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Trump Hosts British P.M.; Trump Limits Refugees, Wants Christians to Get Priority. Aired 5-5:30p ET

Aired January 27, 2017 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JAKE TAPPER, CNN ANCHOR: That is it for "THE LEAD." I'm Jake tapper. I turn you over to Wolf Blitzer in THE SITUATION ROOM. Have a great weekend.

[17:00:10] WOLF BLITZER, CNN ANCHOR: Happening now, extreme vetting. The commander in chief visits the Pentagon. Orders a boost of U.S. armed forces and a sharp scrutiny of refugees to the United States, which he says is aimed at keeping out, quote, "radical Islamic terrorists."

Walled off. President Trump speaks by phone with Mexico's president. They agreed to disagree about who will pay for a border wall. In fact, the president did not mention a wall publicly today. Have they agreed to keep quiet about that?

Prelude to Putin. While welcoming Britain's prime minister and hailing their special relationship, President Trump gives a hint about tomorrow's phone call with Russia's president, saying it's too soon to discuss lifting sanctions on Moscow, but adding he's looking for a great relationship with all countries. Will they discuss Russia's hacking of the U.S. elections?

And biting the hand. President Trump calls the news media, quote, "the opposition party," accusing them of dishonesty, total deceit and deception. So, who does he expect to report on his words?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news: the commander in chief makes his first visit to the Pentagon. After saying he'll let the new defense secretary, retired General James Mattis, override him when it comes to using torture, he orders the strengthening of the U.S. military and strong vetting of refugees, aimed at keeping out what he calls radical Islamic terrorists.

The president today hosted his first foreign leader over at the White House in his first news conference. He and the British prime minister, Theresa May, they spoke of the special relationship between their two countries. There may be one area of daylight between them. The prime minister spoke of the need to maintain sanctions on Russia, but President Trump said only that it's too soon to discuss lifting sanctions.

A day before he talks by phone with Russia's President Vladimir Putin, Mr. Trump said he's looking for a great relationship. His words.

And a day after Mexico's president canceled the White House visit over the demand that Mexico pay for a border wall, the two leaders spoke by phone. Mr. Trump called the talk very friendly, but said Mexico has, quote, "beat us to a pulp" on trade. The president today made no public mention of having Mexico pay for a border wall. Did he promise Mexico to keep quiet about that?

I'll speak with the House Homeland Security Committee chairman Congressman Mike McCaul. And our correspondents, analysts and guests, they're standing by with full coverage of the day's top stories.

We'll get to the Pentagon in a moment, but we begin with President Trump as hosting the first foreign visitor to the White House, first White House news conference, as well.

Our senior White House correspondent, Jeff Zeleny, is joining us. Jeff, the president is juggling some major diplomatic issues.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Major issues indeed, Wolf. As you said, President Trump is on his way back to the White House right at this moment after being at the Pentagon a short time ago.

But he did open up the doors of the White House earlier today for his first meeting with a foreign leader. He has a diplomatic plate that's running over.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Actually, I'm not as brash as you might think.

ZELENY (voice-over): President Trump welcomed British Prime Minister Theresa May to the White House, pledging to uphold the special relationship with the United Kingdom.

TRUMP: Madam Prime Minister, we look forward to working closely with you as we strengthen our mutual ties in commerce, business and foreign affairs. Great days lie ahead for our two peoples and our two countries.

ZELENY: The world was watching the East Room of the White House for Mr. Trump's first meeting with a foreign leader. Yet it was the more challenging diplomatic test he's facing with Mexico and Russia that took center stage.

The president taking steps to cool an escalating standoff with Mexico. He spoke on the phone for nearly an hour today with Mexican President Enrique Pena Nieto, who canceled the trip to the U.S. over Trump's demand that Mexico pay for a border wall between the two countries.

TRUMP: I have great respect for Mexico. I love the Mexican people.

ZELENY: Yet he stood his ground, insisting that Mexico would, one way or another, pay billions. TRUMP: As you know, Mexico, with the United States, has out-

negotiated us and beat us to a pulp through our past leaders. They've made us look foolish. The United States cannot continue to lose vast amounts of business, vast amounts of companies, and millions and millions of people losing their jobs. That won't happen with me. We're no longer going to be the country that doesn't know what it's doing.

ZELENY: A statement from the Mexican government said, "The presidents also agreed at this point not to speak publicly about this controversial issue."

[17:05:04] That line does not appear in the White House statement about the call.

A week into his presidency, Mr. Trump said it's too early to say whether he will lift sanctions imposed by President Obama against Russian president Vladimir Putin. He's set to talk with Putin by phone on Saturday. After being criticized for his praise of the Russian leader, Mr. Trump took a more measured approach today.

TRUMP: How the relationship works out, I won't be able to tell you that later. I've had many times where I thought I'd get along with people, and I don't like them at all.

And I've had somewhere I didn't think I was going to have much of a relationship, and it turned out to be a great relationship.

ZELENY: Standing by his side, Prime Minister May conceded America's election had taken the world by storm.

THERESA MAY, BRITISH PRIME MINISTER: I'm delighted to be able to congratulate you on what was a stunning election victory.

ZELENY: It was also Mr. Trump's first time taking questions from the foreign press, like this one from the BBC.

UNIDENTIFIED FEMALE: What do you say to our viewers at home who are worried about some of your views and worried about you becoming the leader of the free world?

TRUMP: This was your choice of a question?

There goes that relationship.

ZELENY: The president said he believes water boarding and other forms of torture work, but would follow the lead of Defense Secretary James Mattis, a retired general who opposes such extreme measures.

TRUMP: I don't necessarily agree, but I would tell you that he will override, because I'm giving him that power.

(END VIDEOTAPE)

ZELENY: Now, before all this diplomacy, President Trump started his day by making more claims about voter fraud here in the U.S. He said he still has questions that some 3 million people voted illegally.

But, Wolf, we are ending this week without a signature on an executive order about voter fraud. He planned to do it yesterday, did not happen. Planned to do it today, did not happen. It may come this weekend, I'm told.

All this is coming as the increasing problems of the world stage are landing right on his lap here at the Oval Office -- Wolf.

BLITZER: All right, Jeff Zeleny at the White House, thank you.

The commander in chief makes his first visit to the Pentagon. He has some orders for his generals and military planners and signs a controversial executive action, which he says is aimed at radical Islamic terrorists.

Our chief national security correspondent, Jim Sciutto, is at the Pentagon for us today. Jim, so what is the president saying?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, the president coming here that first visit as you say, greeted by his choice for defense secretary, now retired general James Mattis, he had two executive orders. One very well received here. It was titled Rebuilding the United States Air Forces. The president saying that means more ships, more planes, more resources. Didn't specify exactly or exactly how it's going to be paid for, but something that would be well received here. There's been a lot of concern about defending the country in the age of sequestration.

But the more controversial executive action, that one limiting immigration to this country, stopping all refugees from seven Muslim majority countries in the Middle East, including Iran, Iraq, Somalia, Libya, and calling for, in effect, a religious test going forward, asking people about their religious beliefs. Here's what the president had to say.

(BEGIN VIDEO CLIP)

TRUMP: And establishing new vetting measures to keep radical Islamic terrorists out of the United States of America. We don't want them here. We want to ensure that we are not admitting into our country the very threats our soldiers are fighting overseas.

(END VIDEO CLIP)

ZELENY: Wolf, one thing the president seemed to be very aware of was the upset he caused when he went to the CIA headquarters in front of the memorial wall there, made just a cursory reference to that wall. The president effusive in his praise. He was in the Hall of Heroes here, which honors the Congressional Medal of Honor winners. Effusive in their praise, saying they shed their blood, they poured out the love in their hearts and their sacrifice, calling these patriots the backbone, the spirit of the nation, reading off a script there as he did that.

So, it appeared, Wolf, that the president wanted to make very clear that he honors that sacrifice, expressing it in a way that he certainly did not at the CIA, perhaps conscious of the upset he caused after that visit, very different message here at the Pentagon.

BLITZER: Yes, good point. All right. Thanks very much, Jim Sciutto at the Pentagon.

Joining us now is the chairman of the House Homeland Security Committee, Republican Congressman Mike McCaul of Texas.

Mr. Chairman, thanks for joining us.

REP. MIKE MCCAUL (R), TEXAS: Thanks, Wolf.

BLITZER: So, the president says he wants what he calls extreme vetting of all immigrants coming into the United States. I assume you've been briefed on his proposals. What measures will President Trump be putting into place that previous administrations have overlooked?

MCCAUL: Well, it's a 30-day suspension of visa applications coming in from high-threat areas. Seven specific countries will be suspended. The Syrian refugee program, significantly, will be suspended indefinitely until the secretary of homeland security, FBI and DNI director can come to an understanding of what is the vetting process, and can we let these individuals in the United States.

And Wolf, this frankly goes back to a memo that Rudy Giuliani and Judge Mukasey and I drafted to the then-candidate Donald Trump around last June, talking about the extreme vetting process, how he can vet from these high-threat areas to prevent terrorists from coming into the United States.

BLITZER: The president told David Brody of the Christian Broadcast Network today in an interview that Christian refugees wanting to come to the United States should be given priority status. Listen to this.

(BEGIN VIDEO CLIP)

DAVID BRODY, CHRISTIAN BROADCAST NETWORK: Persecuted Christians -- we've talked about this -- overseas. The refugee program that -- or the refugee changes you're looking to make, as it relates to persecuted Christians, do you see them as kind of a priority here?

TRUMP: Yes.

BRODY: You do?

TRUMP: Yes. They've been horribly treated. You know, if you were a Christian in Syria, it was impossible, very, very -- at least very, very tough to get into the United States. If you were Muslim, you could come in. But if you were Christian, it was almost impossible.

And the reason that was so unfair is that the -- everybody was persecuted in all fairness, but they were chopping off the heads of everybody. But more so the Christians. And I thought it was very, very unfair. So, we are going to help them. (END VIDEO CLIP)

BLITZER: So, you heard him say that it's almost impossible for Syrian Christians to come to the United States, easier for Syrian Muslims to come to the United States. What is he basing that claim on?

MCCAUL: Well, actually, Wolf, the fact is that very few of these refugees are Christian, but I would agree with the president that letting in Christian Syrians certainly would not pose a radical Islamist terror threat. So I agree with him on that premise.

Having said that, the majority of these refugees are fleeing Assad, the dictator in Syria, a majority of which are Muslim. So, I'd say the majority of these refugees are Muslim background. And the SAFE Act we passed in the Congress, we did not put any religious test in that bill.

BLITZER: Do you have a problem prioritizing, for example, letting Christians come into the United States, make it easier for them than Muslims?

MCCAUL: Well, I think in the case of Syria -- excuse me -- in the case of Syria, they are not the ones who are going to pose a terrorist threat to the United States.

So, if you're going to provide a vetting process, it seems to me that they would be top of the list, versus, you know, potential radical Islamist. I think the whole point here is that we need to do a better job vetting, both on the visa application process, but also in the refugee program as to who we're letting into the United States responsibly and who we're not.

Because we've had too many of these incidents, the San Bernardino, Chattanooga, Orlando, New York, and the list goes on and on of these terror events happening in the United States. We want to stop that from happening in the future. And I applaud the president for what he's done.

BLITZER: Christians certainly have been persecuted in Syria and Iraq, but I still don't understand why he says it was easier in previous administrations for Muslims to come to the United States than these Christians who have been attacked.

MCCAUL: Yes, I really can't comment on that specific. The majority, again, these refugees are Muslim-based. And again, the Christian refugees do not pose a terror threat to the United States. Seems to me it makes more sense to put a priority on them coming in as a priority.

BLITZER: On the subject of torture, President Trump says he'll defer decisions to the defense secretary, retired General James Mattis. Congress, though, has the final say. It's the law. The law says torture is illegal. Do you believe the president respects congressional authority on this specific matter?

MCCAUL: You know, I do. I think he made a statement that there are three cases, and Khalid Sheikh Muhammad one of them who was waterboarded. In that case it actually got us information that saved American lives and led us to Osama bin Laden.

So, I think what he's saying is, in concept, it can be valuable, but legally, it is in violation of the law. In fact, I voted on the McCain Amendment to basically honor the Army Field Manual, which prohibits torture.

And so I think he understands now that that would be illegal. General Mattis has certainly been very strong about this, as has CIA director Mike Pompeo in his testimony before the Senate, that he would not allow for that.

[17:15:04] BLITZER: And one final -- let me get back to the whole issue of Muslim refugees, Muslims. They have been persecuted in Syria and Iraq. Christians, of course, as well. But how do you tell Syrian and Iraqi Muslims and Christians apart?

MCCAUL: Well, again, this goes back to why the Syrian refugee program needed to be put on hold in the first place. The SAFE Act I introduced did that and what the president has done in this executive order has essentially suspended the refugee program for 120 days, and the Syrian refugee program indefinitely until, again, as was spelled out in my bill, until the DNI and FBI director and secretary of homeland security can ensure the Congress and the American people that they can be properly vetted before they come into the United States.

BLITZER: Because certainly, if Syrian Muslim refugees know it's easier to come into the United States if they say they're Christians, they could just pretend to be Christians, right?

MCCAUL: Well, exactly. I sent a letter to the DNI just yesterday identifying the fact that several of these Syrian refugees who have been brought in now, we found out do, in fact, have terror ties.

This is precisely what I warned about a year ago when I introduced the SAFE Act, is what the FBI director warned me about, and then-Secretary Johnson. And now just like the Iraq refugee program, we're seeing that terrorists have found a way to make this a Trojan horse to get into the United States. And that's -- that's what we're trying to stop by doing this.

BLITZER: But on the issue of extreme vetting, which sounds very important, how do you do that specifically?

MCCAUL: It's a great question. In the memo, we outlined some specific ways to ramp up the vetting process, ask more specific questions, look at social media. But that's also in term of what that means will be a determination that General Kelly is now going to be required by this executive order to make in the next 30 days.

BLITZER: Because as you know, refugee officials here in the United States say already it takes at least a year or two for a refugee to be admitted into the United States.

MCCAUL: Yes, and I would argue there are a lot of technologies, Wolf, out there that I -- have been presented to me that can actually detect whether someone is lying about having terrorist ties that we're not implementing right now, that I think we should be looking at that kind of stuff that could really better protect America.

And then be able to determine who are the just compassionate ones that we want to allow in the country versus the terror threats. But we're not doing that right now, and I don't think the vetting process is adequate.

BLITZER: All right. Chairman McCaul, we have more to discuss. I want to take a quick break. We'll continue our coverage right after this.

(COMMERCIAL BREAK)

BLITZER: We are following multiple breaking new stories tonight. President Trump spoke by phone today with Mexico's president who canceled a White House visit over a dispute over demands that Mexico pay for a border wall. A statement suggests both sides agreed to disagree.

We're back with Republican Congressman Mike McCaul of Texas, the chairman of the House Homeland Security Committee.

Mr. Chairman, the Mexican government, after that nearly one-hour phone conversation between the two presidents, released a statement which says president Pena Nieto and President Trump agreed to stop talking publicly about the border wall, because they clearly disagree on that wall.

But the statement from the White House made no mention of that agreement to stop talking about the wall. As you know, the border wall has been one of President Trump's favorite talking points since he began his presidential campaign. Should the president stay quiet about the border wall for the time being?

MCCAUL: Well, I think he's talked quite a bit about it. I'm glad he had a productive conversation with the president of Mexico.

You know, Mexico is our neighbor to the south. They're not our enemy. I think it's important we work with them. They're one of our largest trading partners.

I know the president is going to renegotiate the NAFTA agreement. And when I met with the Mexican ambassador, he told me that, you know, it's time to update the NAFTA agreement and that they want to work with us on securing not only the northern border, but I think their southern border, which is really the choke point where a lot of these -- these illegal aliens, these Central Americans are coming in through Mexico.

And, so, I think this can all be done in a very-- more constructive fashion, if you will. But I do think it's time to get this done. And I just got off the phone with General Kelly to talk about how we plan to construct this barrier, if you will, a multi-layered one with fencing, with air stats, aviation assets, technologies, all put together. And then how much is that going to cost.

Because at the end of the day, Wolf, Congress, through my committee and the Appropriations Committee, will have to authorize and appropriate the dollars to get it done.

BLITZER: And General John Kelly is the new secretary of homeland security. How much is it going to cost?

MCCAUL: Yes. Well, the estimates right now -- and they're kind of rough ball -- but about 12 to $15 billion.

BLITZER: Is Mexico -- is it at all realistic, Mr. Chairman, that Mexico will reimburse the U.S., one way or another, for that 10 to $15 billion?

MCCAUL: I don't think it's foreseeable that a president who has about 11 percent popularity can get the Mexican Congress to appropriate the monies to do that. But we are looking at creative ways to achieve this goal.

BLITZER: Like what? Like give me an -- give me an example.

MCCAUL: Well, one -- order idea is this border wall (ph) adjustable tax rate. Which, you know, currently, we -- we tax exports but not imports coming into the country. So we favor, you know, foreign workers and manufacturers over American manufacturers. It's sort of in line with the president's America-first policy.

So, if we just change that one law in the tax code, it would bring in an estimated $1 trillion. That alone could easily pay for this wall, and the president could say that part of that did come from Mexico.

BLITZER: Explain that again, because maybe I'm -- I'm not understanding specifically how that money, how Mexico could be seen as paying for this new kind of tax.

MCCAUL: Well, because imports coming in from Mexico would have a tax on them, which currently they don't.

BLITZER: Well, wouldn't the American consumer -- Mr. Chairman, wouldn't the American consumer wind up paying for that increased tax, because goods coming in from Mexico would cost the American consumer more; the American consumer would suffer as a result of that kind of tax?

MCCAUL: No, I would argue that the American worker and manufacturer and producer in the United States benefits here. It really levels the playing field, because currently, again, we tax exports coming out of the country, but not foreign products coming into the country.

And I think, you know, again, I think -- I think it's very much in line with the America first policy. That's just one much many creative ideas we're looking at in the Congress as a way to pay for this.

Now, having said that, Wolf, the initial down payment is going to be the American taxpayer. It's going to be an appropriation done under an emergency spending basis. And we should hopefully be able to get that passed and signed by the president in the next several months. But I'll be working again with the secretary and the appropriators to achieve this goal.

BLITZER: All right. We'll see if Donald Trump, the president of the United States, can one way or another create a complicated -- one way or another, find a way for Mexico to pay -- repay the U.S. taxpayers that 10 to $15 billion which Congress, you say, will appropriate in the coming months to build that wall.

Mr. Chairman, thanks as usual for joining us.

MCCAUL: Thanks so much, Wolf. Thanks for having me.

BLITZER: Coming up, President Trump continues calling for an investigation of voter fraud in the U.S. presidential election, despite a lack of proof to back up his claim that millions of people voted illegaly.

(COMMERCIAL BREAK)

[17:30:00] BLITZER: We're following multiple breaking stories including what President Trump and the President of Mexico are saying about their hour-long phone call today, one day after the Mexican leader canceled a visit to the White House scheduled for next Tuesday because of President Trump's insistence on building a wall along the border and insisting that Mexico pay for that wall.

Our political and business experts are here in THE SITUATION ROOM. We'll discuss, Brianna Keilar, let me just start with you. It was interesting, the communiques released by the Mexican government and the White House following an hour-long phone call, very similar, except for one thing, the Mexican government statement said both leaders, Presidents Pena Nieto and President Trump agreed to stop talking publicly about the border wall because they disagree about the border wall. That was missing from the White House statement, although interestingly today, at his news conference, President Trump didn't mention the border wall.

BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: That's right. Well, a joint statement you would expect would read verbatim, and it did except for that sentence. I think the idea that Donald Trump who campaigned on and made building this border wall, his signature issue, one of his signature issues, the idea that he would not talk about it could look like it's a concession to the President of Mexico after he canceled this meeting with Donald Trump, and that's not really a strong place for Donald Trump to be. That's not, you know, just with his personality, that's not where he wants to be, and yes, he did not mention that during that press conference. But I think a lot of observers find it difficult to believe that he's not going to start talking about the wall again at some point. That would be very uncharacteristic.

BLITZER: David Chalian, the President, he likes to do interviews. He's done three in the last three days. If he's asked by a questioner about that wall, who is going to pay for that wall, is he simply going to say, "Well, we have an agreement now with Mexico. We're not going to discuss the wall." Could you see President Trump saying that?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: No, I can't, which is why maybe it was missing from the U.S. side of that statement. I don't think that's probably something he's going to hold up to. As Brianna said, this is a court promise and I don't think we can lose sight of this. His rallies would chanted back to him. He is not going to simply let go of this, A. B, read the art of the deal, Wolf, you've read it, you've seen it, this is his negotiating tactic. He is going to stay with this notion that they're going to pay for the wall until the final day of the final deal is done.

BLITZER: The -- we just heard from the Chairman of the House Homeland Security Committee, Jackie, say it's going to cost 10 to $15 billion. They're going to put together the legislation in the next few months to get that money approved. U.S. tax payers, they are initially going to come up with it and then they're going to look for some creative financing way for Mexico to be seen as reimbursing American tax payers. How is that playing up on Capitol Hill?

[17:34:47] JACKIE KUCINICH, THE DAILY BEAST WASHINGTON BUREAU CHIEF: Good luck, guys. Well, no, you have a congress that -- you know, I -- well, just remember when they were elected, under a fiscal responsibility and not adding to the deficit. Well, they haven't really said how this will not add to the deficit. They talked about a tax, 20 percent tax, (INAUDIBLE) immediate with backlash from members of congress, specifically from Texas, who said that this will hurt our economy, this will hurt small business owners. So they are really -- they don't have the details yet, even if they do come up with a supplemental later this year, a special bill just to fend the wall -- just to fund the wall.

BLITZER: 10- $15 billion, a lot -- a lot of money. Richard Quest, now, the Trump administration, yesterday, the White House briefly floated the idea of a 20 percent tax at all Mexican imports coming into the United States, then later walked that back saying it was just one option. But if they were to take an approach along those lines, what impact would that have on American consumers and indeed on the American economy as a whole?

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: Let me state the obvious, Wolf. This is an avocado. It's an avocado that comes from Mexico. It prices around a dollar in New York, give or take, depending on the store. If you put a 20 percent -- oh, by the way, 80 percent, 80 percent of the U.S.'s avocados that the U.S. consumes comes from Mexico. If you put a 20 percent tariff on our tax, depending on what you want to call it and how you manage it, and your guacamole has just gone to an extra 20 percent, because -- pardon the pun -- who is going to eat that 20 percent increase tariff or tax? Well, it's not going to be the Mexican side. The distributor -- the producer will pass it on to the distributor, to the importer, to the store and so on. That's very expensive guacamole.

CHALIAN: You remember those television ads when the Clinton health care bill came out, and I think, Harry and Louise -- Henry and Louise? Yes, the --

BLITZER: Yes.

CHALIAN: You've seen nothing yet. If this were to go through with the 20 percent tariff, what democrats will do on the airwaves to republicans about how this impacts people around their kitchen table and the cost of things that they're getting --

UNIDENTIFIED FEMALE: Oh, I'm betting they're so happy.

CHALIAN: -- it would -- it would be devastating politically.

BLITZER: Because there is, you know, so many American jobs also dependent on trade with Mexico, America's third largest trading partner, maybe 6 million American jobs directly related to exporting U.S. goods to Mexico as well. And if there's some sort of trade war, that could cause serious, serious pain.

KEILAR: That's right, and it's a big concern for members of Donald Trump's party. It's why they are looking at this and they are going, "Why are you saying this?" If you talk about how are you going to pay for this and he's talking about a 20 percent tariff, they don't say that at all. That tells you a lot, they're talking about, "No, it's all coming out in the wash in comprehensive tax reform." They're not at all attacking Mexico and they really don't want him to. They think it's counterproductive.

BLITZER: Richard, the former Mexican Ambassador to the United States told me yesterday, he fears that if the Trump administration insists on Mexico paying for the wall, there could be a trade war.

QUEST: I'll go further. There will be a trade war. Here's the real problem with the whole thing, Wolf. You don't need the actual wall to break out. You need a cold war. You need the threats. This trade relationship, a million dollars an hour or something it goes across the border, backwards and forwards, is so -- I think it might even be a minute -- is so fragile and important to both economies.

The mere threat that this trade relationship could be unsettled will send the Mexican peso down. It will send the Mexican economy into reverse, unemployment will rise south of the border. And the real question, if the U.S. will need to ask itself that is, how unstable does it want to create an environment for its southern neighbour, because that is what you're looking at. NAFTA is the -- is the bulwark, if you like, of the trading relationship. If it is interfered with without a proper plan and a proper way forward, then Mexico will feel the full wrath and the U.S. will feel the force.

BLITZER: Yes, and I suspect that that's why there was that hastily arranged phone call today between the leaders of Mexico and the U.S. All right, everybody stand by. There's more information coming into THE SITUATION ROOM. We'll resume our coverage right after this.

(COMMERCIAL BREAK)

[17:40:00] BLITZER: We're back with our correspondents and experts. And David Chalian, we saw very different tone today when the President was at the Pentagon, at that memorial wall there, the wall of heroes, very, very somber, important, than we saw on Saturday, when he went to that memorial wall at CIA headquarters. Also, the news conference with the British prime minister very, very scripted. He was very, very -- he seemed sincere and he wasn't going off the cuff, if you will. Is it too early to say he has made that pivot?

CHALIAN: Yes, I think it's too early to say that because Donald Trump is known to have uneven performances, but it was striking the difference in tone today. You remember during the campaign, he said, "I'm going to act so presidential you're going to get sick of it." And perhaps he's trying that out today, but at the end of the first week of his presidency, he definitely struck a difficult tone. He did start the day on Twitter going after this voter fraud thing again, but when he was standing with a leader of another nation, our closest ally on that stage, he seemed to be aware of his surroundings in a way that we really haven't seen yet, in terms of his week-long presidency, and his tone was one that was controlled, disciplined, and I'm still quite astonished when he got really tough questions from the two British journalists, sort of personal questions, he didn't bristle.

[17:45:01] BLITZER: And one of them said why should anybody believe you because you've changed your mind on so many of these issues. Very tough questions and he was very restrained. He also did something pretty remarkable. He's the commander in chief, but he said, you know, on the issue of waterboarding, enhanced interrogation, torture, if you will, he thinks it works, but he's going to defer to his Defense Secretary retired General Mattis, who doesn't think it works.

KEILAR: That's right. So, he says he's going to give Mattis autonomy on that, basically. But congress also has a say on this, and that's why we've been asking members of congress, and specifically members of his own party, what do you think about it, what you're hearing from the top republicans in congress, House Speaker Ryan, Senate Leader Mitch McConnell, is they're very comfortable with where the law is with the idea that this is not OK, and that the U.S. is not going to proceed with it. But I think the bigger issue here is that Donald Trump is talking about this in a way that really alarms the intelligence and the national security community.

I mean, these are people, many of whom put their lives at stake doing their work and it makes their jobs more dangerous.

BLITZER: It certainly does. You know, Richard, the news conference with the British Prime Minister was interesting in that -- in her opening statement, she said she got a commitment from President Trump that he is 100 percent behind NATO, even though he has said NATO is obsolete. He's been critical of NATO. And during the course of his remarks, he never disputed that at all. What did you think of that news conference?

QUEST: Well, you know, if you actually look at what the president has said about NATO, he has said before that he's committed to NATO, just that it's obsolete. I don't know how you quite square that circle, but he has said that. Now, interestingly, what you saw -- and I agree completely with David -- we saw two Donald Trumps, we saw a presidential one throughout the course of the day, and versus when he's tweeting or when he's going off on a ramble. The interesting thing here is -- or with the prime minister, here you had a very experienced politician, Theresa May, five years as -- in the -- in the kitchen of home secretary. And Donald Trump and she played it majestically.

I mean, she knew exactly how far she could take it, know that Donald Trump would agree, but not take it too far that there could appear to be any friction. So, from that point of view, it was a brilliant tour de force. One point I would say, however, is if Donald Trump continues as he has done today, then it's going to be fascinating because we'll never know which one is going to turn up at an event. And yet, he will have the ability to keep everybody on their toes.

BLITZER: All right. Everybody stand by. There is more coming up. A closer look at the long-distance relationship between President Trump and Russia's Vladimir Putin. They'll be speaking by phone tomorrow. We'll be right back.

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[17:50:00] BLTIZER: President Trump will talk by phone for the first time tomorrow with the Russian President Vladimir Putin, the first time since he became president. Our Brian Todd has been looking into that for us. Brian, what can we expect?

BRIAN TODD, CNN CORRESPONDENT: Wolf, there is huge anticipation tonight over that first phone call between the President Trump from the White House and Vladimir Putin at the Kremlin. One analyst tells us he does not think President Trump is going to raise the issue of Russia's hacking of the U.S. election or that unverified dossier with allegations that Russia has compromising information on President Trump. But it seems clear tonight, this will be the first of many encounters where the two leaders will size each other up and start to lay down markers.

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TODD: It's a critical first encounter with major international implications, and it will play out over the phone. Donald Trump's first call as president tomorrow with his Russian counterpart, Vladimir Putin.

TRUMP: I don't know the gentleman. I hope we have a fantastic relationship. That's possible. And it's also possible that we won't.

TODD: Before he became president, Trump called Putin very smart and openly praised his leadership.

TRUMP: He's been a leader far more than our president has been a leader.

TODD: When asked about Putin today, Trump moderated his tone.

TRUMP: I've had many times where I thought I'd get along with people and I don't like them at all. TODD: Still, those who know the American president say don't expect his attitude toward the Russian leader to change completely.

MICHAEL D'ANTONIO, "THE TRUTH ABOUT TRUMP" AUTHOR: I think that he'll try to work with Putin, try to charm him. I think there'll be some mutually manipulative behavior. You know, these are two guys who think of themselves as masters of the game.

TODD: The stakes of tomorrow's call are high. It's the first American engagement with a man the U.S. Intelligence Community says "meddled in last year's election". A finding President Trump has openly questioned. Tonight, experts point to key potential talking points on the phone call. Will Putin object to NATO's troop build-up in the Baltics? Will President Trump raise the possibility of the U.S. lifting its sanctions on Russia? Today, the president did not rule it out.

TRUMP: And we'll see what happens as far as the sanctions, very early to be talking about that.

TODD: Tonight, fellow republicans including Senator John McCain are warning Mr. Trump not to consider lifting sanctions. McCain says if the president does, he'll step up getting sanctions made into law. Instead, McCain says President Trump, "should remember that the man on the other end of the line is a murder and a thug who seeks to undermine American national security interests at every turn. Tonight, the White House is not saying if sanctions will be discussed. Trump seemed to suggest the call would be an opportunity for the men to get to know each other. Tonight, analysts predict they may get along.

[17:54:54] JAMES GOLDGEIER, AMERICAN UNIVERSITY SCHOOL OF INTERNATIONAL SERVICE DEAN: President Trump seems very enamored of President Putin's authoritarian leadership, of this notion that he's a very strong leader, that he is opposed to the media, and in fact, has cracked down on the media, that he's taken two opposition leaders, that may be something that unites them in this call.

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TODD: Now, as positively as Presidents Trump and Putin seem to view each other right now, experts say this is a relationship that will very likely be tested when both of these alpha males maneuver to strike the best deals for their own countries, in the fight against ISIS, in the push and pull over sanctions, and in trying to win the advantage in Europe. Wolf?

BLITZER: Good point, Brian. Thank you very much.

Coming up, breaking news: President Trump hosts Britain's Prime Minister, talks about the proposed border wall in a phone call with Mexico's President. Will Mexico really pay for it?

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BLITZER: Happening now, breaking news. END