announcer: from our studios in new york city, this is "charlie rose." charlie: we begin with developments in donald trump's order to build a wall between the united states and mexico. the mexican president canceled a afterg with donald trump outrage at the decision. trump said at a news conference that it is the united states being treated unfairly. mr. trump: the president of mexico and myself have agreed to cancel our planned meeting

scheduled for next week, unless mexico is going to treat the united states fairly, with respect. such a meeting would be fruitless, and i want to go a different route. we have issues. insistedtrump has also that mexico would fund the wall's construction. plans were announced today to impose a 20% tax to cover the cost of the new barrier. joining me is a former to mexico. i am pleased to have them both here. tell me exactly what trump thinks he can accomplish now end thes decision to meeting. negotiation's are over and he decides he's going to go another course, which is to impose a 20% tariff. i assume mexico will retaliate by imposing a terrified of their own. >> i don't see how and where this ends, but listen, trump was

pretty outraged by the mexican president's response last night when nieto said no way will mexico pay for this border wall, but trump has promised the american people that mexico would pay for the border wall. it was the rallying cry at his campaign rallies all year. he is looking for a way to fund the wall. he is going to have u.s. taxpayers fund the wall and try to get reimbursement from mexico. what sean spicer floated today was a 20% tax on imports from mexico. he thinks that would raise the dollars necessary to fund the wall. charlie: what is that number? 10 billion dollars or $14 billion? >> i am not sure the exact a prettyut it's provocative move from the white house to try to tax goods from mexico. that will trickle down to u.s. consumers. people buy products from mexico,

like avocados, so there is a real concern among republicans that this will have a negative impact on consumers in the united states. the same time, if mexico imposes tariffs on american goods, that may lead to job losses in the united states. >> that's exactly right. trump the things i think might be missing here is that mexico is one of the most important trade partners of the united states and has been for years. this is not some poor, desolate country. there is a lot of vibrant industry there. the relationship with mexico is of huge concern to the u.s. business community, the chamber of commerce, and major corporations. he is really rattling things here, and i'm not sure how this is going to even out. give us thelos, response and mexico. how do they feel about it, and

how does this set with them other than they are not going to pay for the wall, in their own words? carlos: the mexican people are deeply offended by how this has proceeded. during the campaign, donald asmp characterized mexicans criminals and rate bests, therefore there was a necessity s. have -- rapist therefore, there was a necessity to have a wall. when you put it in that context, you can understand why mexicans or be offended to ask to pay for the wall. when trump said the only way we can have this meeting is if you agree to pay for the wall, it became politically impossible for him to go forward. effectively, both sides have drawn a line in the sand, a bad move to make for countries that are physically next to each other and really indivisible. charlie: what will happen if there is a 20% tariff and a

retaliatory tariffs? >> this could be a debate about who really pays the tariff. states, if you put a 20% tax on gasoline, you would be hard-pressed to tell a consumer they were not paying a 20% tax on gasoline. this is going to be borne by useicans and industries who the mexican economy and their development. it's going to make products less competitive and have an effect and americanobs consumers. inevitably, there will be a lot of rhetoric about what a 20% tariff means. who is paying for it, really? is it the country exporting or the consumers importing? trump will argue it's enough money to build the wall and shut up? reg's he might be able to, and i don't know if his supporters -- >> he might be able to, and i don't know if his supporters will want to hear that.

the tariff will trickle down to consumers and competition a lot of relationships with mexico -- complicate a lot of relationships with mexico. charlie: how popular is the president of mexico? gone veryularity has low. this is a difficult time for him to deal with these challenges. one thing that will be important to theis to demonstrate mexican people that he is standing up for them and their rights. the other issue will be how to convince the united states that this bilateral relationship is good for the u.s. one thing that struck me during my time as ambassador is that industry after industry, american industry, said if it had not been for the integration of production lines between mexico and the united states, they could not have been competitive in major manufacturing or exported to in the world.

a challenge to neato will be to convince the united states -- to pena nieto will be to convince the united states of that. what is taking place? has it shut down? the conversation today between mexico and the united states? carlos: today is a low point. essentially, both presidents decided this meeting would not happen, and they made the decision based on principle. the challenge now is to find a path to engagement. if you look at the two countries next to each other, so intertwined, so many implications for cultural, political, and security issues -- particularly security issues -- that the united states can't afford to not have a relationship with mexico. mexico similarly has a mandate to find a way to engage directly with the united states because of its economic importance.

so now they have to find a way, where they have made decisions on principle, to come back and have a relationship again. a critical factor will be when rex tillerson comes in as secretary of state -- assuming he is confirmed. i think everyone will be looking to tillerson to make the outreach to the foreign minister to find a way to reconstruct the relationship. charlie: how is his standing? he made it possible for donald trump to come to mexico during the campaign. he is a close political ally of the president. how is his standing? carlos: he is a controversial person in mexican politics. there are some who feel he is personally associated with trumpet and they resent that. that are others who say

may have been the situation, but now we are in a different type of situation where we have to find a way, negotiate a better path forward, and we have to use all individuals. he is schooled on economics and trade issues at m.i.t.. to pullhe ability together. he has the president's confidence. there are those in a small circle who feel he could potentially be a useful actor in these negotiations. charlie: thank you both. we will be right back. stay with us.

is here,michael froman he was president obama's trade representative and led negotiations on the tpp. eliminated 18,000 tariffs on american products in nations that together make up 40% of the global economy. on monday, donald trump announce the united states would formally withdraw from the tpp, filling a campaign pledge. his dispute with president neato over -- pena nieto over the

border wall now threatens a bilateral relationship. i will talk to him about all of that. would happened today is the said,n said -- mexicans we are not going to pay for the wall. trouble says if you are not going to pay for the wall, dotcom. the president of mac -- do not come. the president of mexico says, then i will not come, because we will not pay for the wall. trump says we will impose a 20% tear of. what do you make of all of that? michael: according to nafta, we can not impose a 20% tariff without being open to other countries retaliating. largests our second

export partner. we export hundreds of millions of dollars of goods to mexico every year, which supports u.s. jobs. it's the beginning of a trade tit-for-tat that hopefully will find its way to a resolution. charlie: what would happen to said to- if mexico united states we will sell that stuff we were selling to you to china or another market? michael: companies would have to find new markets for their products. the broader issue is threefold. it's the risk of retaliation. it's the risk of imitation, mexico or other countries saying well, if the their tradelate agreement, we can as well. purchasingworld

powers outside the united states. we need access to those markets to support jobs here. thirdly, its taxation. when you raise tariffs, you are imposing a tax on the consumers those imports. low income americans spend a disproportionate amount of income on tradable goods, clothing, footwear, food, so you are raising the cost of the people least able to afford it. .harlie: take the tpp why was the good for the united states? good in well, it was many respects. by all economic analysis, it would have added more than $130 billion to the gdp, increased exports. charlie: how? michael: by opening our market to other exports. we don't use regulations as a disguise barrier to trade. other countries have higher barriers. take automobiles. we have a 2.5% tariff on autos.

if a car comes into the united states, there's a 2.5% tax slept on it unless it comes from a free trade country. vietnam has a 70% tariff. malaysia has a 30%. another so if you sell mobile to vietnam, they put a 70% tax on it. cash seleka are to vietnam, they put a 70% tax on it. card, if you sell a to vietnam, they put a 70% tax on it. tpp would've stopped that. and they want what america produces, automobiles, tractors, agriculture, services. for us to get into that market helps support jobs here. when you have a market like that with 90 million people, you really have two choices, a 70% tariff on autos you want to sell

in vietnam. you need to tear down the barrier and keep production in the united states and sell from here, or you can move your factory to vietnam. our view it was better to keep production in the united states. charlie: that was the argument donald trump used in the campaign, was that these trade agreements were not fair and were causing american workers to lose their jobs. michael: if you actually look at the agreement with the provisions were, and look at said, itld trump has is exactly what tpp addressed. 18,000 taxes eliminated. charlie: it was not just donald trump. it was hillary clinton and bernie sanders who oppose tpp, and the president could not get it through congress. michael: well, it was never formally introduced. charlie: do you think he could have? michael: i think there was more support in congress than meets

the eye. you never have support for something until you actually introduce it, the leadership mobilizes, you have up with operation. i spoke to house republicans individually. i spoke to democrat supportive of trade. i think if it had been introduced -- ofrlie: after the opposition hillary clinton and bernie sanders you had to depend on republicans? are usuallyde bills passed with republican votes and a critical mass of democrats. we had a critical mass of democrats. the big difference this time was a lot of the mainstream republicans, seeing the effects of candidate trump during the campaign, became wobbly on trade. the question is whether there will be leadership on the republican side. was the opposition to trade from linton and sanders and trump based on the same facts? >> i think it was based less on the agreement itself than on

economic anxiety in the country. there has been no bigger impact on wages and jobs in the united states than globalization. but you don't get to vote on technology. you don't really get to vote on globalization. you get to vote on trade agreements. trade agreements become the scapegoat for the quite thatimate concerns american workers have about wage stagnation, income inequality. i think that's what you saw during this election, and anxiety about the economy, and trade agreements becoming the vessel to which that anxiety was poured. think peopleou were not speaking about this and a way they found relevant? michael: i don't have a license in politics, but a large portion of the population -- charlie: in states that

democrats carry, wisconsin, michigan -- michael: trump spoke to their anxieties in a way that other candidates did not. and we need to do a much better job. torlie: trump said i know why you lost your job. michael: what we need to be focused on going forward is how the american workforce can live .n a rapidly changing economy the changes of technology are going to dwarf any impact of localization in terms on the nature -- of the nature of jobs in the nature of work. we are not particularly well-positioned to deal with that with lifelong learning, skills building. we have domestic policies that need to be pursued to make sure people can take advantage of opportunities and deal with transition. charlie: at davos, the president

praised globalization. he said we are for globalization and want to have an impact on global markets. we want to be a leader. look, i think at the moment we are creating avoid -- is all too china willing to step into until. i we see that happening. we sought in davos and we see it across the region. countries saying if the u.s. is not going to engage and show leadership, we are going to have to line up behind china. charlie: and are they already moving to make agreements with vietnam and other countries? michael: they are. a regionalgotiating economic partnership with 16 countries ranging from india to japan, and it's quite different from tpp in a number of important ways. it is not -- it does not raise

workers rights or labor standards. charlie: that was part of bernie sanders complaint. michael: and that is something tpp did that the new deal will not do. the concern is that if china moves ahead with its model of globalization, which is a state run, mercantile run, whereentionalists model they monitor or cut off the internet, or force companies to transfer intellectual property to have access to their markets, that is a much more disadvantageous set of rules for u.s. companies, u.s. workers, u.s. farmers to operate in there and have been possible under tpp. charlie: is it likely we will have a trade war? michael: i cannot answer that. that is up to the trump administration and how they pursue this. charlie: what would cause a trade war? michael: to take unilateral

actions that raise barriers on ports from china to the united states. charlie: -- exports from china to the united states. charlie: the very thing donald trump threatened. would give china license to retaliate and imitate, both of which would have a dramatic impact on our economy. charlie: donald trump says america first. ourael: all of us believe job in government is to pursue u.s. interests first and foremost. it really depends on how you are.e what those interests we have benefited enormously over the last 70 years from setting up a set of rules for the international economy that has allowed capitalism to flourish and our exports to flourish, and if that is going to be undone in the name of america first, it's going to be bad. what about the claim

that china is not on a level playing field? michael: one of the things that china is they are very disciplined in pursuing national self-interest in the most narrowly defined sense. charlie: china first. anyael: without taking responsibility for the international trading system. we have pressed them to take more responsibility for the trading system they have benefited from so enormously. charlie: why have they been unresponsive to that argument? michael: in some ways, they have responded, but certainly not enough. that's why it's important to hold feet to the fire and why the obama administration brought trade enforcement actions against them. we were not shy about it. literallye have hundreds of actions against

china for dumping, for subsidies, for keeping illegal products out of the market. they were always angry about their steel being kept out of the u.s. market. michael: my response has been stop dumping it. if you don't dump your steel -- charlie: is dumping driving the price down so they can beat the competition? michael: they sell it in our market below what they sell it for at home. it's unfair. charlie: it drives other people out of business. michael: exactly. we have seen that in steel, aluminum, solar panels. the veryis this reason donald trump was able to make an argument that resonated on trade and loss of jobs? do -- r we have to michael: i think there was a bipartisan consensus that we

should do everything necessary to hold china's feet to the fire and create a more level playing field with them. of course, china is a country we don't have a free trade agreement. the countries with whom we have them, we have tended to have pretty good trade balances we 'd they have improved over time. china is one we don't have a free trade agreement with and that is where the big deficit is. charlie: they sell more to us than we sell to them. michael: correct. charlie: would tpp have influenced that? michael: china was not part of tpp. charlie: i know, but would it have done anything to be leverage against what china was doing? inhael: by raising standards the region, by saying if you want to be part of the modern trading system you have to have strong labor and environmental protections, you have to government so that owned corporations act fairly,

you have to keep an open and free internet, i think it would have forced china to compete i raising their standards as well. if all the neighbors are offering higher standards, it will have a positive effect on china as well. this willo you think cause other states to pull back and entrench? michael: you have heard comments from prime minister abe, prime and mr. lee, new zealand's prime minister about how withdrawal from tbp damages the credibility of the united states, undermines causes themip, and to feel the need to line up behind china accordingly. senator john mccain and all these leaders in the region have willwithdrawing from tpp have a dramatic negative impact both economically and strategically. charlie: what are the three or

four countries we export the most two? canada, mexico, the united kingdom -- though it is way below mexico -- the european union, generally, has a market we export quite a bit too. those are our major ones. and of course, china. over $100 billion year. used the term has protectionism, which is a term you thought had gone away. by that he means we will do what we need to do to protect american products. believe inok, we all the importance of protecting american jobs, protecting our ability to manufacture here in the united states. we go out at different ways. a couple of years ago, there was a german car company deciding where to put their next manufacturing plant in north america. they came down to the u.s. and mexico. they chose mexico. it wasn't because of the difference in wages. it was because mexico had more

free trade agreements than the u.s. they could produce that car in mexico and ship it to more markets around the world without tariffs. we should not lose that kind of competition. we are never going to compete with mexico on wages. we shouldn't. but we shouldn't lose the mexico on freeh trade. a study recently came out that said the differential in wages is about $600 per car. the differential in tariffs is about $2500 per car. is what peter baker wrote in the new york times this week. mr. trumps move amounts to a drastic reversal of decades of policy. so the president, president obama, nominated you. what became more attractive to

trade more than as a young lawmaker in the senate? importance of being engaged in the world, u.s. leadership, the fact that we need to be in these markets if we will support jobs back here. bywas also informed experience in chicago as an organizer, the effects of steel mills. trade's sake, but if we can do it right, lowering tariffs, leveling the playing field, that is the kind of trade we should do. as a candidate, he called for the renegotiation of nafta. he was very specific, let's make sure mexico has binding labor and environmental regulations. renegotiatedwe nafta. charlie: how do americans feel

about trade agreements? michael: the united auto workers supported the agreement with korea a few years ago. thank you for coming, great to see you. you will be with the council on foreign relations for a while? come back to see us. back in a moment. ♪

♪ haass is here,d the president of the council on foreign relations, as well as an observer and participant in foreign policy. his latest calls on president trump to fix a world that is said to be spinning out of control. it is called "a world in disarray: american foreign policy and the crisis of the old order." richardased to have haass back at this table. where are we, how did we get here, and where do we go? you reach back centuries in this book. richard: where we are is a world in disarray. formed the institutions after world war ii have essentially run out of gas. the disciplines and constraints of the cold war now 25 years gone. distribution of

capacity in many hands, many states and nonstate. ciber, plural for ration -- from -- you have vyber, proliferation. the middle east has been unraveling. europe, with the refugee crisis, brexit, russians in ukraine. north korea is putting nuclear warheads on missile that can probably reach the united states in a few years. how did we get here? some of it is the stuff of history. countries rise, globalization happens, the cold war ended. some is the result of what the united states did, the iraq invasion, pulling troops out. some things we didn't do. barack obama in syria, the red

line. not following up on the invasion of libya. days, thet couple of decision not to go ahead with the transpacific trade partnership. all these countries in asia and latin america lined up with us and all of a sudden we are yanking it away. these countries feel left in the lurch. it is the combination of history, things the united states has done, things that the united states has failed to do. is it a vacuum of leadership that china, most interestingly, is prepared to move into? richard: not so much. they are limited by their own politics. charlie: this year, president xi jinping saying they believe in globalization. richard: up to a point. the chinese have a constraint political system. they want to keep power. they don't want thinks -- they

don't want things to loosen up too much. i think it is a world of increasing when i would call disarray or disorder. countries like china might have a large role in asia. countries like iran, turkey, israel, my had a role in the middle east. of local powers but also a world of growing disarray and at times chaos. charlie: what does the world need? richard: the world needs a united states ready to play more of a leadership role -- more of a traditional leadership role. charlie: that is not how you would define donald trump? richard: not very much. on thefew days transition, he has contributed to the disarray by creating questions of whether the united prepared toable, support our allies, free trade. the america first

characterization sends out a signal that we are just in it for ourselves. what i am worried about is that a lot other countries will say, if the united states is no longer in it for us, we have to take care of ourselves. on some issues, that means they may defer to a local power. on issues, countries may say, we have to take power -- take matters into our own hands. i don't want to have a world where everyone takes matters into their own hands. proliferating nuclear weapons were saying, if i don't act militarily, someone else will gain control of something. trump intalk about terms of the actions he is taken in the foreign policy field. richard: he has taken some serious people. secretary of defense and secretary of state. charlie: they include the cia director. richard: these are all seasoned individuals.

the problem is that they are all on the periphery. what really matters is the relationship between the periphery, the various departments and organizations, and the white house. the white house has become a crowded place. a president, vice president, chief of staff, she -- chief advisor, chief strategist, son-in-law. we don't know how they will work together and we don't know the relationship between all of them and, say, a secretary of state. go back to jim baker, when he was george h.w. bush's secretary of state. everyone around the world knew that when jim baker talked, he was speaking with full backing in authority of the president. i am not sure that when rex tillerson speaks, people will be assured that, when donald trump is either tweeting certain things are when people at the white house are saying things a consistent with the message. to bee: it is in his dna

hands-on with everything and believing it is ok to say what he thinks. richard: donald trump, if you read the inaugural speech, the entire intellectual assumption of the speech is that the united states is getting ripped off by the world. allies aren't doing good enough, trade is bad for us. charlie: how do you think the chinese will respond to that if in fact the united states does not adhere to a one china policy and develops a legendship with taiwan's separate from china, and secondly the united states tries to say to them that you have to stop and abandoned the south china sea? on the former, that is the most politically mow -- politically loaded issue in china. the chinese don't take the cohesion of their country for granted so they see the taiwan issue as the pulling on the thread of the fabric of their country. there is zero chance any person running china could compromise

on that issue and continue running china. xi jinping, in october, has the 19th party congress. this is his chance to consolidate power and put in his people in the standing committee of the politburo. zero chance that will be one inch of flexibility. presidenttrary, if trump continues pursuing a policy on taiwan that the chinese see is inconsistent with the one china policy, they will shut down the relationship and retaliate. retaliate?w do they richard: they could shut down taiwan's trade to the mainland, increase military in the region, maybe decide that they don't want to accept all those boeing planes that are being discussed. there are ways that they could put economic pressure on them. i don't mean that we couldn't retaliate and do something, but we have to understand that this

is going down a path where there will be no winners. it will also be that the two sides won't have the context to cooperate, say on a issue with north korea. charlie: with russia, again, the principal people advising him seem to have a tougher stand on russia then he has acknowledged. richard: that is right. -- asself as well as a well as the national security advisor have this benign take on russia. on one hand, we should show respect to the russians, be willing to talk to them, treat them as a serious country. on the other hand, the goal of our relationship can't just be friendly relations. we have to see some real changes in russian behavior, see them backing off of the pressure they are putting on eastern ukraine, make sure they are not putting pressure on the baltics. i think we should be doing things to on the ukrainians and

reintroduce significant military forces into nato. if we are to reduce sanctions on russia, ithas -- on has to be conditional. charlie: we do not know what behavior the russians could do to precipitate president trump from lessening the sanctions. he has suggested that there may be examples of russian conduct that could cause him to want to reduce the sanctions. again, if they stop doing certain destabilization action in eastern ukraine, he may say they deserve some response from that. he could give some kind of a statement or a pledge that the united states could not try to bring out some kind of regime change in russia which they are worried about. charlie: why is he worried about that if he has such huge popularity with his people? richard: he saw what happened in

ukraine. the economy is contracting in russia. he thinks one of our goals is to see the so-called color revolutions you saw throughout eastern europe. most tyrants don't take for granted their ability to rule. there is no orderly successor. one of the things that makes these countries the kind of systems there are is that there is no mechanism for legitimate political change, so it is all or nothing. charlie: do you think there can be a negotiation with putin? richard: i think there can be negotiation about certain issues, conventional forces in europe, nuclear weapons, possibly ukraine, the middle east, afghanistan. --charlie: the interest you look after in foreign policy picture interest into account -- richard: absolutely.

what we don't want is a cosmetic improvement. we don't want the era of good feelings. we don't want to have that kind of cosmetic stuff. what we want is a very businesslike set of conversations and hopefully we see some very tangible changes in russian behavior. if they are willing to do that, we should respond. the possibilities of doing something interesting and dramatic change comes when everything is in disarray. that is when you have an opportunity to change. richard: it gives you some things to work with. but only if you have the will. charlie: fluidity. richard: fluidity creates opportunities, things you can exploit, act on. but, you then have to be willing to pursue policies over time,

put resources in a way that can turn those opportunities into realities. by not doing things are doing other things, turning disarray rather thannity anarchy. nothing happens automatically for good in the world. there is no invisible hand like adam smith talked about in the economic marketplace, it takes visible hands. the real question is whether we are going to do it. under barack obama, white often we were not. the real question is whether under donald trump we will be willing to have the visible hand of the united states. charlie: who has the strategic mind to create a new world order? i think there are ideas out there. i did my best to put one out in this book, basically a new operating system for the world. we have had an operating system in the world, a set of rules, , whichrly four centuries

was very basic. you don't use military force to change borders and you allow governments tremendous space to do what they want in their country. i call that world order 1.0. when i argue is that during the era of globalization, that is necessary but not sufficient. charlie: we now have all kinds of means to transmit, transform. richard: the conveyor belt of globalization. someone breaks out -- suddenly, zika virus or worse can spread around the world. digital things can spread instantaneously. terrorists, hackers, climate change. what i say as now we need a world that i called 2.0, where sovereign states have the obligation -- we should practice and encourage it -- to monitor things that go on within their borders that could have a negative effect on others.

after 9/11, we established the principle that no country could harbor terrorists that could strike others. they didn't have the rights within their sovereign limits. you want to take that principle and attach it or extend it to virtually anything else that could affect us everything else negatively. charlie: what do you mean by paralysis by analysis? is the tendency, we saw it quite a lot in the previous administration, where you are presented with a set of issues, syria or something else, and you look at it and look at it and persuade yourself that anything you do is complicated, has such downsides, and you end up doing nothing. the only problem is, in my experience, i have worked for four presidents, it is very rare people assess the option of not doing anything different. charlie: what is in your mind the misunderstanding or erroneous assumption about the world works from barack obama?

richard: i think the problem was he had too many people from legal backgrounds. law is about a set of rules. you play the game by the rules. i think barack obama had that and a sense of optimism that human nature and i think he believed that things could get better by the power of reason, that people would be restrained. when i think he never quite internalized is that evil can triumph over good, people have agendas that they are not willing to compromise on, so unless you push back there he hard, that forces can gain the upper hand. i don't think he appreciated the capacity of evil, ideology, people's willingness to use military force. we saw in the middle east, we saw in europe. in many ways, he was more reasonable than the world he inherited. charlie: he could not understand the threats to the world that he saw? richard: he was very wary of large-scale american

commitments. he came into office promising to undo the commitment to iraq, the commitment to afghanistan. he overlearned the lesson of his predecessors. george w. bush was trying to do too much to remake the middle east. predict,ama, i will will be the president who tried to do too little. charlie: should he be blamed for the fact that there was no american presence in iraq? richard: i think, yes. the argument that we had this agreement and his hands were tied was not true. more than introduced 5000 american soldiers without formal agreement by the iraqi parliament. he did not want forces to stay in iraq. any idea that somehow the iraqis didn't want it is something wrong? richard: yes, and we could have worked around it like we did when we reintroduced military forces. right now, 5000 are in iraq

without the sort of agreement the administration said it needed. charlie: with the classic mistake in syria red line or was it not being timely with respect to the rebels? richard: all of the above. perhaps the first mistake was saying assad must go without backing it up with the policy that what we were prepared to do next hour rhetoric. you can't have ambitious rhetoric and limited means. they have to be in sync. charlie: when you say someone has to go, you always run up, head on, to the question of what follows? richard: what if he refuses to go? we will face that again in syria. it is not a question of when we defeat the isis territorial base , but what happens the day after and how do we prevent and isis-like group, whatever they

call themselves, the next radical jihadist group, how do we prevent them from inheriting? charlie: it is interesting what trump said in his inaugural speech. he did not say he wouldn't -- he would eradicate isil or isis, he said he would eradicate radical islamic terror. parts of theome speech he set goals that i would say you can't meet, and that is one of them. what we need to redo -- what we need to do is reduce terrorism to the level that it doesn't change the way we live our lives . to eradicate it -- there were always be people to wake up with these ideas, whether they use box cutters or knives or guns, they are always going to find a way. the true nightmare scenario, they get a hold of nuclear stuff.

-- they or they get build a series of things we can't imagine now. richard: something biological, or a collapse of order. charlie: i once did an interview with barack obama and said the following, "you believe we have the strongest military power, best technology, best universities, on and on, the best rule of law, strongest institutions, so what could go wrong?" politics."ur the kindss gridlock, of threats to democracy that he was talking about in his farewell speech. richard: i think on his watch, our politics did go wrong. the word you and i probably use more than any other in describing american politics is dysfunctional. we have been unwitting -- unable and unwilling to address some of

the core problems. infrastructure, schools, immigration, the national debt. that means the example we send to the world is not compelling. our ability to act in a concerted, consistent way is not when it needs to be if we are to be effective in the world. in that sense, the former president is spot on. charlie: what was your reaction to the inauguration speech? adjectives i expect if he is watching this he won't like. dark, mucht was darker, particularly domestically, then the facts justify. between "people" and the "political elites," it was very divisive. it was protectionist, by american, higher american. if everyone else in the world follows that formula, the chinese only by chinese.

charlie: the pipeline, only using american steel, any worker ever worried about losing their jobs said, "right on." they are thinking about the fact that we have got somebody who is standing up and wants to see american products. richard: absolutely, and in the short run, that will work. in the long run, millions of american jobs are export dependent. many of these jobs will disappear anyhow because of technology and invite -- and artificial intelligence and robotics. basically, trade is being scapegoated. doubts about our reliability and we are not going to save jobs, not going to help american workers, not going to help american consumers if we shut our borders to trade. helpe also not going to ourselves with mexico. one of the reasons the last few years we have had a net outflow

of people going from the united states to mexico is because of nafta. this agreement helped to make the mexican economy modern, more robust. more and more young mexicans stayed home. mexico has had a higher growth rate than the united states. if we end up in a trade war with mexico, ironically enough, the pressure on american borders from mexico will go up. right now, there is an inconsistency tween what is being said in our trade policy and desire to make our borders secure. charlie: did you send a copy of this book to 1600 pennsylvania avenue? have they read it? at that i sent one point to the president-elect and the national security advisor. charlie: did you say, if you read this, you will be a better president? richard: i would not go that far. we will see what happens. charlie: "a world in disarray: american foreign policy and the crisis of the old order." , who has both

experience and intellect, and understanding of the issues that are in play in the world today. thank you for joining us. ♪

♪ >> welcome to the best of "bloomberg markets: middle east." we have just seen the first week of president donald's presidency and the protectionist tilt is rattling investors around the globe. is theming up, kuwait latest country from the gcc looking to tap the global bond market. we are from the finance minister about their expectations. expectingnces passenger growth to be the