>> reporter: the wolfpack. it's almost game day here, carol. i asked j.j. watt. j.j. watt said tom brady is probably the greatest of all time. they're letting them fly here in houston. >> whatever. cory wire, thank you so much. go falcons. i'm carol costello. "at this hour with berman and bolduan" starts now. >> announcer: this is cnn breaking news. hello, everyone, i'm john berman. for now. >> i'm kate bolduan, i'm still here, for now. breaking news for everyone, tehran vows to continue firing missiles despite trump saying the iranians are, quote, officially on notice. on top of this, tension rising with allies australia and mexico after reports of heated phone calls between president trump and the leaders of those countries. >> all this as his brand-new secretary of state, rex tillerson, just addressed his

department for the first time. it is now his job to address not just the conflicts with these allies and adversaries, but also the conflicts within his own department, where a remarkable 900 workers just submitted a letter of dissent over the controversial travel ban. even if he's able to do all that, there is now the issue of escalating tensions with arnold schwarzenegger. >> he's not kidding. let's begin with iran. just a day after the white house put iran on notice for its weekend ballistic missile test, iran says it will, quote, vigorously continue with its missile activity. >> it's just what national security adviser michael flynn called a provocative breach. retired bringigadier general, r, bring us up to speed on the back and forth here. >> that's right, we saw the missile test iran conducted,

medium range missile test. the pentagon considered that test a failure but it raising tensions within the relationship. that along with what mike flynn was iranian-backed rebels targeting a navy ship in the red sea, that's escalated tensions with the iranians vowing to continue missile tests because they say it doesn't fall within the technical restrictions of the deals and the u.n. resolutions because in their words the missiles are not nuclear capable. >> ryan, thank you for that. bringing us up to speed on where we are in this moment. general, when you hear this back and forth, you see what both sides are saying, on notice, iran is being put on notice, that coming from first michael flynn as national security adviser and then from donald trump in a tweet. what does that threat mean? >> well, i think what it means, this administration is setting boundaries very early in the administration, as to the behavior of the reins. and what they're saying is, we

are not going to put our cards on the table, what we're prepared to do, that's strategic ambiguity, they believe that's worthwhile. donald trump had complained about the fact that we showed all our cards all the time. and what they're just trying to do at this point is say, we're going to do what is necessary but we're not going to tell what you we're going to do ahead of time. >> what does strategic ambiguity mean here, though, general? it's not like the obama administration condoned these missile tests, they were against them, they just didn't really do anything about them. if president trump is in fact going to do something about it other than put them on notice, what would that mean, what would doing something about it mean? >> look, there are an entire range of actions that the united states can take, from diplomatic to special operations, observance, reconnaissance. there's an entire range of options that i have no doubt the military and diplomatic planners are working on right now.

we could sit here for a half hour and talk about those different options. but i believe mike flynn and the president want the iranians to keep guessing on what could happen here anden understand th consequences of what could happen if they continue these provocative strikes. >> general, what do these ballistic missile tests signal to you? >> again, what it signals to me is that the iranians are testing president trump and his administration from the outset. they want to see where their boundaries are, how far they can go, and how prepared the united states is to respond. >> and the timing no accident, by the way. the iranians, i think it's a term of diplomatic art, they say this doesn't violate the u.n. resolution because these missiles don't carry nuclear warheads because we don't have a nuclear program. but in fact a ballistic missile for all intents and purposes, it could carry nuclear weapons, correct? >> it certainly could. they're trying to find a

loophole in the resolution and the only people they're convincing of that loophole is themselves. >> general, thanks, as always. the agenda of new secretary of state rex tillerson, in addition to the tensions with iran, some long time u.s. allies, some of the country's very best friends, are getting their first taste of diplomacy donald trump style and they may not like it very much. we're learning that the president's first calls to the leaders of australia and mexico took a pretty contentious turn. this is how president trump addressed the issue a short time ago when speaking at the national prayer breakfast. >> when you hear about the tough phone calls i'm having, don't worry about it. just don't worry about it. they're tough. we have to be tough. it's time we're going to be a little tough, folks. we're taken advantage of by every nation in the world, virtually. it's not going to happen anymore. it's not going to happen anymore. >> for more on this let's bring

in cnn's senior white house correspondent jeff zeleny. jeff, it seems like we're hearing one thing from the white house and a different story is leaking out after. >> reporter: essentially the president confirming those tough phone calls we've been talking about all morning that really have certainly have rankled the normal course of diplomacy. but nothing seems normal these days. it's very common for leaders of countries to have their first phone calls. but we are learning, as "the washington post" first reported, these courtesy calls became confrontational. trump says he's going to do this tough talk with foreign leaders but it makes the job for the new secretary of state much more difficult here. this all came out of last saturday's round robin phone calls. the australian phone call, we're told, was the most confrontational of all.

australia, after all, is an ally of ours. but it's a different moment for tough talk here in washington. >> not just an ally, a really, really close ally. >> like an ally, not just an ally. >> capital "a." not just tensions with these friends and adversaries, jeff. there is also the question of how the president is getting along with arnold schwarzenegger. there's already been this response. >> reporter: so important that he called for divine intervention on the ratings of "the apprentice" under arnold schwarzenegger at the prayer breakfast, trying to use a bit of humor but certainly asking for god's blessing for the ratings. let's listen. >> it's been a total disaster. and mark will ever, ever bet against trump again. and i want to just pray for arnold, if we can, for those ratings, okay?

>> donald, i have a great idea. why don't we switch jobs. you take over tv, since you're such an expert in ratings, and i'll take over your job. then people can finally sleep comfortably again, hmm? >> reporter: that was a realtime response from arnold schwarzenegger responding within minutes, saying he would be happy to become president. one problem with that, the u.s. constitution would not allow that, only american-born people can be president, which governor schwarzenegger is not. but certainly an interesting moment of back and forth that i did not think we would be talking about here today. >> no, and of course president trump, though, has any been a source of concern for him, over where someone was born before they could become president. governor schwarzenegger had rapid response, the ball is in your court, mr. president. let's go back to international

relations. we're going to talk about the heated phone call between the president and the australian prime minister. cnn international diplomatic editor nic robertson joins us right now. australia one of the u.s.'s closest allies all around the world. it's clear that this discussion did not go as either had planned. >> reporter: it certainly didn't. i mean, this came on the back of president trump's announcement that there were going to be restrictions allowing refugees and restrictions on those seven muslim majority countries coming into the united states. what the australian prime minister wanted to get a handle on and wanted to get president trump to agree on was something that the australians had agreed with president obama that 1250 refugees, mostly from those seven muslim majority nations, on an island off the coast of australia, would be taken in by the united states. that was the agreement with president obama. and malcolm turnbull, the

australian prime minister, pushed that point with president trump. that's where things seemed to go wrong. president trump later tweeted that it was a dumb deal. but it did seem to end the phone call early, by all accounts. now, the australian prime minister says he doesn't want to talk publicly about what goes on in those phone calls. he says he thinks they're better off being frank and kept private between the two. however, he did say that the phone call didn't end contentiously. this is how he put it. >> the report that the president hung up is not correct. the call ended courteously. and as far as the nature of the discussion, it was very frankly and forthright. i stand up for australia's interests. i make australia's case as powerfully and persuasively as i can, wherever i am. >> reporter: so interestingly, out of this, for this important u.s. ally, malcolm turnbull, he now has gone up in the

popularity ratings in australia. over the weekend, the country thought he was being too weak. they wanted to see someone who was tougher on this new travel policy. and now they see they've got just that. >> pretty interesting. they say they've got just that. you know what i also say, we don't often hear such clear reports of what happens in these phone calls, you just get those "frank and friendly" readouts. a new world we live in. nic, thank you so much. breaking news from many places around the globe right now. what's the response from capitol hill? i spoke with republican senator lindsey graham who as you may remember has never hesitated to take on president trump. here is his take on trump's butting heads with the australian prime minister. >> the relationship is strong and can withstand a phone call. we'll be fine with australia. the 1250 refugees, if they're well-vetted, we can absorb them too.

he's been on the job two weeks now, the australian prime mince seems okay with the way it ended. my dad was stationed in australia in world war ii, i served with an australian unit in iraq and afghanistan. >> trump tweeted about that deal that the obama administration struck with australia, he called it a dumb deal on twitter. dumb deal or not, is that the way to handle it? >> you know, i wish he would sleep more and tweet less. but that's up to him. whatever he's doing has worked for him. you know, you're still president of the united states, and there's probably better ways to handle this. instead of talking about this, we should be talking about judge gorsuch. >> he does like to talk about that, that is in the win column for him, i know you're very supportive of judge gorsuch. let's go to another part of the world, a lot going on today. the president and his national security adviser are saying they're formally putting iran on notice. those are their words, after its ballistic missile test over the weekend. that sounds like a threat. senator, from your view, what is the president threatening?

>> i don't know. here is what i would suggest we do, that we impose sanctions on the regime for their violation of the u.n. missile test ban, for what they've done in the region, for capturing our sailors, new sanctions on the reign r iranian regime for their behavior. i wouldn't put them on notice. i would go to the congress and say it's now time to punish iran for all the things they're doing in the region including trying to test a new missile. >> a senior adviser to the ayatollah put out a statement saying among other things they're going to vigorously continue their missile activity and also saying that president trump shouldn't make a toy out of himself, i think is how he put it. where does this go if here, do you believe? >> the u.n. security council passed a resolution telling the iranians, stop developing missiles, long range and short range missiles that can disrupt the balance of power in the region. iran has been a bad actor. they've basically toppled four

arab capitals. it's not just trump, it's the u.n. itself, their credibility at risk. i've had it with the iranians toppling pro-u.n. governments throughout the region, capturing our sailors, flaunting the missile test ban. it's now time for them to pay a price. they have a pair of twos. we have a full house. i don't want a war with iran but we want to make them stop. >> along that line, you want them to stop, but what do you think trump will do if iran fires another missile? >> i think the world should not only condemn iran but we should have multinational sanctions against the regime for their continued violation of the u.n. security council resolutions regarding their missile program. and i would -- here's what i would tell the president to do. the deal we have with iran regarding their nuclear program is a bad deal. in 15 years they can enrich and reprocess and make a bomb without even cheating. what i would like to see is

peaceful nuclear power throughout the mid-east. this is a chance for russia, china, the united states, maybe france, to build power plants throughout the entire mid-east for theatio arabs and the irani and we control the fuel cycle so no one can turn it into a bomb. that would be the offer i would make the iranians, we're not going to give you the ability to enrich and reprocess uranium because you'll turn it into a bomb. >> you've spoken out about the travel ban and called it a self-inflicted wound in the fight against terrorism. the white house right now doesn't even want to call it a ban anymore, after some awkward back and forth. why not, do you believe? what are they concerned about with regard to it being called a ban? >> i think the enemy has seized upon this. we're treating people all the same. the interpreter helped us in iraq, and he's a hero in my mind. we've got a young lady from clemson who is from iran who

graduated from clemson, works in a startup company in clemson, south carolina, beloved by her colleagues and the entire clemson university community. she was taken off a plane in dubai. she had a legal visa. what i would suggest is that people like her and the interpreter, people who have already been vetted with a visa, they not be treated as if they're terrorists, because they're not. i do support a time out in terms of future refugee flows from these countries until we get better vetting. we sort of screwed this up in the rollout. >> president trump had a few choice words for you, not surprisingly, after you spoke out. he called you weak on immigration and that you're always looking to start world war iii. what strikes me about the president's response on this one, though, senator, is that there were a lot of republicans that were critical of the president's executive order but he singles out you and john mccain. why do you think you get under his skin so much? >> i don't know. i look forward to helping the president where we can. it's not being weak on immigration to have a system

that can tell the difference between the young lady in clemson who is a value added product to our country, the interpreter from iraq, who helped us, and a real terrorist. that's just being logical and having good common sense. i'm not trying to start world war iii. i'm trying to win the war against radical slislam. the worst thing you can do is declare war on the faith itself. the way we've rolled out this executive order, we're catching people in the web that clearly are not terrorists, and that helps the enemy. i would try to reform this executive order to focus on the problem, which is future flow coming from unstable failed states, which makes sense to me. >> but the president isn't acknowledging any fault in the rollout. >> right. >> he's still calling it a success. there's no problem with the rollout that they've seen so far. the president's not going to acknowledge that there was a problem in how they rolled it out. it sure doesn't seem they've shown any openness to reforming what they've put in place so far.

>> well, i think general kelly and secretary tillerson are on the case now, they're actually working with us to try to restore this young lady's visa. she went back -- >> doesn't the buck stop with the president on this? >> totally. here's what i would say. i would say that the rollout was flawed. the idea makes sense. a time out in terms of future flow. but we've got to have a system that can tell the difference between this young lady, and an interpreter, and a potential terrorist. it was screwed up. and that happens. the rollout with gorsuch was terrific, well done, mr. president. there's a lot of things he's doing i support. but at the end of the day, when something happens on your watch as president, you're responsible for it. it's his responsibility to fix this system in a way that we can all appreciate. i thank he can andi think he ca hope he will. >> there are questions about the covert operation in yemen where one navy s.e.a.l. was killed and

a number of civilians were killed as well. you get these briefings, what have you heard about the operation, do you think it was approved with sufficient intelligence and planning? >> yes. and unfortunately in war these things happen. i really appreciate the fact that president trump went to dover, delaware to be there when the body came home, to show respect for the fallen s.e.a.l., to comfort his family. that goes a long way to our military members, to show that the commander in chief cares that much. but yes, i think the operation was authorized properly. these things happen in war. overall we're going to have more of these operations, not less, because isil and al qaeda are getting stronger, not weaker, in certain parts of the world. >> we'll have more with lindsey graham next, why he says russia should be punished, why the senator is hopeful about the trump presidency. >> and in just a few minutes we'll hear from house speaker paul ryan, this as the senate

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one thing the trump white house has said they want to move on from, investigating russia's hacks during the election. one person who is not moving on, senator lindsey graham. he's pushing for a new investigation. i asked him what more he wants to know. >> i will never be satisfied until the congress and the white house work together to push russia for trying to interfere with our election. i don't think they changed the outcome but they clearly tried to manipulate the outcome. so the current sanctions are in place based on their taking of crimea. there needs to be new sanctions imposed against russia for interfering in our election. so i'm working with democrats and republicans to pass new sanctions. i hope the president will embrace them, because russia needs to be punished. i am in charge of the crime and terrorism subcommittee on judiciary, along with my ranking

member, senator whitehouse. we're going to have an oversight hearing regarding the fbi and try to learn from the fbi what russia actually did, to see if we can validate the intel community's findings and tell the fbi to go after all things russian and try to figure out how to prevent this in the future. >> that's news, that you're going to be pushing this, and i assume in classified hearings. >> mostly. >> are you going to have any open hearings on this? >> yes. what i'll try to do is get people to come forward and explain what russia is doing all over the world, not just in our backyard. >> but even touching on what they're doing in our backyard, do you fear at all that this sets you on a collision course with the white house? because they want to move on, in their words, from these hacks. >> i promise you this. i will not forgive and forget regarding what russia did regarding our election. as a matter of fact i have a resolution i'm drafting now, to

be offered soon, that says an attack on one party by a foreign entity is an attack on all parties in the united states. kind of an article 5 compact, that we're in this together, that when one party is compromised by a foreign entity, the whole process is compromised. so working with senator whitehouse, i want to find out what the russians did in totality, go where the evidence takes us, try to prevent this in the future, and work with my colleagues and the congress to deter russian behavior. if donald trump, president trump, forgives putin for what he tried to do in the election, that will scream weakness and the world will get a lot more unstable. >> what will happen if you send him a sanctions bill and he doesn't sign it? >> then we'll override his veto. >> do you think you can? >> i don't know. i believe most americans are offended by the fact that the russians did hack into the dnc and podesta's e-mail, they did like a this to wikileaks.

it was an effort to compromise our election and they're doing it all over the world. >> tomorrow will be the two-week mark for president trump's presidency. are you more or less hopeful about this president since inauguration day, senator? >> i see a trend that's somewhat hopeful. i think the rollout of gorsuch was well down, the pick was a home run. i actually recommended this man to be picked. so i thought the rollout, the pick was great. i think some of the executive orders are long overdue about deregulating the government. if we can repair the damage done with the executive order and get back on track and have a time out to failed states in the future, then better days lie ahead. the infrastructure bill, i hope that comes soon. things are trending a little bit better. i want to help the president where i can. but i'm very intent on being senator graham. and senator graham would push back against russia no matter who was president, and i intend to do that. >> that might be the major bone

of contention between you and president trump. senator graham, hopeful though on this presidency, that's the headline. great to see you, senator, thank you as always. >> thank you. >> you can see, if he wants to work with president trump where he can but he'll still be pushing for more investigations into russia, you can also imagine the pressure he's under and the fine line he's trying to walk. >> he is one of president trump's favorite punching bags, every time he says something he risks reaction from the president on twitter. the president says it's time to be tough but he also asks for prayers, not for waorld leaders but for arnold schwarzenegger. you don't let anything keep you sidelined.

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liberty stands with you™. liberty mutual insurance. it's been a total disaster. and mark will never, ever bet against trump again. and i want to just pray for arnold, if we can, for those ratings, okay? >> hey, donald, i have a great idea. why don't we switch jobs. you can take over tv, since you're such an expert on ratings, and i'll take over your job, and people can finally sleep comfortably again, hmm? >> that was president trump asking for prayers for arnold schwarzenegger and "the apprentice" ratings. joining us now to discuss this and more serious issues as well, jeff macintosh, director of outreach for the hillary clinton campaign, former chief of staff

to reince puerto rico us, and reid wilson, national correspondent for "the hill." usually you pray for things like the country, other countries, peace, wellbeing, things like that. it's unusual to pray for television ratings for "the apprenti apprentice." on the other hand, reid, i laughed, i also laughed as the comments from arnold schwarzenegger. >> when was the last time president trump did something and you thought, that was normal? this is a white house that is going to blaze a new trail and start a new path. it's a president who is completely unscripted, somebody who is more comfortable talking off-the-cuff about his own success, as we saw with his phone call with the australian prime minister, about his election results even in conversations with -- >> we're going to listen to house speaker paul ryan. >> australia is an essential

ally, they are and will continue to be. i think it's important that presidents and prime ministers, heads of state, are able to have cann candid and private conversations with one another. [ inaudible question ] did he do the accent? say that again. [ inaudible question ] i'm not going to comment on this stuff. let's talk about policy. let me go in the back. >> reporter: most employer based health programs, what is the model for that? >> the model is the plan we ran on last year that you can go online and take a look at. you want a vibrant individual and employer market. we want medicaid to work so

doctors will take patients. we want medicare to be something you can depend on when you retire. what we want is choices. we don't want one choice that's not a choice. we want to have more insurers and providers in the marketplace for our business as consumers and patients. we want patients and doctors to be the driving force and the nucleus of a health care system instead of some government regulator telling you what you have to buy and where you have to buy it. we want a lot of insurers competing for our business. that's what i mean when i say choice. the point of all of this is, it's the cornerstone of the free enterprise system in america. the more choices you have, the more competition there is, consumers benefit from that. and that is obviously true in health care. and it is one of the big reasons why obamacare is collapsing. look, as you heard me say, how few choices and options there are because of obamacare.

it is not coincidental that we have double digit premium increases every year, that the deductibles for obamacare exchange plans are three times as high as people in the large group insurance markets that they get from their jobs. clearly this law isn't working, it is collapsing. and yes, this is what we call a death spiral. you're not getting the kind of pooling that needs to be allowed with choice and competition to get rates down. we had to step in and replace this law before it's too late, before people lose their insurance. [ inaudible question ] the words, you're talking about. right. [ inaudible question ] >> reporter: the allegation that you're intentionally -- can you respond to that? >> there's a misinterpretation of what we're trying to say. our job is to repair the american health care system and rescue it from the collapse that

it's in. and the best way to repair a health care system is to repeal and replace obamacare. it's not an either/or. if you want to repair the american health care system you've got to repeal the law that's destroying it and replace it with a system that's much better. [ inaudible question ] i know most of you, but thank you for saying that. >> reporter: the chairman wasn't sure when the committee was going to be -- and also to the other question, sexual identity and/or yenati orientation. >> i voted for enda. i don't believe in discrimination in the workplace, period. back to your health care point, what was your health care question? the timeline. so all defer to the chairman when he wants to have his markups. we want to be moving our obamacare legislation by the end

of the first quarter. >> reporter: do you support tapping the exclusions for -- >> i always have. there's no secret, i had a bill when we were debate obamacare that did that. my own position is very clear. where congress goes on this is an open question. that's one of the ways you can finance tax credits. there are other ways of financing tax credits as well. >> reporter: are you totally comfortable with trump's executive order -- >> that's a good question. because you know this is not a muslim ban. if it were, i would be against it. we are a tolerant, pluralistic country. we are and we will be. it's really important. the bill we passed last year, if you recall, after the paris shooting, it became clear to us that one of the terrorists infiltrated the refugee

population coming from syria. we wanted to make sure that that didn't happen here in this country. that's like national security 101. and then when we inquired among our professionals at homeland security and the fbi, can you properly vet these people so you can make sure this doesn't happen in america, they said, no, we can't. that's why we passed legislation with 289 votes, a big bipartisan bill, saying let's pause this program until we can figure out how to get this right. that's effectively what this is about. to your point about religious persecution, presidents always and often put preferences in refugee populations. i think president obama had one for sexual orientation. they didn't call that a sexual orientation test. he put a preference in for sexual orientation. religious minorities are being persecuted. yazidis are being persecuted.

christians are being persecuted. there is nothing wrong with saying we're going to take into account minority religious persecution with our refugee situation. >> reporter: the question of australia, what about the perception, and do you have concerns -- >> of course i do. of course i do. [ inaudible question ] like i said, i didn't read the transcript so i can't speak to the president's -- [ inaudible question ] but i do think that there is a perception issue. and i think this loose rhetoric that suggests that this is a religious test or muslim ban is wrong because it furthers that perception, because this is not that. so i do think it's important for people to pause and look at the actual context of this. look at the press conference that secretary kelly had to put this in its proper perspective so that it is not misinterpreted as being something that it is not.

[ inaudible question ] i said this on tuesday, it could have been done a lot better. green card holders, no one wanted green card holders to get caught up in this. the rollout could have been done much better, we all know that. going forward, let's not say this is something that it's not so that we further misperceptions. [ inaudible question ] well, my position on sanctions are pretty clear. i think rex tillerson will be a great secretary of state. i think people who don't know him or haven't followed him very closely will be pleasantly surprised. this is a very capable man, a good model for secretary of state. i don't know what their policy is going to be with russia. i'm a russia hawk. i think the sanctions should have been done a while ago.

>> reporter: do you think a lot of this stuff, you talk about the rollout, this came throuif through congress, would this have been a more smooth process? >> are you talking about the executive order? >> reporter: yes. >> yes, i think they could have done a better job. they don't even have a full cabinet in place yet. it's important to get their cabinet up and running so these interagency reviews could be done well. and i think going forward, they're going to do a better job of these things. >> reporter: donald trump said this morning he's going to renege on a deal with australia, that's the first time we've heard from the president directly on this. is this problematic that this is the way diplomacy is being conducted and should australia be worried? >> i don't think australia should be worried about its relationship with the president

or this country. no, australia is an important and essential ally, it will continue to be. you haven't been, maybe, to many press conferences. i typically don't comment on the tweet of the hour. [ inaudible question ] i would be in favor of additional sanctions on iran. i would like to put as much toothpaste back in the tubas possible. i think the last administration apiepeased iran far too much, aa result iran is far more activist than it otherwise would be. iran, don't forget, is the largest, greatest sponsor of terrorism in the world. the biggest state sponsor of terrorism in the world. iran writes on their missiles in farsi, hebrew, and english, "death to america, death to israel," then tests them. this is not a friendly country that has global peace or

national security interests on their mind. so yeah, i think we need to have a tough on iran policy. i think we should stop appeasing iran. >> all right. right there house speaker paul ryan at his weekly press conference, making a lot of news, including talking about the latest tensions that have been rising overnight, really, between australia and the united states, getting a couple of questions about that, and also about the now new secretary of state rex tillerson. that's where i want to continue the conversation with our panel. mike shields, let me bring you in. he's faced questions about australia and the reports of the heated call between the president and the australian prime minister. and paul ryan kept hammering the point that it's an important ally and will continue to be. but if you're rex tillerson and you walked into the state department today, you're speaking to employees for the first time, he made a good first impression with his remarks

there, but what does he take on first? he's got problems with iran, australia, and mexico. and that's really just overnight. >> well, look, we're a month into president trump's administration. and he inherited essentially a failed foreign policy of the american government, weakness abroad, you're seeing strength now towards iran. a weakness even among our allies. and so the world has been saying to us for years now, please lead, america, lead. someone needs to be the leader. and you play that role. and in europe and in south america and other parts of the world, they behind the scenes have been saying, we don't have the strength of the american leadership in the world now. rex tillerson is going to be a strong secretary of state. donald trump is going to be a strong president. you're seeing that. look, a phone call -- >> strength, getting in a fight with one of your allies on the phone, the first phone call you have? is that the kind of strength you're looking for? >> sure. and the president said -- >> come on, mike. you think the prime minister of australia was looking to be talked down to by the president

of the united states, if that's what happened? do you think the president of mexico wanted to be told something about bad hombres? angela merkel apparently had a bad conversation with the president that he didn't like. i appreciate you're saying, you were against a lot of the last administration's foreign policy and this is a clear break from that, but the idea that the rest of the world is asking for it, i'm not sure there's proof of that, mike. >> it's do you mind. our allies are saying we have a lack of leadership from america, will you please lead. you may not like the tick-tock of a phone call here or a phone call there. and certainly this administration is pretty transparent, we get to learn a lot about these phone calls. what you're seeing overall, the big picture of strength, iran is shooting off missiles because suddenly there's been a change in the white house and a strong leader is challenging them. i'm surprised iran still has missiles. i thought the obama administration made them pea peaceniks, right? that's absurd. dozens of ads were run in

congressional districts and senate races across the country against the iran deal because the american people didn't like the weakness president obama showed towards iran. now the country is showing strength towards iran. rex tillerson is coming in to be a strong secretary of state. he may be the good cop to the president's bad could p, we'll to see how that dynamic works out. a marker has been laid down that the president intends to be strong on the world stage and that's what voters voted on. >> kellyanne conway this morning said the leaks didn't come from the white house, so they weren't trying to be more transparent about these phone calls. >> i think that i don't envy rex tillerson his job this morning. i think going in, needing to smooth things over with one of our biggest allies, talking to mexico about the fact that we're probably not going to be sending

troops across the border to take care of bad hombrhombres, and ml flynn popping off about iran without there seeming to be a strategy behind it, that's a really tough position for rex tillerson, who i didn't have a lot of support for before, to come in with. i think there was this tendency during the campaign not to take donald trump seriously, not to take him literally. he was a showman, he was a deal maker, he was going to come in with a different style of leadership. now that we're actually seeing it play out, it turns out that he meant exactly what he said. when he campaigned in december of 2015 on a muslim ban, we are now watching him put that in. i don't envy paul ryan either having to stand up there and say that is not what it is. >> donald trump is at the white house meeting with members of congress, let's listen in.

>> good. how are you? [ indiscernible ] >> hello, everybody. >> president. >> nice to see you all. thank you. senator, good to see you. we're going to start getting our trade in order. i know you like that. that's one thing we really get along on, right? so thank you all for being here today. great honor. we have put together an all-star team of top-level people that are working on trade. we are working very, very hard and will be very soon. we'll go ahead. you know we have the 90-day period we have to think about. we wart to get that whole thing kick-started and going.

we have some statutory limits. we don't want to have those statutory limits. that's very important. i have some very serious concerns about nafta. nafta has been a catastrophe for our country, our workers, our jobs. they're leaving our country. i want to change it. and maybe we do it. maybe we do a new nafta and we put an extra "f" in the term nafta. you know what the "f" is for, right? >> yeah. >> free and fair trade. not just free trade. it's very unfair. all the statutory guidelines we're adhering to, i would like to speed it up if possible. you're the folks who can do it, senator. so important. and we will make great trade deals, and we will have something that -- i don't care if it's a renovation of nafta or brand-new nafta, but we do have to make it fair, and it's very unfair to the american worker and very, very unfair to

companies that do business in this country. that's why they're leaving, one of the many reasons, including the taxes are too high. we're going to take care of that also. you all know wilbur ross, who's one of the great people of wall street. he's going to be representing us in negotiations along with a lot of other great people. so we've really assembled tremendous talent, some of the best in the world. carl icahn called me and said, i can't believe you got wilbur. wilbur on wall street is known as wilbur. he's one of the greats. and he's fair. and he's fair to other countries. he will be fair to other countries. and i think we're going to have a whole new -- a whole new picture by the time we finish. so i just wanted to thank you for being here. we're starting the process, and i think it's going to be a tremendous thing for our country, for the workers, and for our companies that employ the workers. and thank you all for being here. thank you.

>> there's jared kushner right there, of course, president trump's son-in-law. he went on at length how much he likes having wilbur there. the president says he wants to talk about nafta, creating a new nafta with an extra "f" for fair. reed wilson is with us. i was wondering what would this be about. it's about trade, which goes to show, i think, where this administration wants the focus to be on in these early days. >> and this is an interesting group of senators because as we've seen over the last couple of months, trade does not break down along the element lines. there are elements on the right that want to see the same thing and elements on both sides that like the trade deals. it's interesting he brought in

ron wyden. he took a lot of heat back home in portland and around oregon. a lot of protesters came out and protested his role in backing the tpp while his democratic colleag colleague, the more liberal opponent merkley was. he's going to find allies on the democratic side and the republican side and he's going to find some enemies on both sides as well. >> that clearly seems clear. this is one of those campaign promises that donald trump said. he didn't like nafta. he called it a catastrophe. he wanted a change or a renovation. this is one of the reasons why he won. >> he made a number of campaign promises leading to nafta. he was going to get rid of it entirely, then he wanted to overhaul it. now he's adding an "f." i think it's clear donald trump doesn't spend a lot of time in the actually details he's in charge of.

the idea that he can have a contentious conversation with one of our allies. that's not going to make the world safe. that that's not going have a negative backlash on us, that he can be vague about what this muslim travel ban is, what it applies to, which people, which families it applies to, that he can talk about nafta in a way that he doesn't care whether we scrap it altogether or redo it or add a couple of things. it doesn't matter to him. the fact that he doesn't understand that those kinds of vagueries and that uninterest in how our policies, foreign and domestic works, the fact that he doesn't get that that has a really detrimental effect on the american's psyche and average americans that's incredibly frightening this early on in the presidency. >> we'll have to see how it plays out. he's made it crystal clear. mike shields is also clear that that will force a big change among some members of the republican party including orrin

hatch, including house speaker paul ryan who we heard speak before who were very prominent supporters ear s early on of th. now you get the sense at least for now, they're all in with this president. they're like, we've got your back. it seems like they'll sub limb mate those views. >> part of the reason is because of the people. they elected president trump. it's interesting that jess doesn't get what he's saying. what the democrats didn't get is the message. they didn't care about talking to voters. going back to 2010 even, the republicans have started to chart a different course of trade. so this isn't something actually new. there's a lot more support on capitol hill than you might believe among republicans to take a look at the new trade deals. but look in the end he's been

clear. he ran on this agendagenda. he's bringing both parties together. i'm sort of like what's the problem of that. that's exactly what you would expect the united states to do. he's the one who's in touch with the american people and the politicians on capitol hill are starting to realize we need to listen to them on these issues. >> thanks so much for bobbing and weaving with us on the moving parts. listen to this. unnecessary and harmless. that's what john mccain is calling the conversation between president trump and prime minister turnbull after a tense phone call between the two leaders. this just in. mccain said he also called the ambassador to the united states to express, quote, his unwaving support for the u.s./australia alliance. >> mr. ambassador, thanks so much for being with us. you did work with the obama administration. but what's your take on what was

at best a frank conversation, at worse, something of a spat? >> i think unnecessary and harmless were good phrases from senator mccain. it's just needless poking the eye of a good friend. in fact, we have no better friend in the world than australia. i don't think people quite appreciate how vital that relationship is. they have fought with us in every conflict going back 100 years. they have been our closest ally in terms of sharing of information, in terms of counterterrorism, counterinsurgency, narcotics trafficking, human trafficking, in any endeavor that we're working on to keep america safe. we're intraoperable with them. they've made enormous sacrifices when it comes to the united states. not clear on what advantage there could possibly be to the

kind overintf interaction that described. >> when it comes down to the bottom line, you have john mccain calling it harmless. lindsey graham saying this relationship can survive, it's stronger than one bad phone call. would you agree? >> oh, yeah, yeah. i think the strength of the relationship is deep. we've woven ourselves deep into each other's fabric. you see it not only in the national security space i've described -- >> so is it much adieu about -- >> it would be much adieu except for the fact we've never had this. we've had people from different parties and ideologies. they've always gotten along. it didn't matter if yowl were republican, democrat, or laborer, everyone got along. the reason this is significant is that people in australia were already nervous about this change and they are looking at

-- >> ambassador? >> yes. >> sorry. we're short on time with all the breaking news. we have to let it go. thank you so much for your time. we really appreciate it. >> thank you. >> thank you so much for joining us at this hour. "inside politics with john king" starts right now. -- captions by vitac -- www.vitac.com thanks. welcome in. day 4 of the presidency and there's disruption everywhere you look. not what you traditionally hear at the solemn annual prayer breakfast. >> we had tremendous success on "the apprentice." when i ran for president, i had to leave the show. that's when i knew for sure i was doing it, and they hired a big, big movie star, arnold schwarzenegger to take my place, and we know ho