>> final thoughts. lee carter. >> listen, i think that donald trump's strong speech today. i can't wait to see how the main street media covers it. i think it's going to resonate with the voters. >> keeping an eye on the market. maria: have a great day everybody. here is "varney & company" and charles payne today. take it away. charles: i'm charles payne in for stuart. happening an hour ago. president trump on the second overseas visit as commander-in-chief. his message,s the world must unite every north korea's aggression. and to nato pay your fair share and yes, we'll defeat isis and never back down. and a face-to-face sit-down

with vladimir putin. and steve scalise is readmitted to icu over concerns over an infection. and we'll continue to bring you updates there. virginia's governor, mccauliffe admits that the democrats don't have a leader, and can't name who will take them into the next election. "varney & company" starts right now. ♪ . >> finally on both sides of the atlantic, our citizens are confronted by yet another danger, one firmly within our control. this danger is invisible to some, but for millions at the polls, the steady creep of government bureaucracy that drains the vitality and wealth of the people. the west became great not

because of paper work and regulations, but because people were allowed to chase their dreams and pursue their destiny. america's polls and nations in europe enjoy individual freedom and sovereignty. charles: joining us is lisa booth. this is the president's second overseas trip, bringing the message of draining the swamp overseas with him. what's your reaction? >> i think it's important for him to bring that out. this trip is sort of setting the frame work, it's us or them. it's the western ideals that we all share, or it's isis. and their viewpoint, or it's north korea or it's iran, countries and, you know, terrorist organizations in regards to isis that don't share our western ideals and

then it's also, let's make sure that we don't lose those things that fundamentally make us americans here in our own country. let's, you know, sovereignty is important, as he mentioned, individual freedom is important. don't let the heavy hand of the bureaucratic government squash our ability to succeed and get ahead and build society. i think that message is important both in terms of struggles abroad and also ways to ensure that, you know, we all, you know, share the things that are important here m america. >> he hit on that over and over again. particularly on the cultural side and embracing it, preserving it, pressuring it. that's a pushback against the sort of pc mentality that's been draining or swamping the entire western world, but the specific idea of western ideas, the g20 meeting, what are they today?

is it big government as seen by germany or macron or is it the smaller government that ronald reagan and of course, his counter point in england, margaret thatcher, helped to revitalize the west once before many think is needed right now? >> yeah, and look, i don't know necessarily know if every country is going to share the same idea of what freedom means within their own borders and i think that's why it's important for the president to also highlight the fact that, you know, look, we're all facing some pretty big and common threats, so, let's unite against them. 'cause at the least, we do share, you know, the same ideas, similar ideas about freedom, but you know, i do think it's important, this is something that president trump ran on during the general election as well. talking about american exceptionalism, make america great again, reagan's slogan. that's what americans wanted, they want today make america great again. i think a lot of people felt

that, you know, we're headed in the wrong direction under president obama and that we're sort of apologizing for america's strength and for the things that make this country great and they wanted to go back to the notion that we are exceptional and we should be exceptional in the eyes of the rest of the world. charles: before i let you go. what do you make of that rousing reception and had the crowd in the palm of his hand. it felt like a stump speech, it felt like a red state here. he doesn't always get that reception in some parts of america, it's fascinating. >> it's similar to what we saw in the general election, however the speech ends up getting reported or however this trip ends up getting reported he takes his message directly to the people and the people react positively, but the elites or the people in power, whether it's the media or whether it's other world leaders, you know, may say whatever about it, but you know, he takes his message directly to the people so i think we saw that a lot during

the election as well. charles: all right, lisa, thank you very much. appreciate it this morning. >> thanks, charles. >> the dow futures under pressure and then of course additional pressure from some tough talk from president trump to north korea and the markets were dampered. and a report on thursday, at 11:00, many hoping that maybe we have dramatic drawdowns with respect to crude and gasoline stock inventories. the price of gas, 2.24, your national average, five states now with gas under $2 a gallon. arkansas and missouri right on the edge as well. and now let's check on amazon premarket. guess what? getting into the wine business. e-mack should i be excited. liz: well, yeah. ash is saying, these are whole foods prices, anywhere from $20 a bottle to $40. i understand what ashley is saying.

these are whole foods' prices. there's a talk that amazon may have its brand name wine and they're doing free prime delivery in certain spots and in ohio $8 for the delivery. and it could boost its profit margins. branding your own label. fatter profits than other people's products. >> jack hough, we haven't introduced you, but you look like you want to jump in. >> are you saying i'm an alcoholic? [laughter] it's all about the review, once you get the reviews, it's a network affect. liz: wait for 7-eleven to come up with its talking speaker. hey, 7-eleven, i want mine now. >> private label wine and luxury watches. all i'm saying. let's take a quick look at the

future. it's a little sloppy, there's going to be some pressure in the morning and we're bringing jack and talking about the market watcher saying that the dow transposed-- sending a signal, and they've broke out after a long base. those who believe in the dow theory believe that the transportation must do really well. >> i believe in earnings broadly. they were pretty good last quarter and picked up a bit. valuations look full here, that doesn't mean they can't push higher. they push higher in the later stages of a bull market. they have room to run before they reach the down turn. and what do you think the rally is looking for right now. the market is grappling for right now. could it be tomorrow with the jobs report?

i don't think there will be big surprises there. >> we had a 2% growth economy and we've had a rush of sentiment. the soft numbers, the sentiment, the survey, boom, what are we left with when the dust settles? it's a 2% economy. you can stretch out expansion, i don't think we should be looking for a huge gain here right at the end, but i think the market can continue to kind of muddle higher. >> muddle higher. that's the quote of the day so far. it's early, it's early. in the meantime, bad news, congressman steve scalise has actually now been readmitted to intensive care. ashley: his condition has been downgraded from fair to serious and he's now back in the intensive care unit. he was shot on june 14th, a bullet hit him in the hip and it went through several blood vessels and broke bones and damaged internal organs, and he's undergone surgery. doctors said after the time he

was in initial recovery, they did expect infections, typical of these injuries. there are a series of ups and downs and back in icu. >> our prayers with him and his family at this moment. we are about to show you video of a fire in breckenridge, colorado, it's expected to flare up this afternoon. the entire town is on alert for a potential evacuation. we'll keep you updated on that. and also president trump on the way to the g20 meeting in germany. he's expected to land in 40 minutes and tomorrow, well, president trump will meet vladimir putin. more varney after this. ♪

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>> more violence in venezuela. liz: and they basically were invading the national assembly

with wooden sticks and pipes and beating legislative workers including journalist, five to seven were injured. one injured so badly he was taken out on a stretcher, suffering from convulsions. so this comes on the day of venezuela's 206th anniversary of independence, this was a seven-hour siege, so police had to open a corridor to let those trapped inside out. this comes ahead of the july 16th referendum on maduro's push to draft a new confusion. it's a symbolic vote and he'll probably do it anyway. this is socialism in severe collapse. when you see legislators-- when we reported last week they had done this and stormed the venezuelan parliament and detained senators. ashley: these are opposition leaders. liz: no, these are pro maduro, pro socialists, exactly right attack being opponents. charles: they're giving real arms as well. liz: that's a great point because in the last two years

or so, the venezuelan government has taken bullets from the people and arming hundreds of pro maduro forces throughout the country and about seven dozen thought to be dead, thousands more injured and jailed. charles: socialism doesn't end when you run out of other people's money, it ends like that. thanks, e-mack. president trump speaking at a news conference in poland, addressing the role of north korea. >> not only must we secure from the threat of terrorism, but the threat from north korea, that's what it is, it's a threat. and we will confront it very strongly. president duda and i call on all nations to confront this local threat and publicly demonstrate to north korea that there are consequences for their very, very bad behavior. >> joining us now, ambassador john bolton, fox news contributor and former u.s. ambassador to the united nations.

ambassador, would we really target north korea? if we did, would it be the missile silos, understanding that they're positioned for some sort of conventional retaliation for south korea? >> let's be clear. we start from an unhappy position because in 25 years of pursuing essentially the same failed policy of trying to negotiate north korea out of its nuclear weapons program. now as predicted by u.s. and south reason officials, they're very close to being able to target the united states with nuclear wednesday. i think our diplomatic options are limited, and therefore, when you hear president trump talk about a potential severe american response, that's what he's looking at. what would that entail? possibly an attack on the missile launch sites, possibly an attack on the nuclear facilities. north korea is trying to develop a submarine launch capability and we might look at that. the risk, even if we try a limited strike, the north might

respond in exactly the way would you expect a regime like that to respond, killing civilians in south korea. so it's not happy. i think there are a lot of possibilities we should look at to mitigate that risk, but let's be clear, i think the reason president trump is so concerned, is that his responsibility is to protect innocent americans. and that's why because the options are so limited the unattractive option of a military strike has to be closely examined. charles: it has to be examined and feels like the clock is ticking. north korea's push has certainly been more exceptional, if you will, than anybody thought, even six months ago and let's face it, the loss of innocent lives in this case could be south korean lives if that indeed happens. at the rate we're going, ambassador, is there an alternative? even yesterday, china and russia putting out a joint communique suggesting that america is also at fault for provocation. it was puzzling to me. >> well, these people, this is

out of a cold war playbook and it's unacceptable, but it's what the soviets did during the cold war. they engage in outrageous behavior and say we'll give that up about you give up some behavior you've had, you've been conducting for a long time so when you return to stability, the west is worse off than it was before the crisis that the soviets provoked. and that's the kind of line they've taken here and i think it obviously shows russia and china have coordinated in advance of the g20 meeting and again, it puts to the lie, the idea that somehow, whether through negotiation or sanction, we can change north korean behavior. we can't change north korean behavior. they're never going to give up their nuclear weapons program voluntarily. that's why i think the only diplomatic play left is to convince china and it won't be easy and what we really should do is reunite the peninsula. that it would be in china's interest and ours and you eliminate the north korean nuclear threat by eliminating

north korea. charles: next one for you, ambassador. president trump meeting with vladimir putin tomorrow. what should we expect with the meeting? >> this meeting should be the two leaders getting to know each other, having an exchange of views. i don't think we should expect anything concrete to come out of it. i think it's important for trump to see putin up close and personal. you can see in the new york times, leaks out of the entourage around the president, they don't trust the president one-on-one with putin. they're worried about this meeting, they'd like to see it more structured to see the outcome. i think the president can take care of himself on a one-on-one with putin. he better find out who is leaking these things from are critical of him from his own staff. charles: i thought it was going to be a huge one, and after the

first meeting, the stupid kind of leaks about. ambassador bolten. thank you. >> thank you. charles: the craft store hobby lobby fined $3 million importing ancient artifacts. and happening moments from now, president trump will touch down in hamburg, germany. this is the second overseas trip and likely, most important one yet. stay tuned, more varney after this.

>> hobby lobby he agrees for more than 5,000 artifacts out of iraq and should have the details on that. >> this happened about six years ago. 5500 ancient artifacts, they bought them for 1.6 million dollars, although, the it's fraught with red flags and they were shipped through three separate addresses in oklahoma city, the shipping as ceramic tiles or clay tiles. they've been fishy, unall the-- ultimately they agreed to pay back to iraq and they paid the

founders of hobby lobby are backers of the museum and they're going to be magnificent later object this year. >> they'll rescue them from isis. charles: just want to let the audience who know a couple of answers yes and they would not destroy them. >> that's know the in the if they're in the tiles, they're getting them back and cash on top and say it ends well. >> it's 1.6 million. >> we've seen these people al qaeda and iraq and also, afghanistan with the two buddhist temples blown up. >> it's disgusting, irreplaceable. >> it is disgraceful. thank you all very, very much. the market is going to open less than five minutes and it's been flat all session long.

trying to get a little gain here, we thought maybe the adp report would do it, that missed the mark and an oil number coming out and technology coming out the second day in a row. "varney & company" will be right back. where are we? about to see progressive's new home quote explorer. where you can compare multiple quote options online and choose what's right for you. woah. flo and jamie here to see hqx. flo and jamie request entry. slovakia. triceratops. tapioca. racquetball. staccato. me llamo jamie. pumpernickel. pudding. employee: hey, guys! home quote explorer. it's home insurance made easy. password was "hey guys."

>> opening bell in about 20 seconds. let me just set the stage for you. a really nice rebound particularly on tech stocks. today focus should be on crude oil. holding above 45. those stocks are higher and the rest of the market opening lower. here we are the first ticks are coming in. travelers at the time and not a lot of massive moves, fractional out the gate, down 60 points. joining us now, ashley webster, liz macdonald, scott martin. we're in the holding pattern ahead of jobs. you already kind of pooh-poohed the notion as the jobs report would be the catalyst, it feels like the market is consolidating gains and not giving a lot up. you think it's a slow drift up and nothing changes that. >> i think it's a slow drift up.

the bull market ends when things are crazy. are things crazy yet? crazy means too much irrational exuberan exuberance, market going up 200 points a day. >> and let's not forget they're backed by massive crash flows, this is not a repeat of the dot-com stock bubble. there's a solid earnings directly and i think the market can move higher. >> speaking of massive cash flows, 260 billion. that money has to go to work and keeps coming in and a lot going to our domestic stock market. is that helping as well? >> yeah, i mean, that's great news. that's the investor getting the benefit of transparency and low costs. i've been an etf investigator as you know for 10, 15 years and eetf's have been great. that's a big thing behind the stocks you're talking about there, the netflix, the apples and the googles. and jack is right.

it's fine they're picking up the stocks, the thing that's pooh-poohed, too, is that the market is being narrowed by a few of the stocks. these are the best stocks out there, it's natural that the investors should go toward them. >> i think that scott and jack are right. this is an aging bull, not just a raging bull. they're saying that the global stock prices could pop 9% by the middle of next year. why global corporate earnings are on the rise and looking for increase in global etf. that's from a 2% performance. this is from the global price index. >> and the economic backdrop across the world is better than we want to admit. it's certainly headed in the right direction. another great stock for many, and if you're old school, the transportation stocks have to cooperate or a market rally. yesterday's broke out to a new high. 6.6% this year. 29% for the whole year, 52 weeks, scott.

here is the thing, we had a huge run, consolidation and now that's lifting. do you think that's a bullish sign? >> i like what i'm saying, charles, day-to-day, the market is pretty fun. june was a nothing month. and a math month as kids like to say. it's a fun month because there's a lot going on under the surface. the end result was consolidation pattern. if you look at the chart and the s&p 500 the past 30, 45 days, the next base. maybe some policy moves out of d.c., i believe that takes the market up another 10 to 15%. charles: jack. >> i just want to touch on the etf, i guess fund trade you've been seeing a lot of the banks talking about. keep in mind all the money is flowing into stock indexes. we know the proportions going into certain stocks. active managers, they're seeing where they are overweight versus the indexes. where are they underweight versus the indexes. those flows basically trade

against the active funds and by looking at what active funds overown or underown, you can make pretty good bets and guesses. charles: you think the regular person at home can beat a wall street master mind. can make more money through the masterminds. >> bank of america and merrill lynch and credit suisse put out monthly reports talking about where active funds are crowded and underowned and people are using that to make bets on wall street. charles: and the pharaohs of wall street have taken a hit. and taking a look at tesla and sales coming in slightly less than expected. tesla, e-mack was 380 a share. liz: it did drop to lows we haven't seen since last year. underwhelmed vehicles, and sold from 25,000 the first quarter. elon musk says the model is

20,000 a month, but you watch what they say on the earnings conference calls and they keep blaming manufacturing problems. five of the last seven quarters. for elon musk, it sounds like hope and change the subject. something it happening and he's hi highfalutin' according to some. ashley: and you're not the only game in down. when mainstream gets them in like volvo, that's a reality check. charles: the stock, 386 a share. wall street knew, people buying that stock knew it was inevitable the big boys were going to try to compete with them. what changed in the last three or four days? >> it's funny, charles. it goes to show you that stocks that go up and grow toward the sky eventually need to pull back. you know, tesla got a little over its skis there, i'm not shocked.

okay, a bad joke, how the stock has come back. while we've seen pour numbers, the reality is everybody is freaking out and the stock is back where it was in may. the stock to me is attractive here, we own it, but know with stocks like these, they get so far along the valuations and they come up with the valuation problems. it's a chance to accrue more. >> you had to go along for the ride. i had to get a pun in there. >> the stock implies five years from now, tesla will be as woo i had spread as bmw. could it happen? i think it's a tall order. and we'll look back and say elon musk was a great cheerleader for the electric car, but the others made the bulk. charles: and giving a seat away to a standbypass injure and change the music from rhapsody in blue to rapsy in black and blue.

liz: and a woman with a two-year-old son on the last leg of a 18-hour flight flying out of houston to boston and goes to her seat. a man is sitting in the seat. he paid $75 because he was on standby for that seat. she had paid $1,000 for that seat. a flight attendant shrugs and says, you know what? the air flight here is overbooked. can't do anything about it. forced to sit with her two-year-old son in her lap for three or more hours, maybe four hours. and against f.a.a. rules. she gets off the plain and customer service says call this toll-free number you have to pay extra to get to boston. she finally got a refund, an apology and a voucher, not enough. what happened here, she had this, she recorded it. and put it up on social media. charles: and they would have ran into the wrong parent, would have seen a different shot of a parents with a two-year-old.

so stupid, so horrible. let's check on the big board. we've been open for seven minutes and we drifted lower again. fighting some serious head winds and anxiety growing about north korea and the adp jobs report slightly lower. amazon is developing its own wine and scott, this is why we call them the everything company. your reaction? >> well, i mean, i used to do some drinking and shopping on amazon. i quit that because, obviously, it had some bad ramifications and maybe they're going to bring that back. you know, i mean, look, there's probably nothing at this point that amazon doesn't want to do or can't do. one thing out there looming is the breach into the pharmaceutical industry. look, it's interesting from the standpoint, they have a lot of amazon prime members and touch so many of ours lives, they might as well try to get into the wine business. if you look at craft beer and all of those kind of let's say attractive spirits that people like to drink, wine is another

one they can capitalize on. charles: jack, what do you think? >> this is the perfect amazon business. pricing is inefficient. it's grape juice, folks, it shouldn't cost $40. but it does and they're going to sell it to people who might be intimidated going into a wine store. charles: you're telling me you wouldn't pay a prem pre yum for a barola. there are some differences between wine, no? >> what i'm saying, it helped to have a big network of reviews you can look at what people think. you don't have to depend on the opinion of the guy who owns the store or the wine magazine or whatever, you can crowd source the decision of which wine to buy. ashley: and the price doesn't always indicate the quality. in some cases it does. charles: although under $5 wine is usually not good. >> prime members feel rich and urban and rich. and don't worry about them affording the wine.

charles: grocery store chain kroger is suing lidl. the german invasion has begun. liz: it looks like kroger is mad, saying copy right infringement. preferred, it looks like the same name as lidl is using. and others have preferred selection in their grocery section. ashley: welcome to the neighborhood message. charles: rolling out the welcome mat. the grocers hit pretty hard. do you think there's some valuations and value plays there? >> you know, charles, it's funny. i don't like the grocers necessarily. i don't like the business and things like target like you said, we own costco, but i tell you, it's getting to the point where kroger, i like how e-mack put that. an em with -- welcome mat and we're probably mad about the amazon deal and what it did to our stock.

and there's a value in kroger because the stock has been smoked in the last month. >> and super value, sbu, special victim units, this stock has been killed with the rest of them. if there's a value play. charles: 3.20, if you go for it use 2.95 as a stop loss. thank you very much to jack and scott. once again, let's check the big board,s because the more scott spoke the more it went down. we're down 99 points, pretty rough start for the session. i want to take a live look at hamburg, germany. any moment from now, president trump is going to land to start his first g20 meeting as leader of the free world and we're going to take you there when it happens. a new requirement in chicago for high school students, it you want to graduate, rather, you better have a plan. we're talking about proof of a job, apprenticeship, something like that, if you can't, well, no diploma for you.

>> all right. folks, checking the big board here, dow off 89 points, been down as much as 100. an uninspired start to the session. two major headwinds, north korea more of an issue, president trump discussing that this morning and our potential options and adp jobs report less than anticipated. this, of course, before tomorrow's big jobs report from the federal government. meanwhile, amazon has discussed a possible partnership with the dish network. i want to go to nicole petallides and find out what it's about. nicole: very interesting possible partnership between amazon and dish. though no deal is imminent. there's talk of a possible deal according to the wall street journal and how it would be beneficial to both companies. amazon's down about 1% today. dish is slightly higher. but you've had a chief executive, the two of them speaking, multiple times at a

satellite convention, a robotics convention, another in seattle. they've crossed paths and dish has been acquiring additional airwaves for quite some time. dish tried to meet with sprint, t-mobile, at&t unsuccessfully. amazon wants to have delivery drones, amazon can have prime service on dish as well. amazon also wants wireless for connectivity overall for the echo and the like. they tried to give it a guy with the fire phone, remember that? but no go then. maybe this is it. charles: maybe, many and so will roll the dice anytime and this time a smart partnership. thanks a lot, nicole, appreciate it. president trump on the second overseas trip for the g20 meeting. of course, the big threat of north korea is in the background here. joining us is congressman francis rooney, republican from florida and a member of the house foreign affairs committee. i want to ask what, we heard this morning, president trump used the word severe, also

confront very strongly. the words are becoming more ominous, of course, from the white house. it's a massive course of threat we're getting from north korea. what action are you comfortable with us taking right now. >> first, to have any chance of a nonmilitary solution to this mess in north korea, we are going to have to get china and i would hope that russia would engage with a strategic partner. if it didn't get them engaged going to go military and what the president said is true, you can't go in and partially take out a missile silent, you've got to get them all. you've got the get the plants they're enriching uranium and everything else they're doing. it would be a severe and invasive military operation and hopefully china and russia can help us avoid. charles: and many of the missiles already aimed at south korea.

many don't think there's they way to stop all of those if they started to rain down on south korea. >> that's right, it would have to be so massive to eliminate the prospect of, you know, missiles going whatever it is, 80 miles or something to take out some of the 25,000 troops we've got over there as well as civilians. it might be a question, which civilians get harmed, north or south koreans. charles: having said that, you mention china and russia who have seemed not only reluctant to go as far as they could to stop this. but issuing a joint communique to america, causing problems with war games and some actions they've taken. is that a clear signal despite the fact that everyone says they must be involved that they've drawn a line in the sand? >> they've been involved before successfully during the bush administration with china, not

russia, and maybe this is a posturing, positioning statement that will enable them to actually take some more covert or silent actions diplomatically. i don't know. i know that we can't solve the problem by ourselves without a dire remedy. >> i want to shift gears here to chicago, they won't allow the high school students, not going to be able to graduate unless you prove you have a plan for the future. i know you're on the education work force committee as well. do you think this strategy is going to work? >> well, i think the mayor's mixing a metaphor here. it's one thing to encourage career and technical education and encourage students to get a job of all different magnitudes, and respect all work. he think this whole movement away from the liberal notion if you don't go to an elite college you don't count for anything and more toward the human dignity of work is good. that doesn't necessarily mean you ought to withhold a diploma for it.

charles: not only that, do you think that chicago, the school system itself has prepared these kids? i mean, from what i see, most of these schools in these liberal states and cities, these kids are graduating and the day they graduate they have zero idea what they're going to do the next day and zero preparation. >> i've seen some pretty dire statistics about the reading level and math level of high school graduates in some of the inner cities and that's a very good point you make. you know, almost any job now days, even finishing concrete, which is something that we do in our family businesses, requires literacy and ability to use a flat screen. charles: yeah, to your point, the empire state federal reserve manufacturer's survey, 87% of the job don't need a college degree and yet there's a giant skills gap out there. thank you for your time this morning. >> thanks for having me on.

charles: we appreciate it. only one dow stock in the green and wal-mart barely 2 cents. the dow is down 114 points. it's a sloppy start to the market as we await the arrival of president trump in his first g20 meeting in germany. "varney & company" will be right back. your insurance company

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>> happening right now, president trump arriving in hamburg on air force one, on his way to attend the g20 meetings today and tomorrow. blake burman is in hamburg with the latest, blake. >> hi there, charles, we expect the president to be on the ground. i'm not sure if that's the support plane, but either way the president will be on the ground in hamburg momentarily. when he's just down the road where we're staying, this is when the interesting part of the trip starts to begin for the president. he will have a 10 to 15 minute meeting or so with angela merkel, the german chancellor hosting the g20 summit. you can imagine what's on the top of the agenda. defense spending, trade, merkel telegraphed in her own right, the president's decision to pull out of the paris climate agreement, something she does

not agree with. they will have a bilateral meeting after that. the president will have dinner with the leaders of japan and south korea and the main issues, i think it's fair to say, north korea, north korea, and north korea after that. you've already heard the president's comments on this day in which he said he's looking into, quote, pretty severe things into north korea in response to their intercontinental ballistic missile test. earlier this week, the president describing north korea as having, quote, very, very bad behavior, in a news conference earlier this day. when you fast forward until tomorrow when the g20 summit kicks off, we know that president trump will have his first one on one face time with vladimir putin, the white house has not said what is on the agenda though, syria, terrorism, of course, will be part of the discussions there, and it remains to be seen whether or not the president will get into cyber issues, and russia meddling into the 2016 election.

on top of all of that, charles, keep in mind, too, the chinese president is here and the mexican president is here, it's a platter of worldwide issues for president trump on this second foreign trip. should be on the ground here in hamburg at any moment here, charles. >> blake burman, thank you very much. we'll come back to you in just moments. meanwhile, guys, it's interesting because moments ago, of course, president trump threw down the gauntlet once again at nato for not paying their fair share. if he's meeting with merkel. germany paid 1% of gdp. supposed it pay 2% or more. ashley: yes. charles: and poland meeting the obligations and the crowd went wild. that's one of the strongest moments during president trump's address to the polish people. ashley: yes, it was a friendly crowd and he talked about the defense of western values, that

the west would never ever be broken, but nations must have the will to protect borders from those who would destroy it. it's a good speech to a friendly crowd and a whole different ball game now that he's getting into hamburg, germany. to blake's point all the world leaders are there and i think that friday is going to be the most fascinating when he meets with vladimir putin face-to-face. liz: to your point about the refugee crisis, poland has effectively shut its borders, this is the worst refugee crisis since world 2. world war ii. and 57% said, yes, we would give up money from the eu funds and money from the eu to keep our borders protected, that's 57%. 51% said we would leave, want to leave the eu altogether rather than give up border security. poland is the 7th poorest eu nation and they get a lot of development funds.

it's quite a finding how the polish people feel about the migrant crisis. charles: what do you make, speaking of shots across the bow. we've heard president trump verballize his. one thing we haven't reported on yet, the eu signed a new trade deal with japan and it's sort of ironic that the eu is going to say-- is going to preach free market and free trade to an american president. >> that's a good point and germany, of course,s had a been sideling up to china as well at a time when china is thought to be the source for sanctions of individuals. maybe a target, maybe the u.s. could sanction individuals in china and bankers for doing business with north korea. we know that north korea ships coal and more to china. the thing to the backdrop what the president is saying is western values and ambassador bolten nails is on the head, he says it's about nuclear proliferation.

they're moments away and iran would be behind it with money, with a check to buy it, that technology from north korea. that's dangerous for the world. ashley: i think it's fair to say the honeymoon between chinese premier xi and the president is over with at the point after mar-a-lago. the arms deal with taiwan didn't please them and sanctions against the chinese bank doing what the administration called here illicit dealings with north korea. those two things have really irked china and in the news of this eu trade deal with japan, i think it's part of an effort to try to marginalize donald trump. liz: that's right, and germany's trade deal with china as well. iran got to the bargaining table, negotiating table only after there were sanctions placed on bankers and individual companies and individuals doing business with iran. so, could the same be done with china's work with north korea?

that's the issue. charles: well, if china's trade goes up 37% in their first quarter with north korea despite the fact that coal imports are down 50%, it clearly shows they're not committed. maybe xi verballized in mar-a-lago, hey, we're on your side, but when push comes to shove, so far they decided trade over the threat of a nuclear north korea. ashley: they said they don't want strangling economic sanctions against north korea. there's a balance and they don't want regime change. and china and russia putting out a joint statement saying to north korea hey, knock it off and saying to south korea and the u.s., you knock it off by immediately responding with these military exercises. charles: what do you make of the notion that the mainstream media say it's a showdown, the next 48 hours is a showdown who will be the leader of the western world? >> this is the media typically

overreacting and hyperventilating for head lines. they should stop and be reporters and journalists and not write to the headlines they have in their own heads. charles: and after a wave of elections victories, upset of theresa may in the u.k. liz: i think there's division in germany and france. charles: no doubt. there's division in america as well. we're talking who-- traditionally the president of the united states is the leader the free world, bottom line, that somehow someone could usurp that, that it could be angela merkel or macron is worrisome. ashley: then they'll wake up. yes, they think it's an opportunity here, but make no mistake, the united states is the biggest and most powerful country on earth and whatever happens, whichever way the nations go, the united states carries the big stick. the point is, if they try to marginalize the united states and snigger behind donald

trump's back, it's not going to work, the fact remains that the united states with pursuit of policies will be the leader of the free world. charles: isn't it ironic that president trump is sticking out the olive branch and need to work. and merkel is saying more and more we're going to have go it on our own and trade deals with others countries. ashley: charles they don't like dealing with donald trump. he's unpredictable, he's not a politician, he's volatile and they feel uncomfortable hanging out with him. charles: and they feel uncomfortable because the last president rolled over for them every time and ideological brethren. and he saw america as they saw america, as a bully that had to be many put down a notch. >> and all of those things are the reason why donald trump got elected in this country.

liz: that's right, ashley. ashley: for those qualities. liz: and that's the president, secret service-- sorry. here is the issue, stop looking micro, the media has to stop that, they have to look macro. and western values are at issue here. do you want a middle eastern basically dictatorship and an asia basically calling the shots and setting the agenda or do you want freedom and democracy? that's what the president is saying. yes, he's gotten in blood feuds and nasty political fights in washington d.c., the d.c. gotcha-politics machine is in full tilt. he's fed into that with reckless betweens tweets, let's face it. charles: and draining the swamp is not easy. liz: he's transparent. he's fighting for western values and what is right and good about the united states. charles: okay. let's go back out to hamburg and go to blake burman for an upda

update. >> and the police are behind me right now. [laughter] this gives you a little bit of the flare here. we're going to let them go by. >> as you can probably guess the president of the united states is about to be in town and so are world leaders, lots of police here. we expect the president to be on the ground at any moment, charles. the way the deay lays out, until he has the meet with angela merkel, bilateral meeting at that. the president's first appearance, one of the first appearances in poland, made some interesting comments as relates to democracy and person values in which he said, i'm quoting here, charles, about the invisible danger, the steady creep of bureaucracy, that drains the vitality and people. the west became great not because of regulations about

you because people were allowed to chase their dreams and pursue their destiny. it's that quote that was posed to a senior official earlier today, hey, was that directed at western european nations, specifically germany, and the leadup to this meeting today with angela merkel and that white house official said, no, theres' a clear message some believe from the president today, saying, hey, look, there are certain western values that we live by and those are the values that we uphold going forward and we await the president. charles: and i want to go what blake is talking about. under ronald reagan, 159 significant regulations, that impacted the economy. under president obama. 148, and those kind of things

strachle the economy and we're trying to untie those knots. liz: it's a smothering pillow of hyper regulation that the obama administration unleashed across the country. here is the first lady and the president. charles: first lady and the president coming down right now. charles: trump descending on air force one. this is huge next two days for the united states and let's face it for the entire world. a lot is at stake. tomorrow president will meet with russian president. congressman, what are you

anticipating, what do you hopes comes face to face with president trump and vladimir putin? >> to my judgment, is most important thing for president trump and vladimir putin in particular but also for the g20 leaders in general to get to know each other more on a personal level in case a crisis should erupt and have familiarity with each other and able to engage in candidate discussion that is are necessary perhaps to temp down on the crisis and prevent it from getting worse and in terms of particular issues, certainly north korea, missiles, nuclear weapons has to be on the table, russia's invasion of crimea and ukraine. that needs to be talked about to some degree. you have what's going on with syria with conflict and you have assad involved with islamic state. eastern europe, energy exports of russia to intern europe and

the impact that plays on geopolitical politics and the relationship between in theo and russia to try to make sure that what happened in ukraine and crimea does not spread to the western theater. charles: rex tillerson saying that the united states is open to jointly working together with respect to syria. we have seen scurmages and issue starting to brew there. should russia take the lead but we are involved closely? >> well, we need to have negotiations with russia and try to determine what the future is going to be alike once the islamic state is defeated in mosul and the rest of iraq and syria. that's going to be key to long-term peace and stability in that region of the country. russia has interjected themselves into syria making them a major player in that process so i hope that president

trump and the rest of the folks who represent the united states of america will get with vladimir putin and their counterparts on the russia side and try to work out a long-term strategy that will bring stability and peace to that region of the world and certainly that kind of stability and peace is sourly lacking and much needed. charles: congressman brooks, thank you very much. mercedes schalpp joins us. america, you heard the president's speech this morning. give us your thoughts? >> it's going back to the basics, charles. it's going back to this idea of courage, of determination of the western values of freedom. these are topics that we just haven't seen in the past or haven't seen in a long time, so i think for president trump the symbolism of going to poland, poland that has suffered under -- under oppressive situations whether it be the nazis or russians where they have dealt with those situations i think

was incredibly, not only symbolic but sends very important message to the rest of the world and also the fact that poland, this idea of the creeping in of government bureaucracy where poland is resistant to the fact that the european union imposing itself, its rules and regulations on poland is very significant because it sends a very nationalistic message, something that, i think, the polish people can relate to and also the american people can relate to. charles: talking about the struggles that poland had particularly when they were sandwiched by nazis and soviet union. what's going to be the solution ultimately? >> well, i think it's complicated for europe. i think that you're seeing the impact of a migrant situation, a

migrant crisis that has impacted so european states, nations, the european union has been very weak on the issue of immigration and i think that when you see the fact, for example, in the united states that the majority of americans agree with the president's travel ban with this idea with ensuring that we know who is coming in and out of our country, i think that's -- that's something that not only the american people understand and relate to but somethings that you are seeing more europeans basically saying, look, we need to find some sort of control to our borders. so i think it's a very strong message that the president is sending but i believe in the sense of the european union they obviously are -- between germany and france, they are going to be very vocal, they have made it very clear that they are going to continue allowing migrants to come into their country and what has created a certain sense of sense of uncontrollable border

in that area. charles: right, another issue is on trade and the notion of free versus fair trade. i found it fascinating this morning that the eu cut a new trade deal with japan. we are still waiting on details and they are going to probably lecture and we anticipate angela merkel will lecture to president trump to avoid trade wars, of course, he talked about the lack of seeing fords on the streets of germany on the first visit as president of the united states, they will love to preserve the status quo. they would love to preserve current trade deals as they are while americans understand that so far we got the short end of the stick there. >> right, in the case of merkel, for example, she wants the status quo on nato where they don't necessarily have to pay their fair share. it's what you're going to see in g20 summit, more tension that what we have seen in the past. not only will president trump face attention that we are going to see when he meets with putin, for example, the president of

china but also with merkel because mel is going to be upset at the fact that the president pulled out of the paris climate accords and upset of the fact where the president is headed in terms of focusing on the trade deals but, you know, i think that the president made his position very clear. this is about protecting american interests, this is assuring that there's american prosperity and protect american workers and something that you believe the europeans would understand and they had a very different impression on where they want to take the trade deals and it will be interesting to see where we can find the common ground. we just saw president trump talking with poland and several countries in eastern europe and dealing with issues of energy and at earntive energy sources. it is having tailing with

countries as well as figuring out what the role will be between the united states and the european union. charles: mercedes schlapp thank you very much. >> thank you. charles: joining us is corey lewandowsky. he started with rose -- rousing speech and greeted with different reception at the g20. what do you make of the next two days? >> the president went to poland and was very well received and clear dichotomy from what the mainstream media wants to report that people don't respect america anymore. the president is out causing chaos, that's not what's going on. we probably saw 40,000 people chanting donald j. trump and usa and the president went to thank the people of poland for holding up to their fair share of the bargain when it comes to paying

their fair share when it comes to nato, this is a very different type of conversation that he's going to have with germany and other g20 leaders now. the president has been very clear. the united states is not going to continue to be the policeman of the world. everybody has to pay the fair share and it is not fair and should not be incumbent of the people of the united states to be the world protectors of everybody if those countries aren't willing to pay for their own protection. charles: we should also point out that the president didn't leave it ambiguous for the media, he came right now, we always supported article 5 and we have done not just through money but through our deeds and actions as well countering the narrative that somehow in his first trip that he did not pledge cooperation with nato and that led to the question of america will coming to the aid

of the allies. >> that has been a long standing tradition. mainstream media on the president's first trip overseas was up in arms that he didn't invoke the term article 5. as you know, he said it very clearly today and what this will be is a blip in the radar screen. it's a fair and honest conversation to say that the united states will pay their fair share and other countries will need to do that as well. what we have seen from time he was president elect other countries are increasing fair share that they are supposed to be paying, which is fair to the united states and putting america's first and making sure nato is a sustainable viable option moving forward. charles: if you were advising president trump, what would you want him to get out of this meeting tomorrow with vladimir putin? >> well, i think it's important that the president and vladimir putin have a candid conversation. most important in my mind an

opportunity to potentially work together in syria to defeat isis in the place where they are being housed. we want to make sure that we are killing terrorists in their homeland and not in ours and if there's an opportunity for the united states and russia to work together to ensure that we have a relationship there, one whereby we agree that isis needs to be destroyed in that location, very important. we also have to make sure that the relationship between the united states and russia is such that north korea has to have a discussion point here. we cannot have a madman launching potentially nuclear weapons for thousands of miles, icbm's aimed and targeted not only at the united states but potentially as russia as well should kim jong un decide to change his way of doing things. so i think the united states and russia and president trump and vladimir putin have to have a very candid conversation about syria and about north korea and find way that is we can work together for the betterman of everybody. charles: just a moment i spoke

to representative brooks and he began with north korea and talked about the importance of syria but also brought ukraine, eastern europe and nato-russia relationship, if you will. is it too early to those things to focus on great threats that cast shadow over the world? >> it's my opinion that we have to deal with the most egregious threats as soon as possible. right now the most egregious threats are north korea and syria and we can have longer-term conversation and what they have done with crimea and other places, that's not as pressing in my mind because we have direct impact of north korea potential mission missile launches and we have a direct impact on isis and isil continuing to have a stronghold in syria and by working together, two super powers working together, we can help alleviate not just the problems in one of those places but

potentially both of those places. charles: corey, president trump also talking about big government today and i point out to the audience that in eight years under ronald reagan we had 159 negative regulation that is hit by 100 million or more, under former president obama we had 488 of them certainly crushing the economy, killing entrepreneurship and really dampening the spirits of business. we've already seen a sharp rebound and optimism in those areas because of the election of president trump and we have seen him take action through executive order. how much harder should we be pushing on that and how much can we do without congress? >> we need to continue to push very really. we need to look at companies subsidized and i think about samsung and lg. they take products and dump them on u.s. soil. they don't manufacture here although they are starting to because they understand that this administration in

particular, the commerce department is going to hold them accountable. we should be given preference to companies that are manufacturing here in the united states. you think appliance companies. this administration has been very clear. charles: all right. >> american first policy because that's job here and that's the pyrety of the administration. charles: corey lewandowski, i appreciate this morning. dow is down 135 points. we have a rebound there. also the imagery helps when we see leadership around the world. varney & company will be right back.

charles: and now this, eu antitrust regulators are reportedly considering another record fine against android mobile operating system. gerri joins us now. >> that's right. the last fine $2.7 billion and it will be something if they are successful in this. what they're doing is investigating android and google for using market dominance to maintain that dominance and expand it. that's what's at issue here. rivals have complains that what's going on they do not allow access to google play. what's google play? that's where you buy apps and games, you can't have access unless you build in google search and chrome applications. you're looking at the picture of this right now. so that's -- that's what they say is the problem, keep in mind, in europe it's okay to dominate the market, you just can't use that to put other rivals at a disadvantage. so i don't really know how you

pull those two things off but that's the way the europeans think about it. charles: any word from google yet? >> we have been watching their website and also been talking to the european commission, they don't want to talk yet, what they say they will be doing is panel of experts to look at this in more depth and figure out if they can really goo forward with this. charles: you know what's interesting is they are going to fight the previous record fine but they weren't going to fight it, they were kicking and screaming. >> it is, remember what happened to microsoft, exact same kind of complaints. at the time they had the record fine, $2 billion, remember, the google had something like $90 billion or $100 billion in marketable securities, the money isn't that meaningful for them. really what it says about competition and where they can go forward. charles: gerri willis, thank you

so much. >> europe can no longer rely on the united states. lieutenant peters, you will get his reaction next. congress is back in session on monday with a very big agenda to tackle before their next recess, so can tax reform, health reform get done in three weeks. not a rhetorical question so you can't take it that way. more varney next.

charles: now back to your money. checking the big board here. dow down, 20, 30 points lower

for the session. the 30-year mortgage still below 4% and then there was good numbers on the ism service numbers, oil higher in the last few minutes, so we seen that they are found some support. what rebounded yesterday but back to losing ways once again. once again, blue apron well below ipo price, it's becoming an unmitigated disaster. check on the price of oil, latest read on supply, at the top of the next hour, a lot of anticipation that this number is going to be very, very good, which means huge drawdowns there. cosco, well, it's a winner yet again. they reported higher sales, comp store sales are phenomenal. the company doing well in the age of online shopping. of course, don't forget about tesla serious red arrows there.

the stock was $386 a share within the last week or so and now it's down there at ten-month low. hey, a new interview, german angela merkel doubled down in comments that europe can no longer rely fully on the united states anymore but in poland today president trump reaffirmed america's commitment to europe and nato, roll tape. >> americans know that a strong alliance of free sovereign and independent nations is the best defense for our freedoms and for our interests. that is why my administration has demanded that all members of nato finally meet their full and fair financial obligation. charles: colonel peters, your reaction to the speech. >> charles, i've been kept call about trump's attitude with russia and putin.

that warsaw speech was to me the most timely and most effective speech given by an american president on european oil since ronald reagan said mr. gorbishash, tear down this wall. really understand polish and central european history. it called out russia. he still didn't call russia by name. just to give you one example. he mentioned forest, in the beginning of world war ii, massacre, soviet security force forces, executed in cold blood 10 to 15,000 pow's and other

references to polish fight for freedom and i will tell you, no nation on earth has fought longer and harder for freedom than poland. they know where the threat is. the threat is from the east and president trump to his credit said we worry about threats from the south and the east. we will see where that goes tomorrow with putin. charles: you bring up the intellectuals, pow's that they attempt today wipe out. president trump making mentioning of historic figures in poland, history and branching out further to europe in general preserving its culture. did you like that part of the speech and do you think that echos beyond poland itself? >> this is a perfect speech that i've heard from an american in literally since i can remember. in defense of western

civilization was vital. american left has decided the western civilization is like every other civilization, no, it's not. it's a gift, it's an achievement and so i was so encouraged by his praise of poland, resistance for freedom fighters, identification of europe's problems and the threats they face and we all face and, again, the defense of western civilization. it will be mocked by the american left, but by god, it was a wonderful thing to hear on european soil from an american president. big points to president trump on this one. >> another one for you, sir, president trump meeting with vladimir putin tomorrow and you want him to carry this message with him as well. how does he do this against vladimir putin face to face who, of course, has his own agenda? >> well, it's going to be tough. the real master to have art of the deal or one of them is really vladimir putin. he's bamboozeled american

presidents. one of the things the president can do to himself is to really call putin out. i'm very concerned because putin can be persuasive, old kgb officer, he knows that president trump likes flattery. if president trump walks out of the meeting tomorrow with vladimir putin, we really need to build a new partnership with russia, we need to lift sanctions, it will tell me that he still doesn't get it. certainly, i am very worried about the meeting with putin tomorrow but members of trump's cabinet are very worried also. at the same time that's the most important meeting of trump's presidency so far, he has to mend fences with the eu, the disparaging things he said about nato and the eu, actions he's taken -- it's a fight we don't need. we need unity. charles: he was pretty tough on

nato this morning in poland. i'm not sure that's going to happen. sir, with only five of the nations are paying even pledge of 2% gdp and germany paying 1% gdp, i don't think he's going to get off the message. >> he has to say that because he always say that is. what mattered in the speech this morning, we will article 5 which is attack on one is an attack on all. that's what matters to europeans and by the way, european defense spending was already on the uptake before trump came to office. now, it's going to accelerate. he did have a good message on that but, you know, let's not pick unnecessary fights. let's remember the ebb my of our civilization, the enemies are vladimir putin, isis, north korea, the enemy is not the european union. we may not like the european union, we don't want socialism, we don't want brussels giving

orderers. the europeans have chosen it through democratic elections. let's have our system here and let's let the europeans have their system there and let's see which one works better. charles: very insightful but even more so this morning, i appreciate it. >> thank you, charles. charles: they have a very big agenda. joining us scott, congress, can we will realistic here, can they do health care, can they do tax reform? can they come together and get something accomplished? >> well, charles, there are a lot of speed bumps on the road to tax reform and health care is the biggest one and it looks like the vote in the senate on health care reform won't be until two weeks from now. so already we are seeing delays and delays in the speed bump that has -- we have to get over before we get to tax reform debate and then we have to remember they have to pass a budget for 2018 before they can

even tackle tax reform so there are all of the speed bumps and potholes on the road to tax reform and it's really looking very difficult right now. charles: scott, tax reform these days seems to include all of the above. ronald reagan was able to achieve tax cuts and then a few years later more tax reform. i know congress is having tough time throwing things in parallel track but the american public overwhelming approve of middle-class tax. how about crafting a middle-class tax cut and maybe addressing small business owners through individual taxes because that's where we know 95% of businesses file their taxes, give them their 15%, give the middle class a tax break, couldn't that be the first domino to go and get the rest to have agenda through? >> it depends on what your

objective is. they're not the kind of tax code the economy needs to jump-start new investment and create jobs and if you want to do that, if that's your objective, you need a big tax cut for larger businesses or corporations because, remember, the u.s. has the highest corporate tax rate in the industrialized world and we have other really serious problems in the corporate tax structure itself that's inhibiting the ability of u.s. companies to be competitive in the global economy and to create jobs and i think you have to fix those if you really want to jump-start the economy and move forward with a more competitive economy. >> i guess my problem, though, it feels like with most of the proposals thus far, it still feels like to globalists win. it feels like let's lower tax rate for the largest corporations on the planet and make it up with border adjustment tax that effectively crushes the purchasing power of the middle class. >> well, i disagree with that, charles.

we have analyzed very carefully and when you look at the tax plan overall that's been proposed in the house, it's a large cut for everybody. and we find that it would boost the level of the economy by 9% over the next decade, create millions of new jobs and write a -- bring a lot more investment. we find it it's a very positive tax plan. charles: scott, always great having you on. we will definitely discuss this again very soon, so see you soon. i want to get back to the markets right now. checking on the big board that we cracked 100, down 96. remember we were down 135 and we got the ism number, best number in a long time. ashley: coming 57.4, doesn't mean anything to anyone but better than expected. that's nice, up and bettered

than expected. of the 17 industries by the way, ism track, 16 showed nice growth. charles: best number since august of 2014. coming up we got a rare letter to tupac to madonna. democrats continue to be in disarray. virginia governor, close ally of the clinton said there's no democrat leadership in capitol hill and says it's all broken. former governor mike huckabee will join us next.

russia would engage as strategic partner with us. if we can't get them engage, it would have to go military. i think what the president said it's true. you can't go out and take missile site and you have to get the plants where they're enriching uranium and everything they are doing. it would be a very severe and

invasive military operation and hopefully russia and china can help us avoid. when you have something you love,

you want to protect it. at legalzoom, our network of attorneys can help you every step of the way. with an estate plan including wills or a living trust that grows along with you and your family. legalzoom. legal help is here. charles: let's check on crude oil bouncing back after worst loss in a month. now this, in an interview, new interview democratic governor of

virginia terry mccollough was unable to name a leader of the democratic party. >> who is the leader of the democratic right now? >> i think there are many leaders, governors need to lead the wait a minute i complement the folks in capitol hill doing what they're doing but we need action out of washington to help compete on a global basis and today we are not seeing anything out of washington. charles: former arkansas governor mike huckabee, governor, the democrats, they are a party in disarray. easier to find amelia earhart. who is the leader of the band that's made for you and me? he can't even come and might as

well mickey mouse because they have become the mickey mouse party. charles: these are the people who are not representative of the younger more open generation that america seems to be moving toward. >> well, you know maxine waters is proving that the new 78 is the new 35. they have maxine waters, elizabeth warren and bernie sanders who isn't even a democrat, independent who ran in the democrat party, all of them are moving so far to the left and many of their speeches including the speeches of tom pérez, their chairman, are unwatchable by anyone under the age of 13. charles: they think vulgarity is

you are being hip these days. it's not that they are sinking but flailing away and making it worse for themselves. it's really odd. the only thing they can hope for is bad news for america. >> well, charles, i don't swear but if i were a democrat, i probably would because i would have nothing else to say about my party. i think that's what we see with people like tom pérez and the others who are using profanity to communicate their lack of a message. profanity is essentially the forcible expression of a mind, so when a person defending a party is reduced to swearing in their public speeches, it's because they've got nothing else to deliver. charles: next one for you, governor, president trump arriving at hamburg, colonel ralph peter said it's the best speech since reagan tear down

this wall speech, your take from all of the events this morning? >> i think it was significant that colonel peters said that because i love ralph peters but he's not been a big fan of donald trump and for him to say that is significant more so for those of us who have been more supportive of the president. i agree with him. it was a powerful speech because he touched on not just the issues of military power but rather moral power, this is where i believe america's strength really has always come from and it's also where poland's strength has come from and these are resilient people, the polls are extraordinary to what they have been through and how they overcome it. donald trump did an amazing job of touching to the hearts of polish people and really expressing an appreciation and solidarity with their quest for freedom and their quest for a moral basis for culture and society. charles: speaking of the moral

power, it also feel like you can certainly connect the dots on some of the words he used associated with north korea, perhaps a severe response, a confront very strongly and talked about bad behavior. what we have to do next we will have to do it from a moral high ground even though it will have devastating consequences, perhaps. >> i think there's a point in history i hope we have learned when people say over and over, they are going to kill you, that you might want to take them seriously. if there was a lesson that the jewish people learned from the holocaust and there are many, that's the one, if you talk today israelies today, they will tell you that they are going to kill you, they know it and they mean it. charles: see you real soon. bret baier, host of special report on fox news channel joins

us in the next hour. more varney after this.

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charles: all right, lisa, second overseas trip and he's beginning, bringing message of draping the swamp overseas with him. what's your reaction? >> look, i think it is important to lay that out, one, we are

facing a lot of threat as broad and so i think this trip is important to sort of set the framework of it's us or them. it's the western ideals that we all share or it's isis and their viewpoint and it's north korea or it's iran, countries and terrorist organizations in regard to isis that don't share western ideals and then it's also, let's make sure that we don't lose those things that fundamental make us americans in our country, sovereignty is important as you mentioned, individual freedom is important, don't let the heavy hand of the bureaucratic government squash our ability to succeed and get ahead and to build a stronger society so i think that message is important of both painting things in terms of struggles abroad and also ways to ensure that, you know, we all share the things that are important here

in america. charles: he hit on that over and over particularly on the cultural side, treasuring it, that's something a pushback against the sort of pc mentality that's draining or swamping the entire western world but the specific idea of western ideas that you talk about, lisa, i think the g20 meet asking going to be about essentially what they are today, is it big government as seen by germany or macron or small government that ronald reagan and counterpartner in england margaret thatcher that helped revitalized that many think is needed right now? >> look, i don't necessarily know that every country is going to share the same idea of what freedom means within their own borders and i think that's why it's important for the president to also highlight the fact that, look, we are all facing some pretty big and common threats so let's unit against them.

charles: i'm charles payne in for stuart varney. another busy day in politic ands for your money. several big stories including president trump, he arrive inside hamburg, germany. this, of course, for the g20 summit. he's meeting with russian president vladimir putin for the first time tomorrow. and north korea is sure to be a very big topic at the g20. nikki haley, you are our ambassador to the united nations, says we're prepared to use military force, and president trump is calling on all nations to respond to the threat. and more chaos in venezuela. supporters of president maduro storming the legislature, beating opposition lawmakers with pipes and ticks. we are all over that. and hobby lobby fined millions of dollars smuggling artifacts from iraq into the country in boxes labeled, quote, clay tile samples.

"varney & company" starts, hour three, right now. ♪ ♪ charles: whoo! weekly oil inventories out, e. mac's riding a wave -- >> look at that, they're down 6.3 million barrels, that's way more than expected. they're looking for a drawdown the of 2.28 million, so again, a drop of 6.3 million barrels. and, in fact, an industry group said yesterday expect a drop of 5.8 million. it's even deep or than that. so oil is now pushing, look at this, popping a little bit higher. this is the third drop in four weeks. i'll tell you, the price ranges for oil all over the map, charles. you remember at the beginning of the year we said oil is going to stick at 60, now it's 40-60. raymond james essentially saying, you know, oil could go to 80. they don't believe the inventory numbers. so i'll tell you, the past four months we've seen ricochet

actioning in oil, and oil clearly had been in a bear market. now popping a little bit higher. again, the third drop in four weeks. an unexpected 6.3 million drop in barrels of oil. charles: that is huge. the dow's recovered some of its losses. we were down at the worst point at least 135, 140 points, so we're making a pretty good rebound on that. thank you very much. also early this morning, president trump touching down in hamburg, germany, for the g20 summit. tomorrow he meets with russia's president, vladimir putin. bret baier, what should we expect from that meeting? everyone's going to be watching. >> oh, charles, it'll be a big moment. there are a lot of things on the agenda for president trump; namely, the biggest threat is north korea, most imminent, with that icbm launch. but when it comes to russia, i think a negotiated solution to syria is number one on the agenda with vladimir putin. i think the speech today in poland was pretty powerful when

it came on a number of fronts directly to russia. you had lines in that speech that said that russia needed to get away from dictators in syria and iran. and also some very pointed actions with poland to get poland off of russian dependence or their dependence on russia for energy. and liquid natural gas deals with poland. that's a geopolitical shift in that region and a pretty strong signal ahead of this meeting with putin on friday. charles: we did hear also morning that secretary rex tillerson suggesting that we will probably end up working with syria -- i mean, with russia with respect to syria. and you have to wonder who takes the lead there, particularly with some of their skirmishes and confrontations over the last two weeks. >> definitely. two alpha dogs, right? putin and trump. i think it'll be interesting to see what president trump, what tactic he uses in this meeting, whether it's the president trump

who likes to be liked and tries to negotiate the deal or the president trump who wants to be feared. and, obviously, economically i think the u.s. has an upper hand when it comes to russia. charles: bret, i also want to ask you about congress, of course, they're on break this week, but they return back to washington on monday. they're only going to have three weeks to work out a whole bunch of stuff beginning, of course, with health reform before they leave on the august recess. how confident are you that we'll see any progress? >> well, i think they're going to try to get some things across the finish line, charles. namely, the debt ceiling increase. but that is going to be a tough lift for some conservatives, especially in the house who have already threatened that they need negotiations on this. health care is a tough, as you know, they're still counting votes in the senate. there will be an effort by some republicans to cancel the august recess and keep congress in session to continue to plow through these items that you

mention. because really the ultimate goal is to get to tax reform before the end of the year, and that's what this administration really wants to deliver on in 2017. charles: real quick, senator cruz's idea and ben sasse with, hey, let's repeal it, give it a one-year clock to coming up with a new plan. that seems to be gaining traction. could be the nuclear option everyone could agree on. >> it is. and remember that repeal has passed, i think, 50 times from republicans. they're very comfortable with that part, it's the replace that's very sticky. if you give a timeline, it does give some people an out to try to figure out the best way out of obamacare. there's no doubt that obamacare is not working currently as it's fashioned. democrats will concede that as well. so that may be something that does gain traction, and we're hearing more and more about it on capitol hill. charles: speaking of democrats, virginia's democratic governor, terry mcauliffe, says there are no democrats that he could

even point to to lead the party. what's your reaction to that? >> stunning to hear terry mcauliffe say that. obviously, a party leader, now a virginia governor that is in a state that is sometimes purple, red and blue. he's right though. if you think about the leaders of the democratic party right now, you would point to bernie sanders and elizabeth warren. that is not exactly where the party needs to be if it's going to try to get some of these rural and even some of these moderate seats. they'll need some people like the old congressman heath heath shuler, former nfl star. the moderate blue dog democrat is a missing animal up on capitol hill, and that's interesting to hear governor mcauliffe say that. charles: it feels like to me when they picked tom perez to be the leader of the party, the dnc at least, that cemented this sort of notion of failure at least -- it really cemented the fact that they were not listening to the american voters in november. >> you look at those special

elections, charles, and it shows you the difficulty the democrats have in finding their own identity. they need to be able to compete in suburban atlanta. they need to be able to compete in south carolina in these districts, otherwise they're never going to take back the house in those numbers. charles: bret, thank you very much. always appreciated. >> see you, charles. charles: our next guest is not only a rising star in professional golf, but also in politics and happens to be a friend of president trump. lpga natalie gulbis. natalie joins us now. here's the big news all across the headlines, you are actually considering running for congress. >> that is very i true. i am considering running for the third district of nevada, somewhere where i've lived since i was 18 years old. i opened up a boys and girls club there in 2010, and that's been the area that i've chosen to live, and i've gotten to travel all over the world, but i always come back there. this is a very unique opportunity more me. charles: i've read where you've actually met with leadership in washington, d.c., so this is not

just sort of an inkling, this is something that feels like you're probably closer to doing rather than not. what's the impetus for it though? what did you see in this country and particularly in this district that that made you feel like, hey, maybe i should step up and provide some leadership? >> well, an opportunity. if you think if you look right now even at the district, the person that's currently holding the position, jackie rosen, after six months she's already deciding to go another direction and run for senate. and that's something that i'm not. i'm not a career politician. i come with an outside, positive perspective and really just want to serve the people of that that district. and i know that i can do positive things in that district. because i am not a career politician pushing my own agenda, i would be somebody very different and unique for a situation like congress in that third district. charles: speaking of i unique, nevada is one of these states that i think is representative of the country, because you've got pockets of old orer folks -- older folks, blue collar, family, it is like the ultimate

representation of america. so i agree, i think it's a mace that needs -- a place that needs to have certain issues addressed. what do you see as being the most pressing? besides these career politicians using office as a steppingstone? >> well, especially in my district, education is huge. they do not rank high in education, and for me, that really touches on a very specific nerve. having my boys and girls club, i also do a lot of work with the clubs in the area and getting to see just the education if -- and the need for more fund anything that area. and, of course, the hot topic is health care. that's something that directly affects all those employees who live in the district and work on the strip and specifically with those families that i interface with. their kids go to those clubs, and it's a very, very real issue. charles: natalie, i've always been a big fan as a golfer, and i'm going to be rooting for you. thank you very much. >> thank you. thank you for having me on.

charles: now this, congressman steve scalise returning to intensive care because of complications from his gunshot wound. ashley, you've got details. >> yeah. continue to follow this. we are expecting an update today, but we mow he's been -- we know he's been downgraded from fair to serious. as you say, he's been moved into the icu as a precaution. he's had several surgeries after being hit in that shooting on june 14th near the capitol where they were pacting for a baseball game -- practicing for a baseball game. that bullet impacted several blood vessels, broke bones and hurt internal organs. that's why he's had several surgeries. doctors do expect ups and downs, and now he's going through one of those downs, fighting infection. charles: our thoughts and prayers with him and his family, for sure. president trump speaking in warsaw, poland, earlier this morning saying big government is a silent threat to freedom. also, congress getting back to work on monday. health care and tax reform are at the top of the agenda, but

can they get anything done before their next vacation in august? we're all over it. more "varney" after this. ♪ ♪

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charles: check here on the big board, dow off 81 points. 50 points, rather, better than an hour ago helped in part by a very strong ism number and a bigger drawdown on crude oil inventories. and don't forget, of course, about tesla. we can't say the same there. red arrows have been the course for this stock now on course for its worst week in ten months. it was $386 not long ago. meanwhile, president trump is in europe on his second foreign trip since taking office

x he's bringing a message from back home abroad. roll tape. >> finally, on both sides of the atlantic our citizens are confronted by yet another danger, one firmly within our control. this danger is invisible to some, but but the steady creep of government bureaucracy that drains the vitality and wealth of the people. the west became great not because of paperwork and regulations, but because people were allowed to chase their dreams and pursue their destinies. americans, poles and nations of europe value individual freedom and sovereignty. charles: joining us now, grover norquist, what do you make of president trump's message there? >> i think it's extremely important. it's exactly what a president should be talking about to the rest of the world.

the model that the united states has is not democracy. hot of countries have -- lots of countries have elections. zimbabwe has elections. the model that we have presented to the world is one of expanded liberty, more individual liberty and people creating more wealth, jobs and opportunity for themselves, their families, their a neighborhoods, their nations because they were free. and the united states has gotten too bureaucratic and has too much expensive big government. but europe's got it even worse. i mean, europe is the future we need to avoid, but we should reach out to europe, to poland, the other countries and say don't continue down the path of ever bigger bureaucracy that you've been heading down. it doesn't work. charles: of course, with that big bureaucracy comes big tax bills and to pay for all of it. and still you have angela merkel, macron and you have others in the e.u. who are feeling a little bit stronger now after a wave of election

victories. this seems to be one of the big issues, this and trade policies at least on the economic front that are going to be hashed out over the next day or so. >> well, a number of the european countries are wedded to this idea of ever larger bureaucracy and stasis. they don't mind a lack of change or growth. they're happy with sort of the way it is. you know, kings can be reasonably happy even if the peasants are impoverished. and the bureaucrats in europe live very, very well. it's just the rest of the europeans that aren't doing as well as they could, and some in europe -- the british and the poles and others -- have a more american attitude towards individual liberty. some of new europe, eastern european countries know the extreme of big government -- charles: right. >> -- under soviet occupation. i do hope the french and the germans will sort of pick up on that, not get in the way of poland developing its own energy sources so it's not so dependent

on the soviet union -- russia. charles: right. next one, grover, illinois now in the middle of a big budget battle. >> yeah. charles: the state senate, of course, voted to override the governor's veto on an income tax hike, and the house is expected to do the same thing. they're going to raise taxes to fix the problem that was created by too high taxes. [laughter] i mean, how much worse is this going to get? >> no if one's life is a complete -- no one's life is a complete waste. some people serve as bad examples. [laughter] illinois does that for the other 49 states. on july 4th, maine went the opposite way. they ended a stalemate and signed on to a tax cut. they repealed a tax hike that had been put in through the initiative process and some other tax increases. and there the governor, who's a republican, and the republicans won the fight for less spending, lower taxes, and they moved forward. illinois appears to be, with the governor fighting against it,

collapsing further and further into pension liabilities they can never pay -- charles: right. >> and taxes, i mean, people are leaving illinois. it should be a big hint. people are leaving illinois. you're doing something wrong when people leave your state. illinois used to be a prosperous state. people moved to it. and unfortunately, that's changed. charles: let's broaden this out to the national stage, because congress is going to get back to work on monday. >> yeah. charles: listen, they're going to have three weeks to get health care reform done, and then there's the august recess. and, of course, this health care thing is -- every time we hear that maybe progress is being made, ultimately, there's no progress at all. >> two things. it'll be that way until it passes, okay? charles: okay. >> the votes will be there. there are a number of senators who want something special for their states; or money or something else.

and people call it politics, it looks a lot like corruption to me. if we have to pay some of these senators to get their votes, they'll do so. the democrats did it to put obamacare in -- charles: so you're saying a couple of cornhusker kickbacks, and we're going to check this off in the next three weeks? [laughter] >> unfortunately -- well, fortunately, we will get a reform in health care. charles: okay. >> unfortunately, some senators who should be doing it on principle are trying to walk away with cash. there's probably worth every dollar. charles: grover, thank you. see you soon. >> you got it. charles: hobby lobby agreeing to pay millions of dollars in fines after the company was caught smuggling ancient iraqi artifacts into our country. we do have those details for you after this. ♪ ♪ these days families want to be connected 24/7.

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one that keeps you connected to what matters most. charles: and now this, hobby lobby agreeing to forfeit thousands of artifacts smuggled out of iraq. ashley's got the story. >> yeah, this happened a little over six years ago, and prior to this purchase by hobby lobby, they were given a warning saying likely these artifacts are

stolen from archaeological sites. but they agreed to buy 5500 often comment artifacts for the price of $3.6 million -- 1.6 million. be they were shipped to three different corporate addresses and were labeledded as ceramic tiles or samples of tiles. the feds say they were smuggled into the country through the united emirates and israel. hobby lobby eventually saying, okay, we hear what you saying. they've paid a $3 million fine and have returned the art a factions to iraq. -- the artifacts to iraq. but it's sparked an even bigger story. we had jack howell on the show earlier who said i don't have a problem with this with isis running rampant in syria and iraq. so many ark logically significant places and items are being destroyed by isis, there is a train of thought that getting it out and preserving it is very important. charles chaferl i've got a poll on my twitter handle, and the question is should christians take religious artifacts from

places like iraq to save them for humanity? i would say 98% of people who are responding agree that, you know what? if you don't save them, they'll be lost forever. >> yeah. charles: a horrific scene in venezuela in the congress. pro-maduro thugs armed with sticks and pipes attacking lawmakers. this is, well, what happens when socialism fails. we're all over it. ♪ ♪ ♪ we hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain unalienable rights,

that among these are life, liberty, and the pursuit of happiness. ♪

charles: president trump in hamburg, germany, meeting with world leaders at the g20 summit. blake burman is there now. what's on the president's schedule tonight and tomorrow? >> reporter: things about to get interesting here, charles, in about the next 30 minutes or so when president trump is set to sit down with angela merkel, a meeting that'll last 10, 15 minutes or so. then there will be a bilateral meeting between the two nations for about half an hour. trade, defense spending and, of course, the paris climate agreement expected to be among to conversations there. and later tonight the president has dipper with the leaders

of -- has dinner with the leaders of south korea and japan. and then, of course, the wig one tomorrow -- the big one tomorrow, a one-on-one with vladimir putin. earlier today in a speech in poland, president trump had this warning for russia saying that they need to join the community of responsible nations, as he put it. listen. >> we urge russia to cease its destabilizing activities in ukraine and elsewhere and and its support for hostile regimes including syria and iran. >> reporter: so some strong words there, charles, from the president today as it relates to russia. however, he's also getting pushback and criticism for saying at a news conference this morning that he isn't necessarily sure if russia meddled into the elections,, saying it could have been them, could have been other countries as well, who knows, as he put it. charles, back to you. charles: thanks a hot, blake burman. now back to washington politics, some republican governors

reportedly trying to derail that gop health bill because they want to keep federal money from obamacare. dan henninger, wall street journal deputy editorial page editor. it's hard to keep money away from republicans. >> yeah, that's for sure. the shrewdest thing the architects to obamacare did was insert a law that said if the states took new medicaid patients, the federal government would pay 100% of the costs. and as we know, medicaid is one of the biggest expenses the states have second only to k-12 education. and 13 republican senators took what essentially was a bribe. charles: ironically, when you add in the federal dollars, they spend more on this than k-12 education because of those federal funds. guys like you were warning them, don't take it, don't be seduced by it. if you're someone like kasich, it looks like manna from heaven, but we all flew it came with a

cost. >> yeah. ohio so far hats gotten about $3.4 billion in federal funding because of the new medicaid enrollees. so the republicans out there are hooked, and now you've got these moderate senators saying, oh, don't do anything to reform medicaid too much. that is just a fool errand because they have got to do something about these incredible outlays that have been committed to medicaid. charles: and also the idea that states say the new ideas that states will get a certain amount of money from medicaid and determine how it's spent, and that would bring along with it some fiscal discipline and responsibility. obviously, they're trying to sidestep that. >> yeah. i mean, that's the big thing. the waivers, allowing the governors to experiment with the way medicaid works in their own states. and i'll say this, to his credit, scott walker of wisconsin did not take the expanded medicaid money, but he is still trying to reform medicaid in that state with what he already has. and that is the direction that these republican governors should be going in.

but the fact is they were is desperate for the money, they took it, and now it's going to be very difficult to let it go. charles: yeah. well, it's a central issue, i think, in holding up health care. >> absolutely. it's holding up the bill. charles: you're right, it was a brilliant stroke of genius. i want to take a look at tech stocks. some of the big names dipping here recently. they were up earlier, coming back once again. our next guest though says now's not the time to buy. don't go for the dip. amplify etf's ceo says it's not a buying opportunity just yet. buying the dip on teching has been the way to make money for the last decade. >> that's right. i think, charles, it's time to wait, be cautious right now given what's happening geopolitically. there's a lot of risks out there. you know, recently the nasdaq 100 dipped below its 50-day moving average. that hasn't happened since 206. it's been -- 2016. it's been bouncing above that. so i think investors should be

cautious given this current technical movement in the nasdaq. charles: what about the notion of rotation? of course, banks have come on since the stress test. i'm seeing industrial names do well, material names do well. they're very quiet with, but they're moving up very strongly at the same time. >> yeah. we're starting to see a little bit of this reflation trade that happened when president trump was elected. some of these areas are starting to come back, you know, financials are benefiting from these great stress test results they had. also it seems like the fed will be raising rates no matter what, perhaps, and that benefits the banks. certainly seeing some material stocks do well. so there does seem to be a rotation, charles. and, you know, where's the atm, so to speak, where have people really made money? tech stocks. that's where some of that money, i think, is coming from right now. charles: you know this, the etfs have done extraordinarily well. a record amount of money pouring in the first half of the year, a lot of that coming out of mutual funds.

do you think now that the individual investor community, that the self-directed investor says, you know, i like etfs and because of this, that could even administer stability to the overall -- add more stability to the overall market? >> yeah. i think the rise of etfs has really helped out. i think the financial industry by this kind of move towards indexing, it creates a more diversified approach for most investors. i think, you know, mutual funds haven't had that real solid track record in terms of performance. many active mutual funds have underperformed just passive indexes, and et fs have really benefited from that. i think the big advantage for investors is not only do they get diversification, but they tend to be lower cost. and fees matter in the long run. charles: they certainly do. i can tell you, you're in the right business right now. christian, thanks for sharing your insight this morning. >> thanks, charles. charles: well, more chaos in venezuela. president maduro's supporters

storming that country's congress yesterday, but, e. mac, you've got breaking news right now. >> yeah. reuters is finding there's some military officials including captains, lieutenants and sergeants, 123 of them have been detained in prisons for a possible treason and rebellion. so this looks like there's unrest in the military in venezuela. so what happened? basically, you're talking about the siege yesterday. hundreds of pro-maduro, pro-socialist forces attacked the opposition party in the congress in the national assembly when they were celebrating venezuela's 206th anniversary as a country. it was a seven-hour siege. hundreds were, basically, in lockdown. they were besieged, up to 230 according to -- 350 according to bbc. anywhere from 5-7 opposition leaders were hit in the head. one guy was taken out on a stretcher suffering from convulsions. journalists were assaulted too.

so this comes ahead of this referendum symbolic vote july 16th. maduro is putting to the people of venezuela his push to rewrite the constitution to seize even more power. it's a symbolic vote as pro-maduro forces now attacking legislators. we broke news last week that this happened last week when they moved in and detained opposition leaders last week and also were attacking people just even on the sidelines, even visitors were detained last week. charles: i remember when chavez raised the pay for military over and over every single year by huge percentages. maduro did the same thing. they can't pay these people off. could this be the beginning of the end? >> well, that's -- this is breaking news. this is really important that military leaders, captains, lieutenants and sergeants, 123 soldiers in venezuela now have been imprisoned by maduro, accused of treason, rebellion and ore charges -- other charges. so military unrest it looks like

according to reuters in venezuela. charles: we know the ultimate outcome of socialism isn't just running out of other people's money, but violence and bloodshed. it's sort of surprising it habit come to this sooner. >> well, you know, they were trained by the cubans. chavez got most of the training for his police forces and military from the cubans. barack obama did an opening to cuba, but all the while they were setting the stage for something like this eventually to happen in venezuela. charles: where do you see it going? >> you know, this is a really difficult situation, charles, because there are just no good answers at the moment. again, three or so years ago when they were going to have a real referendum that might have meant something, barack obama pulled back support from that. that was the time when the venezuelan opposition really needed our support. you're now to the point where, look, venezuela is a petrol state. they ship oil to the gulf of mexico. the united states uses it. possibly, the united states should think about trying to

divert that oil, force them to sell it, say, to china, raise the cost. as liz was reporting, it sounds like they're having pushback from the military. and if you can exacerbate that situation by cutting off some of their petrol dollars for which he pays these thugs over there, possibly it could help at the margin. charles: e. mac, u.s. intervention or just stay back? >> well, it is a 180-degree turn from president obama's administration where now the trump administration, including rex tillerson, is saying this is a grave and serious issue including nicki nikki haley at the u.n., calling out the collapse of socialism on venezuela. it's on our doorstep, and the vice president has been known to give passports to has blah leaders in the middle east -- hezbollah leaders in the middle east. >> and they've recreated relationships with iran as well. >> right. >> venezuela can become a national security problem for the united states if we just leave are it alone, so it's not a problem that we can simply let fester the way it is. charles: thanks a lot are. nikki haley, meanwhile, getting

tough with north korea. says we're prepared to use military force against the rogue regime, and we're all over it. more "varney" after this. ♪ ♪ go, go! [ rock music playing ] have fun with your replaced windows. run away! [ grunts ] leave him! leave him! [ music continues ] brick and mortar, what?! [ music continues ] [ tires screech ] [ laughs ] [ doorbell rings ] when you bundle home and auto insurance with progressive, you get more than a big discount. that's what you get for bundling home and auto! jamie! you get sneaky-good coverage. thanks. we're gonna live forever!

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charles: checking on that big board right now, remember we were down a lot more, and we've got some good news. first, manufacturing factory numbers the best since august of 2014. and then crude oil inventories dropped almost three times more than expected. crude oil is higher, that's bringing back the stock market with it as well. well, tensions escalating with north korea as that regime successfully launches an intercontinental ballistic missile, this capable of reaching most of alaska. here now, congressman dan

donovan, member of the house foreign affairs committee, on how america should respond. representative, thanks for coming to the studio. >> good to be with you. charles: this is a huge issue, and everyone sort of says the same thing, we need to get russia and china involved, we need to have diplomatic solutions. but realistically at the rate that they are improving their a about to -- their ability to launch these missiles and perhaps ultimately tip them with a nuclear weapon, we may have to do something beyond diplomatic solutions. >> and we may have to do it alone. you know, he's an international villain, and he's a threat to the entire earth. but if we have to go it alone, america's never been afraid to do things alone. but it's so much better if we do it as a coalition of people. the russians can help us with syria, and the chinese can certainly help us with north korea. recently, their trade with north korea increased by 40% in the first quarter of the year, and that's not showing us that they're trying to help us. charles: right.

and a 50% reduction in coal, so they made it up in other areas of the economy. south korea's president, new president came in, and the first thing he did was halt the deployment of a thad missile system under auspices of an environmental study. this is a guy who helped them -- he put back passive approach to this, and the clocking is ticking. >> yeah, i don't think it's going to work. we saw pass i leadership in the united states for the past eight years, and we know that didn't work. so with the aggression and strength that president trump is trying to show, you know, starting tomorrow in germany he'll be meeting with putin, he'll be meeting with president xi, and i think he's going to tell them face to face that they've got to get on board, or we're going to do this alone. charles: well, everyone's watching that with serious anticipation. and also the idea that if we do some sort of a first strike in north korea, we've got to go

probably beyond a message because of all the conventional weapons that are at this very moment aimed at south korea. we'd have to take all of that out or as much as possible. >> we have great military leaders that will orchestrate what's necessary to protect our friends and our nation, and i trust they'll advise the president what they think is best, and he'll make the final decision. that would be a last resort, charles. we have to try everything short of that before we resort to any military action. charles chicago congressman, tomorrow president trump in his first face to face sit-down with vladimir putin. they could put this on pay-per-view and make a lot of money. [laughter] if trump heard that, he probably would do that. what are you expecting tomorrow? >> i think he's going to address the interference with our elections, the situation in syria, and that madman, assad there, who's killing his own babies and women with chemical weapons that both damascus and moscow had guaranteed us a few short years ago that they didn't exist any longer. so i --

charles: admittedly, though, they had an imaginary red line that they never took seriously. >> because when our president drew that red line and they crossed it, he did nothing about it. charles: what do you think russia wants out of this? what's their angle here? and how do we find some sort of middle ground that both parties, both sides can feel like they took something away? >> yeah. i think putin doesn't want to lose face with his people, and he doesn't want to look like he heeded to trump's demands. i think they'll have to come out of there and negotiate in a way where both of them look like they achieved what they wanted to without ceding anything. charles: earlier this morning president trump gave a speech in warsaw aimed at the polish people and their resolve and resilience throughout the years but also aimed at europe and the fight for where the western world is going to go with respect to preserving culture, with respect to keeping sort of,

you know, a sort of focus on the future where they don't allow these internal threats to do what nazi aggression and the soviet union couldn't9 do years ago. >> he reinforced his commitment to nato -- charles: article v. >> i think our president just wants everybody to do their fair share; pay their fair share of what it costs to protect the world and also to put forth resources whether it be personnel or equipment or otherwise. charles: right. >> everybody picking up their fair share. of he knows america has a great responsibility, but i think he's tired of everybody just depending -- charles: germany paying 1% of gdp is not going to cut it. representative donovan, really appreciate it. did cnn commit a crime when it threatened to reveal the identity of the person who made that body slam video? senator ted cruz thinks so. we're going to have the details for you right after this. ♪ ♪ ♪

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pretty serious problems. cnn has really taken it too seriously, and i think they've hurt themselves very badly. very, very badly. charles: president trump weighing in on the cnn controversy earlier this morning. senator ted cruz says that cnn might have committed a crime when they threatened to reveal the identity of the person who made that trump body slam video. all right, ashley, ted cruz actually is calling this theft by extortion. >> well, yes, it is. saying, look, basically the threat was if you do anything like this again, then we will out you, so to speak, give all your personal details online. cnn's claim is we wanted to protect this guy from hatred and a backlash from those who didn't like it. i think a threat in any form of exposing someone's details is a threat. no matter how you try to, you know, to put it into a certain way. there's no doubt that cnn, i

think, mishandled this whole thing. they should have -- what's wrong with outing the guy? what's wrong with saying this is joe schmo is this is what he put out there? charles: particularly because he's got other compelling things he's put out -- >> anti-semitic things. charles: right, right. and that's where they made the mistake, right? >> i think so. charles: i think they made the first mistake of finding out who it was. >> a breathtakingly tedious development in a breathtakingly tedious story. [laughter] this is overblown. was it unseemly? yeah. but who cares? charles: i thought it was kind of crazy. what about the blood gates9s? -- floodgates? >> people coming up with mem many es? charles: there's some good ones out there. >> hilarious. charles: cnn is probably going to have to out thousands and thousands of other people. [laughter] i hope they learned a valuable lesson, because we need to get back to the notion of reporting news. sometimes even real news.

more "varney at after this.

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charles: all right, guys, all about president trump in g20 meeting. what are you looking for. >> the president did stick it to russia and poland. he said russia has been a destable siding force in a speech that was eloquent, freedom in democracy and upholding western values. charles: definitely powerful. ashley: it was. in front of a friendly crowd because that would get him all geed up. putin is very good at reading people. a slippery character. charles: adp job's report, very strong manufacturing data. it's what you want to see. the kind of number we want going into tomorrow when we get the

government's job's number. neil cavuto is going to takateway and set the tone. neil, it's all yours. neil: did i just hear lizzie, stick it to putin, ashley, one of the nicest guys in the universe say geed up? [laughter] neil: i don't know about you guys but i have standards over here. charles: loosey goosy. neil: i will try to carry on here. but, of course, that's what everybody is waiting to here. lizzie put it best here, whether the president is going to stick it to vladimir putin and indicate no matter what role the russians might or might not have played in the election, he is his own man and will make it very clear, if you were monkeying