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The Situation Room

Interview With Rep. Mike Lawler (R-NY); Markets React to Trump Tariff Threats; Tense Economic Forum. Aired 11-11:30a ET

Aired January 20, 2026 - 11:00   ET

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

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ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN HOST: Breaking news: de-escalating in Davos. President Trump's push to take Greenland is turning the annual economic forum in Switzerland into an emergency summit with European leaders.

I will ask Republican congressman Mike Lawler about President Trump's tactics. Plus, we're live in Greenland to find out what people there actually are saying about being in the middle of a global dispute.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. Pamela Brown is off today. You're in THE SITUATION ROOM.

President Trump is heading to the World Economic Forum in Davos, Switzerland, and he could get a rather chilly reception from allies bristling at his recent policies. Just a short time ago, France's president railed against President Trump's latest global tariffs. Listen.

(BEGIN VIDEO CLIP)

EMMANUEL MACRON, FRENCH PRESIDENT: We have to fix prosperity in democracies. I mean, it doesn't make sense to have tariffs and be divided, and even to threaten now with additional tariffs.

We can use the -- I mean, the crazy things is that we can be put in a situation to use the anti-coercion mechanism for the very first time vis-a-vis the U.S. if they put additional tariffs. Can you imagine that? This is crazy.

(END VIDEO CLIP)

BLITZER: And IN a rather remarkable twist overnight, President Trump leaked this private message from President Macron, the French president writing -- and I'm quoting now -- "My friend. We are totally in line on Syria. We can do great things on Iran. I do not understand what you are doing on Greenland" -- end quote.

President Trump doesn't appear to be backing down at all on his ambition to take over the Danish territory. This morning, he posted this A.I.-generated image of him planting the American flag there in Greenland with a sign declaring it to be a U.S. territory established, he says, this year.

Let's go to CNN White House reporter Kevin Liptak.

Kevin, the president seems to have turned up a bit today. Is there any sense of urgency among the European leaders to get more clarity from President Trump?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: There is an enormous amount of urgency, and you see that reflected in all of these text messages that they're sending to him that he is later posting on TRUTH Social.

That message from the French president, Emmanuel Macron, was really remarkable, telling the president point blank he just didn't understand what he was trying to do here. He also invited the president to Paris for an emergency G7 summit, although I'm told by a White House official that the president has no plans to go to Paris at this time.

That speech that Macron delivered earlier today was pretty remarkable. And just, Wolf, I will note, he's wearing those sunglasses because he has an eye issue, if anyone was confused by that. He said that this was a world without rules that was moving -- the U.S. was moving towards.

There are international laws trampled underfoot, where the only law that seems to matter is that of the strongest, really remarkable words. And he's not necessarily talking about China or Russia there. He's talking about the United States, an otherwise stalwart ally of France's.

And it just gives you a sense of the moment that the president has brought the world to. And he's not the only world leader that's reaching out, the president also posting a message from the NATO secretary-general, Mark Rutte, who has spent the last year trying to cultivate President Trump, Rutte saying that he was going to spend his time at Davos trying to emphasize the president's foreign policy accomplishments and that he was -- quote -- "committed" to finding a way forward on Greenland.

Now, this -- none of this seems to be having any effect on President Trump. He was speaking last night, and he only seems to be hardening in his view when it comes to Greenland. Listen to what he said.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't think they're going to push back too much. Look, we have to have it. They have to have this done. They can't protect it. Denmark, they're wonderful people. And I know the leaders are very good people, but they don't even go

there. And because a boat went there 500 years ago and then left, that doesn't give you title to property. So we will be talking about it with the various people.

(END VIDEO CLIP)

LIPTAK: So, you hear the president there referring to title, to property. And I think that gives you a clue as to where the president's mind-set is in all of this.

When we talk to officials, they say that the president, on this one- year mark of his presidency, feels emboldened. He feels emboldened by the successful bid to take Maduro out of Venezuela. He is sort of entrenched in this view of U.S. dominance of the Western Hemisphere.

And, certainly, he plans to bring that to Davos. In this speech that he delivers tomorrow morning, that will be a theme as he addresses these world leaders. As the president put it last night, Wolf, this is going to be a very interesting Davos.

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BLITZER: To put it mildly.

All right, Kevin Liptak at the White House, thank you very, very much.

I want to bring in right now Republican Congressman Mike Lawler of New York. He serves on the Foreign Affairs Committee.

Congressman, thanks so much for joining us.

I know you oppose the use of military force to acquire Greenland for the United States. Do you have any concerns at all that President Trump may be actually considering to do that?

REP. MIKE LAWLER (R-NY): Look, I think there is broad bipartisan opposition in Congress to any use of force in relation to Greenland.

But I think the president has made an important point about the importance of Greenland strategically and from the standpoint of national and global defense, and especially in relation to NATO, and combating the malign influence of Russia and China in particular in our hemisphere and certainly in the Arctic region.

You just look at, just two weeks ago, the oil tanker that was seized off the coast of Iceland. That oil tanker came from Iran, went to Venezuela, and was headed to Russia. This unholy alliance that has been brought over the last few years by China, Iran, Russia, Venezuela, North Korea, and others has sought to destabilize the U.S., Europe, and the free world.

And what the president is focused on extensively is pushing back against that malign influence in our region. We already have military presence on Greenland. I think, if the end result is greater cooperation with NATO and increased U.S. military presence on Greenland and greater cooperation with respect to minerals, I think in the long run that is a good deal.

If there was an opportunity to negotiate a sale, as in the past with Alaska or the Louisiana Purchase, this is not a new concept. Great. But the use of military force, in my opinion, should be off the table. I do not think that is in our interest and certainly not that of our allies.

BLITZER: The president, overnight -- we have been showing our viewers this image -- he posted this A.I.-generated photo of him actually planting a flag, an American flag, on Greenland. And it showed him showcasing that map of Greenland and Canada as part of the U.S. to European leaders.

Even if these are just simply in jest, he is threatening tariffs on European countries right now over Greenland. These are NATO allies. Do you worry at all that the U.S. could be straining these critically important relationships with our NATO allies and pointing and trying to depict them as rivals, like Russia, for example, and he's basically saying sit back and watch?

LAWLER: Look, I think, obviously, the president has been on the world stage for over a decade now. And I think people certainly understand his use of social media as a means to spur conversation.

The fact here is, our NATO allies are vital. The president over his tenure has done a masterful job in getting our NATO allies to actually increase their defenses, to increase their spending on defense as a percentage of their GDP, much to their opposition for many years.

And now they're approaching 5 percent in many cases, which is important as we combat this malign influence from Russia, China, Iran, and others. I think ultimately they're going to have a conversation at Davos. I think that conversation will be productive.

And I think, ultimately, the end result here, in my estimation, is that there will be a deal with respect to greater U.S. military presence on Greenland and greater cooperation from NATO in combating this malign influence in the Arctic region, which for us in the Western Hemisphere is certainly critically important.

BLITZER: I know you -- you know him, your fellow swing district Republican Congressman Don Bacon. He told me the other day that the U.S. invasion of Greenland would lead to President Trump's impeachment, impeachment.

Where do you stand on that assessment?

LAWLER: Look, I'm not getting into that. The bottom line here is, the president is the commander in chief. He's well within his authorities when it comes to foreign policy.

The objective here is to strengthen our defense capabilities in the Arctic region. The president brought this up over a year ago when he first came into office, and many people snickered. They also snickered about the Panama Canal. He was right about China's malign influence in the Panama Canal. [11:10:10]

BlackRock stepped in. They purchased the two ports, and China is out of the Panama Canal. It is imperative for our security to push back against these efforts by Russia, by China. I think the president has made this a focal point in a way that, frankly, many presidents wouldn't, but that's also why he's been able to deliver on foreign policy in a way others have not.

I think the ultimate goal here is to increase our military capabilities and protect our region, and I think ultimately that's what you're going to see come out of these discussions.

BLITZER: On another important foreign policy issue, Congressman, the Russian leader, Vladimir Putin, was invited, invited to join President Trump's so-called Board of Peace on Gaza, even as we continue to see Russian attacks on Ukraine.

Is Vladimir Putin worthy of serving on that proposed Gaza Board of Peace? What do you think?

LAWLER: No.

Vladimir Putin is a war criminal and a dictator and despot. I believe we need to enact secondary sanctions on Russia and those that do business with Russia, and I think, frankly, Europe needs to step up to the plate and cut off Russian gas.

The fact is, Vladimir Putin continues to act in an aggressive posture in Ukraine, and his continued unwillingness to actually negotiate a cease-fire, from my vantage point, requires Congress to act, and I think it's time to pass the sanctions legislation.

BLITZER: Republican Congressman Mike Lawler of New York, thanks so much for joining us.

LAWLER: Thanks, Wolf.

BLITZER: And still ahead: Markets are reacting as President Trump reignites fears of a potential trade war over Greenland.

And the new message from Europe right now, as President Trump's threats sparked a lot of fear and concern among U.S. NATO allies.

Stay with us. You're in THE SITUATION ROOM.

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BLITZER: Happening now: global markets now reacting to President Trump's latest tariff threats over Greenland.

Europe is now weighing countermeasures to Trump's bullish push to acquire the Danish territory, including activating what's being called a trade bazooka. Treasury Secretary Scott Bessent is trying to calm fears. Listen to

this.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, U.S. TREASURY SECRETARY: Everyone, take a deep breath. Do not escalate. Do not escalate. And President Trump has a strategy here. Hear him out, and then everything will be fine.

(END VIDEO CLIP)

BLITZER: Joining us now, CNN senior reporter Matt Egan and CNN chief national affairs correspondent Jeff Zeleny.

Matt, let me go to you first.

What are we seeing with the markets, first of all, this morning?

MATT EGAN, CNN SENIOR REPORTER: Well, Wolf, this Greenland crisis is setting off shockwaves on Wall Street.

You can see the Dow is down about 550 points, or a little bit more than 1 percent, the Nasdaq down by 1 percent as well. The good news, relatively speaking, is that markets were down even more earlier this morning, but they have come off their lows a bit.

But investors are piling into the safety of precious metals, with gold and silver surging. Let's take a look at the CNN Fear and Greed Index of market sentiment. You can see market sentiment has started to tick lower, although it does remain much higher than it was back in April during the president's Liberation Day tariffs.

We also can take a look at where the Fear and Greed Index is. So before today, the Fear and Greed Index was in greed mode. Investors were feeling pretty bullish about things, but it has moved into neutral territory and towards fear.

Now, all of this is being set off by the president's threat to impose tariffs on eight European allies. He's warning that tariffs are going to go into effect at 10 percent, starting on February 1. And then they'll more than double to 25 percent on June 1 if there's no agreement over Greenland.

And, look, this is rattling investors because a lot of them had hoped that the worst was over when it comes to tariffs and trade tensions. But, Wolf, the latest developments in just the last 72 hours or so suggest that the trade risks, they continue to linger for investors.

BLITZER: And, Matt, let me follow up. If the E.U., the European Union, retaliates now, and I suspect they will, what would a so-called trade bazooka mean for the U.S. and the U.S. economy?

EGAN: That's right.

So Europe does have something that's known as a trade bazooka. It's an anti-coercion instrument that took effect in the European Union back in 2023. And it's designed to protect the European Union from trade and investment threats, just like the threats that have been unleashed by the president.

And France has reportedly argued that the E.U. should activate this bazooka. Now, if it did get activated, this would allow the E.U. to have a whole broad range of options to respond with, including export controls and blocking access to the E.U. market.

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And the risk here is that this evolves into some sort of a tit for tat situation, where both sides continue to escalate. And things could get out of hand pretty quickly. And it would be damaging not just to the U.S. economy, but to the European economy as well -- back to you.

BLITZER: Let me get Jeff Zeleny into this conversation.

One year in office in the second term, it marks a major point, and he spent, the president, a good portion of this year focusing in on foreign policy issues, as opposed to domestic economic issues. Talk a little bit about how Americans are feeling about the president's foreign policy issues.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Wolf, it's been a year of whiplash on policies.

But in about 40 minutes or so, it marks a year since President Trump returned to office. But foreign policy, as you said, has been really one of his top priorities now. But on Greenland specifically, look at this polling here. Americans clearly are not with the president in terms of his desire to acquire Greenland.

Only 25 percent overall favor this idea; 75 percent are opposed to it. But when you look at the breakdown there, of course, Democrats are opposed to the Trump administration's views. That's to be expected. But 82 percent of independent voters oppose this plan, and only about half of Republican voters do.

Wolf, this is one of the exceptions, that Republicans on Capitol Hill, Republican leaders are really speaking out against the president's idea to acquire Greenland. We will see if it changes, but he is intent on doing this.

It could be a bit of a distraction, but it is really -- has the potential of shattering the Western alliance and NATO specifically. We cannot -- there isn't a time in our history when the U.S. has been so at odds with NATO allies over this.

So, as he goes to Davos, Switzerland, for the economic forum this evening, he will be meeting with world leaders tomorrow. They're very high-stakes meetings, actually, much more so than usual Davos summit. So the president clearly has not made the case for why this is necessary, and the country is not behind him.

BLITZER: That's what the polls show, clearly. Independents especially, they're moving away from him big time as a result of all of this.

Matt, tariffs have certainly been a huge part of the president's first year of this second term in office. Talk a little bit about how Trump's tariffs are working out for the American people.

EGAN: Well, Wolf, the president has argued that foreign countries are going to pay for his historically high tariffs, but this new study from a German think tank, the Kiel Institute, finds otherwise, right?

They found that when you look at tariffs over the last two years or so, foreign exporters, they only paid for 4 percent of the tariffs. That's this small blue sliver of the pie chart. The vast majority, 96 percent of the tariffs, are being paid by U.S. importers and consumers in the form of higher tariffs.

And one of the authors of this study, they said that the tariffs, the idea that other countries are paying for them is a myth and that these U.S. tariffs are an own goal.

Now, it's true that the rate of inflation in the United States has not skyrocketed, as some feared it would. However, some tariff-sensitive items have gone up significantly in price. Look at the 2025 price increases for a whole variety of things that are exposed to tariffs. Bananas are 6 percent more expensive, and the vast majority of bananas consumed in the U.S., they are imported.

Car repair is up by 6 percent, camera and audio equipment, double- digit price increases. And look at this, coffee. Coffee is 20 percent more expensive. And so, look, the president has said that he will address affordability, but it's hard to see how tariffs over Greenland are going to help the cost of living.

And, if anything, Wolf, this study suggests that these new tariffs, they could make matters worse.

BLITZER: You just came back, Jeff, from South Georgia, spoke to a lot of voters out there. What are they feeling about these tariffs?

ZELENY: Well, I was really struck by how many voters, business owners, farmers, were talking specifically about tariffs.

It's a tax, and they are feeling this tax. We talked to an owner of a toy store in Macon, Georgia. And she said the idea that these countries are paying the tax is not her experience. That's not true. Some of the items on her shelves are going up 15 percent to 20 percent. Farmers, they do not believe this China policy, the trade policy, has been helpful.

But when you look at our polling overall, it's really interesting. Asked if the president has the right priorities, take a look at these numbers here; 64 percent of Americans say the president does not have the right priorities. Only 36 percent say he has the right priorities.

Of course, tariffs and trade have been at the center of all of this. When you ask Americans what the top concerns are, what issues are on top of their mind, the economy is 42 percent, democracy 22 percent, immigration 15 percent, health care policy 8 percent.

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So, economy and the cost of living remains the most important issue facing the country here. So that really sets out the challenges to come for the president as he enters his second year back in office. Of course, in the midterm election year, we know it's always about the economy.

BLITZER: Yes, as James Carville said many, many years ago, it's the economy, stupid.

ZELENY: And it still is.

BLITZER: It still is.

All right, thanks very much, Jeff Zeleny. Matt Egan, thanks to you as well.

Coming up: the French president, Emmanuel Macron, responding after President Trump posted his private messages for the world to see, the stark warning that President Macron just gave the U.S. at Davos.

We will be right back.

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