craig melvin: that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [music playing] good morning and welcome to "street signs. were live from davos i'm joumanna bercetche >> i'm with you from london. these are your headlines. >> european stocks see red as the coronavirus outbreak worsens. authorities are acting fast. >> we have international cooperation and transparency on what is going on in china. china is dealing with it and the

countrys that had a case in their countries are dealing with it in a proper way >> u.s. president trump takes the fight to davos steven mnuchin shares that he will go ahead with tariffs >> our motto is to identify multilevel solutions we prefer to work with the solutions i think europe has to be as such together. >> certainty is better for the markets saying he is optimistic for the trade talks.

>> christine lagarde is posed to post the first review in years and talking about the fine line between monetary and fiscal policy >> politicians were in charge of central banks or a world where it sometimes has to shut up even when difficult, i'd rather choose the latter. >> coming up shortly on "street signs," we'll be spoeaking to th ceo of volkswagen as he speaks of a radical shake up of the carmaker >> welcome to everyone on our continued coverage u.s. treasury secretary mnuchin has warned european countries

against arbitrary taxes. he addressed italy and the uk's plans to forge ahead with the levee and said they will retaliate by taxing european companies. a warning came after saying they would strike a trade deal. >> already having some private conversations we don't need to have on tv >> please do please do. >> i've made some comments on this already we'll be having some private conversations. i'm sure the president and boris will be speaking on it as well as the president did with macron >> this is a principal issue for you and the american government. you just don't want foreign governments and countries imposing taxes on your companies

willie nilly >> the willy nilly is the clear part we've been clear the tax is discriminatory in nature international tax issues are very complicated and take a long time to look at. if people want to put taxes on our digital companies, we'll consider putting taxes on car companies. >> speaking of the auto industry, renault shares are under pressure after citi downgraded to a sell saying they are running out of cash in the sale of stake of nissan may be the only option for the french carmaker i spoke to the chairman and asked him if the alliance had turned a corner. >> question of the alliance,

what are their new challenges. how are we going to get out of the situation. the good news, we are now in the new stage of the alliance. probably back to when it was created 20 years ago which was a success. we are now shaping up the whole thing in a way that we can only have positive news in the coming future >> joining me now on set, the ceo of volkswagen. i want to take you back to comments we heard earlier from the panel. yet again, the prospect of tariffs was raised it is like a sword hanging over europe and the german automaker industry, how much of a concern was that for you looking to

2020. >> it is a concern but we are optimistic we are increasing our footprint in the united states we fully adopted to the new agreement in the investments for the region we are just groundbreaking we are investing 900 to 1,000 additional work places we have the full approval on the administration we can do what we can to avoid tariffs >> have you been in talks? >> yes we continue the dialogue

>> taking you to other comments you've made. you said in order to survive, car companies need to become technology companies why can't car companies just be companies that make technologically advanced cars? >> it is how you describe it cars are becoming the most releva relevant, the most precious unit cars are becoming devices. they are fully connected data streams into and out of the car will be much higher than with smartphones, so the car gets a new role in the internet eco system we have to adopt that. from the traditional car manufacturer to become a tech company. that's a long way to go but we are on the way >> you need to focus now to

stream line your business to reach those ambitions? >> luckily, we have quite strong sales. last year, the sales were good financial figures we are going to see we've gone out of a strong position our brands are growing we have increased the market share we are in good shape it will be a good transition >> speaking of tech companies, tesla is opening a factory in germany. your home turf are you worried about the competition? >> i think good competition is important. they are paving the way and

running higher risk than we can. they are paveliing the way. they show electric cars are working. we appreciate tesla's success. >> one of your other competitors, renault, had been struggling of late a lot of questions about the future of the appliance there. when you think about the industry as a whole, does it concern you one of the key players is struggling so much? >> you know, the auto industry has been consolidating there are always companies which have to find a new position, new role size matters software plays a new role. the alliance is different. >> there is talk potential ceo

for renault could come from one of your own. would you be comfortable with that >> very sad that luka is leaving us he played an important role in the group. i think he's one of the best mark mark marketeers we accepted he's going to leave and probably in talks with renault. that's what he told us >> a quick comment on the demand out lo outlook for this year. how are you seeing the european demand outlook >> on the worldwide scale, we are seeing a flat market or slight increases being

optimistic we don't see a fast-growing market anymore we have to face that situation we will be prepared. 2020 will be a crucial year for volkswagen because we are starting to roll out electric vehicles in china, in europe mostly we are looking optimistic to 2020 >> we'll take it mandy, i'll hand it back to you in london. >> let's take a look at some things that are not so optimistic the chinese city wuhan has shut down all in and out going flights to deal with the coronavirus. the virus has so far killed 17

people several hundred cases have been reported in thailand, china, japan and to the united states they hope to work to stop th spread of the virus. they are being implemented the director general said the organization needed more time to decide whether to declare the outbreak an international emergency. cathay pacific has suspended flights to and from wuhan adding that it is monitoring the situation closely and will continue to work with hong kong health authority i want to bring in the finance minister from australia. on the sidelines of davos here, one of the concerns that emerged

is the health risk in the asia-pacific region on the case of the coronavirus picking up overnight. >> we have processes in place to monitor any of this threats and usual process apply as they always would >> you are monitoring the situation closely? >> we are. >> another topic is the signing of the u.s. and china phase one trade deal are you happy to see that happen >> absolutely. we were meeting in davos and the level of tensions between the u.s. and china was wide on global growth in 2019. we welcome that development. there is more work to be done. we believe it is in our interest as it is in u.s. and china and

all trading nations of the world for there to be sustainable creation of china into the future >> does it possesse a risk >> resolutions between u.s. and china will help facilitate stronger global growth and in australia. that's good news for us to create jobs. we welcome that. >> the world has been gripped but i am images of the bu bushfires. one criticism levelled to your government was that you were slow to respond. >> well, look, australia has established arrangements when it comes to bushfire and other

emergencies. this season was severe and unprecedented. the prime minister has led an historically unprecedented bushfire initiative. our focus right now is getting on top of some of those fires. some is of those are still burning. once we are on the other side of all this, there will be inquiries to assess how in the future, the fire of this intensity can be responded to in this fashion >> there is a view that the government actually missed some warning signs in anticipation. can we expect to see a change in the policy out of your government >> in terms of climate change, we have a very ambitious climate change we are one of only a handful of

countri countries around the world there is 400 million and those are agreed to in paris we will be more than halving emissions and reducing by two-thirds that is more ambition than the uk and others. >> you say that and australia is a very coal intensive economy. will we see a phasing out? >> the we are the country that leads the world in terms of investment we invest almost twice as many

into germany just to name a few. right now, 25% comes from renewables that will go up to 50% cole will continue to be an important source of power. i was talking to the indian minister that said in order to look at the question of global demand, do you prefer us to use cleaner coal with less ash content and less moisture or the comparatively dirtier coal from other sources. we have found using the cleaner australian coal is actually better >> we'll have to leave it there.

thank you for joining us today the finance minister of australia. i'll hand it back to you in london holding a title entitled "after brexit. joined on stage by the italian finance minister and deutsche bank ceo let's listen in. >> the best possible relation with uk. i would say most of the results depend on the position of the uk if the uk government wants to have very large access if they

wants to have for the market so they are ready to do this. it is up to us to decide we have our rules. i think we will reach a good agreement. i think it is still possible we can't have zero tariffs together we can have zero tariffs and zero tamping >> what do you think, minister is the most important aspect, as far as italy is concerned in the negotiation and what do you think will be the biggest sticking points?

>> i think the balance between the deepness of the agreement, comprehensiveness and capacity to level the playing field at the end of the day, the deeper agreement is not for the market we first want a deal that is as much as possible comprehensive we know the fda is not a single market that will be change. first, it is important to not lose time because if the uk has said, it is not going to use the option to prolong the transition they have told us that they have a short time we need to move quickly to define the principals and focus on the things. focus on zero tariffs and level the playing field. you need this.

internal and external security that can be realistically done that will hopefully minimize at the maximum, the disruption. we'll have changes we have supply chains integrated that's not a minor thing we want to minimize this as much as possible and financial markets as much as possible. we'll make an intelligence use but it is not the same as single market on one hand with the good faith and agreement to prepare itself for a change which can will be in the midterm deep. that meets our agenda on capital market union, banking union, how to develop growth if our single market we will launch with even more determination because of brexit.

>> how hard are your lives planning for all of this coming up next, christine lagarde set to launch the first strategy review in 16 years. cionf e ive looking at the first desi othyear that's next. a golf course is designed to be difficult. to challenge your thinking and test your execution. but great minds are driven to seek out the complex. they see what others don't, from an angle others won't take. they learn that embracing those challenges is what sets them apart. i am justin rose, and we are morgan stanley. but how do i know if i'm i'm getting a good deal? i tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if i'm getting a great price. this is how car buying was always meant to be.

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staying with us on "street signs. hosting a meeting called after brexit, renewing growth. >> at the end of the day, europe can only be competitive if we stand with a clear stance. >> we have the commissioner for the economy here what is the plan to get out of this 1% growth trap beyond just making a deal with the uk? >> i would say first in this moment, i think that the green deal that was the first proposal of this new commission that in some way is giving to the commission a profile

this was a main tool for new growth frankly speaking. we can't overestimate the importance of this thing we are talking about changes in our way of housing, in our way of transport, in energy sources, in foods so it is a change, i think that can remind us only to what happened in the 50s and 60s? change made on the real life of hundreds of millions of people, if we are serious on this. i think we will be serious because we are not only announcing a program we are not only mobilizing

investments but we are taking decision on regulation and on new rules for state aid. we are taking decision on the package. this is not all we need. we need also a review of our fiscal rules to facilitate investments. in general, future prove for the future and other digital innovation i would mention this on the second point to have a more coordinated and supportive fiscal policy at the eu level we are now at a better situation

than 20 years ago. we should always keep an eye on some countries but in general we need a support the fiscal stance because the normal tools are sufficient we can't imagine to help growth only with monetary positions this was perhaps extraordinary but now we need to join fiscal policies in the position jie think we'll hear the same thing today from christine lagarde. doesn't everyone think that in the market >> something demanded.

we should have more tackled in the regulation saying always before you put a new regulation, you take 100 pages with a small fund. you can't take more than that. >> that's not easy to do >> i know it is not easy we operate airplanes, we have so fragmented air traffic in europe we have planes circling in the air. it is hard to image inn we get one air traffic control in europe brexit, we will increase with cost at the border with zero impact it is just cost.

there will be no stimulus. border patrol. if i go to another countries, they ask me what would i do. i say three things, invest in education, infrastructure and easy border access you are talking regulation this and that the idea of carbon pricing is great. don't call it tax. call it carbon price but don't regulate which technology should solve the problem. we say we have an idea and also the solution that's wrong industry and science should solve the problem. the people who are more innovative have the advantage. >> if i may, the mood in brussels now is not average.

>> you look skeptical. >> i've heard that before. >> yes but i can assure you, the mood is on the contrary on some targeted issue, to have an evolution limiting some regulation then we need obviously regulation coherence with the green deal you were mentioning the carbon adjustment >> the pricing >> it is a price we need to ininvolve some is taxation directly. but regulation will not be the core of this new green deal. >> okay. we have a deal >> wow, we just got a policy

deal, i think. a whole new approach >> germany, that's been a big problem. didn't we come off of 0.6% growth >> we shouldn't criticize the home country first of all, i'm so happy i'm not a banker talking about deregulation i fully support frank apple. it is one of the reasons why u.s. is doing so well. it is not only on the tax side, fiscal stimulus but deregulation across industries. i'm the first one who always said we need deregulation. we are doing too much. if you overdo it, you actually stop the growth. you have to be careful with that we need to be careful what it means to the european markets. >> germany, i think there is some room for the stimulus

we shouldn't do a mistake to do it broadly very specific items linked to the agenda, the green deal where we have the competitive advantage and where you really think about the stability and esg, everyone is thinking about the cost to it if europe is playing it the right way, with the stimulus, with the support, could be a gross potential. if we define these buckets, we have a chance to accelerate growth and to benefit from it. in this regard, we can think about some fiscal stimulus some on its own is not the solution and the balance between deregulation, defining the buckets and last, we had yesterday's session at the deutsche bank agenda point

we need a new narrative for europe people still see europe as the project that brought peace to the region that was fantastic we need to now explain to the people what europe is standing and link deregulation agenda, the green deal with a narrative of what it means for the people living in europe and potential if we do this, there are great chances for the region >> let me add in on the stimulus i'm not saying because i'm a german, i'm in favor of balanced budgets. i am also a capitalist, which you cannot say any longer. the tax money of future generation germany still has two trillion loans. that's a lot of money the kids have sto pay in the future we are living at the moment, not in a recession we are not in a recession.

that's our point we have to bring these things. we are spending the money of the next generation. why you are spending our money now. that's not fair. taking money out of the system and the government not spending less that has not taken place in u.s. or europe. germany has a limit. if you read books of capitalists, you have to put a limit on what you can spend. germany has that in their ko constitution now we can't spend the money of the next generation. that's easy. as a businessman, you are politicians. people are living now, not in the future >> it is an interesting dilemma

for italy because that is a high debt load country with very little economic growth how do you think about how to stimulate the growth picture >> i think i agree about that. welcome back to "street signs. we are live from davos i'm joumanna bercetche >> and we are live from london these are your headlines >> european stocks see red as the coronavirus outbreak worsens. authorities are acting fast. >> we have international cooperation and transparency on what is happening in china now, actually, china is dealing with it and the countries that had a case are dealing with it in the proper way. president trump takes the fight to davos

u.s. treasury leader says the u.s. will go ahead with digital tax plans but says europe is a tough negotiator >> our motto is identify at the multilevel solutions we prepare to work on the solutions. i think europe has to be ready also as such to respond if needed together. >> with european carmakers in the firing line, the ceo of volkswagen tells this show a lot is at stake in trade relations with the united states >> to deliver on the last year, we are increasing our footprint in the united states we fully adopted to the new nafta agreement. we can do what we can to avoid tariffs. the dutch finance minister tells

cnbc about the fine line and fiscal policy. >> if i had to choose between a world where politicians are in charge of central banks or european central banks or a world where i have to shut up even when it is difficult, i'd rather choose the latter the swiss national bank chair chairman thomas jordan told me more about the pick up i asked to address optimism about the outlook. >> in some case, yes, we did not change your boyce for the world and for europe we see an improvement in 2020. not very, very strong but a

slight improvement >> do you think one of the reasons we saw the slow down was on the back of the weakness of the economy? >> yes indeed a couple of factors for 2019 we saw a weakening demand. this is a phenomenon we see globally the car industry was hit hard in germany. we have many firms that supply parts into this industry >> how would you say the balance of risk is now would you say it is tilted up or down side? >> we believe it is still tilted to the down side >> if you do see morris being to the down side, surely another risk is that the ecb go ahead and cut interest rates in their economy, that wouldn't help the

exchange rate again on this frank. >> the situation in the eurozone for us we benefit for an improvement to the eurozone it has an impact on the exchange rate the rate again, is a very important factor of the monetary compensation in switzerland. >> you seem to have the view that negative rates can still be effective on stimulating the economy? why and how? >> making the exchange between credit channel looking at whether the credit channel is effective that's not that important to us. we have to maintain a certain interest rate with interest rates abroad that is necessity to have

negative rates in switzerland as long as we have this very low interest rate environment. >> it seems you are looking over your left shoulder closely to see what the ecb do. if they cut, you'll have to cut as well. >> we conduct an independent intd policy, so we do not follow the ecb per se but we have to take into account the international capital environment and business cycle and decide what is best for the swiss economy and to maintain the price ability. we have anna ton muss policy we are an open economy and take into account what happens in switzerland. >> you released the tiering, the minimum threshold the banks charge in your view, is that one reason

to go even more into negative territory in the future? >> we know negative rates have also side effects. we would like to minimize those effects to minimize the threshold. that gives us freedom to maintain rates for long and cut rates if necessary let's bring in darryl white, the ceo of bmw financial group in europe, we spend a lot of time talking about efficiency of negative rates in canada, you don't have to worry about that quite yet the bank of canada has resisted the trend to cut rates with what we saw in 2019 when you look at the health of the canadian economy, do you see

them going in that direction >> i don't know that it is inevitable when you look at the canadian economy, it is stable. a lot of things that happen in canada are linked to the united states when we look at the environment we traffic in right now compared to not even a year ago, compared to six months ago, all of the risks with respect to trade, china, usmca deal, all of those are a lot more stable than they were six months ago. >> did you actually see that evidence cutting down on the certainty of the future? >> sure. on both sides of the border. on the u.s. and the canadian side

consumerism remained healthy but there was a pause on spending from corporate and commercial borrower you start to see some is release, we are siege that right now. all the way back to where we started on interest rates, we have a more certain view of the economy growing at 2, a little more than 2% there were three reductions in the fed last year. i can't tell you exactly what will happen with the rate in canada but i think 1.75% is the highest overnight rate in the world. so there is room but at this point, it looks stable from where we sit at our bank >> it sounds like looking broadly, the outlook is more

positive for 2020 than in 2019 no one is mentioning the r word, recession now in these conversations. >> remember when we were here a year ago, we were coming out of the callamity of the markets from december, november, 2018. today, most conversations are around stability you look at the big macrofactors that have been adjusted, you can see some capital formation coming back to the economy in north america, it feels a little today like after the fiscal stimulus in 2017. we waited for the answer once the answer was known, there was a release. it feels like a little of the same mode. classification on trade. >> i know you are making a big push in digital.

that entails a cost. is that expensive, how do you balance the shift and focus on stream lining versus the associated cost. >> for us, it is all about the customer you need to meet the customer where they want to be met. we have customers that want to meet us in person or digitally or not at all. it means being able to cover products we have to eliminate low-valued work and deliver better product digitally. it is a big investment and cost but nonnegotiable. something we have to deliver and are living >> darryl white, ceo of bmo financial group.

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northern europe has long faced criticism for not spending more asking the dutch minister whether the opportunity to increase investment. >> if you look at what we have done in the last couple of years, this has been a government that has been spending on all different parts of what the government can spend from defense to schools to roads and police and also on climate change that is a topic that will stay with us not only the next couple of years but next decade >> whether you are in the trump camp or the thunberg camp or somewhere in between, how much more money will netherlands be spending on that >> we will be spending more

money. the task of politicians is to take care of this. there is this divide that you are referring to as well that we do need to bridge. this is a time of transition it is imperative we do take action but we do it with our populations. >> let's bring in henrik anderson, ceo of the largest wind turbine manufacturing in the world. one topic that has come up a lot is that of sustainability. you must be a man in very high demand >> thank you for having me couldn't feel better it is clear we have been doing this the last four decades but it is also right that the timing has never been better for having the conversation

we see it from public and private. we are finding ourselves in the middle of that discussion of how do we make that transition from the traditional energy to more renewable. >> i was having a sustainability discussion with a group yesterday. one topic that came up is that of tradeoff. your company is very good example of a company that has had a long term vision initially, it was tricky to get up and running to get people to believe in what you had to offer and things have turned around. what do you think your experience is with the ceo of this wind turbine company and what that means in terms of broader term thinking? >> the first one is that wind, if we look 10, 20 years back, wind was always known as the

highly condition and getting subsidies to be at all financial viable if we look at major markets today, the levelized cost of energy has come down with two-thirds of the cost which means literally 80% of the world markets will be at or below the same price so there is a financial argument that has gone away from that so how do you make that decision on your energy source. we are in a positive situation they want renewable. there is no argument geps it >> looking at the numbers, denmark imported more than 20% of wind energy compared to 15% across the european union.

coming out with big bold markets. how do we get from 15% to 47%? is that a function of government subsidies in that space? no and i keep having the meetings i think the most important thing is to keep doing it on a consistent basis the renewable section keep renewing year in and year out. i'm always nervous when somebody says we need to do this this year and then you get quiet. that stops the development also get private sector

involved they really need to go at an end. we look in waerd to how can we do more to educate and to make it easy. >> i know you are making a big push in north america, how does that work out for you given that the trump administration is not as keen as others? >> i was in the u.s. many weeks ago, when you walk around in factories we have positioned in colorado, in u.s., it makes me emensely proud coming in to see the pride of having a job in the u.s. producing assets that goes up and creates renewable energy in the u.s i hear refrain and discussions that renewable energy comes at a higher percentage.

all the energy sources go hand in hand. >> thank you for talking to time to speak to us i'll hand it back to you >> thank you for that. spread of the chinese coronavirus has a second chinese city being sealed off. we had a major tumble with china with the loss for the week europe is down looking at the u.s. futures. the implied open could be a marginal move to the down side we'll keep an eye on how these markets will open up stay tuned with "street signs" from davos throughout the morning. ♪

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it is 5:00 at cnbc global headquarters here is your five at 5:00. seeing some red. the dow coming off its first back-to-back losing streak since december the growing coronavirus threat china has closed down the city at the center and stepping up screening of travelers coming from china boeing's new ceo speaking out for the first time painting an optimistic pic