future. i think the other key point is prime minister made it clear that she wants britain to be
open for business. that means open to having highly skilled migrants from across the world. it means open to having new trade deals right across the world with the united states, with australia, with new zealand and other countries. she wants britain to be a bastion of business, low taxes, low regulation, open to trade and ready to be an economic powerhouse. >> here is something i don't understand, watching trade deals get negotiated, they take decades. why is that? have things changed overtime? can a trade deal between the u.s. and the uk be quick? >> i think two reasons why trade deals have taken a long time. first is often you had regional trade blocks. for example the one between the u.s. and the eu, that involved all 28 member states, all of whom had different specific
interests and industries and sectors that they wanted to protect. if you have bilateral deals between individual countries the negotiations tend to be much quicker. and the second reason is when you look at deals like the one between canada and the eu, what that was held by two things. first of all, eu trying to impose all sorts of environmental regulations on canada and was saying that the canadians needed to improve human rights in some ways. i think if you get rid of all aspects of trade deals and really concentrate on bilateral basis purely only tariffs and impediments to trade they can move much quicker. >> thank you so much. matthew elliot, editor at large and organized the leave campaign in the united kingdom. we are one week into president donald trump's leading the country. it has been incredibly busy
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and can help protect your potential profits. fidelity -- where smarter investors will always be. mexico with the united states has outnegotiated us and beat us to a pulp through our past leaders. they have made us look foolish. we have a trade deficit of $60 billion with mexico. on top of that the border is soft and weak. drugs are pouring in and i'm not going to let that happen. >> and the president keeps checking things off of his to-do list asking ceos to bring back jobs to america pulling out of the tpp, reviving the keystone pipeline, raising the borderline possibly with mexico and that is just in week one. let's talk a little bit. i was going to say susie welch
is going to be our next guest. it has only been a week but it seems a lot longer. the reason it seems a lot longer to me is it has been so busy, there has been so much coming on from the executive orders that he signed to the car fulfills with the press to the tiff with mexico. it has been an incredibly, incrediblebly active week. >> trade is one of these things -- trade is one of these things that is very confusing i think for a lot of people with a lot of questions about it. when you say trade deficit it sounds like a bad thing. number one, 60 billion is not chump change. we have larger trade deficits with germany and japan. with china it is bigger. we run a deficit. one wonders about negotiating with them. i wrote a quick piece on my took page about why it doesn't matter. if you want to send -- we want
to send high value goods, i would rather make more money than just ship a bunch of stuff. >> now, susie welch is ready for us. welcome. good to have you. i just remarked that it has only been a week but seems longer because so much has changed and so much has been happening. your thoughts. >> it seems longer because he assumed the presidency the day after the election. he immediately started acting like the president the next day sort of making pronouncements about what he was going to do and meeting with leaders and calling people on the phone. that is why it seems like a long time. it seems like a lot because he has not been subtle in anything he has done. as we are talking in a lot of nuance which a lot of cnbc nuance sophisticated audience is saying that is right. that is not donald trump's forte or way of being. he is like a sledgehammer on this mexico thing. it is true. he is on mexico. he started on mexico and will
keep going on mexico. >> he is forceful and direct. nuanced is not the immediate word that would come to mind there. what do you think about trade overall and the idea that we might put tariffs either a border adjustment tax to equalize the effects of vat taxes that other countries have or direct tariffs on a specific country? is that a constructive thing or not in your view? >> i think it is a scary thing. i don't know how it is going to work. i would like an economist to explain it to me. i do think that it sounds great. we are going to punish people for not manufacturing in the united states and not buying in the united states. but this free and open market, the supply and demand is a beautiful thing. it is sort of a perfect ecosystem. i hope it works. i hope there are more jobs and incredible growth. i'm not sure yet just trying to
put my economic eye glasses on, how that actually works and whether or not it will work the way they say it will work. >> what has become really clear in the first week is that he has no interest in extending olive branches or maybe you can interpret it differently in terms of how he treated the mexican president first. had this been a good trait if we are ceo? >> you know, thinking about the day before the inauguration where everybody was anticipating what donald trump's speech was going to sound like. this is where he is going to extend the olive branch and start talking about healing and coming together and common ground. what he dished out, what we all heard was -- he didn't double down. he gave exactly what they wanted to hear and he has gone forward. it is like he doesn't hear the opponents or he doesn't care about them. he doesn't hear that noise.
i think this is a trait that is not uncommon among very successful entrepreneurs who had a lot of opponents and people who said you can't do that. that is not going to work. your idea is crazy. they just don't hear it. he just doesn't hear it. >> did you happen to hear our interview with trade repat the top of the 1:00 hour? >> i did. >> did you hear the part where melissa asked him about goldman sachs reports and costs of higher goods and he said basically that was sort of fake news and i think he called it garbage basically insulting citi group and goldman sachs. whatever you think about wall street is one thing. when some senior members of your staff come from goldman, what did you make of that? >> it is all part of the same piece which is that they hear the people cheering in the room. they hear the people saying go, go, go. they think about those crowds that anything they say thumbs up. they are not going to try to parse anything. what worked for them was really
this incredible self belief, this incredible consistent self belief in their system of thinking and they are going to keep doubling down on it and not going to go that report was quite interesting we are going to change our thinking. >> great to see you. thank you. >> thank you. >>. the mexican base following the president's comments. we are tracking the fallout.
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welcome back to power lunch. we want to call your attention to what is happening with the mexico peso versus u.s. dollar. we have been drifting lower, dollar losing strength. mexican peso gaining strength picking up especially here in the last hour and a half after headlines coming out of president trump having a phone call with mexican president. that has helped at least propel the dollar to the down side. earlier today it was about 21.37 pesos per u.s. dollar. now you can see it is about 20.86. want to turn your attention to etf tracking mexican stock
market. after outsized losses over the past couple of days you can see about 2% of upside. we will keep an eye on mexican-related assets. >> the day has made a big difference here as the negotiations sort of get going. controversial comments from mexico's former president about the u.s. auto industry. we will tell you what fox has said that has everybody talking today. how president trump's border policies impacting manufacturers with plants in mexico and in the u.s. we will talk to a person who is directly affected and that is ahead on power lunch. matters. in, everyd both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision.
welcome to the second hour of power lunch. i'm melissa lee. michelle is at the white house. two hours until the closing bell. the war of words between the u.s. and mexico, tension on both sides of the border. president trump saying mexico has beat us to a pulp on trade and that he is going to renegotiate our deals. former mexico president saying the u.s. produces cars at a high
price and mediocre quality. says that is why ford, chrysler gm went broke. and apple and amazon set to report earnings next week. the exbest stocks to buy. >> let's check out moovs. you have chevron biggest drag on the dow. revenue coming in a bit light and added 15 more oil rigs last week. colgate shares falling. consumer products giant blaming stronger u.s. dollar. the other way gamble up, wynn resorts up 8%. revenue beat thanks to strong results. >> the major averages lower but the trump rally pushed markets to all-time highs which brings us to the trade battle.
how does this trade impact investors? let's bring in cnbc contributor. also with us portfolio manager of the five star rated global value fund. good to have you with us. i was taking a look at a slide that was put out by a major bank yesterday and basically it was sort of all the levers. $128 per share for s&p 500 and how they could hurt or help that impact. on border adjustability that was negative $5 for 2017. >> that is a big hit. >> how do you parse this all? >> in the political sense i think the president may be able to hide behind the border adjustment tax in so far as included as part of tax reform. one thing that put out is if mexican peso down since the
election a 20% drop makes mexican imports that much cheaper here. it might be in that wash for consumers. it would also hurt retailers. there would be a negative impact on business in the united states if we see this. >> on that very point we had trump's trade adviser on talking to us in the past hour of the show. i asked him specifically about the impact to retailers and cited a citi group report which specifically outlined the percent earnings hit to names like kohl's, lululemon and others. take a listen to what he had to say. >> this is a false narrative, a fake study. citi group has no credibility. you got goldman sachs, citi group, the peterson institute. i went through three months of this on the campaign trail and all they did was try to bury us with all of this garbage studies about the roof caving in and the world falling apart. people out in america, i think
the vice president pence said it best on the campaign trail. people in fort wayne know better. those tactics are just scare tactics that cnns can take on about trying to scare us about backing off. >> they may not be backing off. retail stocks are backing off. they are feeling the pain on the potential of some sort of tax. >> i always look at stress and strain as buying opportunity. trump's just beginning. this guy is a negotiator. so he hits everybody hard with big announcements and then works his way back. at least that is what it seems that he is trying to do. for us we look at it and say whatever there is always an opportunity when there is stress and strain. and for us it is more outside the u.s. than inside. even though everybody is talking about putting a wall around the country our view is there is so much opportunity in other markets, more compelling. >> mexican stocks right now?
>> we have never owned them before. now they are on our list. stress creates opportunity. they go down. i take a look at them. we like conglomerates and holding companies. i have no interest in investing where everybody else is investing. i want to go where they are not investing. >> i like that because i have been bullish on mexico for years. thank you. >> i was going to ask you, do you thi mexico's cheap? i heard from some folks they think it is cheap. you said you are not into mexico yet. you want to see the peso fall more. do you need fundamental change in the relationship? does that just get cheaper? >> it just has to get cheaper. bad headlines are good investment opportunities. the more bad headlines we see stocks get weaker. the index is not down much. it has had a decent rally. the peso is down but stocks are not down so much. we want tosee the stocks down.
even though it is cheaper with the currency you are not getting the bargains that we want yet. >> with all due respect i think the one mistake we have made since june of 2015 which donald trump announced his candidacy is that we haven't taken him literally. i think he says what he means when it comes to trade policy and border taxes and tariffs. i don't think it is a negotiating posture. i think this is where he lives. and so i think this is a prelude to more chaos economically. that doesn't mean i am bearish on the u.s. i think tax reform will go through. when you're dismantling multi lateral agreements and starting to break architecture of trade put in place over 40 or 50 years -- >> what about the architecture of trust being broken? i understand the critique of the media. i get that. we are far from perfect. listen to what he said to melissa. what he basically implied was
that goldman sachs and/or citi group are creating research reports for the benefit of institutions like msnbc and cnn. >> we read them every day. >> here is -- >> what i'm going to say is let's say you are right. the opportunity is not in the u.s. stocks. go to europe. take advantage of -- >> i'm talking about the fact that come after the media and here you are trying to come after wall street. many senior members of the administration -- >> i'm not sure how that would go. >> what about this? look at what we are doing. the faint has worked again. taking us off the topic at hand which is how bilateral multi lateral trade is affected by policies by saying it is the
media's fault and fake news and we get bound and caught up. it is purposeful to keep us from talking about the real -- >> you watched the show yesterday. >> i want to come back to something you said because i think it is a critical intellectual construct and that is the idea that stress creates opportunity. that has been one of the lessens of the last year. at the moments of maximum stress whether brexit or day of u.s. election, those were days where opportunity appeared if you had the stones to go and get it. >> so right after brexit the next two days the markets were down. we are backing up the truck buying stocks. brexit hasn't begun yet. so the fact is it is about to happen. you want to buy stress. it is not just the last year. go back as far as you want in history. stress in markets creates disruptions in prices and that creates opportunities. we had a good year last year in an environment mostly in europe
yet we made so much money when the markets were barely up because there are always interesting situations. >> that is an opportunity. >> opportunity for somebody. >> thanks very much. infrastructure main focus for president trump. how is he going to pay for it? to jane wells in long beach, california. >> reporter: guys, he may not like the tpp but president trump likes the ppp, public private partnerships. are they a win for taxpayers, job seekers and investors? we are going to look at one project after the break.
welcome back to cnbc. right now carlos slim, mexican billionaire is holding a news conference in mexico as a result of the tense situation between the u.s. and mexico over the last 48 hours and the social media war that erupted between the presidents. here is what he said so far. he says he is willing to help
the mexican president with negotiations with the united states. he says mexico needs to negotiate from a position of strength and says that the situation with the u.s. has actually united all of mexico. he doesn't hold news conferences very often. he doesn't like to do them or interviews much. for him to do this today signified he was pretty upset by what has happened between president trump. >> thank you. that update on carlos slim. a major focus for president trump when it comes to the economy, infrastructure spending saying he will leverage public private partnerships. jane wells. >> reporter: the president wants to use tax incentives to do more infrastructure like this and create jobs. if that is the case this is the
future of civic building. it is a half billion dollar new city hall complex for long beach being built by a private company cheaper and faster than if the city tried to do it. it is shouldering the cost of building, operating and maintaining the complex. after the next 40 years long beach will pay a support or a service payment annually to the company which will equal about $16 million or what the city has been spending to run its own city hall. plus gets land in the deal to develop on its own. there are incentives for the private partner to keep up his end of the deal. >> in the event they don't perform in the way promised, if the elevators are out or leak in the roof or some problem with the facility that disrupts city's operations the payment may be reduced. our annual payment is at risk based on our performance. >> reporter: by the way, there
are no tax incentives for this particular deal. has about 40 projects around the world. relatively new here because we have always had a strong municipal bond market. some have not done well. there toll roads that lost money. they are attracting a lot of investor money from institutional investors and public pension funds. back to you. >> interesting i can see how it could work in a case where you are building a municipal building like that. as you point out there have been toll roads privately financed based on fee income maybe something structurally wrong. in what areas could this kind of template be used to create jobs and goose an economy? >> reporter: it really is based on the project. you have it so right. in the past perhaps civic
leaders were a little too aspirational and had high hopes for things. for example, long beach is always going to need a city hall. it one it had is not seismically secure. back over there behind this crane is a courthouse. that was a ppp done so well they were watching it at the city hall here it went so fast and done at such a lower cost. they said let's do that for ourselves. it's for things like airports, the terminal at la guardia where you know they are going to be used and there is a long term usage for it. >> thanks very much. back to michelle on the north lawn with more on carlos slim. >> we will show you the live picture of carlos slim doing the news conference in mexico city where he is talking about what he thinks they should do saying they are willing to work with
negotiations to need to become very united because of the situation between u.s. and mexico and he says the two parties that dominate the country need to also unite and support the president of mexico who, by the way, has very, very low ratings among the mexican people right now. nearly in single digits in some opinion polls. he has a lot of issues right now besides his fights with president trump at this point. that's what it has been, a fight. they have been slowly but surely raising gasoline prices in mexico to try to make them like the united states and have them float depending on the price in the market ask has had lots of protesters. he hasn't looked good in his relationship with trump. this perhaps has helped him a little bit now that he has taken the stand and decided not to
come for the visit on tuesday. carlos slim trying to support the president. >> two questions, one because i don't know the answer, the other because i know you will. how popular is carlos slim within mexico? and number two, give us a thumbnail of what his business interests are in and between the united states and mexico. >> reporter: i haven't seen an opinion poll on carlos slim in a very long time. he is a figure that can cause a lot of division in mexico because he is so wealthy and because he is believed to have a monopoly and have a lot of control on telephone prices and there is a lot of narrative in mexico that he has hurt the mexican economy. his business empire is vast. he has retail chains. he has restaurants. he has oil drilling. he has telephones. he is one of the largest providers of phone service in the united states. he might be fourth or fifth at this point.
he does pay as you go. if you go get a phone at 711, maybe wal-mart it is probably -- a very good chance it is a carlos slim-backed phone. you are going to pay by the minute. you are not going to be on contract. that is his business model. >> that is where he really made his mark. the core of his interest. >> he would be considered the warren buffett of mexico. you won't see slim. basically i don't want to say bailed out "new york times" but made a huge timely investment in the "new york times." >> bailed out is good. >> the at&t of mexico. he has all of these industrial holdings. he has a big cigarette company along with a bunch of smaller holdings. i think you are making a very interesting point with oil.
last year a year and a half ago mexico did something it has not done in 75 years. it opened up its oil industry to foreign direct investment. the first offshore drilling by foreign company in a lease auction will be next month or in march. and so mexico is at a time where it is not with good relationship with the u.s. its oil industry needs a lot of american capital because foreign oil, oil revenue makes up 30% of mexican tax revenues. >> oil is super important. they have made a dramatic change in mexico. they have been nationalistic about the oil company. only the mexican oil company could do drilling and investment. they ran out of money. they ran out of know how. they need to do deep water drilling and they don't have the money or the know how. they have to go through a major constitutional change which was pushed through by this unpopular
president. now those auctions are coming up. they are key because oil production in mexico has been falling steadily through the years due to lack of investment. they finally managed to get it to plateau but this is a government that relied dramatically on revenue from the oil company. it was seen as a national holding. they would produce revenue and the mexican government would say we are taking the first 20% of that and that is how it worked. they are going through very, very big changes there trying to modernize it and make it more investable so they have more oil and more revenue. he'll get a piecef that, as well. >> thank you very much. we will be back with you in just a couple of minutes on the norg lawn of the white house. motor oil, networking equipment and jobs not just another weekend at the mathisen household. more power lunch right after this. how about we pump more into promotions? ♪
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the other issue going on which is the situation with mexico. both countries put out to be almost completely the same joint statement where they both say there was a productive and constructive call this morning regarding bilateral relationship between the two countries. they agreed on importance of the friendship and work together to stop drug cartels, illegal arms and gun sales. however, there is one big difference when it comes to the wall the mexican statement says very clearly that they have both agreed that they are not going to discuss who is paying for the wall publically. that is what it says in spanish. in english it says they agree that when it comes to the cost that this will be part of a comprehensive discussion of the aspects of a bilateral relationship. it doesn't appear that on the u.s. side they have agreed explicitly that there will not be a discussion about how the
wall will be paid for. >> love that. thank you very much. really heats up. time for the good, the bad and ugly. to the good. valvoline. on to the bad. juniper network down. shares down even though it met on earnings and beat on revenue it is the forward guidance that disappoint disappointed. that is dragging the stock. and it is an ugly day not being cut in half but the stock is down 8.5%. shares are plummeting after it missed earnings estimates. >> we have a live report from mexico on how president trump's tough talk is being received. all that and much more coming up on "power lunch."
i am sue herera. as we have been saying president trump and mexican president spent one hour talking on the phone this morning amid rising tensions over who would pay for the border wall. both said it was a productive and constructive conversation. president trump and russian president vladimir putin are said to have their first
official conversation over the phone on saturday. putin congratulated trump on his victory shortly after the election but the two haven't spoken since. former president george h.w. bush is hoping to be released from the hospital over the weekend. he had been hospitalized since about january 14. scientists may have figured out how to add tollways to the bland grocery tomato. researchers think they can return by adjusting genetic recipe. they say a tastier grocery tomato could be ready within three years. that is the news update. i know you like tomato sandwiches so we did that one for you. >> i love tomatoes so much. instagram account dedicated to it. we want to tell you more about what carlos slim is saying at the news conference saying if the united states hits 4% growth it will be mexican workers in the united states that get it
there. one of the more provocative things he said during this news conference saying the main worry for everybody in mexico is the situation of mexicans in the united states. they are worried about that. on another note we want to tell you we saw jamie dimon go by. he is in the white house. part of the first week where donald trump is getting very involved in how he thinks he can improve the u.s. economy jamie dimon, the chain of business leaders that we have seen coming in and out of the white house over the last week. we were doing a live shot when jamie dimon walked by or else i would have tried to grab him. >> you can ask him about potentially being called having no credibility. carlos slim, has he been political in the past? >> he is not overtly political, not into making a lot of political statements at all. behind the scenes, certainly
there are connections to political parties in mexico. that is going to happen. doing something like this is a little bit out of character. >> interesting. thank you. >> the oil market closing for the day. let's get to the cnbc energy desk. >> recouping losses as we got to the close. pretty much flat on the week and still stuck smack in the middle of that range which is frustrate frg so many. we did get the baker hues recount numbers out a little bit earlier. we heard addition of 15 oil rigs. that makes some people concerned that prices could continue lower from here. back to you. >> thank you. if you think that president trump is being tough on mexico, listen to this. apparently it goes both ways. mexico's former president making controversial and by the way down right wrong comments about the american auto industry today on cnbc. phil lebeau joining us from
chicago. tell us what he said and why it is probably wrong. >> let's hear from former president of mexico. this is his analysis in terms of why the u.s. auto industry collapsed about seven years ago. >> such a high price and such a mediocre quality that you cannot compete. you cannot compete manufacturing in the united states. that is why ford, chrysler, general motors went broke, went broke five years ago. >> we'll get to that comment about mediocre cars in a bit. here are facts that perhaps mr. fox might want to brush up on. gm and chrysler went bankrupt. they didn't go broke because of mediocre vehicles but because the credit market throws up and that caused a collapse they could no longer borrow against assets and had high cost
structure so had to renegotiate the labor contracts with the uaw and health care costs were through the roof. those were stripped out as part of the bankruptcy. we want to show you this graphic here in terms of vehicles sold in the united states but built in another country or where they are built. ford sells 80% of the vehicles it sells here in the u.s. are built here. 13% from mexico. 7% from canada. why are we showing you this? today rbc is out with upgrade of ford saying if there is border tax instituted ford among auto makers is probably the best insulated because it has the highest production for vehicles sold in the u.s. here and the lowest content in terms of the value of the vehicles being brought in from mexico. just a couple of things for people to keep in mind when they hear people in mexico making comments about mediocre u.s. cars. >> there was a time when vincent
fox was right. i'm thinking of the plymouth reliant. he is wrong now. i will read a line from the 2016 initial quality survey. u.s. domestic auto makers show strong improvement. u.s. domestic brands have lower levels than all import counter parts combined. he may have been right 30 years ago but it is good. >> he is wrong on a number of fronts. when you watch the interview it is clear he is arguing for the mexican auto worker and the manufacturing that is going on down there. i get it. anybody in their own country would be doing that. get the facts right. the facts that he stated this morning were completely wrong. >> this is why you have to be careful about anything you hear from fox, vincente. >> how is this news playing in
mexico? welcome. good to have you with us. i want to get your sort of man on the street, person on the street, view of what has been going on between the united states and mexico in the first few days of the trump administration. how does it feel there? >> reporter: well, it's very tense. people are very angry. they are really appalled. people here love americans. there are many american tourists walking around. there has always been a friendship between the countries. on the radio this morning you heard statements like he is so upsetting. this is the beginning of a war. he is so insulting. we can't stand up for this. so people on the street are very angry. you are seeing an immediate reaction on social media. here in mexico you have hash
tags like adios starbucks and wal-mart. there is a boycott of american products and companies starting to trend on social media. i have spoken to a lot of business men and they are actually the most concerned right now. there is $500 billion of trade every year in play between the two countries. they obviously don't want to lose that but they have started to tell me that they may need to start looking south to start selling their products to markets like the brazilian markets or argentine yn market. there is this combination of anger, anxiety and just raw nationalism, if you will. and he is under tremendous pressure to keep standing up to donald trump. people say here that donald trump sort of forced his hand
because he wanted to come up with bilateral agreement to immigration issue but given president trump's stance he really had no option. the business community especially are holding their breath in boardrooms across this country and decision makers are frozen. >> thank you very much. we appreciate it. president trump's plan to pay for a border wall, the tax on mexican imports not sitting well with some members of congress. joining us now is democrat from colorado. congressman, thank you for joining us. when i think about states that may benefit or not benefit from trade with mexico, colorado is not necessarily the first state that might come to mind. why is this such a hot button issue for you? >> well, you know, there is no reason at all to have a trade war or conflict with our close
ally mexico and there is 4.9 million reasons not to. that is how many american jobs depend on trade with mexico. >> listen, i think for many people that have been around a while as has our president donald trump in business they might remember 1984 when mexico devalued the peso massively which set off effectively a trade war with the united states and damaged a little bit of u.s. business. that wasn't that long ago for that many people. do you believe that this tougher stance with mexico is in any way deserved? >> absolutely not. no good can come out of it. this ultranationalism is contagious. nothing happens in isolation. if we levee tariffs they will. the only thing is devastation for both shared economies. >> we just heard in mexico city the idea that there is a back
lash against american products whether starbucks or mcdonald's or wal-mart. you would expect that that kind of grass roots consumer movement would mushroom, wouldn't you? >> absolutely. so not only are these kinds of actions damaging, i heard from a restaurant in my district like a lot of food companies imports a lot of food from mexico. she said she will literally be out of business. not only that but it damages the american brand overseas because of the choices that individual consumers make. we engage in meaningless, empty ultranationalism. >> the theory, obviously, is i'm sure you know is that the restauranture in aurora, colorado, who is importing, for example, mexican produce because the adjustment that would occur in the dollar peso relationship
basically might come out either whole or ahead. >> she will be paying more for the same produce if there is a 20% tariff. that is the proposal that donald trump has talked about. there is no way that she can afford to pass that along to her customers. >> she would be able to buy more. if the dollar strengthens she would get -- the idea is that the two would offset. >> look, you're relying on a theory. in actuality anything can fluc wait with the currencies. if we engage in this behavior the dollar will wind up suffering. >> it was a pleasure to have you on the program fighting for the state of colorado. we appreciate it. thank you. >> thank you. a big week of corporate earnings lies ahead. what is the one stock that you should be buying now ahead of reports? that name is -- coming up.
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fnchlths you thought this week was busy for earnings, next week we have all kinds of corporate earnings coming out. what stock may be the best buy, best results? let's ask our team. is there one name that you've got your eye on? >> we think on some level maybe the best name would be an etf. in terms of single stocks we think amazon has gotten a little less. we think that moving heavy into netflix territory. we think it stands aloft atop the universe here. we think they have less international risk than other big tech companies. really bright future. i think the february 2 news will be pretty positive. >> i like it. just clear, concise, clean.
craig johnson, do you agree with that or do you have another name you are focussing on? >> another name we are focussing on. there are over so0 stocks that are reporting next week out of the s&p 500. we chose facebook. and the reason we chose this as we look at all names reporting and found they have one of the biggest kind of spreads out there in terms of calls and puts. from our perspective nice upward trending slope in facebook. looks like a triple bottom close above about 135 opens up for another leg higher and probably about 10% upside. >> not only 10% upside of facebook you have done something i have always welcome which is invented a new word. upward slending which is trending and something or other which we will use. >> sliding. >> it is like our former colleague when he created
dieseline as new fuel. for more trading nation you can head to our website. so how would a 20% tariff really impact manufacturing? would it send it slending down? we will speak with a man who owns factories here and in mexico. power lunch returns right after this. and now the latest from trading nation.cnbc.com and a word from our sponsor.
i could i's behalf and also that the u.s. should be focusing on manufacturing high tech and value added not going back to the past, a reference that some of the manufacturing in mexico is perhaps not as advanced as what we've seen here in the united states. let's talk to another mexican businessman. fernando turner jr. he has auto manufacturing plants in detroit, monterey, mexico, and also in china and he joins us on the phone. sir, thanks for calling in to "power lunch" today. tell us, what is the mood among the mexican business community, especially with the auto parts manufacturing community that's so big in monterey in the wake of what's happened over the last couple of days between the u.s. and mexico. >> thanks for having me, michelle. the mood has been very, very hectic. i don't think any of the two departments handled this situation very good. it's been a big distraction from productive work. they're looking at it and
reacting to it. our auto industry, the border tax or anything that makes it harder to trade is going to directly impact the price of the finished goods for the american consumer. that means working or the car used for going to work is going to be more expensive for the very people who voted for mr. trump. it's going to be i think about -- >> are people there angry? tell me what the mood is among the people and mopping the business community. >> the people are angry and scared. regarding any investments that are focused or involving bilateral trade with the united states, which is almost anything here, so you there's a lot of feeling. we are waiting for the dust to settle and we are really hoping
that mr. trump talks to his advisers and looks at the numbers that it is going to have. they are going to be unbelievably powerful. >> are you supportive of your president deciding not to come next week? >> yeah, definitely. i mean, the environment -- i mean, the atmosphere was very, very negative. i mean, it was great that he didn't go and i think it was a mistake for the other secretaries to go. they were there already before these new or recent twit jter fm mr. trump. >> you manufacture boats in monterey and detroit? why? what's the difference? >> well, we have -- excuse the language, but mr. carlos nunez was saying we have the lower
value added manufacturers in mexico, we have automation, but it's -- michigan together with the technical and the kind of work that is done by experts, engineering experts which is higher based jobs. they're limiting. they have the completed subsis stance and it will be very expensive to ship from anywhere far from the factories who are buying those from us. >> so a perfect demonstration of what a lot of people talk about, the supply chain that is north mesh, not necessarily the united states or just mexico, but symbiotic. mr. turner, thank you so much for joining us. we've been showing people video of the factory floor in mon terry as we've been conducting this interview and we thank you for weighing in on what the mood is among the business community there. >> thank you for having me, michelle. nice talking to you. >> melissa. >> michelle, we have a news
alert. lockheed martin. morgan brennan. >> in response to the fact that the pentagon says it is launching reviews tied to both the f-35 program made by lockheed martin and the boeing air force 1 program, we have a response from lockheed martin specifically saying that we are confident such a thorough and objective analysis will show that only the f-35 with its advanced stealth and sensors can meet the 21st century air superiority requirements of all of our military. it is launching a review to see whether boeing's fa-18 fighter jets could with improvements be used to basically replace or use instead of the f-35. also, the company noting that they are completing the guide down program costs using multi-year procurements and noting that they had delivered
200 f-31 jets so far. shares of lockheed down 1%. back over to you. >> morgan, thank you very much. when we return, the check will be delivered. or two about . or two about . so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars. you totanobody's hurt, new car. but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do? drive three-quarters of a car? now if you had liberty mutual new car replacement™, you'd get your whole car back. i guess they don't want you driving around on three wheels.
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citigroup, all of these. the peters institute. i went through three months of this on the campaign trail and all they did was try to bury us with the garbage studies about the roof caving in and the world falling apart. people out in america, vice president pence said it best on the campaign trail. people in fort waiyne know better. cnn and the msnbc's can go on it. we're not backing off. >> that was the trade czar, adviser, peter navarro reacting to a question that you asked about what the effects could be of a border adjustment tax on retailers. >> retailers. >> i wonder what steven mnuchin, gary cohen, what they think. >> goldman sachs alone, jeff, michelle. >> reporter: yeah. i bet they're wondering as well. my check please, guys. i called the mexico city bureau
over our sister network telemundo, what's going on there. the big story, what is car loss flynn going to say. then this. the vanity fair cover in mexico features melania trump. the coincidence there, the irony was astounding to them. >> absolutely. good stuff, michelle. thank you. thanks for watching "power lunch." >> have a great weekend. "closing bell" starts right now. welcome to the "closing bell", everybody. i'm kelly evans here at the new york stock exchange. >> i'm mike santoli in for bill griffeth. president trump has a full schedule today wrapping up his first week in office. >> yeah, trump welcoming a foreign leader for the first time since taking office. theresa may, of course. the two just wrapped up a news