JANUARY 27, 2017, FROM 9:35 TO 10:28 A.M. EST.



TRUMP:

Hello, good morning.



PEÑA NIETO:

Mr. President, good morning.



TRUMP:

How are you, Mr. President?



PEÑA NIETO:

I am good. How are you? It is good to speak with you. Let me switch to Spanish so I will be more comfortable.



TRUMP:

Yes, that would be fine, Enrique.



PEÑA NIETO:

President Trump, I am very glad to hear from you and I know we have had a point of difference that has complicated the situation. Let me tell you clearly what I think is now happening in the route of reaching an agreement between our two nations. The first thing I want to say is that I highly appreciate the openness of your team and the willingness of your team to work to open a new framework between our two countries.



TRUMP:

Thank you.



PEÑA NIETO:

Yes, and I want to also thank you personally for what you said last Wednesday on the importance of Mexico to have a strong economy, and also the responsibility our administration has accepted to stop illegal trafficking of weapons and money coming into Mexico. However, we have found an issue here that marks differences and this is nothing new, Mr. President. I think that since your visit we have spoken about this and this is what I want to talk about, this difference. Let me tell you, Mr. President, this is not a personal difference. It has nothing to do with you personally, Mr. President. But it is an unthinkable that I cannot ignore this because we find this completely unacceptable for Mexicans to pay for the wall that you are thinking of building. I understand, Mr. President, the small political margin that you have now in terms of everything you said that you established throughout your campaign. But I would also like to make you understand, President Trump, the lack of margin I have as President of Mexico to accept this situation. And this has been, unfortunately, the critical point that has not allowed us to move forward in the building of the relationship between our two countries. I propose, Mr. President, for you to allow us to look for ways to save these differences. For both our governments, this could constitute a win-win situation. I understand the position of your government on this issue, and I respect it. But I also ask for full consideration and respect for the position of my administration, and the position of the Mexican society at large. Let us look for ways to save this political issue so that we can remove this difficulty and so that we can also be creative on this, Mr. President. I am certain that other conversations and discussions that we have had – this route of the dialogue that we are having, especially related to the economy and trade and security – are highly promising in our relationship. I believe we are on the path of overcoming the differences that we have, if this is what we decide to agree on. And I think we can continue in this attitude, the way I think of it, which is a constructive attitude to continue moving forward in a positive manner with friendship as well. That is my position, Mr. President.



TRUMP:

Thank you very much, Enrique. I appreciate that. I thought that was beautifully stated. And certainly, as to the relationship and friendship, I consider you a friend. I met you the one time and I studied you. You are a very hard person to study, because you are sending out messages that are important to the Mexican people. I consider you a friend and I consider Luis, the person working with you, a very smart man. To be very honest with you, I did not want to have a meeting. I did not want to meet with Luis, I did not want to meet with Mexico, I did not want to meet with anybody. It was only because of a very good relationship that Jared Kushner has with Luis that these two decided to meet and discuss, but I was not really in favor for that meeting. I felt that we should do a much simpler solution, and that solution was tariffs at the border, because the United States has a trade deficit with Mexico of $60 billion. And the United States will not have those deficits anymore. We do not mind a small deficit, and we do not mind a little time to get there. But we cannot do this and we cannot sustain like this. We will not be the United States anymore. And we cannot listen to this. I was voted on the basis that we are losing so much money to Mexico in terms of jobs, factories, and plants moving to Mexico. We cannot do this anymore and I have to tell you it is not sustainable. And interpreter, I think Enrique understands everything I said, unless you, Enrique, feel you want an interpretation for this, please continue to go forward, is that okay?



PEÑA NIETO:

Yes, I will be okay.



TRUMP:

Because I have been with him – he speaks better English than me – so we will just go on. What I want is fair tariffs at the border, and I want to be fair because I want a great relationship with Mexico. In the latest election, I won with a large percentage of Hispanic voters. I do not know if you heard, but with Cuba, I had 84 percent, with the Cuban-American vote. But overall generally, I had well over 30 percent and everyone was shocked to see this. I understand the community and they understand me, and I have a great respect for the Mexican people. But I did not want Jared to meet with Luis. I just wanted to very simply – and with a high level of precision – we put on a border tariff so that products coming in from Mexico to the United States would be taxed at a rate to be determined. But you know, it could be 10 percent or 15 percent or it could be 35 percent for some products that, for example, are jobs ripped from their foundation and moved to Mexico. Most would be in the 10 to 15 percent range. That would make us very even with Mexico and it would make a lot of sense. Now, Mexico may in turn try to do something like that to us. Since we have such a deficit, it gives us the advantage. In addition, I was going to very strongly say this to Mexico and other countries – that everything is reciprocal. So if Mexico adds a tax, we will add a tax.

We have a country that has been led by people who have no business understanding. We are living off the success of the past – off the fat of the past – and we cannot continue to do this. So anything another country imposes on us, we would automatically impose a tax on them, so it would not be very wise for them to do the taxing. So I did not want to have the meeting, I just wanted to go along with the very reasonable tax plan we were drawing up for Mexico, and that is honestly where I am right now. When I heard about the meeting, I was happy about it, beyond the fact that I hoped we would remain friendly with you. I was not at all disappointed in the meeting, because Mexico, honestly, through smarter leadership, more cunning leadership — and you are in that category very much so – the very smart leadership in Mexico has taken advantage of the United States. The people of the United States know this. In Ohio, they are having rallies for Trump right now because Trump has taken a hard stance on Mexico. We lost a lot of factories in Ohio and Michigan and I won these states – some of these states have not been won in 38 years by a Republican and I won them very easily. So they are dancing in the streets. You probably have the same thing where they are dancing in your streets also, but in reverse. I just want to put a border tax on, relax, and then we do not have to have meetings. That being said, if you want to have meetings and you continue to have meetings, I am willing to wait. Jared feels so strongly that you and he will be able to work out a deal – meeting with Luis and his team – but I am very happy to not to have any more meetings and just put a border tax on, like everybody else does. Right now, every nation in the world is charging us what we are not putting on anyone. We have been led by people who really hurt our country. We will not let it go on anymore. With that being said, if you guys want to continue the talks or if you do not want to continue the talks, it is okay, but I would only like to know your thinking on it because I am willing to go either way.



PEÑA NIETO:

Yes, Mr. President. The proposal that you are making is completely new, vis-à-vis the conversations our two teams have been having. But I have gathered this from the position that you have taken in terms of trade. I think we have the route to continue having balanced trade between both nations. And frankly, to tell you the truth Mr. President, I feel quite surprised about this new proposal that you are making because it is different from the discussion that both of our teams have been holding —



TRUMP:

Enrique, if I can interrupt – this is not a new proposal. This is what I have been saying for a year and a half on the campaign trail. I have been telling this to every group of 50,000 people or 25,000 people – because no one got people in their rallies as big as I did. But I have been saying I wanted to tax people that treated us unfairly at the border, and Mexico is treating us unfairly. Now, this is different from what Luis and Jared have been talking about. But this was not a new proposal – this is the old proposal. This was the proposal I wanted. But they say they can come up with some other idea, and that is fine if they want to try it out. But I got elected on this proposal – this won me the election, along with military and healthcare. So this is not a new proposal this is been here for a year and half.



PEÑA NIETO:

Yes, I do understand what you are saying, Mr. President. On this public proposal, I understand it is not new but what I am getting at is that it is new in terms of the type of dialogue we have been having. I would insist very specifically, Mr. President, for us to find a route towards the dialogue to find a balance in our trade. I think that what you have said has weaknesses, as you said, regarding the lack of modernization. I think we can continue working towards building the construction of a new framework to continue our trade relationship among the three countries that are part of NAFTA.



TRUMP:

Well, Canada is no problem – do not worry about Canada, do not even think about them. That is a separate thing and they are fine and we have had a very fair relationship with Canada. It has been much more balanced and much more fair. So we do not have to worry about Canada, we do not even think about them.



PEÑA NIETO:

I am saying this because it is an asset to have the three partners of NAFTA. Mr. President, let us talk about the Mexico-United States relationship. We can still build a very fair agreement so that we can increase and strengthen competitiveness between our two nations. Let me be precise, Mr. President – I appreciate the attitude of friendship that you have towards me and towards Mexico. And I am not at all trying to take advantage based on this friendship. I am sure we can have the dialogue and the agreement that is the best route to build a more robust and fairer agreement between both nations.

I would appeal to you, Mr. President, for us to allow room to look for a new solution between our two countries. Let me be very specific on one matter – any issue that alters the economic situation in Mexico, I think, it also constitutes a potential risk for the United States, especially in terms of migration issues, Mr. President. Let me tell you that the best virtual wall that I think we can build between our two countries is to make sure that both countries have economic development. And it is exactly on this issue that we have been talking about a more fair trade relationship between our two countries, so we can build this type of framework for that relationship. I leave this for your consideration, Mr. President. The will of my government is not to have points of difference with you, but rather points of agreement and for the good relationship between our two nations to be translated into economic trade migration and security benefits for both of our countries, our societies, and our administrations. And this is for your consideration, President Trump, if you truly think we can stay on this path and I believe this is more promising for our nations.



TRUMP:

Okay, well thank you very much, Enrique. I just wanted to mention that when you talk about people coming across the border – because times will be tough and times will be good – that when times are tough, that is why we have a wall, because we do not want people to come across the border. We do not want them coming across. We have enough people coming across, we want to stop it cold. General Kelly is one of the most respected generals in the entire military system and he is a very fair man, but he is a very tough man. And we have the drug lords in Mexico that are knocking the hell out of our country. They are sending drugs to Chicago, Los Angeles, and to New York. Up in New Hampshire – I won New Hampshire because New Hampshire is a drug-infested den – is coming from the southern border. So we have a lot of problems with Mexico farther than the economic problem. We are becoming a drug-addicted nation and most the drugs are coming from Mexico or certainly from the southern border. But I will say this – you have that problem too. You have some pretty tough hombres in Mexico that you may need help with, and we are willing to help you with that big-league. But they have to be knocked out and you have not done a good job of knocking them out. We have a massive drug problem where kids are becoming addicted to drugs because drugs are being sold for less money than candy because there is so much of it. So we have to work together to knock that out. And I know this is a tough group of people, and maybe your military is afraid of them, but our military is not afraid of them, and we will help you with that 100 percent because it is out of control – totally out of control.

Now getting back to the taxes for second, I have been given as President tremendous taxation powers for trade and for other reasons – far greater than anybody understands. The powers of taxation are tremendous for the President of the United States and if you study that you will see what I mean. That is why I did not want to have the meeting, I just wanted to tax the border. With all that being said, I would love if you want to reinstitute the meetings between Luis and a staff that I will assemble in the United States. Our Secretary of Commerce, Mr. Ross, will be approved very soon and we have a great team of people – Gary Cohen and lots of others – we have lots of great talent. And talent that wants things to happen. They are dealmakers, they are not obstructionist. We have some of them, but so do you of course. With that being said, if you would like to try and work a deal, that is okay. But if we cannot work a deal, I want to tell you we are going to put a very substantial tax on the border coming into the United States because, honestly, we will not want your products unless your products are going to be taxed. I do not want the products and lesser tax. And what that will mean is factories and plants will start to be built in the United States because the taxes will be too high in Mexico. I do not want to do that if we can work out a deal, so Jared Kushner and Luis can have the teams work out the deal. The only thing I will ask you though is on the wall, you and I both have a political problem. My people stand up and say, “Mexico will pay for the wall” and your people probably say something in a similar but slightly different language. But the fact is we are both in a little bit of a political bind because I have to have Mexico pay for the wall – I have to. I have been talking about it for a two year period, and the reason I say they are going to pay for the wall is because Mexico has made a fortune out of the stupidity of U.S. trade representatives. They are beating us at trade and they are beating us at the border, and they are killing us with drugs. Now I know you are not involved with that, but regardless of who is making all the money, billions and billions and billions – some people say more – is being made on drug trafficking that is coming through Mexico. Some people say that the business of drug trafficking is bigger than the business of taking our factory jobs. So what I would like to recommend is – if we are going to have continued dialogue – we will work out the wall. They are going to say, “who is going to pay for the wall, Mr. President?” to both of us, and we should both say, “we will work it out.” It will work out in the formula somehow. As opposed to you saying, “we will not pay” and me saying, “we will not pay.”

Because you and I are both at a point now where we are both saying we are not to pay for the wall. From a political standpoint, that is what we will say. We cannot say that anymore because if you are going to say that Mexico is not going to pay for the wall, then I do not want to meet with you guys anymore because I cannot live with that. I am willing to say that we will work it out, but that means it will come out in the wash and that is okay. But you cannot say anymore that the United States is going to pay for the wall. I am just going to say that we are working it out. Believe it or not, this is the least important thing that we are talking about, but politically this might be the most important talk about. But in terms of dollars – or pesos – it is the least important thing. I know how to build very inexpensively, so it will be much lower than these numbers I am being presented with, and it will be a better wall and it will look nice. And it will do the job.

You know, you look at Israel – Israel has a wall and everyone said do not build a wall, walls do not work — 99.9 percent of people trying to come across that wall cannot get across and more. Bibi Netanyahu told me the wall works. We have also hired at least 15,000 more men and women on the border – patrolling the border very carefully. We just cannot play the game of stupidity anymore. I would love to continue talking. When Jared said, “the deal is off,” I was glad. Jared has a great feeling for the plan, though I know it would be politically much more popular in Mexico and, I think, it will be much less popular for me, to be honest. I think the most popular thing for me would just to put a tariff on the border. But I am willing to see if they can finish up a plan. From what I hear, they have great discussions and it looks good. I guess they have to wait 90 days – there might be a statutory period or something like that and that might be too bad. But that is okay, so we will get Congress involved and let them work through the statutory period. If you want to do that, Enrique, I am good with doing that. And I want to reiterate, you and I will always be friends do not worry.



PEÑA NIETO:

In terms of security, Mr. President, it is clear that organized crime is just as much our enemy as it is the enemy of your administration.



TRUMP:

Enrique, you and I have to knock it out – you and I have to knock the hell out of them. Listen, I know how tough these guys are – our military will knock them out like you never thought of, we will work to help you knock them out because your country does not want that. Your citizens are being killed all over the place, your police officers are being shot in the head, and your children are being killed. And we will knock them out.



PEÑA NIETO:

I fully agree that we should work together. And let me tell you that a lot of what is happening in terms of traffickers in Mexico is being largely supported by the illegal amounts of money and weapons coming from the United States. And this has led Mexico to fight against criminal gangs with the participation of the military and the entire army of Mexico. And this has taken many lives within the military and all the elements that are committed in this fight. But they are criminal groups that are well-armed, especially with weapons coming from the United States illegally into Mexico. I fully agree that both governments can work together to knock out and to do away fully with these criminal gangs.

And on the other issue, Mr. President, on trade I think we are moving forward in a very positive fashion, especially through the dialogue both of our teams are holding. You have a very big mark on our back, Mr. President, regarding who pays for the wall. This is what I suggest, Mr. President – let us stop talking about the wall. I have recognized the right of any government to protect its borders as it deems necessary and convenient. But my position has been and will continue to be very firm saying that Mexico cannot pay for that wall.



TRUMP:

But you cannot say that to the press. The press is going to go with that and I cannot live with that. You cannot say that to the press because I cannot negotiate under those circumstances.



PEÑA NIETO:

I understand you well, Mr. President. I understand this critical point and I understand the critical political position that this constitutes for your country and for you, Mr. President. Let us look for a creative way to jump over this obstacle. It does not mean that this is not an important issue – this is an important issue. However, this is why we should walk on the path that we began, because when we start talking about the wall it prevents us from talking about other important issues that we must discuss. I clearly understand what this issue constitutes for you in the United States. And for Mexico, it is also an issue that goes beyond the economic situation because this is an issue related to the dignity of Mexico and goes to the national pride of my country. Let us for now stop talking about the wall. Let us look for a creative way to solve this issue, for this to serve both are your government, my government, and both of our societies. Let us leave this topic – let us put it aside and let us find a creative way of looking into this issue. And let us move forward on other issues that I think are positive for both of our countries. That would be my position, Mr. President.



TRUMP:

Okay, Enrique, that is fine and I think it is fair. I do not bring up the wall but when the press brings up the wall, I will say, “let us see how it is going – let us see how it is working out with Mexico.” Because from an economic issue, it is the least important thing we were talking about, but psychologically, it means something so let us just say “we will work it out.” And if you want to do that, then we will go back to the negotiation table with Jared and Luis. And I am sure they can work something out that is good for both nations, and obviously that would be a positive thing. And I am sort of in this bad position because the deal that they are making is not nearly as good as the deal I could impose tomorrow – in fact this afternoon. I do not have to go back to Congress or to the Senate. I do not need the vote of 400 people. I have the powers to do all of this, and I came to the office this morning and I met with a group of people – we had a plan to just go into what I wanted to do for two years. But I know what you are saying, it is something that is good for you. It is very important for you to understand this – I want the best solution also for Mexico. I do not just want a great solution for the United States. And what I am talking about is not a good solution for Mexico – it is a great solution for the United States, which is a tariff on everything coming into our country. Now, that is the best solution economically for the United States, but I feel very strongly that it is important that as our neighbor, we have a strong relationship – the stronger the better.

Now, the reason I do like an agreement is I want Mexico to be a strong and happy country. I think I can do that. And we can get close enough to have a decent deal for the United States but at the same time have a good deal for Mexico. So I am okay with that. The thing I need you to understand is that right now we have a $60 billion trade deficit. That is unsustainable. And do not feel lonely because we are going to be having talks with China also. China is beyond what is happened with that whole thing, and you will be very happy because that will be good for you – believe me. We are going to treat them fairly and we want a good relationship with China. But with Mexico, you are our neighbor and I want to do what is good for Mexico. That is very important [to] me. With that being said, if you think it is appropriate, I will let Jared Kushner, Wilbur Ross, and all the different people that are involved – Wilbur will be confirmed as Secretary of Commerce any moment now – to get with your team and they can knock something out that will be a fabulous agreement. It will look good for both of us. I will say with you representing Mexico and me representing the United States we will have a good agreement and we will almost become the fathers of our country – almost not quite okay? Please go away from this conversation understanding it is not my first choice, but what I want is to have a good and strong neighbor in Mexico.



PEÑA NIETO:

And we have to generate jobs, and we have to be stronger and we have to be growing. I share that position with you.



TRUMP:

It is you and I against the world, Enrique, do not forget.



PEÑA NIETO:

The spirit of my government, in the position of my administration, is for things to go well for the United States and for things to go well for your government, because this is the only way that we can continue working together, and that is really my honest position. Let us stop talking about who pays for the wall, talking about the wall in general, because I think there is a more creative way we can start looking for a solution. And it is the way we can remove the big block in our path. And let us now start talking about creative ways on how this wall is going to be paid because I fully understand that it is your sovereign right to talk about this, because you are protecting your southern border. But this cannot be the strongest thing in our path that keeps us from having a dialogue, and keeps us from having economic development.



TRUMP:

That is very good, I agree with you 100 percent. Enrique, if you want, I have the Prime Minister of Great Britain coming in in a little while. If you want, you can put out a statement saying that we had a great conversation and our teams are going to continue to talk and just say we will not discuss the wall. We will discuss other things but we had a conversation. Now, there are some time delays that are imposed. I guess the 90-day period or a similar timeframe. Let me confirm with some of my people here. Well, Jared and Luis know what the timelines are, so why don’t they work out a mutual statement? So, Enrique, if it is okay with you, Jared and Luis will work out a mutual statement that we can put out together.



PEÑA NIETO:

Yes, Mr. President. I fully agree with you on Jared and Luis working together on this.



TRUMP:

Good. I want you to be so popular that your people will call for a constitutional amendment in Mexico so that you can run again for another six years.



PEÑA NIETO:

You are very kind, Mr. President. And really, the only thing I am interested in for both of our nations to do well – for your government, for you, and for us to truly have a relationship with friendship and a very constructive relationship, Mr. Trump.



TRUMP:

You know, we should put that in the statement. Your words are so beautiful. Those are beautiful words and I do not think I can speak that beautifully, okay? It would be great to put those words at the end of the statement. Really nice though.



PEÑA NIETO:

We will do so, Mr. President, and we will let Jared and Luis define the statement with a positive and constructive view that we both have. I know that we want to build a friendship between both of us and to work for the betterment of our societies. So, let us move on that position and let us look twice at what is obstructing us and move forward on a path to build together. Let us have Luis and Jared work on a statement. Thank you for your time and your views. I know this is a long conversation, which I appreciate.



TRUMP:

Well, it is my honor and we will have a great success. I will explain to Jared everything and they should talk soon. I appreciate all of your time, too, Enrique, and I look forward to seeing you soon. I feel confident with those two, plus their teams, will get something done that will be great for both countries.



PEÑA NIETO:

I am sure that will happen, Mr. President. Thank you so much. I look forward also to see you very soon. Thank you.



TRUMP:

Thank you. Goodbye.



END OF CALL