Mexican President Cancels Washington Trip; White House: 20 Percent Tax on Mexican Imports Could Pay for Wall; Trump Orders Probe into Alleged Voter Fraud; Interview with Sen. Bob Menendez.
JAKE TAPPER, CNN: -- across the country. What is the Democratic strategy in the Donald Trump era? I'll moderate. That's Tuesday night, 9 p.m. right here on CNN. That's it for "THE LEAD." I'm Jake Tapper. I'll turn you over to Wolf Blitzer in THE SITUATION ROOM. He also is not going to keep his mouth shut.</s>WOLF BLITZER, CNN ANCHOR: Happening now. You're canceled. Mexico's president calls off a meeting with President Trump after declaring his country won't pay for a border wall. The White House responds by suggesting President Trump could fund the wall by imposing a 20 percent tax on imports from Mexico. Tonight the White House is walking that back. Pushing an investigation. The president backs off his false claim of widespread voter fraud by calling for an investigation, but is there really anything to investigate? Stump speech. The president takes a trip on Air Force One to a GOP congressional retreat. He gives a campaign-style pep rally but leaves without taking questions from lawmakers. Are they on the same page? And the opposition. President Trump's chief strategist, who previously edited a right-wing website, says news organizations have been, quote, "humiliated by the election result." He calls the news media the opposition party and says it should, quote, "keep its mouth shut." I'm Wolf Blitzer. You're in</s>THE SITUATION ROOM. ANNOUNCER: This is CNN breaking news.</s>BLITZER: Breaking news, tensions exploding over a plan to build a border wall. After saying his country will not pay for a wall, Mexico's president cancels a meeting with President Trump. The White House followed that stunning move by suggesting that attacks on imports from Mexico could pay for the wall. That would hit American consumers in the pocket as they pay higher prices for a vast array of products from Mexico. The president, meanwhile, picks up where he left off, with his unfounded claim of voter fraud. And he says he'll pick up his pen again. This time he's ordering an investigation, saying he wants to keep the ballot box secure and safe. But Republican lawmakers are unimpressed by the president's claims. The House Oversight Committee chairman, Jason Chaffetz, an aggressive investigator, says he doesn't see any evidence of voter fraud. We're standing by to see if the president will sign that order tonight. President Trump, meanwhile, is pushing -- he pushes ahead as he takes his first flight on Air Force One to the congressional Republican retreat in Philadelphia. As the White House and GOP leaders work to coordinate legislative action, Mr. Trump calls it a chance to achieve great and lasting change. But critics say his actions could sidetrack the agenda. I'll speak with Democratic Senator Robert Menendez. And our correspondents, analysts and guests, they are standing by with full coverage of the day's top stories. President Trump is facing his first major diplomatic firestorm as he keeps busy signing executive actions. Let's start our coverage with our senior congressional reporter, Manu Raju. Manu, is the president about to start a trade war with Mexico?</s>MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Wolf, I can tell you some top Republicans are growing increasingly concerned about the president's policies towards Mexico and this recent proposal by the White House to impose a 20 percent tax on Mexican imports in order to pay for the wall. Tonight, Wolf, the White House trying to walk that suggestion back. And at the heart of that is the -- how to pay for the wall with Mexico, Republican leaders grappling, trying to find out how to do just that.</s>RAJU (voice-over): Tonight, Donald Trump trying to unite Republicans in Congress who have been uneasy about some of the new president's early moves.</s>DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Nice to win. Do we agree? It's been a while.</s>RAJU: After his first trip aboard Air Force One as president, Trump addressing GOP lawmakers at a party retreat in Philadelphia.</s>TRUMP: This is our chance to achieve great and lasting change for our beloved nation.</s>RAJU: But his trip overshadowed by his first diplomatic firestorm. The decision by Mexican President Enrique Pena Nieto to cancel a meeting with Trump next week in Washington, amid the country's refusal to pay for a new wall along the border, one of Trump's central campaign promises.</s>TRUMP: The president of Mexico and myself have agreed to cancel our planned meeting scheduled for next week. Unless Mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless; and I want to go a different route. We have no choice. The American people will not pay for the wall, and I've made that clear to the government of Mexico.</s>RAJU: And the president blasted NAFTA, the trade deal with Mexico and Canada, that many Republicans on Capitol Hill strongly support.</s>TRUMP: NAFTA has been a terrible deal, a total disaster for the United States from its inception, costing us as much as $60 billion a year with Mexico alone in trade deficits.</s>RAJU: Such tough talk has unnerved some top Republicans.</s>SEN. JOHN CORNYN (R-TX), MAJORITY WHIP: I don't see any benefit in trying to crawl back into our shell as a country. We can't do that economically. We're obviously next door to Mexico. As I frequently tell my friends in Mexico, I said, "We can't get a divorce. We need to figure out how to make this marriage work."</s>RAJU: GOP leaders tried to sidestep the feud between Trump and Mexico and revealed the cost U.S. taxpayers may have to shoulder if Trump fails to get Mexico to pay for the wall. (on camera): Do you think the president should tone it down to salvage this relationship with Mexico?</s>SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: I don't have any advice to give to the president about that issue. We are moving ahead. As the speaker pointed out to our group yesterday, with, what? Roughly yes, 12 to $15 billion. So we intend to address the wall issue ourselves, and the president can deal with his relations with other countries. On that issue and other issues.</s>RAJU: Are you concerned about the relationship with Mexico?</s>REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: I think it will be fine.</s>RAJU: Now, to pay for that wall, Wolf, Sean Spicer, the White House press secretary, on the way back from Philadelphia, telling reporters that they're looking at the idea of imposing a 20 percent tax on Mexican imports. And as soon as that suggestion came out, Republicans started to push back, including Lindsey Graham of South Carolina, John McCain of Arizona, John Cornyn, who we recorded there in this piece, raising deep concerns about this idea. And then immediately afterwards, Wolf, the White House starting to walk that back. Sean Spicer saying this is just one thing they're looking at. They have not embraced this idea. It's just illustrative of exactly the proposals they're looking at, at how to pay for this wall. So not embracing that quite yet. Still an open question, but how exactly to pay for this wall that could cost upwards of $15 billion.</s>BLITZER: Yes, this crisis in U.S.-Mexican Relations now clearly escalating. Let's see what happens next. Manu Raju in Philadelphia for us. President Trump is following up his unfounded claim of widespread voter fraud by ordering an investigation. Our justice correspondent, Pamela Brown, has been looking into that. Pamela, I take it not much congressional enthusiasm for this kind of investigation?</s>PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Not at all. In fact, they're coming out and saying they don't want to investigate this. And, Wolf, the executive order may be signed soon, but how to proceed from here is unclear for officials within the Department of Justice, because there is simply no precedent for this.</s>BROWN (voice-over): President Donald Trump is expected to soon sign an executive order authorizing a voter fraud investigation. The president declaring the investigation is needed to keep the ballot box safe. As he addressed Republican congressional leaders today at a retreat in Philadelphia.</s>TRUMP: We are going to protect the integrity of the ballot box, and we are going to defend the votes of the American citizens.</s>BROWN: But some Republican lawmakers tell CNN they believe any investigation would only serve as a distraction, since the claim of widespread voter fraud, which he says cost him the popular vote, is baseless.</s>REP. ADAM KINZINGER (R), ILLINOIS: I think it's dangerous ground, because it begins to undermine the base of the Constitution, which is the idea of a fair election.</s>UNIDENTIFIED MALE: We have a lot to do and those issues kind of -- can distract us.</s>BROWN: But the White House says there's no harm in conducting the probe.</s>KELLYANNE CONWAY, WHITE HOUSE COUNSELOR: He is the leader of our democracy, and he just wants to make sure that the undergirding hallmarks of our democracy -- one person, one vote -- are protected. Why not have an investigation? What are -- what is everybody afraid of?</s>BROWN: Voter fraud investigations are normally triggered when the FBI and Department of Justice discover credible evidence to suggest fraud. Not because of an order from the president.</s>UNIDENTIFIED FEMALE: The U.S. Department of Justice is an independent agency. In order for the Justice Department to do its job and to work and function well, it has to do so independent of direction from the president and must completely stay above politics.</s>TRUMP: Have a good time, everybody.</s>BROWN: President Trump continues to cite a 2012 Pew research study which concluded millions of voter registrations across the U.S. are inaccurate and no longer valid. But the study's author, David Becker, has repeatedly told CNN the study found no evidence of widespread voter fraud.</s>DAVID BECKER, AUTHOR OF PEW RESEARCH STUDY: There's a big leap between an out-of-date record and administrative inefficiency on a list, and the act of voter fraud. The -- it just doesn't happen.</s>TRUMP: There are millions of votes...</s>BROWN: In an interview with ABC News Wednesday, the president said Becker must be groveling.</s>TRUMP: Take a look at the Pew reports.</s>DAVID MUIR, ABC NEWS: I called the author of the Pew report last night and he told me that they found no evidence of...</s>TRUMP: Really, then why did he write the report?</s>MUIR: He said no evidence of voter fraud.</s>TRUMP: Excuse me, then why did he write the report? According to Pew report -- then he's -- then he's groveling again.</s>BROWN: The president insisted he would have easily beaten Hillary Clinton in the popular votes if he wanted to.</s>TRUMP: I would have won the popular vote if I was campaigning for the popular vote. I would have gone to California, where I didn't go at all. I would have gone to New York, where I didn't campaign at all. I would have gone to a couple of places that I didn't go to. And I would have won that much easier than winning the Electoral College.</s>BROWN: Hillary Clinton received nearly 3 million more votes than Donald Trump nationally.</s>BROWN: And how President Trump's attorney general nominee Jeff Sessions will respond to this is still unclear. He has already been asked about Trump's request for a voter fraud investigation by senators on the Judiciary Committee. It's likely he'll respond before the committee vote on his nomination next Tuesday -- Wolf.</s>BLITZER: Pamela Brown reporting for us. Thanks very much. Joining us now, Democratic Senator Robert Menendez of New Jersey. He's a key member of the Senate Foreign Relations Committee. Senator, thanks for joining us.</s>SEN. ROBERT MENENDEZ (D), NEW JERSEY: Good to be with you, Wolf.</s>BLITZER: What's your reaction to the cancellation of this planned meeting next Tuesday between President Trump and President Pena Nieto of Mexico? The Mexican president announced he wasn't coming?</s>MENENDEZ: Well, it's a major, major issue. First of all, there's no way that President Pena Nieto could possibly come to the United States, with the announcement of President Trump that Mexico is going to pay for the wall. Secondly, Mexico is our second largest export market in the world as of the end of 2015, the last year we have records for. We sent about $267 billion of U.S. goods and services to Mexico. So, we have actually an export surplus when it comes to services that we provide and get paid for in Mexico. So, it's our front door neighbor, and the reality is we have much intertwined in term of our respected interests and fate. So, you know, this is a major, major challenge to the U.S.-Mexico relationship, which is important to us in so many different dimensions.</s>BLITZER: Speaking of that, United States and Mexico have an important security relationship, as you know. The two nations cooperate very closely on drug trafficking, terrorism, for example, are those security agreements in jeopardy right now?</s>MENENDEZ: Well, I would hope not. I mean, it's in both countries' interests to stop the drug trafficking, human smuggling, the variety of issues we have with gangs in the Western hemisphere, particularly in Central America as they try to get their reach up into the United States. So, it's in both country's interests. But obviously when you continue to challenge a country, when you say to your neighbor who lives next door, if we were living side by side as neighbors and you say, "There's no fence between us, but by the way I'm going to put one up and you're going to pay for it," that's just impossible to accept for the president of Mexico and the Mexican people are very proud. So, at the end of the day, this permeates the overall relationship, but I certainly hope the security element of it and the interests we mutually have will be preserved, notwithstanding this challenge that we have between President Trump and President Pena Nieto.</s>BLITZER: Now, the White House a few hours ago suggested the president wants maybe a 20 percent tax on all imports from Mexico coming to the United States to pay for that wall for the border wall. Since then the White House has now started to walk that back. They got a lot of grief from a lot of Republicans, I should say, as a result of that initial proposal, how to pay for the wall. But do you worry that the U.S. and Mexico right now could be headed toward a trade war?</s>MENENDEZ: Well, Wolf, as a senior member of the Senate Foreign Relations Committee and the ranking Democrat on the Western Hemisphere subcommittee, and as a member the Senate Finance Committee that deals with all tax and trade questions, yes, I am worried because, you know what? OK, you're going to slap 20 percent on Mexico. So, they'll slap 20 percent on the $267 billion that the United States sells in goods and services to their country. Those are goods and services made by Americans here. Jobs in the United States. And at the end of the day, if that's what's going to happen, American workers suffer. And at the same time consumers suffer because the imports that come from Mexico, particularly in food product among others, are ultimately going to be far more expensive for the consumer. And we have world trade organizations obligations. I'm not sure how this sits in the context of our world trade obligations. So, at the end of the day, you don't want to start disrupting the international order, because others will find the belief that, if you can do it, so can we.</s>BLITZER: Your Senate colleague, Republican Senator Lindsey Graham, he just tweeted this, and I'll put it up on the screen. Let me read it to you. "Simply put, any policy proposal which drives up costs of Corona, tequila or margaritas is a big-time bad idea. Mucho sad." Your reaction to Senator Lindsey Graham. He was obviously trying to instill a little humor in that.</s>MENENDEZ: Yes, and Senator Graham and I get along very well. We see in many parts of the world eye to eye, even though beer we're on separate sides of the aisle. And he is probably, you know, one of the members of the Senate who has the greatest humor in the context of being able to use it in a very powerful way. The reality is, is that all those things that he talked about and thing that are far -- maybe far more important, like food products, are going to be more costly to U.S. citizens. And when our products become more expensive if there's a retaliatory tariff by Mexico, that's going to affect jobs here in the United States. That's not how you become the greatest job creator ever known to mankind. And, so, you know, our challenge is we need to work with Mexico and get our relationship to meet our mutual challenges, to create greater stability, greater economic growth, to control the traffic of people and at the same time protect ourselves against the scourge of gangs and drugs. But you don't do it by putting up a wall. Last time a wall was built was in Germany, and at the end of the day, it ultimately came down. And, so, I don't believe that this is the way to go. And I don't believe that the taxpayers of the United States should spend nearly $20 billion -- billion dollars on a wall, the great wall of hate, at the end of the day when that 20 billion could be spent far better in creating educational opportunity, in creating jobs, in a whole host of things that are important to our country.</s>BLITZER: Paul Ryan, the speaker of the House, he says $14 billion, but I know that figure is moving all the time. Stand by, Senator. There's a lot more to discuss, including President Trump's decision to launch a formal investigation into what he regards as widespread voter fraud.