>> rose: welcome to the program. we begin this evening with president trump's promise to build a wall between mexico and the united states and to get mexico to pay for it it. all of has resulted in the mexican president canceling his trip to washington to meet with president trump. we'll talk about it with phil rucker of the wash torch post and carlos pascual, a former ambassador to mexico. >> the mexican people and the mexican government have been deeply offended by the way this is proceeded. during the campaign, candidate trump at that point in time characterized mexicans as criminals and in some cases rapists. therefore there was a necessity to have a wall to separate mexico and the united states. and when you put it this in that context you can understand why it was so difficult for mexicans to say that this was show, that they were show going to pay for this wall am and so when president trump essentially said

to president neato that the only way we will have that is for mexico to pay for the wall it was impossible for him to go forward. what both sides have done is drawn a line in the sand. a bad move to make between two countries that are physical clea next next to each other and indi visible as a unit. >> and for understanding a trade we turn to former u.s. trade representative in the obama administration michael froman. >> at the moment we are creating a void that china is all too willing to step in to and to film and we see this happening. we saw it happening as you mentioned in daf os. we see it happening across the region where the countries are saying if the u.s. is not going to engage, show leadership as it did in the context of ttp, then we're going to have to line up behind china. >> we close this evening with richard haass, president on the council of foreign relations, his new book a world in disai ra, american foreign policy and the crieses of the world orld.

>> i think the real alternative to a u.s. lead world is a nobody lead world. increasing disarray, countries leak china might have a large role, countries like iran, turkey or israel might have something of a role in the middle east. russia, germany and europe. so it is a world of local powers but more than anything it is a world of growing disarray or worst yet, also at times a world of chaos. >> mexico, trade, tariffs, the wall and foreign policy when we continue. >> funding for charlie rose is >> rose: funding for "charlie rose" has been provided by the following: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.

>> rose: we begin this evening with development in president trump's order to build a wall between the united states and mexico. mexican president-- enrique pena nieto said he would cancel his meeting with trump. nato his decision comes one-- trump said at a news conference this afternoon that it was the united states that was being treated unfairly. >> the president of mexico and myself have agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treated united states fairly, with respect, such a meeting would be fruitless and i want to go a different route. we have no choice. >> rose: trump has also insisted that mexico fund the wall's construction. plans were announced today to impose a 20% tax on all imports

into the united states from mention coto cover-- from mexico to of could the costs of the joining me phil rucker from "the washington post" and carlos pascual, a former u.s. am bas disor to mexico. i'm pleased to have them both here. phil, just tell me exactly what is it that trump thinks he can accomplish now with this decision by, to end the meeting, all negotiations are over and now he decides will go another course which is to impes a 20% tariff which then i assume mexico will retaliate by imposing a tariff of their own. >> yeah, i don't see how and where this ends. but less in-- listen, trump was outraged by pena neato response when he said no way will mexico pay for this border wall but trump promised the american people mexico will pay, it was the rallying cry at his campaign rallies, he has to find a way to trump the wall. he having the u.s. taxpayers

through the congress fund the construction of the wul and get reimbursement from mexico and what the white house press secretary sean spicer floated today was a 20 3ers tax on any import from mexico, they think that with raise the billions of dollars necessary to fund the wall. >> what is that number, 10 or 12 or 14 billion? >> i am not sure what the exact number. is i don't know that there is a clear estimate of it yet. it is a pretty provocative move by this white house to try to tax goods from mexico. you have to imagine that will trickle down to u.s. consumers. people buy products from mexico including some of the foods we eat like avocados and so there is a real concern among republicans that this could have some sort of negative impact with consumers in the united states. >> rose: and at the same time if mexico imposes a tariff on american goods that may impede them from being sold in mexico and create job losses in the united states, it is argued. >> are that's exactly right.

look one of the things i think trump might be missing here is mexico is one of the most important trade partners of the united states, has been for years. it is not some poor des late country, there is a vibrant industry there, a lot of commerce across the border between the u.s. and mexico. the relationship with mexico is of huge concern to the u.s. business community, the chamber of commerce, some of the major corporations in the united states rely on trade with mexico. so he is really kind of rattling things here. and i'm not sure how this is going to even out in the weeks to come. >> rose: carlos, give us the response in mexico, how do they feel about it, how does it sit with them other than they're not going to pay for the wall in their own words? >> the mexican people and the mexican government have been deeply offended by the way that this has proceeded. during the campaign, candidate trump at that point in time characterized mexicans as criminals and in some cases rapists. therefore there was a necessity to have a wall to separate

mexico and the united states. when you put it in that context you can understand why it was so difficult for mexicans to say that this was show, that they were show going to pay for this wallment and so when president trump essentially said to president pena nieto the only way we'll have this meeting is if you agree to pay for the wall, it became politically impossible for him to go forward. and in effect what both sides have done is drawn a line in the sand, a bad move to make between two countries that are physically next to each other and really indi visible as a unit. >> rose: what will happen if there is a 20% tariff and then there is a countervailing tariff by mexico? >> i think the answer that phil gave was exactly right. there is going to be a debate about who in fact actually pays that tariff. the united states if you put a 20% tax on gasoline, i think it would be hard pressed to tell a consumer that they were not paying a 20% tax on gasoline. in the end this is going to be borne by american consumers, american industries. just even those industries that

are giving inputs from the mexican economy and using them in the development of finalized products in the united states t will make those products less competitive. it will have an impact on american jobs and consumer. there will be another debate of rhetoric of what a 20% farrive means. who is paying for it really. is it it it the country that is exporting or really the consumers in the other country. >> rose: now phil, will donald trump be able to argue that the 20% tariff, i will make enough money to build my wall and shut up? >> he might be able to. and i don't, maybe his supporters are going to want to hear that. but that tariff is going to trickle down to consumers here. and it's going to have other ramifications. it is going to complicate the trade relationship that a lot of u.s. companies have in mexico. >> rose: how popular is the mexican president with his own people. >> he's having a great deal of deficit as a result of corruption issues and security issues, pis popular iteratings have gone very, very low. so this makes it a very difficult time actually for him to be able to deal with these

issues and the challenges with the united states. i think one of the big things that's going to be important for him is to be able to demonstrate to the mexican people that he's standing up for them, standing up for their rights. the other issue is going to be how to convince the united states that this bilateral relationship is good for the u.s. one of the things that struck me from the time i was ambassador here was industry after industry, american industry, saying if it had not been for the integration of production lines between mexico and the united states, they could not have been competitive in basic manufacturing. they could not have exported to major markets throughout the world. and so a challenge for pena nieto would be to convince the u.s. side of that persons of the united states at a time when he was in fact suffering in the ratings in his own country. >> rose: so what kind of contact is taking place. are they simply shut down or is it-- what is the conversation today between mexico and the united states?

>> well, today is the low point. because essentially both presidents decided this meeting wasn't going to happen. and they made that decision on the basis of principle. and the challenge now is to figure out how to find a path to engagement. if you look at two countries next to each other, so intertwined, third largest trade partner for the united states 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. and mexico similarly has a particular pan date to find-- mandate to find a way to engage with the united states because of its economic importance. and so now they have to find a way where they've made decisionses on principle but show they can come back and have a relationship again. i think a critical factor will be when rex tillerson comes in as secretary of state, assuming that he is confirmed, that will create another line of communication and action that will be through more traditional foreign policy channels.

i think everyone will be looking to rex tillerson to make that particular move and outreach to the foreign minister here in mexico to show find a way to reconstruct the relationship. >> rose: how does his drk dsh how is his standing? because he is one who i think, you know, made possible the agreement for donald trump to come to mexico during the campaign. how is his standing, he's a close political ally of the president. >> secretary-- he is a controversial person in mexican politics. there are some who feel that he personally is associated with president trump and resent that. there are others who say well, that may have been the situation but now we're in a different type of situation where we have to find a way to have a negotiation to find a better path forward. and we need to use all of the individuals who have influence and who have knowledge. he has a ph.d in economics from mit. he's schooled on economics and trade issues. he has the ability to pull

together a whole range of angers here on the mexican side and has the president's confidence. so from that perspective there are those who are in a smaller political circle who feel that he could potentially be a very useful actor in these negotiations. >> rose: phil, what is next tomorrow for donald trump? >> well, tomorrow he has got theresa may here at the white house. the new prime minister of britain and it's his first bilateral meeting. i think one thing that is important about what trump has done today with pena nieto and mexico is he is-- he knows the world is watching. he knows all these other heads of state around the world are watching everything that our president, the u.s. president is doing right now. and he's trying to send a signal that if anybody disunt get along with his plan or betrays him that he will retaliate, which is what he did with mexico. >> rose: thank you, phil, thank you, carlos. >> thank you. >> thank you. >> rose: we'll be right back. stay with us. michael froman is here, he served as president obama's trade representative from 2013

to 2017. in that time he lead negotiations for the transpacific partnership, the largest regional trade accord in history. the tpp was a key component of president obama's so called pivot to asia. it would have eliminated 18,000 tariffs on american products in nations that together make up 40% of the global economy. on monday president trump announced the united states would formally withdraw from the deal fulfilling a major campaign pledge. today's heightened tensions with mexican president enrique pena nieto over the much disputed border wall now threatens one of the world's largest bilateral trade reasons. for all thoses reasons i'm pleased to have michael froman back at this table. welcome. >> thank you. >> rose: i want to get to the tpp, the implications and trade war and all of that. so what happened today is the mexicans say we're not going to pay for the wall. the president says he's not going to pay for the wall, he might not come. the president of mexico says we're not coming and we're not

playing for the wall. the president of the united states says well we're going to impose a 20% tariff and that will pay for the wall. help us understand this. >> well, it is challenging. because both under nafta and under our obligations in the world trade organization, we cannot impose that 20% tariff and not leave the door open to other companies, other countries to retaliate. so if we do that, we're in violating our international obligations, it means that mexico could raise tariffs on our exports. and mexico is our, i believe, second largest export market. we export hundreds of billions of dollars of goods to mexico every year supporting u.s. jobs, whether it is manufacturing, in agriculture or in services. so it's the beginning of a trade tit for tat that will hopefully find it's way towards resolution. >> rose: and what would happen to mexico? would it then say to the united states, we'll sell that stuff we were selling to you to china or

some other market? >> well, companies will have to reorder their marketing. we'll have to try and find new markets for their products. but i think the broader is issue is threefold it is the risk of retaliation of mexico raising tariffs on our products. it is the risk of imitation, whether mexico or other countries saying if the. is can violate its international obligations, we can raise tariffs on american products as well. and since 95% of the world's consumers live outside the united states, 80% of the world's purchasing power is outside of the united states, we need access to those foreign markets to support jobs here. and thirdly, it's taxation. because when you raise tariffs on mexican imports, that means you are imposing a tax on the consumers of those imports. low income americans spend a disproportionate amount of their market on tradeable goods, clothing, footwear, food. and so you are raising the cost on the people who are least able to afford it. and in that regard it could have

pretty broad implications both economicically and in terms of our relations with other countries. >> rose: take the tpp. why was ta good for the united states. >> it was good in many respects. one, by all the economic analyses it would have added more than 130 billion dollars to our gdp. it would have increased imports $350 billion a year. we know that exports. >> rose: how would it do this. >> by opening other markets to our exports. we are already a very open market. we have very low tariffs in this country. we don't use regulations as a disguise barrier to trade. but a lot of other countries have much higher barriers. take autos, we have a 2.5% tariff on autos. a car comes into the united states, it is a 2.5% tax slapped on it. unless it comes in from a free trade country. vietnam has a 70% tariff on autos. malaysia has a 30% tariff on autos. >> rose: so if you sell an auto to vietnam, they put a 70% tax. >> 70% tax. tpp would have eliminated that.

would have eliminated the tariffs in malaysia as well as a whole series of nontariff barriers that they have to the market in malaysia. these are some of the fastest growing markets in the world, vietnam, 90 million people, growing 6% a year an emerging middle class. they want what america produces. whether it's autos or tractors or high quality good nutrition agriculture or our services. so for us to be able to get into that market helps support good jobs back here. you have a market like that, 90 million people, you really have two choices. they have a 70% tariff on autos and you want to sell autos in vietnam, you can either ter down the barrier, keep your production in the united states and export the product from here or close your factory here and move it to vietnam to serve that market. our view was that it was better to tear down the barrier to keep production in the united states. >> rose: that is the argument that done alt trump used to campaign, that these trade agreements are not fair, and american workers are losing their jobs. >> well, i think anybody who

actually looks at what is in the agreement, who is in the progreement, what the provisions are, if you look at what president trump has said, this unfairness that other countries have barriers to our exports, that is exactly what tpp addressed as you mentioned in your introa deuks, 18,000 taxes on american exports eliminated. >> rose: it wasn't only donald trump t was hillary clinton and it was bernie sanders who opposed tpp. and the president couldn't get it through congress. >> well, it was never formally introduced to congress. >> rose: but with a head count, you think he could have. >> i think there was a lot more support in congress than meets the eye. you never have the votes for something until you actually introduce it it, the leadership mobilizes, you have a whip operation. but i, i spoke to a hundred house republicans individually, i talked to the democrats who were supportive of trade. i think had it been introduced in the right environment t could well have passed. >> rose: not withstanding the opposition of hillary clinton and bernie sanders, you had to depend on republicans. >> trade agreement and trade bills generally are usually

passed largely with republican votes and a critical mass of democrats. we had a critical mass of democrats. the same ones who voted for trade promotion authority last year. 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. and i think the question is will there be leadership on the republican side to get back. >> rose: was the opposition to trade to bernie sand eschs and hillary clinton and donald trump based on the same facts? >> i think the opposition to trade is actually less related to the trade agreement itself, than to the feeling of economic anxiety in the country. we know that technology is a much bigger impact on the nature of jobs, and on wages in the united states than globalization. but you don't get to vote on technology. and you don't really get to vote on globalization. globalization is a force. it is the result of the containerrization of shipping or the spread of broadband. you get to vote on trade

agreements. trade agreements become a scapegoat for the quite legitimate concerns that american workers have about wage stagnation, about flk inequality. i think that is what you saw during this election, that anxiety about the economy. and trade agreements becoming the vessel into which that anxiety was poured. >> rose: do you think hillary clinton made a mistake by not speaking to those anxieties in the way that they found relevant? >> you know, i don't have a license to practice politics. >> rose: you're a smart guy. >> but i think clearly there was a large segment of the american public-- . >> rose: clearly in states that democrats carry. >> were angry. >> rose: wisconsin, michigan and pennsylvania. >> absolutely. clearly there was a group of people who felt that president trump spoke to their anxieties in a way that other candidates did not. and i think the burden-- . >> rose: i that said i know why you lost your job. >> and we need to do a much better job-- . >> rose: i know why you lost your job and i will fix it. >> that is what he said. i think what we need to be

focused on going forward is how to make sure that american public, american workforce can take advantage of the changes and live in a rapidly changing economy. the changes of technology are going to dwarf any impact of globalization in terms of the impact on the nature of jobs, the nature of work, and we're not particularly well-positioned to deal with that kind of rapid change and transition, life-long learning, skills building, the kind of domestic policies that need to be pursued to make sure people can take full advantage of the opportunities and deal with the transition. >> rose: at daf os, the president of china xi jinping basically praised globalization, said we believe in globalization, we are for globalization, we want to have an impact on global markets. we want to be a leader. >> look, i think, i think at the moment we are creating a void that china is all to willing to step into. and to fill.

and we see that happening. we saw it happening as you mentioned if daf os. dafous. we see it happening across the veg on. where the country is saying if the u.s. is not going to engage, show leadership as it did in the context it of ttp then we're going to it have to line up behind china. >> rose: are they already moving to make agreements with vietnam and the other countries? >> they are. they are negotiating an agreement, it's called the regional comprehensive economic partnership. it has 16 countries ranging from india to japan. and it's quite different from tpp in a number of important ways. it doesn't raise workers rights, labor standards, doesn't protect the environment. >> rose: it's part of the complaint-- that was part of the complaint of bernie sanders and hillary clinton. >> those are the things that ttp did that rcep won't do. >> rose: it was part of the complaint. >> that's right, that's right. and i think the concern is is that if china moves ahead with its model of globalization which is a mer can tillis

interventionist mod well they monitor and cut off the internet, or they force companies to transfer their technology or their intellectual property in order to have access to their markets, that is a much more disadvantageous set of rules for the u.s. companies and u.s. workers and farmers to operate in than could have been possible under tpp. >> rose: is is it likely we'll have a trade war with china. >> i think, i can't answer that, because it's really up to president trump and his administration in terms of how they pursue this. clearly with china,. >> rose: tell me, what would cause a trade war and how do you avoid a trade war. >> what would cause a trade war would be to take unilateral actions that raise barriers to exports from china to the united states. and-- . >> rose: the very thing that donald trump has threatened. >> and that that would then give china license to retaliate against us, to imitate us, both of which would have a dramatic impact on our economy. >> rose: donald trump says he believes in america first.

>> look, i think all of us believe that our jobs in government are to pursue u.s. interests, first and fore most. and i think it really depends how you define what those are. 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, markets to flourish, our exports to flourish. and if that's going to be undone in the name of american first, it's going to have an impact. >> rose: is there an argument to be made that the chinese have not played fair. >> absolutely. >> rose: that it's not a level playing field. >> absolutely. look, i think one of the great frustrations with china is that they are very disciplined about pursuing their national self-interest in the most narrowly defined sense. >> rose: china first. >> china first. >> without taking any responsibility for the international trading system. one thing that we have tried to do is encouraged them, pressed them to take more responsibility as the second largest economy in

the world, for the trading system, that they've benefited from so enormously. >> rose: why have they been unresponsive to that argument. >> because i think in some ways they have responded but certainly not enough. that's why it it is important to hold their feet to the fire and why the obama administration brought more than 16 actions against them, trade enforcement actions. when we found areas where they violated their obligations, we were not shy about bringing a case to the world trade organization or under other laws, why we have literally hundreds of actions against china, on dumping or illegal subsidies. where we keep out so much of their steel out of their market through our trade remedy laws precisely because if they're not following the rules we've got to be firm in upholding the laws. >> rose: they ailes were speaking about that, always angry about their steel being kept out of the u.s. market. >> they are angry. my response is stop dumping it, if you don't dump your steel. >> rose: dumping is what is

driving the price down to beat the competition. >> selling it it in our market below their cost at home or below what they sell it for at home. so it's unfair. >> rose: in order to have market share. >> absolutely. >> rose: drive other people out of business. >> we have seen that in steel. we've seen that in aluminum. we've seen that in solar panels. >> rose: that is the reason donald trump, my guess is, could make an argument that resonated on trade. >> that's right. >> rose: and the loss of jobs. we have been vulnerable, he would argue, to the trade practices of other countries. and i'm going to stop that. if we have to do-- whatever we have to do. we'll play bir that i rules. >> i think it is 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 with whom we don't have a free trade agreement. the countries with whom we have free trade agreements we've tended to have pretty good trade balances and they have improved over time. china is one the countries we don't have a free trade agreement with and that is where a big part of our trade deficit

is. >> rose: in other words they sell to us more than we sell to them. >> correct. >> rose: would tpp have influenced that. >> china was not part of tpp. >> rose: i understand. but would it it have given emphasis, would it have given muscle, anything to have been able to be a leverage against what china was doing? >> by raising standards in the region, by saying if you want to be part of the modern trading system, you have got to have strong labor and environmental protections, you have to put disciplines on your government owned corporations so they act fairly. you have to respect intellectual property rights. you have to keep an open and free internet, i think it it would have encouraged or forced china to compete by raising their standards as well. if all their neighbors are offering higher standards, it will have a positive effect on china as well. >> rose: you think those nations in asia look at the united states as sort of pulling back and retrenching from its commitment and its participation in the future of the region?

>> i fear that they do. and you have heard comments from prime minister abe or prime minister li or new glee and's prime ministers about how withdrawal from tpp damages the credibility of the united states in the region, undermines its leadership and create this vacuum that china will fill and that they will feel the need to line up behind china accordingly. and you know, senator john mccain, this isn't just my belief, senator john mccain and all these leaders in the region have all said withdrawing from tpp will have a dramatic negative impact both economicically and strategically for the u.s. >> rose: we touched on this. what are the three or four countries that we export the most to? >> canada, mexico, the united kingdom, although it's way below mexico. the european union, generally, as a market. we export quite a bit to. but those are our major ones. and of course china. china over a hundred billion dollars a year. >> rose: trump also used the

word protectionism which is a term you thought had gone away and by that he means he will do exactly what he needs to do to protect american products? >> well look, again, i think we all believe in the importance of protect iting american jobs, protecting our ability to manufacture here in the united states. we go at it different ways. a couple of years ago there was a german car company was deciding where to put their next manufacturing plant in north america. came down to the u.s. and mexico. and they choses mexico. and it wasn't because of the differ recommendation 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. >> rose: without tariffs. >> without tariffs. we shouldn't lose that kind of competition. we're never going to compete with mexico on wages. we shouldn't. but we shouldn't lose the competition with mexico on free trade agreements because that is something we have control over. and i saw a study that recently came out that said the differ

recommendation in wages is about $600 per car. the differ recommendation in tar riffs because of mexico's trade policy is about $2500 per car. >> rose: here is what peter baker wrote in the new york time this week. mr. trump's moves amount to a drastic reversal of decades of economics poly in which presidents of both parties have lowered trade barriers and expanded ties around the world. although candidates have often criticized trade deals on the campaign trail, those who made it to the white house including barack obama ended up extending their reach. so the president, president obama, nominated you. became more attracted to trade than he was as a young politician in the state legislature and in the senate? >> well, i think he had a pretty consistent perfective on-- perspective on this. which is that the porntion of being engaged in the world, of u.s. leadership and the fact that we need to be in these markets if we're going to support jobs become here. but he was also informed by his experience in chicago as an

organizer and seeing the effects of steel mills close down. so his view was, not for trade for trade's sake. but if we can do trade right, by raising labor and environmental standards in other countries, by lefting the playing field, that's the kind of deal we should-- that's the kind of deal we should do. so as a candidate he called for the renegotiation of nafta and was very specific about what he mentd. let's make sure mexico has binding and enforceable labor and environmental commitments. that is what we did in tpp. mexico and canada were both part of tpp. through tpp we renegotiated nafta. >> rose: what about american labor? how do they feel about trade agreements? >> they have rarely supported them. we had the united autoworkers support the agreement with korea a few years ago but i think other than that i'm not aware of another trade agreement that they supported. >> rose: thank you for coming. great to see you. >> thanks for having me.

>> rose: you will be in camp with the council of foreign relations. >> i will be. looking forward to it. >> rose: michael froman, trade representative during the obama years. back in a moment. stay with us. >> richard haass is here, the president of the council on foreign relations and a veteran observer of u.s. foreign policy as well as a participant in u.s. foreign policy. he has written over a dozen books. his latest calls on president trump to fix a world that seems to be spending out of control. it it is called a world in disarray, american foreign policy and the crisis of the old order. i am pleased to have raiched has haass back at this table. welcome. so where are we? how did we get here, and where do we go. because you reach back element centuries in this book. >> where we are is a world in disarray that a lot of the institutions that formed the world after world war ii have essentially run out of gas. the disciplines and constraints of the cold war are now 25 years gone. you've got a distribution of capacity, military, economic,

whatever in so many hands, some of them states, some of them not states. you have globalization which has created challenges that the world can't even begin to keep up with whether it's sieber or prolive raise or lots of other things. so the middle east, we talked about it on this show is unraveling, indeed has unraveled to some extent. europe which by far is the most stayed almost boring part of the world is now anything but with the refugee crisis, brexit, russians in ukraine. north korea is putting new clear warheads on missiles that can probably reach the united states within a couple of years. so this is at least a world in disarray. how did we get here? some of it is just the stuff of history. countries rise, globalization happens, cold war ended. some of it is the result of things the united states did. the aye rack war, the libya invasion, pulling u.s. troops out of iraq, subsequently by barack obama. a lot of it is things we didn't do. again barack o bamia, syria, the

red line, other such thing, not following the invasion of libya or in the last couple of days the decision to not go ahead with the transpacific trade partnership. the united states has long been a supporter of free trade, all these countries in asia and latin america lined up with us. and suddenly we are loose lucy with the football and yanking it a what and all these countries feel left in the lurch. so it's this combination of the stuff of history, things the united states has done. things the united states has failed to do that i think accounts for where we are. >> rose: is there a vacuum in leadership that china, most interestingly is prepared to move into? >> not so much. i think china might be prepared in this or that issue. china it itself is limited by its own politics. >> rose: but at the same time you saw as davos president xi jinping saying we believe in glob allization. >> up to a point. the chinese have an extremely constrained political system. they want to keep power. they're not really-- won't allow things to loosen up that much.

their exrensee-- currency is not converteddable. i think the real alternative to a u.s. lead world say nobody lead world which is a world of increasing what i would call disarray or disorder. countries like china might have a large role in asia. countries like iran or turkey or israeli, lusha germany and europe, a world of local powers but more than anything, it's a world of growing disarray or worst yet as we see in the middle east also at times a world of chaos. >> what does the world need? >> what the world needs is a united states that is willing to play something of a traditional leadership role. the world also needs a new what i call-- . >> rose: traditional leadership world is not a defined president trump. >> not at all. in just a few short days but also over the campaign and transition, he has contributed to the disarray by raising fundamental questions about whether the united states is any longer reliable. whether we're prepared to support our allies. we're obviously not prepared to support free trade. there are real questions in also

the whole america first characterization. it sends out a signal that we're simply in it for ourselves. what i am worried about is a lot of other countries are going to say hold it, if the united states is no longer in it for us, we have to take care of ourselves, on some issues that might mean they simply defer to a local power, say to a china. on other issues country may see hey, we've got to take matters in our own hands. i don't really want to have a world where suddenly everybody is taking matters in their own-- . >> rose: forming their own alliances. >> proliferating nuclear weapons or saying if i don't ak militarily someone else is going to gain control of something. so yeah, i really worry about a world that is not lead. >> rose: talk about trump. in term its of the actions he's taken in foreign policy. >> he has chosen some very serious stable people, secretary of defense and secretary of state. these are two. >> and they include the secretary of cia director. >> head of homeland security. these are all seasoned individuals. the problem is that they're all

in the periphery. what really matters is the relationship between the periphery, the various departments or agencies and the white house and the white house has suddenly become a very crowded place. you have a president, a vice president, a chief of staff, a chief strategist, a senior advisor in the son in law, a national security advisor, kellyanne conway, there are a lot of cooks in that kitchen. we don't know how they're going to work together and we simply don't know the relationship between all of them and say a secretary of state. you know and i know say go back to jim baker. when jim baker was george h-w bush's secretary of state, everyonearound the world knew when jim baker talked he was speaking with the full backing and authority of the president. i'm not so sure that when rex tillerson speaks people are going to be able to assume that if donald trump is either tweeting certain things or various people at the white house are saying or doing things that are inconsistent with whatever the message. >> rose: because it is the nature in his dna to be hands on

and involved in everything. and believing that it's okay for him to tell everybody what he thinks. >> one other thing, 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 enough, trade is bad for us. we're spending too much on the world. >> rose: 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 relationship with tie want separate from china, an secondly, if the united states try toses say to them you know, you've got to stop and abandon the south china sea. >> on the former, that is the single most nor all gik politically loaded issue in china. >> they say that time after time. >> it it has the virtue of being true. the chinese don't take the cohesion of their country for granted. when they see the tie want issue of the pulling of the thread on the fabric of their country. there is zero chance that any person running china could

compromise on that issue and continue to run china. plus this year is not just any year. xi jinping in october has the 19th party congress in china. this is his clans to consolidate his power. put in place his people in the standing committee of the pollity boro. zero chance there will be 1 inch of flexibility. to the contrary, if mr. trump pursues or persists in pursuing something on tie want, that the chinese see as inconsistent with the one china policy, they will shut down their relationship and they will retaliate. i think we should have zero doubt about it, they will retaliate. >> rose: the question is how do they retaliate. >> they could shut down tie want's trade to the mainland that could have real impact on tie want. they could increase their military presence in the region. they could look for something economicically. suddenly they could decide that maybe they don't want to accept all those boeing planes that are being discussed. their way is they can put economic pressure on them 678 i'm not saying we can't then retaliated and do some things but we have to understand, this is going down a path, there will

be no winners. no one will be better off from this process. plus, can i say one other thing it it will also mean therefore the two sides won't have the context to cooperate say on an issue like north korea. >> rose: and russia, what should be our relationship with russia. again, the principal people that are advising him seem to have a tougher stand on russia. >> than he's acknowledged. >> absolutely. you're right. he himself, however, as well as the national security advisor have this consistently what, benign take on russia. i don't know how that's going to play out. what i hope we do, two things. on one hand we should show respect for the russians, be willing to talk with them, treat them as a serious country, not insult them, not humiliate them. on the other hand the goal of our relationship just qunt be friendly relations, we need to see real clangs in russian behavior, backing off on the pressure they're taking on eastern ukraine, that they don't put pressure on the baltics. we should be doing things to help arm the ukrainian, and we

have to reintreu dews military forces into nato. if we being to relieve sanctions on the russians or reduce sanctions it has to be conditional in exchange for real changes in russian behavior. >> rose: and we do not know what we maf-- behavior the russians could do to precipitate president trump from lessening sanctions, cuz he has suggested that there may be examples of russian conduct that would cause him to want to reduce the sanctions. >> quite possibly. again, if they did stop doing certain destablization aks in eastern ukraine, he might say therefore they deserve some response to that. he could, but there are other things he could do. cogive some statement or pledge that the united states would not try to bring about regime change in russia, something that putin is clearly worried about, but we should only offer them things. >> why is putin worried about that when he has such a huge popularity. >> he saw what happened in ukraine. he saw the president get chased out of the palace by a mob.

the economy is contracting in russia. >> he thinks we were behind the mob. >> he thinks that one of our goals is to see the so called revolutions like you have seen throughout parts of yeern europe. he is wore eds. most tyrants don't take for granted their ability to rule. and there is no ordinarily-- one of the things that make these countries the kinds of systems there are, there is no mechanism for legitimate political clang stvment all or nothing, and i think putin is worried. >> rose: do you think there can be a negotiation with putin? >> i do. i think there can be a relationship with him about certain issues, about conventional forces in europe, about nuclear weapons, possibly about ukraine. we could possibly work with them in the middle east or afghanistan. >> rose: you say in the book the goal is not smooth or good relations, the goal in foreign policy is seeing that why interests are looked after, that other countries behavior takes your interest into account. in the case of russia their behavior showed greater difference to our interest and concerns in the relationship

would improve. >> absolutely. what we don't want is a cosmetic improvement. we don't want an era of good feeling. remember in the late 60s the glass boro summit. we don't want that kind of cosmetic stufer. what we want to have is a very business like set of conversations and hopefully we see some very tangible chainings in russian behavior. if they are willing to do that, yes, we should respond. >> rose: henry kissinger used to say to me and i assume he still says it, that the possibilities of doing something interesting and dramatic change comes when everything is in disarray. that is when you have an opportunity to change what has been, you know, decades of. >> possibly, because it it gives you things to work with. but only if you have the will. >> rose: more fluidity. >> fluidity creates opportunities, it it creates things that you can exploit, you can act on. things are not in cement. i get that. but you've got to then be willing to pursue policies over time, put reseurs-- resources in

in a way that will turn those opportunities into realities. it doesn't automatically happen. by not doing things or by doing other things it's also possible to turn disarray, rather than into opportunity, into anarchy. so the real-- it's not comuk. -- automatic, nothing happens automatically for good there is no to use the old economics image, there is no invisible hand like adam smith talked about in the economic market place that makes the markets in capitalism work. it takes visible hands. so the real question is whetherrer with a going to do it under barack obama quited often we were not. the real question is whether under donald trump we are going to be willing to have the visible hand if you will to stretch the metaphor of the united states. >> rose: so whos what shall-- 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, this world order 2.0. basically a new operating system for the world that reflects-- . >> rose: what does that mean. >> basically we have had an operating system in the world, a set of rules for nearly four

centuries which was very basic. you don't use military force to change borders. and you essentially allow governments tremendous space to do what they want within their own country. i call that world order 1.0 it is based on the idea of sovereignty. i'm arguing a world of-- nothing stays local. >> rose: geography is different too. because we now have all kinds of means to transmit, transform. >> absolutely. the conveyer belt of globalization, an infectious disease breaks out, suddenly zika virus or worse can spread around the world. digital things can spread instantaneously. terrorists, hackers, climate change. none of these things respect borders or geography. i am saying we need a world 2-rbgs.0 where sovereign states have the obligation and we should encourage it we have to practice it and encourage it to monitor things that go on within their borders that could have a negative affect on others. we don't want other countries.

like right now, remember after 9/11. we established the principal that no country could harbor terrorists who could strike others. they didn't have the right within their sovereign limits to harbor terrorists. we want to thaik that principle and attach it or extend it to virtually anything else that could go on within a country that could affect us or anybody else negatively. >> rose: what do you mean by paralysis by analysis. >> it's the tendency we saw it quite a lot in the previous administration, you are presented with a tough set of issues on syria, something else, and you look at it and look at it and you persuade yourself that anything you do is complicated. anything you do has such downsides you don't want to do it it. and you end up doing nothing. the only problem is in my experience i have now worked for four presidents. it's very rare that people subject to as much rigor and scrutiny the option of not doing anything different. >> rose: what was barack obama in your judgement classic misunderstanding or erroneous assumption about the way the world works?

> i think he was, had the problem of some people legal backgrounds. i'm now going to alienate every lawyer watching the show, but laws about a set of rules. and you go into a court room and everyone accepts them. you play the game by the rules. i think barack obama had that and a sense of poism about human nature. and i think he believes that things could get better by the power of reason that people would be restrained and what i think he never quite internalized is that evil can triumph over good, people have agendas, that they're not willing to compromise on. so unless you push back very hard, bad forces can gain the upper hand. i don't think he appreciated the capacity of evil, of ideology, of people's willingness to use military force. you saw it in the middle east. we saw it in europe. in some ways he was more reasonable than the world he inherited. >> so therefore he could not understand the threats to the world that he saw. >> i think he was also for political reasons extremely wary of large scale american

commitments. again he came into office promising to undo the commitment to iraq, undue the commitment to afghanistan. he overlearned the lessons of his predecessor. in some ways george w. bush was argueically-- arguably the president who tried to do too much, to remaining the middle east. barack obama historians i will predict will be the historians who tried to do too little. >> rose: should he be blamed for the fact there was no american president presence in iraq. >> yes, i believe so. i think the argument that we had this-- we didn't have this agreement. and he had his hands tied is simply not true. why do i say that? because he himself introduced more than 5,000 american soldiers without formal agreement by the iraqi parliament. when there is a will, there tends to be a way. he did not want american forces to stay in iraq. >> rose: so he didn't want agreement. so any idea that show it was because the iraqis didn't want it is simply wrong in injure judgement. >> yes, sir. we could have worked around it just as we did when we reintroduced american military forces in iraq. right now american military

forces are in iraq, 5,000 without the agreement the administration years ago said they needed. >> rose: was the classic mistake in syria the red line or was it not being timely with respect for the rebels. >> all of the above. and perhaps the first mistake was saying a sad-- assad must go without backing it up with a policy in which what we were prepared to do matched our rhetoric. you can't have ambitious rhetoric and limited means. something has to shall-- something has to give. they've got to be in sync. from the beginning we got in trouble. >> rose: but you always run up against when you say someone has to go, you always run up head on to the question of so what follows. what goes. >> what if he refuses to go. and as you said the bigger question is-- we're going to face that again, by the way, in both-- not so much in iraq but in syria. i think it is a question of not just if but when we defeat the isis territory-- territorial basis. >> what happens the day after. how do we prevent an isis-like

group, whatever they call themselves, whatever the name is for the next radical jihadist group. how do we prevent them from inheriting. >> rose: that what is interesting about what trump said, he did not say he is going to eradicate isil or isis from the face of the earth, he said he would he radiate radical is-- islamic extremism. >> several places in the speech he actually set 2k3w0e8s. i would suggest he can't-- that's one of them. that there is just no way we can do that. what we need to do is reduce terrorism to a level where it doesn't change the way we live our lives, that it doesn't really exact significant costs but to eradicate it, there is always going to be people who are going to wake up with radical ideas and whether they use box cutter or knives they buy at the local kitchen supply store, or guns, they are going to always find something-- . >> rose: something much more frightening than the world we live in today. >> which is the true nightmare scenario.

they will hold nuclear stuff. >> rose: or they steal it or they-- figure out a way or they build a sizer of things that we can't imagine now because technology is moving. >> could be something biological. >> right. >> you could have a collapse of order. >> what about this. i once in an interview with barack obama said the following am you believe we have the strongest political power, you believe we have the best technology. you believe we have the best universities on and on, you believe we have the best rule of law. you believe we have the best strongest institutions. so what could go go wrong. and he said our politics. >> our politics are one of the things-- . >> rose: which means gridlock, which means in a sense of kinds of threats to democracy that he was talking about in his farewell speech. >> yeah, i think on his watch our politics did go wrong. i mean the word you and i probably use more than any other in describing american politics is disfunctional. we've been unable and unwilling to address some of the core problems whether infrastructure,

our schools, immigration, the national debt. and it means the example we set-- send to the world or set for the world is not compelling. others get disillusioned and our ability to act in a concerted, consistent way is not what it needs to be if we are going to be effective in the world. in that sense the former president is spot on. >> rose: how about the present president. what was your reaction to the inaugural speech as you sat watching? >> okay, the i expect if he is watching it he want like. i thought it was dark, much darker, particularly dommestically than the facts justify. i thought it was quite divisive. you mentioned before between the quote unquote people and quote unquote the political elites it was very divisive. it was obviously protectionism, if saying we have to buy american, hire american. well, if everybody else in the world follows that formula, the chinese only buy chinese and hire chinese. >> rose: but when he talks

about the pipeline and they have to use american steel, everybody, every worker who is ever worried about losing their job said right on. they're not think being protectionism, trade war, they're think being the fact that we've got somebody that is standing up for see american products. >> absolutely. and in the short run that will work. but in the long run, millions and millions of american jobs are export depend ent. and a lot of these jobs that might be saverred today are goes to disappear any how because of technology. and because of artificial intelligence and robotics and driverless vehicles. so basically trade is being scapegoated. we're losing the strategic benefits of trade, it's raising doubts about our reliability and we're not going to save jobs. we're not going to help american workers. we're certainly not going to help american consumers if we shut our borders to trade. can i say one other thing. we're also not going to help ourselves with mexico. one of the reasons in the last few years we've had a net

outflow of people going from the united states to mexico is because of naftda. nafta this agreement that is more than 20 years old helped make the mexican economy plod earn, more robust so more and more young mexicans stayed home. mexico has had a higher gret rate than the united states. if we end up in some kind of a trade war with mexico, guess what, ironically enough, the pressure on american borders from mexico is going to go up. so right now there is an inconsistency, a contradiction between what is being said about our trade policy and our desire to make our borders secure. >> rose: send a copy of this book to 16700 pennsylvania avenue. >> i did. >> rose: did you really? >> yeah. >> rose: and they read it. >> i sent one to at that point the president-elect and i sent one to the national security advisor. >> rose: with a note saying if you read this you will be a better president. >> i never go that far. i sent it to them in the hopes he would-- i sent them some of my previous books. we will see what happens. >> rose: a world in disarray, american forree policy and the

crisis of the old order. richard haass who has experience, intellected and understanding of the issues that are in play for the world today. thank you for joining us, see you next time. >> for more about this program and earlier episodes visit us online at pbs.org and charlie rose.com. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

>> rose: funding for "charlie rose" has been provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide. > on tomorrow's pbs newshour antiabortion actists descend on the annual march for lif

boom! hello, i'm julia child. welcome to my house. what fun we're going to have baking all kinds of incredible cakes, pies and breads right here in my own kitchen. mmm, yum, yum-- a chocolate genoise raspberry ruffle cake. alice medrich, master teacher and chocolatier will show us how it's done, step by fascinating step.