Return to Transcripts main page
Quest Means Business
No Kings: Davos Counts Down To Trump's Arrival; World Leaders: Trump Has Changed World Order; NATO Under Pressure; Global Stocks Fall Amid Trade Tensions, Tariff Threats; ECB's Christine Lagarde Defends Fed Chair Jerome Powell; Gary Cohn Says Trump Delivering On Promises. Aired 4p-5p ET
Aired January 20, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:16]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. Markets sharply lower. The Dow, the NASDAQ, the
S&P, they are all reacting to what is happening in the global economy.
Hit the gavel. Trading comes to an end. Now, those are the markets and these are the main stories we are following today.
One year into Donald Trump's presidency and leaders from France, Canada, the E.U. say he has upended the Western Alliance.
The President of the ECB, Christine Lagarde on this program tonight will tell us uncertainty is back in a big way.
And the chief executive of Bank of America tells us capping credit card costs is not the way forward.
We are live at the World Economic Forum. I am Richard Quest with my new friend, Colin Colander, and you better believe it, together, he is rather
portly, we mean business.
Good evening tonight from Davos, as the sun set on Day 2 of WEF, a message for President Trump and other global elites that illuminated on the
mountainside right up there just a short while ago, it was "No Kings." It was burned into the snow.
Now, of course, it is a reference to the U.S. President. He is expected to leave for Davos from Washington in a matter of hours. Mr. Trump's speech
will be the climax of a week that's now well and truly dominated by U.S. threats to take Greenland and to tariff all of those countries and anyone,
apparently, who stands in the way.
So what a potpourri. What an extravaganza we have here in QUEST MEANS BUSINESS.
We will be reaching our own crescendo this evening. On tonight's program, the President of the ECB, Christine Lagarde, our good friend, the WTO
Director General, Ngozi Okonjo-Iweala, and the Chief Executive of Bank of America and Allianz. If that wasn't enough, we've got the vice chair of
IBM, Gary Cohn, a former adviser and just to throw into the mix, the president of Microsoft, Brad Smith.
Why would you turn anywhere else? So let's get underway. President Trump addressed the issue of Greenland during a nearly two-hour news conference.
Mr. Trump said he has lots of meetings scheduled here, and he thinks, in his words, things will work out pretty well. And it was a mixed message
because on the one hand, he said he thinks it will work out pretty well, and then he gave this ominous message to those who are opposing his
efforts.
(BEGIN VIDEO CLIP)
REPORTER: How far are you willing to go to acquire Greenland?
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: You'll find out.
(END VIDEO CLIP)
QUEST: So, there you have it. On the one hand, "You'll find out." On the other hand, "I think it will go pretty well."
As Davos prepares for Mr. Trump, leaders are surveying the damage the U.S. under his policies has done to the Old-World order. Start with President
Macron, who slammed the rule of the strongest and the imperial ambitions in an address. It follows Donald Trump's posting a screenshot of a text from
the French leader.
And then throw in the Canadian Prime Minister and the European Commission President, also giving clear messages. Apparently, there is no going back
to the old ways.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: Playing for time and hoping for things to revert soon will not fix the structural dependencies
we have. So my point is, if this change is permanent, then Europe must change permanently, too.
MARK CARNEY, CANADIAN PRIME MINISTER: It seems that every day we are reminded that we live in an era of great power rivalry, that the rules-
based order is fading.
(END VIDEO CLIP)
QUEST: The President of the European Central Bank, Christine Lagarde says trust is firmly undermined and it is bad for business. She joined me here
earlier and told me she is not surprised by some of Donald Trump's recent threats.
(BEGIN VIDEOTAPE)
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: Well, it is a movie we've seen before. And what is, I think, more important than the tariff
themselves is the rising uncertainty that we are seeing again. So, uncertainty is back.
[16:05:04]
And, I think it is really very inconvenient for both corporate America, SMEs in America, and the same in Europe, because people then don't exactly
know how they are going to sell, how they are going to buy, who is going to bear the burden of tariffs.
So, to have these economies that are doing well at the moment or reasonably well stall because of uncertainty is really inconvenient.
QUEST: That uncertainty coming just at a time when things were starting to settle down.
LAGARDE: Yes.
QUEST: Monetary policy was becoming slightly more predictable in a sense of direction.
LAGARDE: Very predictable. You know, two percent inflation, two percent interest rate here in Europe. Yes.
QUEST: But the point being that we now have been thrown into the maelstrom again, because it is not just tariffs, it is the whole future of the
Transatlantic Alliance, the whole future of Transatlantic business.
LAGARDE: And what people need to know is that that business is huge. It is huge in terms of trade of goods and services. It is big in terms of
investment, it is big in terms of security and bond holdings.
So, the intricacy of this link between the U.S. and Europe is very deep, and to jeopardize that, to put it into question is not conducive to good
business policies and I think corporate America should be thinking about it, as European corporate is thinking about it.
QUEST: I guess the issue, you know, talking here, everybody seems to think it is just sort of going to go away. Everybody seems to think it is not a
game, but people are playing out their roles, and what I question is whether something has fundamentally changed -- there is no going back. The
trust has gone.
LAGARDE: I think the trust is undermined. When you keep repeating the same pattern of undermining the rule of law, undermining the contracts,
undermining what has been agreed between parties, then parties begin questioning, is that for real? Is that going to change again? And that's
when uncertainty looms large.
QUEST: You were the one who warned about the second Donald Trump administration. You were the one who actually said to Europe, you need to
be prepared. This is going to be different and you need to be ready.
You've been vindicated.
LAGARDE: Okay, I am going to tell you something which I hope will be proven right next year. This is a wake-up call, a bigger one than we ever had. And
I think that Europe is going to look at its strength, look at its weaknesses. Do, you know, a big SWOT analysis and decide what do we need to
do to be strong by ourselves, to be more independent, to rely on the internal trade that we do with each other so that we can just not ignore,
but at least be prepared and have a Plan B just in case the normal relationship is not restored.
QUEST: Okay, does Europe has the capacity to do it? It certainly could do it, but the reality is the mechanisms of European decision making are so
difficult at a time of crisis.
LAGARDE: The mechanisms are laborious. I wouldn't call them difficult because at the end of the day, it works, but it takes a lot longer than
what it does in the U.S.
We don't have Executive Orders in this country -- in this region at large, but eventually we find the means and the ways to circumvent adversity and I
know that we will.
If you look, for instance, at, you know, the single market, we are pushing and have been pushing and advocating for capital markets union, we have
been pushing and advocating for this 28th regime where people will be able to invest without the burden and the bureaucracy that exists otherwise.
This is happening.
2026 will see significant proposals on the table, and I think that what is happening now is going to give a big accelerator to this movement.
(END VIDEOTAPE)
QUEST: So, you join us as we are comparing notes on what we are wearing. Ngozi Okonjo-Iweala, Director General of the World Trade Organization, with
me now.
The important -- you were just commenting, weren't you?
NGOZI OKONJO-IWEALA, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: Yes. I said, we are both wearing blue and that's auspicious.
QUEST: Auspicious for what?
OKONJO-IWEALA: For hope.
QUEST: Okay.
OKONJO-IWEALA: Blue is my favorite color.
QUEST: Is it really?
OKONJO-IWEALA: Yes. I always wear blue all the time when things are going a bit rough.
QUEST: You must be never out of blue at the moment.
Let's just talk about the situation at the moment, because, you know, you famously on this program told us to chill about Donald Trump, and that was
what Scott Bessent has been saying here, don't take it too seriously.
What is your word now what we should be doing?
OKONJO-IWEALA: My word now is steady nerves.
QUEST: All right.
OKONJO-IWEALA: Steady nerves. You've got to remember, you're in a bit of a game of poker, and so you have to be smart, sensible, keep your nerves
steady so you can formulate the best strategy and approach to deal with the situation.
So, it is a continuation of my chill. In other words, getting overly excited and acting very quickly isn't really the way to go.
[16:10:08]
QUEST: Now, Scott Bessent, the U.S. Treasury Secretary said exactly the same thing. He sort of said a version of don't retaliate in these sort of
things. Now, I think he was thinking in a different sense than you mean it.
OKONJO-IWEALA: Well, you know, but maybe this chill that I said last year hasn't been so bad, you know, from chill, we were able to go to a situation
in which we avoided a trade war and I know things are very different now. Trade measures and trade policies and instruments are being used for non-
trade issues. That's why I said it is really tough.
QUEST: But there is nothing you can do about that, there is nothing the WTO can do about that because if that is the weapon du jour for the
administration, as we are seeing, obviously with Greenland, then there is nothing more you can really do.
OKONJO-IWEALA: There is nothing we can do because it is outside of our remit, a bit above our pay grade, if you want to put it that way, you know.
So, using trade measures for geopolitical issues is not part of what we can deal with.
QUEST: If we look though at trade flows, one of the statistics I saw recently suggests that trade obviously is growing in many parts of the
world, and it is circumventing the United States.
People are still getting on, and it is really the U.S. loss in that sense.
OKONJO-IWEALA: Well, that is what, in a way, has been very -- in a way heartening. So, we are in a situation where people feel bruised, battered,
and the trading system has been the same. But guess what? When you look at the actual numbers and I am a numbers-driven person, we find that almost
three-quarters of world trade is still going on, on WTO terms.
So business is trade, not politicians, and they are carrying on with it because they find the rules and the stability and predictability of the
system works largely, although there is work to do.
QUEST: Are you able to engage with the U.S. on other issues? Are you finding that you do have -- that they are able to be part of the system?
OKONJO-IWEALA: Well, we are engaging with the U.S. on trade issues.
QUEST: Yes.
OKONJO-IWEALA: So, they may be doing things unilaterally, which may be outside of the WTO system, which is not me, which are outside of the WTO
system, but they are still part of the WTO. They still find some aspects of the system useful, even as they criticize it.
But the thing we need to remember about the WTO is its made up of its members, and the members are very proud of saying its a member-driven
organization. So, when they criticize the WTO, I ask them, who is the WTO? Certainly, not Ngozi Okonjo-Iweala; it is you.
QUEST: No, but you know what they are criticizing. They are criticizing those members that don't follow the rules or the way China was admitted and
managed to circumvent most of the rules.
OKONJO-IWEALA: Well, let me tell you this. It means those same members are the ones who are going to fix it.
QUEST: Right? All of them?
OKONJO-IWEALA: Yes.
QUEST: Are you making real progress on that?
OKONJO-IWEALA: That's the good news I have. I don't want to over you know, dramatize or promise or anything, but we are working on it. Members are
working on actually looking at what are the key reforms that need to be done. So, even though I said the system is stable, they have shown
resilience, but there are many criticisms.
And like I told you last time, I do agree with the U.S. and a lot of the criticisms. But Richard, they are also not the only ones with criticisms.
The developing countries also have criticism. So, members have to work on this and there is progress being made.
QUEST: All right.
OKONJO-IWEALA: So, we are trying to set out the reforms to see what do we need to fix that needs fixing, but also what is good that is working that
we need to keep.
QUEST: Come with me and let me get your pen. Choose. And don't fall off the stage. Choose your color.
OKONJO-IWEALA: Blue.
QUEST: Oh, go on then, take the lid off. What gives you hope? And feel free to write on the board like always.
OKONJO-IWEALA: And now I am going to do two things. First --
QUEST: Oh, here we go.
OKONJO-IWEALA: Yes. You know, resilience.
QUEST: Why does that give you hope?
OKONJO-IWEALA: Because it means that there are things -- some things are working that you can build on. I am not talking of taking a trading system
and taking it back to the old ways, but there are good things we can build on to make a new system.
So, resilience of the multilateral trading.
QUEST: You're not going to get multilaterals in there.
OKONJO-IWEALA: No, MTS. The second -- that's one, two -- young people in Africa, they are doing amazing things. They give me hope.
QUEST: All right, excellent.
OKONJO-IWEALA: Okay?
QUEST: Your handwriting is worse than mine.
OKONJO-IWEALA: It is. I agree completely. But there you are.
QUEST: I take that is the chemist and you have made up your prescription.
Good to see you.
OKONJO-IWEALA: Thank you.
QUEST: It is so lovely to have you with us.
OKONJO-IWEALA: Yes, good to see you again!
QUEST: Thank you so much.
OKONJO-IWEALA: Thank you. Goodnight!
QUEST: Thank you very much.
Now, Donald Trump's pressure campaign to acquire Greenland is creating a rift in NATO. Lines that Microsoft's president says is critical for both
sides of the Atlantic.
[16:15:07]
(BEGIN VIDEO CLIP)
BRAD SMITH, MICROSOFT PRESIDENT: NATO has made both sides of the North Atlantic stronger. Whatever we do, we always need to continue to invest in
our strengths.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: Can't go wrong with a bit of yodeling up the mountain.
As the U.S. President tries to bully Europe into giving him Greenland, the President of Microsoft, Brad Smith, told me Greenland is an issue of trust
between the U.S. and Europe, and as he admitted, it is not the only one.
(BEGIN VIDEOTAPE)
SMITH: I have to say, I am encouraged that President Trump said today that he will meet with people here. There will be a conversation. I think we all
need to reflect on the fact that the future of Greenland is not only a security issue, but we need to think and talk about it in the context of
all of the other shared issues across the Atlantic.
Jobs, 10 million Americans work for European companies or have jobs that are based on trade with Europe. Trade itself, 40 percent of American
exports go to other NATO countries.
Investment, 70 percent of foreign investment into the United States comes from the rest of NATO. Technology, Europe is the American tech sector's
biggest market after the United States itself.
It all depends on trust. Trust requires dialogue. We should welcome the conversations that will take place here.
QUEST: If that's -- I mean, and you're right, but it is difficult to see that the Europeans can budge in any way on the sovereignty question. I
mean, Macron today, von der Leyen today, they are all saying the same thing.
So, when they meet tomorrow or whenever it might be, that's going to be the tricky part.
SMITH: I think in some ways, we see things as a company at Microsoft that others don't always see because we do more than any other company to
protect the cyber security of the United States and the cyber security of Canada and NATO members on this side of the Atlantic.
[16:20:00]
And what we see every single day is that strength comes most when we act together. The shared interests across the Atlantic give us the opportunity
to do things together that no single country, no matter how powerful it is, can do by itself, and we need to therefore find a way to act together. And
I think that is a message that I hope people can think more about.
QUEST: And that's going to be an interesting one, because that is what you're saying is the clarion call to reality. That, you know, if you don't
sort this out, we will all be much worse for the end of it.
SMITH: Absolutely. NATO has made both sides of the North Atlantic stronger. Whatever we do, we always need to continue to invest in our strengths. And
that's a big part of what we bring to Europe as an American technology company.
QUEST: When I hear people talking about, like today, like Europe needs its own tech giants, do you agree with that in a sense that Europe has -- does
now need to step up itself?
SMITH: Well, I think there is always room for more partnerships, there is always room for bringing in to the global ecosystem more companies from
Europe.
I just came from a meeting with Mistral talking about what Microsoft and Mistral can do together, both to help each other succeed, but frankly, for
the good of Europe and the good of the world.
We will always be stronger together.
QUEST: But the last thing you want, the very last, forgive the assumption, the last thing you want is to have to be put in the position of choosing
U.S. or Europe. You know, you're both.
SMITH: We absolutely defend both sides of the North Atlantic.
QUEST: I want to talk A.I. There seems to be now that we are all using it. We know it is coming. It is in different parts of the supply chain, in our
companies, in ways that we can't even imagine. But the research shows we are very wary of it. And don't -- when I say we don't want it, we don't
want to take it over.
SMITH: Well, I think what we really want, most of us, is to create a new technology that drives economic growth, that promotes prosperity, that
helps people do new things in their lives that makes countries stronger.
And I think we can do that. I think we have something to prove every day that we can build A.I. and make it work this way, that we can serve
customers.
Certainly, you look at an economy like Europe, a bolt, a dose of additional productivity growth, of economic growth, it would be good for Europe, it
would be good for any part of the world, and I think we have the opportunity to create that.
QUEST: Come over here, sir. There we go. Choose your color.
SMITH: I will be green.
QUEST: Oh --
SMITH: That said --
QUEST: What gives you hope?
SMITH: Shared interests.
QUEST: Oh, interesting.
SMITH: Because that is what the tech sector has across the Atlantic. That is what we have with our customers. That is what our two continents have.
North America, Europe, we have 80 years of wind behind us showing what shared interest can do for our people.
We need to keep investing in it.
(END VIDEOTAPE)
QUEST: That's the president of Microsoft on shared interests, I will show you what the board looks like a little later assuming we can decipher what
anything says.
Now, President Trump is set on Wednesday to speak about affordability. Last week, he posted a barrage of economic proposals on Truth Social and among
them, capping credit card interest at 10 percent.
It is controversial at best. The Bank of America's chief executive, Brian Moynihan told me that policy might actually undermine the affordability of
Trump's goals.
(BEGIN VIDEOTAPE)
BRIAN MOYNIHAN, BANK OF AMERICA CHIEF EXECUTIVE OFFICER: The key thing is we are for affordability in our company. So we've developed a whole host of
consumer products with affairs with the U.S. consumer and banking, low overdraft fees, $5.00 loan products, you can get $500.00 to help you
through the next pay day, all of these different things.
And so the point on this is we will work with the administration to try to figure out what they really want to do on affordability, but the idea of
capping something and create reallocation of credit and stuff, which actually will work against the principle we have.
So that's why things have to be more carefully thought -- dealt with.
QUEST: Arguably, that's one aspect, undoubtedly very serious -- this very serious dispute with the Fed, and one can't avoid the fact that Jay
Powell's comments took us into a new era of the way we now to regard the relationship.
What are your thoughts?
MOYNIHAN: Well, I think there are two pieces to this. One, the independence of the Fed is something that was set up to be independent on monetary
policy especially.
It was set up to have a view of the economy, that they could make decisions and that's has served the United States pretty well the last hundred-plus
years if you think about our growth relative to the world's growth.
[16:25:09]
And so the markets, you know, financial services industry, we all believe is important. And so I think -- but on the other hand, the President of the
United States has a right to pick a Fed chairperson.
When those come up from time to time, it is up in May, the President has a right to pick and he will put someone in. And my guess is, as we work
through on the monetary policy side, the enormousness of the task that sits on your shoulders within those jobs, will do it.
And I think, you know, I think people let it play through.
QUEST: Right, but does it -- I guess there is no easy way to ask these questions, but is it difficult for somebody like in your position when you
find, you know, the questionable ability of the Fed's independence, which is core, the politicization of monetary policy, which seems to be on the
agenda.
MOYNIHAN: Well, the politicization of monetary policy around the world is one thing we are all very concerned about, everybody that participates in
worldwide economy. So, if you look at places where the Fed isn't independent, it is not the best place to do business typically.
QUEST: When we look at the U.S. economy at the moment, the upgrade in growth. All in all, it has done remarkably well considering the headwinds
that are there. What is going on in your view?
MOYNIHAN: So first of all, our team at Bank of America Research team, which is one of the best in the world. Originally, 15 months ago, we would have
had U.S. growing in 2026 at 2.2 to 2.4 percent. That dropped all the way down to about one and a half and now it is back up to 2.8, and they just
raised it from 2.6 to 2.8.
Why? The stimulus of The Big Beautiful Bill, the tax bill coming through, which has the stimulus to the broad American economy and stuff for bonus
depreciation and a finalization of interest rate, the A.I. build out and then, frankly, deregulation and all of that is aiding well.
So, they've increased their view of the economy every single quarter. And now just raised again last week.
QUEST: You have the name "America" in your name, Bank of America. Are you concerned and I ask you this both as a citizen and as a CEO and you can
take it anywhere you like.
Are you concerned that there is this perception of the rule of law and democracy is under threat in the United States?
MOYNIHAN: Look, it is our 250th Anniversary.
QUEST: Exactly!
MOYNIHAN: Weve been through some interesting times. That election in 1800 was pretty tricky, if you go watch "Hamilton," you'll see a great rendition
of it.
But, you know, at the end of the day, America -- what makes America special and why it works is this ebb and flow of the process from time to time in
the swing.
Sometimes it makes it uncomfortable to be in the middle of it when it is happening. But you know, at the end of the day, I think America will see
its way through and that is what has made us special.
So, each time we were counted out -- in the 70s, we were counted out, manufacturing jobs were down, Japan was going to take over the world on
manufacturing and guess where we are today? So, I think the idea is capitalism and democracy is what drives America.
People forget the first things is important.
QUEST: But we don't do a service if we pretend nothing is going wrong, do we?
MOYNIHAN: No we don't.
QUEST: And that's also part of that same process.
MOYNIHAN: Yes, and the key is to help advise the administrations, as our company has literally since the first one, since George Washington was in,
we have been around for 240 years. So and, you know, think about it and say what is good for America? That's what we always try to tell people.
Sometimes they do something different, sometimes they do the things that we would suggest and others suggest. But on the other hand, our job is to
always be there and help make sure America is fair as well.
QUEST: Excellent. Come over here, sir. Come over here. We are talking about -- I will give you a choice of color. Here we go. Your choice of color.
MOYNIHAN: I will do green.
QUEST: Green?
MOYNIHAN: I am a banker. I have to do green.
QUEST: What gives you hope?
MOYNIHAN: You know, I say capitalism done right gives me hope.
QUEST: Capitalism done right.
MOYNIHAN: Yes. Because what that will mean is you can grow in perpetuity.
(END VIDEO CLIP)
QUEST: There we go. As you can see, that's Brian Moynihan writing on the board. And you may have noticed, actually, if you look at the board over
here, you come and join me. You'll see the board is slightly -- it is different to the one you just saw with Brian. That's because there were so
many people, we had to rewrite it.
Their comments are the same, but anyway, I don't know how we are going to cope with all of that by the time we are finished.
The rift over Greenland is rattling Wall Street. The Dow tumble more than 800 points on Wall Street's worst day since October.
We will talk about that next.
QUEST MEANS BUSINESS we are live at WEF.
(COMMERCIAL BREAK)
[16:32:42]
QUEST: Hello, I'm Richard Quest, stuck up a mountain. There's more QUEST MEANS BUSINESS. In a moment you'll hear more from Christine Lagarde of the
ECB on why the president decided to rally behind the Fed chair Jerome Powell, and a former member of Donald Trump's inner circle, Gary Cohn, now
at IBM, says the president is delivering on his promises.
We'll get to all of that, but only after the headlines, because this is CNN and on this network, the news always comes first.
President Trump spent an hour speaking to reporters ahead of his trip to Davos. He spoke at length about his first year in office, back in office, I
should say. Domestic issues in particular. He expressed doubts that NATO allies would help defend the U.S. and declined to say how far he'd go to
acquire Greenland.
Sources say the U.S. Justice Department has subpoenaed at least five Minnesota officials, including the mayors of Saint Paul and Minneapolis,
the state governor, Tim Walz, and its attorney general, Keith Ellison. It's part of the probe into whether the state and local leaders obstructed
federal immigration enforcement efforts. All officials named so far are Democrats.
Netflix has upped the stakes in its battle to buy me. Sorry, its battle for Warner Bros. Discovery. It's revised its bid to an all cash offer for WBD's
movie studio and HBO. The two companies hope the new offer will help fend off a hostile takeover from WBD -- from Paramount. Warner Bros. Discovery
is the parent company of CNN.
All right, all right, the sharp and acute amongst you will have noticed that my little aside is not true, because, of course, WBD would have split
off by the time if Netflix, if Netflix ever gets us.
Right. Now, Wall Street had its worst day since October as President Trump ratchets up the pressure on Europe. The Dow off 870, S&P, horrible day for
the Nasdaq down over two and a third percent.
[16:35:02]
The dollar interestingly sharply fell largest in a month. Allies are prompting the sell trade. Investors sell dollar assets and other U.S.
stocks on tariff fears.
Amol Sharma is the financial editor at the "Wall Street Journal."
Good evening, sir.
AMOL SHARMA, FINANCIAL EDITOR, THE WALL STREET JOURNAL: Good to be with you.
QUEST: Thank you for braving the cold.
SHARMA: It's a balmy weather. Yes.
QUEST: Yes, absolutely. What's going on here? Because we're now in a very tricky situation. The markets have held their nerve.
SHARMA: Yes.
QUEST: And seemingly until today.
SHARMA: This is -- finally Trump has rattled the markets. OK? So the markets had shrugged off almost everything in the past, all of last year
really after liberation day, it seemed like no matter the radical pronouncement the markets would rebound quickly, shrug it off, and even
tariff threats. And we've seen in the past, well, today's trading session showed you that that's not the dynamic here.
Clearly people are very worried this is an all-out trade war that's about to unfold with Europe. And it's -- it has the feeling of a crisis more than
a passing storm for investors.
QUEST: Really? And that's different now because the comments we're hearing and you must be hearing as well, business leaders are saying we're now
really worried. As Christine Lagarde said on this program, the uncertainty, major uncertainty is back.
SHARMA: I think because Europe and the U.S., which of course are each other's biggest trading partners, had been working towards a deal. And that
was the talk that, well, they're progressing towards a trade deal. So this was really a shock that it's going in the other direction. And I think the
sort of tenor of the rhetoric out of the administration ahead of this Davos trip has been at a higher decibel than people expected about Greenland.
QUEST: Right. But when you hear, for example, Scott Bessent, today in his morning news conference, it's sort of an odd, I mean, a chill don't
retaliate, which I can see what and why he's saying it, but you can't really say that to people who are being told your sovereignty is being
questioned.
SHARMA: He's said that before. This is a, this is a common phrase or turn of phrase that Bessent has used before. You know, right after liberation
day, in fact, I think he told everyone, I urge you, don't retaliate.
QUEST: Right. Yes.
SHARMA: That's the wrong thing to do with the U.S. and so it's curious he's bringing that back now and I will see --
QUEST: But he's claiming vindication on that by saying, you know, those -- only China who retaliated full throttle and they were the ones who got hit
hardest arguably.
SHARMA: Right. Yes. I mean, that is -- he's pointing to that evidence. I think one thing you're hearing here in Davos is a little bit of surprise,
consternation among some of the business leaders and people from the E.U. delegation of why there isn't a stiffer response yet. Why not, other than
Macron, who has come out forcefully and said this is unacceptable the way that Europe is being treated here, there's not really a coordinated, strong
message. And I think we'll see tomorrow if that begins to unfold.
QUEST: Now it's your first Davos in your new role, congratulations, and what do you make of it, and this sort of, you have the Congress center here
where all the panels take place and then you have the A.I. OG?
SHARMA: Yes.
QUEST: That's going up on the promenade.
SHARMA: Yes. It is. There are different Davoses I've learned. So there's, you know there's the public Davos and there's the secret Davos going on
where discussions about trade policy and deals are being hashed out.
QUEST: Yes.
SHARMA: And yes, there is A.I. Road which is basically the entire road at this point. So it is and you also see a big presence of all the sovereign
investors, the Middle East investors, that whether it's in A.I. or in other areas, they're really dominant here this year.
QUEST: But one of the fascinating parts about it, and I've always said this about Davos, and I am an ardent critic of it in a sense. But there is value
in everybody coming together at the beginning of the year to seeing where everybody stands on different issues. And I always say about this, if it
didn't exist, you'd probably have to invent something similar.
SHARMA: I think there is value to that. I do think that everyone was planning for a different dynamic perhaps a few weeks ago.
QUEST: Yes.
SHARMA: And it's all turned on its head in a matter of days. But some things will -- are constant and people are, you know, the A.I. investment
story line being huge.
QUEST: Oh, they will be gone. They'll be gone in a few years. Something else up there. Do you ski?
SHARMA: I do, I do. And I have been told that I will enjoy myself.
QUEST: You won't.
SHARMA: I won't ski.
QUEST: No, no.
SHARMA: I want to enjoy myself.
QUEST: No, no, you enjoy yourself. 20, 25 years of coming here, and I've been at the mountain twice.
SHARMA: OK. No. Well, a friend told me to go up the first day and at least hike a little bit. So I did that. Yes.
QUEST: Oh, well, you're ahead of me already. Come over here. Join me at the board.
SHARMA: Sure. OK.
QUEST: Choose your poison.
SHARMA: I'll go with this one.
QUEST: Everyone is going blue this year. There we go.
[16:40:01]
SHARMA: If it'll make it prettier, I'll do it.
QUEST: No, you go with whatever you like. I'm not going to be influential.
SHARMA: OK. What am I doing here?
QUEST: What gives you hope? One word. What gives you hope?
SHARMA: I see, other than my children. Wow. This person. OK.
QUEST: That's Christine Lagarde.
SHARMA: OK. I'm going to go with -- resilience.
QUEST: Resilience?
SHARMA: Yes.
QUEST: Thank you very much. I'm grateful for you, sir. Thank you.
SHARMA: Thank you very much.
QUEST: Enjoy your stay.
SHARMA: Thank you very much. This is a pleasure.
QUEST: Thank you very much indeed.
Now, coming up next, part two of my interview with the ECB president, Christine Lagarde. She talks about the importance of central bank
independence. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:43:21]
QUEST: What a gorgeous view. Shema there's not more snow and I'm not even sure we're going to get any snow this week. As you can see, it's quarter to
11:00 at night here in Davos. It's cold but not freezing. Well, no, it's freezing literally. But it's not -- you know what I'm saying. It's not that
cold. I'll quit while I'm ahead.
All right. Let's have a look at the board and see how it's been going. The question we're asking this year is, what gives you hope? We've had shared
interests, human adaptability, realism. We've had two resiliencies tonight. "The Journal" and Ngozi scribbled over there. Brian Moynihan, of course,
was capitalism done right. And we've got two technologies. And of course, Christine Lagarde, who gave us my grandchildren and a nice emoji heart.
Now, talking of Christine Lagarde, the head of the European Central Bank, says that the Eurozone is working to become more competitive. The president
told me the bloc is in the middle -- in the process of adopting reforms proposed in the Draghi Report. You'd be familiar with the Draghi Report.
Every time we have that, take a drink.
Cheers, Mario.
Even so, Christine Lagarde admits much of the work of the Draghi Report and of reform is still a work in progress. We discussed central bank
independence and why she signed a statement in defense of Jerome Powell.
(BEGIN VIDEOTAPE)
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: We closed ranks and said, jay Powell, we respect you. We honor you, and we are together in
this. Number two, it shows that we are all attached to central bank independence. OK. People will say independence, why is that?
[16:45:02]
Because in any place, anywhere in the world, where you have seen that independence questioned, almost instantly, inflation rises, bad decisions
are made and there is financing of debt without limitation. So it's really important.
QUEST: Turning to the economy of Europe at the moment, as you chided me a moment ago, interest rates down, inflation down, and which leaves monetary
policy. Where are you looking forward?
LAGARDE: As we have repeatedly said, we will decide meeting by meeting.
QUEST: Data dependent.
LAGARDE: Data dependent. Yes.
QUEST: Data dependent. Yes, that's it.
LAGARDE: And no preset course. But the most important thing at the moment is that we are at target. 2 percent medium term. We are there, and have
been for several quarters, so that's what matters. The data that we have, unless there are striking developments, would lead us to believe that we
are in a good place, not a static place. We are really obviously alert and agile, but we are in a good place.
QUEST: And you have enough maneuverability if there was to be an exogenous event to stimulate if necessary.
LAGARDE: Absolutely, yes.
QUEST: And at this point, I suppose I need to take a drink because I'm going to say the Draghi Report. And we will share that when we say that.
What does Europe need to do now to implement this Draghi Report to make the changes? Draghi basically set a path and it's not being followed fast
enough arguably.
LAGARDE: First of all, I would observe that some of his reforms have been implemented. About 11 percent of the reforms. 60 percent is underway.
That's where you say it's taking too long. My hope is that Europe can show unity, a determination for sovereignty and a degree of solidarity. We have
done it in the past. When COVID hit, that was the case. We need to apply the same spirit and the same determination to doing exactly that.
Implement and deliver on most of the Draghi Report. Don't get me into this reform or the other. I'm generally very supportive.
QUEST: Right. Right.
LAGARDE: But there are a few things that I could argue about.
QUEST: What gives you hope, Madam President? Choose your color. This will be deeply significant. Deeply significant.
LAGARDE: I'll take the blue of Europe.
QUEST: Blue of Europe.
LAGARDE: Yes. Yes. OK. What gives me hope? I'll write it here.
QUEST: Anywhere you like. Oh. Oh.
LAGARDE: Voila.
(END VIDEOTAPE)
QUEST: There you have it. Christine Lagarde, and my grandchildren.
Gary Cohn was President Trump's top economic adviser until he quit over tariffs and other matters. What Gary Cohn is telling me about how Greenland
and Trump's new tariff threats.
(BEGIN VIDEO CLIP)
GARY COHN, VICE CHAIRMAN, IBM: I think there's a deal to be done where it's a win-win for both countries. I'm not able to comprehend the fact that we
would actually go to war with allies in the NATO group.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:50:44]
QUEST: The skies, oh, look at that. The skies around Davos were extra busy this morning. Private jets are landing in airports close to where we are.
Tomorrow morning Air Force One will be touching down and it's not for the first time.
Donald Trump made his first visit to Davos as U.S. president in 2018, a year into his first term. Then the message was America first. But it was
also a message of America is open for business. He touted his tax cuts, the booming stock market and strong economic growth.
Gary Cohn was Mr. Trump's top economic adviser during that first term. He quit the White House early in 2018 partly over tariffs. The former Goldman
Sachs president disagreed with the decision to tariff steel and aluminum. Now, of course, Gary Cohn is vice chair at IBM. And he joined me here in
Davos.
(BEGIN VIDEOTAPE)
COHN: I think the president is very aware of the significance of Greenland, where it is, where it's geographically located. And ultimately I think
there's a deal to be done there where it's a win-win for both countries.
QUEST: Except the question of sovereignty. That is something that, seemingly from what Macron and others have said today, is the non-
negotiable point that the U.S. is either going to have to fight or accept.
COHN: Yes. And look, I think that's an untenable situation. This is a NATO ally country. There are French soldiers on the ground. There are German
soldiers on the ground. There's Spanish soldiers on the ground. I find it - - I'm not able to comprehend the fact that we would actually go to war with allies in the NATO group.
QUEST: But even if it's solved, isn't the real problem here that the trust of a transatlantic alliance has been, if not destroyed, has been badly
damaged, and that's going to have long lasting implications.
COHN: Look, it's not what I would have liked to see. I think it's not what a lot of people would like to see. I think NATO members could have
understood if the president wanted to negotiate quietly with them about their strategic importance of Greenland, but doing it out in the public, no
one wins when you have an argument out in the public. Doesn't work at the dinner table. It doesn't work in politics.
QUEST: You obviously were part of the first administration. You've witnessed the second. We're one year exactly into the second
administration. What's your gut overview of it?
COHN: I think on a policy front, the president has done exactly what he told you he was going to do during the election. You know, he has delivered
on what he talked about. He talked about the immigration problem in the United States. He talked about the regulatory burden. He talked about
bringing enterprise back to the United States. He talked about bringing industry back to the United States.
If you go through his laundry list of things that he ran on and that people elected him on, he's delivering on those.
QUEST: Are you an admirable or are you in admiration of it, or are you watching with some criticism of it?
COHN: Look, I'm not sure they're the tactics I would have chosen.
QUEST: Right.
COHN: But they're the results that people voted for.
QUEST: OK. Now we look at where we stand technologically, on technology, where -- because obviously that's your bailiwick now. And the benefits that
we are seeing are there and growing and will get larger. But so are the potential down risks. Employment, the haves and have nots. Are we giving
enough time and attention to that?
COHN: So on the employment side, I might differ with you. I do think there are some unintended consequences as we get there. Look, right now we're
seeing the price of power, the price of power in the United States. Price of power in the world is going up because data centers are trying to buy
and accumulate more power than they -- than we have in the system. So one of the short term effects is the price of power.
On the long term effect of employment, this is where I think I disagree with you a little bit. If you go back in the history of the world and you
go back and look through every major technological advancement, all it did was create growth and create productivity, and productivity and growth
creates jobs.
[16:55:02]
And you can go back to the horse and buggy to the car. Your internal combustion engine. You can go back to the internet. You can go back to any
one of these seismic changes we lived through, the global economy got bigger, jobs were created and global wealth went up.
QUEST: Before we come to the board, final question to you. Of all the jobs that you've had, and you've had -- you've been in different --
COHN: Are you trying to say I can't keep a job?
QUEST: No, I'm not. I'm saying you've come in different worlds from banking to government now into tech at a different level. Are you enjoying this
level because it's a different life than you had before? Completely different.
COHN: They've all been different lives and they've all been spectacular. Really being involved in the technology world now for the last five years
is extraordinary. Having spent 30 years in financial services was extraordinary. Going to serve my country in the government was
extraordinary. By the way, you gave me, you gave me my answer, what gives me hope.
QUEST: What gives you hope?
COHN: Technology.
QUEST: Oh.
COHN: What's wrong? OK.
QUEST: Why?
COHN: Because we're going to be able to proliferate economic growth in a way we've never been able to.
(END VIDEOTAPE)
QUEST: We have two technologies on the board. Gary Cohn is one of them. We'll take a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment" from Davos with, of course, my dear good friend. We're calling him Colin Colander. But you may have a better
idea that you think we should call.
So tonight's "Profitable Moment," there is a very different feel in Davos, of course, because of what's taking place with Greenland, tariffs, and the
transatlantic agenda. That much is obvious and clear. But I go further tonight. I'm going to tell you that for the first time over the last few
months, CEOs have run away from answering difficult questions about what's going on. They didn't want to get enmeshed in the politics of one side or
the other.
That is shifting. It's not that they are taking sides per se, but here at Davos, for the first time I'm actually hearing CEOs being prepared to say
something. You heard it on tonight's program. Brad Smith of Microsoft, very firmly wanting to point out the significance, importance and the relevance
of the NATO business. You heard it yesterday with Telefonica about how Europe needs champions.
Again and again, CEOs are coming here and saying to us, look, we don't take sides, but what's happening is deeply bad for business overall. And I think
that that's going to be the shifting force that eventually moves this one way or the other because then people will start to say, this is costing us
money. This is bad for business. Do you agree?
I thought so. Thank you. Always good to have him agree. And that's QUEST MEANS BUSINESS for this Tuesday night. I'm Richard Quest in Davos. Whatever
you're up to in the hours ahead I hope it's profitable. I'll see you tomorrow here in Davos.
You're looking very good. Yes. Cold up here, isn't it?
END
