. thank you very much. very bipartisan way, mike. i want to congratulate you and everybody else. i will read a few names. this is a hard. it is all about the dodd-frank disaster, or fixed it, have gone a long way toward fixing it. mike crapo, thank you very much. steve daines, thank you, steve. incredible job. john kennedy thank you very much, john. heidi heitkamp, heidi, thank you very much, appreciate it. david perdue. where is david? oh, i love david. [laughter]. what a great guy he is. jim risch. jim, thank you. what a great lawyer. i learned all about you, one of the great lawyers. [laughter]. i think i have to use him. tim scott. tim, thank you, tim. great job. it's a great achievement. pat toomey, who really does know the financial world i can tell you from experience, right, pat?

great job. also representatives jeb hensarling. fantastic, fantastic job, thank you, jeb. you wanted to get near the table instead of getting over here. that is, like the prime location until about ten minutes ago, right? i think mia now has the prime location. [laughter] >> all about real estate. >> i know it is. it is all about location, isn't it? [laughter] jim banks, andy barr, kevin cramer, sean duffy, tom emmer, french hill, bill huizinga, david kutoff. patrick mchenry, where is patrick? right here. >> greatest name in politics. patrick mchenry does a great job. more important than the name. i think you have the greatest name in politics. if i had that name i would be president 10 years sooner.

telling you it is a great name. thank you, patrick. mia love. thank you, mia. blaine luetkemeyer. keith roth. thank you, keith, very much. claudia tenney and ann wagner. these are people that have worked so hard. we've been talking about this so long, and so i want to thank all of them. i also want to thank vice president pence who has been working with me on our previous discussion long and hard. secretary steve mnuchin, secretary ross, secretary linda mcmahon, doing a tremendous job at small business group. she is going all over the country talking to groups of people. linda, i just heard the other day, you're doing a fantastic job, thank you very much.

really great. thank you also to many great members about congress and, for the people that worked so long and so hard. today i'm proud to keep yet another promise. we made a lot of promises. in fact i think we probably in terms of campaign promises, we promised but we actually approved more than i promise, if you really look at it. a commentator actually said that this was a commentator obviously that liked me, but he said we were going to do this and we have done more. and we have, if you look at regulation and look at all the things we've done but we kept yet another promise as i signed the economic growth regulatory relief and consumer protection act into law. it's a big deal. it is a big deal for our country. this is truly a great day for america and a great day for american workers and small businesses all throughout the nation. the legislation i'm signing today rolls back the crippling dodd-frank regulations that are

crushing community banks and credit unions nationwide. they were in such trouble. one size fits all, those rules just don't work and community banks and credit unions should be regulated the same way and you have to really look at this, they should be regulated the same way with proviso for safety as in the past, when they were vibrant and strong but they shouldn't be regulated the same way as the large, complex, financial institutions. and that's what happened. they were being put out of business one by one. and they weren't lending. since its passage in 2010, dodd-frank has dealt a huge blow to community banking. as a candidate i pledged that we would rescue these community banks from dodd-frank, the disaster of dodd-frank.

and now we are keeping that commitment, and all of the people with me are keeping that commitment. incredible group of people. dodd-frank's complex and costly regulations gave large banks an unfair competitive advantage at the expense of neighborhood banks all over the country. since dodd-frank's passage, just eight years ago 20% of small banks have been put out of business. they have disappeared. while banks that were considered too big to fail, we heard that many times, too big to fail, had the resources to comply with dodd-frank's brutal maze of costly regulations, and maybe we're going to have to start looking at that also for the larger institutions, because they also are put at a disadvantage in terms of loaning money to people wanting to open up businesses. so perhaps we will be taking a look at that. many small banks were forced to shut down. regulations also made it nearly

impossible for new banks to replace the ones that went out of business. made it totally impossible to open up new. almost nobody opened up new. in the past, scores of new banks formed every single year. in recent years. that number has plummeted. again to almost zero. these community banks are vital for local lending. have a direct stake in neighborhoods and their states. local businesses have few other resources and few other ways of getting credit. for many americans these small banks are the only financial institutions in their entire community they made their. when these community banks close their doors and denies small business and everyday americans access to capital that they

desperately need. by liberating small banks from excessive bureaucracy, that's is what it was, bureaucracy, we are unleashing the economic potential of our people. this legislation also strengthens protections against identity theft, a big problem nowadays, bigger than anyone understands. expands crucial financial access to low income and minority communities, and insures that educational, and job training opportunities are available to more families in need. those are great opportunities. some of the people up here are working very, very hard on creating those opportunities. these critical reforms are helping all americans proses per. today's legislation is the next step in america's unprecedented economic comeback. there has never been a comeback

like we've made. and one day fake news will report it. that is okay. you've been extremely nice. republicans in congress passed the biggest tax cut and reform in the history of our country. we passed. we signed a record number of bills terminating job-killing regulations, in the history of our country, no president, whether it is four years, eight years or 16 years, in one case, has ever passed more regulation cuts. and these were necessary cuts. because we're leaving necessary regulations. regulations is fine. but it has to be reasonable. that is what we've done. unemployment has reached its lowest level in nearly two decades. african-american unemployment has reached its lowest level in history. and, the same thing for hispanic

unemployment, lowest level in history. women, lowest level of unemployment in 19 years. small business optimism has never, ever, been higher according to polls and charts. and we're restoring our forgotten communities by fighting to reclaim the stolen manufacturing jobs, you see that happening right now. you see what is going on with cars. where secretary ross and i and, as you know, secretary mnuchin and lighthizer and the whole group, we're all working together. peter, we have a big group working together but you see there was an article today but there will be more than an article, cars, cars, pouring into our country and hurting our jobs and they're closing. but they're moving back. as you know, chrysler is moving back to michigan, big plant.

many car companies are coming into our country now. big difference. but you take a look what we're doing on trade. china, going to be much different. a lot of reporting doesn't have it right because we're not talking about the deal we're trying to make. we don't want to do that. but we're working very well and very hard with china. as you know, i don't blame china for this, china has been taking advantage of the united states economically and in other ways for many, many decades, for many decades. and it was like missing in action, our representatives. they were missing in action. they wouldn't do anything. we had a trade deficit last year with china of at least $375 billion. and i believe the number was probably over$500 billion. and we had massive theft of intellectual property to the tune of perhaps, hard to value, $300 billion a year.

and that is all ending. that is all ending. and our relationship with china is a very good one. and i told president xi, i don't blame china, i blame the united states for allowing this to happen. because people in my position and people in these positions should have never, ever, allowed that to happen but we're changing it. this is an incredible time for america, amazing progress is happening for our country every single day. i again want to thank members of congress, who helped pass so many vital legislative acts. we have another one that passed yesterday called right to try. nobody knows what that means. that is a patient terminally ill, ends up leaving the country to find help. they wanted hope. we have drugs in the pipeline anywhere from 10 to 15 years.

they may be very good but you're not allowed to use them. these people are terminal, they're terminally ill. they are going to die and we had no access, they had no access at all to getting into that pine line to getting something that may or may not work. we have something incredible at the fda, we have some incredible drugs under research. so right to try, which amazingly was something that every one said could not be passed, right to try passed. i will be signing probably sometime next week. and this gives people hope. we can go. they will sign a waiver. they will be able it use what they need and in many cases, they will be helped. won't have to fly to africa. they won't have to fly to south america. they won't have to fly to europe, or wherever, just seeking help. rich people, poor people, they're seeking help. they had no access.

now they have the right to try. the right of hope. and i know many of the folks standing with me agreed with me and approved it. it is such a wonderful bill. and it is so incredible that it was not possible to get it passed, but we got it passed. we had some tremendous help from some tremendously talented senators and congresspeople. so i want to thank all the people up here today. what we're doing today, with respect to dodd-frank is truly important legislation. and i have to say, for a congress that they say, you know, won't be doing much because we have an election coming up, i think we're doing an awful lot when we think about it. i think we're doing an awful lot. i think we're doing more than any congress in a long time so. [applause] so i will be signing now a very, very important bill from the standpoint of people and jobs an loans and getting out there and building a business.

it is a tremendous honor to be with all of you folks today. thank you for the great job. thank you for this incredible amount of work. i know how hard this one was. the dodd-frank was something that they said could not be touched. and honestly a lot of great democrats knew it had to be done. they joined us in the effort. there is something no sighs about bipartisan -- so nice about bipartisan. let's do more of it, all right? thank you very much. [applause] [inaudible conversations]

[applause] no thank thank you. >> thank you. i will give you one of these. thank you very much, everybody. reporter: break down of this summit raise the risk of war with north korea? >> we'll see what happens. i hope we continue onward, we'll see. but we are in a very strong position. i think they want to do what's right, i really think they want to do -- it was only recently that this has been taking place. and i think i understand why it has been taking place. but, they want to do what's right. i really believe kim jong-un wants to do what's right. hopefully things will work out.

okay? thank you very much. [shouting questions] >> wonderful dialogue with kim jong-un? >> we have a wonderful dial we have a wonderful, there has been a good relationship. it started with hostages coming back home. the hostages came home. we didn't have to pay. we wouldn't have paid, but they came back home. they're now safely ensconced in their houses. and they're very happy. and thrilled. and they never thought it was going to happen. so the dialogue was good until recently. and i think i understand why that happened. reporter: why was that? >> i won't say that. some day i will give it to you, you can write about it in a book. but i really believe we have a, a great opportunity. we'll see whether or not that opportunity is seized by north korea. if it is, great for them and great for the world. if it isn't, it will be just fine. thank you all very much. reporter: mr. president, do you

expect him to call you? [inaudible conversations] neil: all right. you just listened to the president there, we never leave these things until the very, very end, until i am completely convinced all possible questions have been exhausted and asked, at least at that particular meeting to sign on to a leaner dodd-frank. it is not canceling out dodd-frank. for larger banks and financial institutions some of the same big requirements would remain in effect. it just addresses some of the financial laws, onerous provisions on small, medium-sized banks. the headline here though is what the president had to say about why he canceled the june 12 meeting with his north korean counterpart. he saying all communication is open. for now the meeting with the north korean leader is off. whether things can be rescued before june 12th and get it back on is anyone's guess. it looks extremely doubtful

right now. the markets when first getting wind of this early this morning are tanking. they come back from half the losses reached earlier today. a lot of confusion, as well as what is happening on financial reform front. make berman at the white house first on north korea and what we do now. hey there, blake. reporter: neil, couple different messages to north korea first in the letter and what we heard from the white house. first in the letter and afterward when he took questions from reporters. the president says he has a wonderful dialogue with north korea. the president appearing to be open for more talks potentially down the line, essentially opening up hand to kim jong-un saying we have a good relationship, at least for now. the united states and north korea, north koreans, we are willing and ready to houck, however, both in the letter and then in his prepared statement before that dodd-frank signing the president also flexed his military muscle. the commander-in-chief saying that he had spoken with his top

military leadership and that the united states is ready to act if necessary. the commander-in-chief also saying he had spoken with leaders from japan and from south korea and that those countries have agreed, according to the president, that if the united states needs to, needs to engage in any sort of military posture, that they would pick up the bill. in the meantime, the president went on to say that the maximum pressure campaign will continue, but the president also added, quote, i am waiting. there is an issue here about what, if anything, this has to do with the chinese. i know, me and you, neil, chatted about this yesterday afternoon. it was notable that the president said he spoke today with the leaders of south korea and with the leader of japan. but he did not mention at all saying that he had spoken with xi xinping of china. when president trump was asked, what exactly, whether or not this risks leading to nuclear,

risks, rather, leading to war down the line, the president suggested that he knows exactly why there was a change in posture, with the north koreans. he did not say exactly why. but president trump has said in the recent days that he feels something had changed after xi xinping had met with the north korean dictator kim jong-un. bottom line here, as it stands at this very moment the summit between north korea and the united states some 19 days from now is off and it does not appear as if we have any sort of firm commitment as to when or if that ever might take place. neil? neil: just trying to follow the timeline here, blake, in talking to our own brian kilmeade the president did intimate he thought it was still on. i believe that was happening last night. i'm wondering if these comments that the north koreans were making about the vice president might have just unsettled him or enough to say, the hell with it? reporter: there were a couple difficult comments. what they made about the

vice president in which they said he was politically foolish, essentially. we are led to believe from reporting of myself and other fox colleagues here have spoken to white house officials all across this campus that is not essentially, not rather, that comment that was the tipping point. instead of what officials here at the white house are pointing us to comments one of top advisors to kim jong-un said in which that person said, quote, whether the u.s. will meet us at a meeting room or encounter us at nuclear to nuclear showdown is entirely dependent and decision and behavior of the united states. it is latter part, that nuclear to nuclear showdown, white house officials are telling us, look, do not overlook that at all. they believe the north koreans last night essentially threatened potential nuclear war down the line. they say, look, we are used to the name-calling from the north koreans and certainly the president and the vice president who is a long-time politician is used to that as well but they feel the north koreans really

escalated things last night. neil: blake, thank you very, very, very much of the let's get the read on this former bush 43 advisor christian whiten and "wall street journal" reporter shelby holiday. shelby, what happens now? >> i wouldn't be surprised if the meeting is back on in a matter of days. the president looked casual. i thought it was significant mike pence was standing behind him. a lot of ways, they thought this was president standing up for his vice president, considering what the north koreans said, calling him a political dummy. it wasn't just about that comment. the north koreans were hesitant to talk to the u.s. and secretary of state mike pompeo about logistics for the summit. they did follow through on returning the hostages and blowing up their nuclear site but there are a lot of details that are hard to hammer out. one significant thing north korea experts are saying now there was never an understanding what the u.s. would be willing to give up. defining the term denuclearization meant different

things to both parties. the u.s. wanted kim jong-un to give up his nuclear weapons. kim jong-un wanted u.s. to cut back on some of the things we do on the korean peninsula and some weapons we have over there. we simply are not willing to do that. so it was also just a difference much opinion when it comes to what the summit would actually, would actually produce. neil: christian, what do you think happens now? if the ball is in the north koreans court presumably, what do they do? >> now is time for china to feel some pain and they will feel a lot of it. as implied, trump said that he thinks he knows what was going on here, what caused this, and it was that change of approach from north korea after their second meeting, after kim jong-un's second meeting with the chinese dictator xi xinping after which they changed their tone. they insulted vice president pence and started to jerk us around just as they did in the two big previous rounds. the president holds china

accountable here. frankly even before this reese blow upthere was a little too much optimism our trade disputes with china had been solved. this is actually, the president doesn't make a distinction between trade policy and foreign policy and now it will be time i think for bad cop with the chinese. neil: you know, keith, so fascinating watching markets on all of this. the closer we look to a deal, any deal, trade deal, whether it's china or north korea deal, whether it's upcoming summit that is now not upcoming, great. the worst it looks not so great. some issues that would benefit, for example, from a calmer world which really are most of the dow 30 stocks, including boeing and caterpillar, all of that, take it on the chin today. what do you think happens now? >> well, i tell you, traders are really getting down to business. this market unbeknownst to the average investor has so much leverage involved. i'm not particularly concerned, neil, about 150 points or 200

points to the downside. that is realignment. traders are taking the foot off the gas, taking a breather where we go next. if it was 3 or 400 points that is real selling. this is minor realignment as they wait for a real shot at this summit. neil: shelby, i'm looking at all of this, i'm looking at gold, racing ahead on this was first happening, flight to quality to treasurys, places people go, lesser so now but we still have three hour to go. the markets would prefer talk instead of no talk, right? >> the market wants stability. you somely don't get stability from the president. this is his style. this is his negotiating tactic. will he or won't he? he is always keeping everybody guessing. i think this move could be significant in the broader sense i know traders always watch the president's actions to forecast many some of his other actions. when the president says he will pull out of something or slap tariffs on something,

occasionally he will walk that back and moderate his stance but in some instances such as today he will flat-out cancel something or pull out agreement, paris climate agreement, iran deal. people try to read the tea leaves but at this point the president is so unpredictable that can be very hard to do. in that case i think watching some -- i think it was really important he looked relax. he seemed to be chewing gum actually. he seemed to be making jokes. neil: it have been lunch or whatever. >> people behind him were laughing. he was very calm. neil: let me ask you this, christian. we're getting word the national security council will convene a 5:00 p.m. eastern time meeting to discuss north korea. obviously behind the scenes they're recalibrating. are they setting up a meeting and not losing hope there could still be a meeting? >> well, clearly in his letter and then today in his remarks trump left open the possibility that north korea could realize error of its way, realize what it is losing and it is really

losing a chance to come in from the cold if it wanted to be a normal nation. i think it is hard for pongyang and beijing at this point to go back to the agreement because it would look like a concession on their part. they would lose face on their part, but you never know, it could happen. i think you will see instead return to maximum pressure campaign probably even more so than before. president and others calling out chinese violations of the tough sanctions put in place and that is sort of a common thing. china will be tough in early part of a crisis with north korea, curtailing trade with north korea, but slowly goes by the wayside and loosen up. we're seeing some of that, which is encouraging north korean misbehavior. general military and economic measures being ramped up bense pongyang and beijing. neil: if this is off the table, keith, for the time-being, focused on chinese trade talks, how much do you weigh that in on investment? >> obviously i'm watching it very, very careful, neil. i'm looking at stocks like boeing. i'm looking at big tech.

i'm looking at some of manufacturing. all of that has got tentacles all over the world. any calming of this, any re-engagement is going to be good for those stocks and be good for trade. i'm not so concerned about the level of tariffs themselves but the overall attitude that approaches it. neil: got it. thank you, guys, all of you. meantime as they were speaking here letting you know the administration is playing both good and bad cop, sometimes at the same time. they are weighing new sanctions against north korea and they could take effect early as next week. more after this. fixing what went wrong. and ending product sales goals for branch bankers. so we can focus on your satisfaction. it's a new day at wells fargo. but it's a lot like our first day. wells fargo. established 1852. re-established 2018.

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>> welcome back to "cavuto: coast to coast." i'm nicole petallides live on the floor of the new york stock exchange where we've seen stocks sell off today after president trump cancels the summit with north korea, with kim jong-un and with that, we've

seen the market selloff. in fact it moved to the lowest levels of the day a short time ago, down 280 points. it has since pared those losses. you can see the dow down about 110 at this time. that being said we're seeing less of a risk play here today, with gold and treasurys moving higher, stocks, oil, and the u.s. dollar sell off. interestingly enough, take a look at defense stocks. those have made a move to the upside, without a doubt as president trump, after speaking with james mattis, secretary of defense, saying that we have a strong military, the most powerful military in the world and north korea shouldn't try any reckless acts. with that, these stocks had intraday jump. raytheon, northrop grumman, arrow jet, huntington ingalls moving significantly to the upside. the dow is down one thing. neil. neil: thank you, nicole. the summit is off and the president is saying exactly why.

>> while many things can happen and a great opportunity lies ahead potentially, i believe that this is a tremendous setback for north korea and indeed a setback for the world. neil: all right. former cia analyst sara mueller here on all of this. do you think the meeting will happen even with all this? >> i think it may happen but there is going to be a lot of groundwork in place, the groundwork that seemed to be missing this time around. i was on your show past few weeks and other shows on fox business, basically i have been saying a summit does not happen until the summit actually happens. numerous variables could derail it. we saw one of the variables happening today. president trump making statements in light of north korean rhetoric and statements past 24 hours but statements north korea has been making for weeks and months, hot cold rhetoric out of the north korean

playbook. neil: tara, we learned that the south korean president who was visiting the president early this week, we are perplexed and regret the summit won't be on hold. the perplexed part amazes me. do you think they ran that by them? >> i don't know why they were perplexed. everybody watching this was cautiously optimistic. i was supportive of the idea getting this sort of summit, even multilateral tax going with the north koreans. at the end of day you need diplomacy even with maximum pressure campaign to reach a positive development when it comes to denuclearization. having said that this was announced very quickly. it was agreed upon with a very short time horizon and it didn't seem at least for reports, there were sort of proper reassurances in place from the north koreans about any sort of zones of agreement that might potentially come out of the summit. to have a summit, for the sake of a photo-op i think would have been problematic. to have a summit that could have

potentially ended with a negative outcome would have been more problematic than calling off right now. on one hand, it is troublesome that we're sort of at where we're at. this doesn't bode well for the negotiations but this is actually better, i think than having a summit go forward where you could have had serious negative consequence to it going poorly. neil: yeah. sort of like the reagan example of reykjavik where he walked out of the summit at the last minute. they regrouped, got a deal going. crazier things have happened. what do you think ultimately happens here? do you think we have a chance within the next year to sign an accord with the north koreans that would include eventually denuclearizing the peninsula? >> so i do think there is still a window of opportunity. i think, i guess, as foreign policy person i'm always optimistic there are windows of opportunities because historically we've seen very difficult, intractable conflicts and nuclear situations become easier over time. i think what need to happen, you will need to have a lot of groundwork and preparation, you

will need to have this happen in phases. we'll not have a summit that reaches the ultimate outcome in one sit-down. you will not have sort of a treaty that solves everything in matter of months. you need to put hard work on both sides from the intelligence community and state department and administration, you will need to think about what a phased diplomatic solution looks likes here and what the united states is willing to give up in exchange for concessions from the north koreans and where there might be zones of agreement. and to be frank, the north koreans have cheated and agreed to things and reneged on agreements before. so they're not exactly trustworthy. so verification mechanisms are actually the most important and critical part of any sort of agreement whether it is phased or, you know, even if we had a summit and it miraculously game to a positive solution only as good as the paper it is written on. you need to have verification that people are doing actually what they agreed to do. neil: tara, thank you very, very much. the dow down 132 1/2 points.

implications of this, tougher trade war with china, all of sudden at the same time we decided to fight a region here. maybe for good reason and maybe to play a game of hard ball that will ultimately have us winning in the latter innings. markets are right now selling and maybe asking questions later. pah! that will never work.

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and that 2% cash back adds up to thousands of dollars each year... so i can keep growing my business in big leaps! what's in your wallet? neil: some of the president's actions today, walk away from the talks, might have been telegraphed yesterday, when the administration was kicking around steeper tariffs, on imports coming into this country and most notably from china, making jacking up 25% from 2 1/2% now on most cars that get in here. then the final coupe day grawe with north koreans. jonathan hoenig, my favorite market watcher, what do you

think, jonathan? >> no question the trade issue is front and center for investors now, played out on almost ad hoc basis. remember back during the financial crisis, when we waited every day to figure out which stocks would be on the no short sell list. you remember that, those stocks would spike. neil: sure. >> we're waiting to see what industry the president potentially will levy a tariff on, that is what is influencing markets right now. you're seeing it right here today with potential tariffs, as much as 25% on autos and auto related industries. neil: so you're an investor, pretty good one. you're looking all of this. this could be a short term thing we're getting hung up here. the tone of the administration, suddenly, not saying anti-china, not so warm and cozy, i love the president of china. he is seriously considering making a move like this, walking away from the north korean talks, whatever you think of those developments, wouldn't it make you less inclined in the immediate term to be buying u.s.

multinationals that would presumably benefit from free and fair trade everywhere? >> well, i mean, neil, unfortunately, we wrapped up, the president wrapped up, you know, diplomacy with trade, which i think is too opposite things to begin with. neil: right. >> but we, you know, whether or not america walks away from north korea, neil, is inconsequential. in my opinion it was a photo-op to begin with but the question of tariffs is very consequential. tariffs are taxes. you can't say this president is against regulation, for smaller government when he is also instituting taxes on americans, neil. you don't need to tell you, adam smith or milton friedman will tell you negative effects of tariffs. president bush could tell you, neil, go back to early 2000s, tariffs on steel, what those did to jobs and productivity this is politics, politics brought to the markets. that is why you're seeing markets react in this way. people are saying we don't know

what the tariffs will be, if they are up to the president's whim or caprice. neil: it is interesting, i think the markets have a thing with the status quo, with the establishment and everything else. they are very much inclined to keep things kind of as they are. so, if you enter into the mix the possibility of tariffs or getting tough on china, whatever the merits of that argument, to walk away from nafta or whatever, start something new, whatever the merits of that argument, they get rattled. so you, young investors come to you, jonathan what do you tell them? >> i think that is exactly right, neil. we always talk about the market hates uncertainty. you heard this time and time again. you talk about something, 25% tax on induss city like autos, you're not just talking about uncertainty for the automakers. you're talking about millions and millions of voluntary transactions now which people will start to reconsider, everything from the person buying it to the, all the, all the changes that come along the way.

so this definitely put as negative into the markets. but the president has said neal, that he believes trade wars are good. that they're easy to win and that the threat of tariffs seems to be something very much in his mail bag, in his bag. that is going to make investing i think very difficult, for example. steel stocks, rallied on the promise of tariffs. they have fallen off on promise tariffs are released. that is what makes investing in this type of economy so difficult. neil: well-said. jonathan hoenig, thank you very, very much. there is a little bit of history to what the president was doing today. some call it staged history, whatever you want to call it. remember reykjavik? remember ronald reagan? remember he got incense he read a report he was supposed to sign, right here, mr. president, he read the final communique. he didn't like it. he got his irish up. stood up and left. then he got a deal. sometime later. after this.

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neil: summits are like a deal with your house. a lots of lawyerss. sign here, sign here. a lot of like when ronald reagan

and he and cale gorbachev would sign a agreement. they noticed something in fine print the gipper noticed that he would have to suspend space initiative. sign here, mr. president. he saw that. was infuriated. stood up and walked out. the rest of course is history. because he came back and eventually they did sign a deal. former reagan official, larry phieffer who remembers it so well. larry, there is precedent walking away from something even though the world is pressuring you to do something but that was pretty unusual back then, wasn't it. >> absolutely, neil. brinksmanship makes for great stories and can make for great presidents. i wouldn't necessarily make it my first course of action. neil: at least you walk out before we get into the situation. can you refresh my memory, larry. haven't been to the reagan library. that is prominent feature and beautiful feature going back to those days, reagan saw this

right away and it almost seemed like, you know, you're right there at the house closing and, yeah, it is not exactly what we want but sign, sign, sign, and he refused to do that. relive that for me. >> well, as i recall from that era that was definitely put a shock through the system. you had a lot of people who had worked assiduously to establish a deal that we thought met all the requirements of the president, but, in the end he saw something he didn't like, and so, so that system responds to the president when he, when he decides he wants change. neil: i'm sorry, go ahead, finish the thought. >> i was going to say, they were able to reach another deal and we got historic deals we got. neil: i'm sorry for that. another take, this guy doesn't read anything, that he is not that bright. we can sneak something in there. but he noticed that and it changed things. let's fast forward to today.

this president had more responding to bellicose talk from the north koreans. what do you think about his temperment and as you do ronald reagan's, reconvening, and what would it take to get these two back in the table. i know in the case of reykjavik, post-reykjavik, it was understanding where this whole spacing would be on the table. it would be out there. what do you think this president's are? >> i think the beauty of the letter the president wrote is, he gives kim the opportunity to respond and come back to the table. kim also was not the individual making the bellicose statements. there were people working for him. neil: that's right. >> so he was probably calculating on his side as well, so, hopefully kim will, will seize the opportunity to move forward. they have been all like, maybe more like poker games than house closings where -- neil: far bet analogy.

it is interesting i noticed that too, the president's letter was carefully crafted he didn't like the language out of the north korean regime, he went on to be complimentary as you can get about the north korean leader. ronald reagan even after walking away from reykjavik after that consistently praised gorbachev as a man of peace and one who clearly wanted a better than soviet union than his predecessors. >> right. neil: so he left that open to be inviting to gorbachev, let's give this another shot? >> clearly the kim regime and it is predecessors are regimes that center around one individual. so stroking that ego as much as possible can hopefully reap benefits. neil: but you know, you think about it, kim is a nut. say what you will of gorbachev, he wasn't a nut, he wasn't crazy. best as i can remember he wasn't killing millions of his people and starving them. >> true. neil: there is a difference there. how do we go forward?

>> absolutely. i agree with you, to try to mirror this with the reagan-gorbachev era would suggest we have a gorbachev on the other side and i'm not certain we do. so i think for the president continues to hold firm and, push the sanctions as hard as he can, keep the allies, korea and japan, you know, close. work with china to try to maximize the pressure from china. and, i, what i have cautioned people who asked me all along, this is going to be a long road this is one where we need to be patient. it is going to be a series of fits and starts. right now we're having a fit. but i imagine before too long we'll have another start. neil: i think you're right. i hope you're right. larry phieffer, very good seeing you. >> thank you he much, neil. neil: going back in time there. go back to look at that time, the big mistake reagan made,

pilloried in the press, you botched it, you botch the i had. he didn't. he scored a deal, he was tough, he got what he wanted and they both made history. after this. ... they appear out of nowhere.

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president regarding china and getting tougher with them on trade and then the comments out of the secretary of state pompeo just late yesterday and early today sort of indicating problems with the north koreans what they are saying you know you could put it altogether. edward lawrence has been following this and joins us hey, edward. hey, neil. yeah the president saying though he would still like to meet the north korean leader but he says the recent anger and hostility out of the statements of north korea forced him to cancel that june 12 meeting. here is part of the letter the president wrote to the north korean leader. it says i felt a wonderful dialogue was building up between you and me and ultimately it is only that dialogue that matters, some day i look very much forward to meeting you. now it seems the last straw for the president was the north korean leaders recently demanded that the u.s. sit down at the meeting room or face a nuclear to nuclear showdown. >> i've spoken to general

mattis and the joint chiefs of staff and our military which is by far the most powerful anywhere in the world that has been greatly enhanced recently as you all know, is ready if necessary. >> still the president leaving the door open to meet with the north korean leader. now reaction in congress is pouring in the house speaker paul ryan says that the president must continue to work with our allies towards a peaceful resolution but that will require a much greater degree or seriousness from the kim regime. senate majority leader chuck schumer tweeting out that if a summit is to be reconstituted the u.s. must show strength and show a concrete verifiable enduring elimination of kim jong-un's nuclear capabilities. now again, the president does say that he wants to meet kim jong-un and in fact the state department is still going forward with preparations for that meeting in singapore but still, right now, the summit is off. neil? neil: all right, thank you my friend very very much edward lawrence let's get the read on

all of this with rebecca fellow on white house saying they're still holding out the possibility of peace or peace talks more to the point, how likely do you think that is in the near term rebecca? >> i don't think it's very likely at all. you know president trump has said every single time he's indicated that he's optimistic that the summit could actually bring about a peaceful solution to the nuclear crisis in north korea. he has hedged every single time so he has left himself a lot of space here and he even made the point i thought was so important which is that the economic pressure campaign stays in place and that if kim indicated that he was not serious and was not willing to negotiate in good faith president trump was willing to walk and that's exact ly what he did. neil: all right so if you're willing to walk how long are you walking away? in other words if it's not imminent in your eyes does each passing day, week, potentially month lessen the likelihood that they get back together or together at all?

>> no i think that we are going down a path now where it's increasingly unlikely that this will happen again, that we'll actually ramp up to the point where diplomacy looks like it might be achievable and the trump adminitration is right to say they want to see north korea make the strategic decision to move away from its nuclear capabilities but it wasn't just trading political barbs again. she actually threatened nuclear war so this is a country that is not indicating that it's willing to move away from its nuclear capability so president trump should not move forward when they're not actually willing to negotiate in good faith. neil: had they not been saying some of the nasty things they've been saying forget about pence, but i'm talking about the regime , not the leader himself about their intention to continue to be a nuclear nation and wanting that etched into whatever deal is ultimately made , that defeated the whole purpose of the deal itself, right? >> that's exactly right. president trump, he can't, if he

wanted a deal, any deal, you know, at any cost he could have struck one. he can still strike one. he can strike one that says the north koreans will agree to take apart their nuclear programs over the next 10-15 years and they wouldn't by the way. they can say get the u.s. out of south korea and we promise to stop testing our missiles and our nuke. they can do these sort of half measures like they have in the past in exchange for economic relief and president trump could have done that. that's not what he wants. he wants complete verifiable denuclearization of north korea and if they're not willing to do that then he should walk. president obama said this dozens of times. no deal is better that it's better to have no deal than to have a bad deal and that's exactly right so that's what president trump has decided to do. no deal is better than a bad deal. neil: of course it was his iran deal that was deemed such a bad deal that it was worse than no deal but we'll leave that aside very very quickly is it your sense now that the chinese

played a critical part in veering this off course? the president suspects that second meeting that kim jong-un had with the chinese president, something changed. what do you think? >> 100% neil. this is something that i wrote right after the meeting that a lot of the commentary was saying oh, look this is a good indication that perhaps china is willing to work with north korea to get this problem solved and what i was saying was no, this is a bad thing because china is still an allie of north korea and if china is now indicating it's going to provide north korea diplomatic cover we're in major trouble. we could never solve this problem without the help of china so when that happened i started getting even more worried than i was. i was never optimistic this was heading in the right direction but i do give the trump adminitration great credit for securing the release of three american prisoners in north korea and not conceding on economic pressure that was key and i applaud the courage of president trump to walk away because you better believe that he wanted this summit badly so

it was very good of him to go ahead and cut bait whenever it was the right time to do it. neil: rebecca thank you very much, of the senior fellow institute so rebecca's point is not just the main street world riveted by this of course it would be the wall street world as well. you know the drills better things look for a deal and peace and whether it applies to north koreans also are dealing with the chinese the more they like it, the less that seems to be the case the more they dislike it, so stock started cascading when we got word of this this morning. the read from gary b. smith and from all of these developments. erin is it your sense that what the market takeaway it with give back if talks are back on? >> i think it'll give it back anyway. we've seen even when we had the massive escalation in the tweets in september of last year, and the infamous little rocket man the market was only down even slightly for two days and re

bounded on the third so we've also we're in a much better place for evaluations than we were even back then and the markets already moved through for the day so this is something where fears flare up very quickly, that it'll rebound in a day or two. we've seen that pretty consistently every time this comes up in the news. north korea is just a very short term fluctuation in the market. neil: but jack, i don't believe the chinese are. i believe that they're a little different case and if we get, if there is some sense that the chinese might have intervened to make this fall apart, we're going to start analyzing a trade deal with the chinese and maybe exact more punishment than earlier have been thought to be the case. now i may be completely wrong but i think that's the one to watch for the time being more than north korea. what do you think? >> i agree. i think this is all about carrot and stick with china using north korea as kind of the pawn in the middle so to speak, and i think

there is a sense and i think china wanted to demonstrate to trump that they're the ones holding the cards here, that if they tell kim jong-un to act in a certain way and negotiate in good faith or at least best faith as he can he will, and so i think part of this calculus is maybe this last meeting was to demonstrate to trump and his administration that china is holding the cards, and that if they do want a north korean negotiations then they have to behave on the trade front with china and so i think that we're not going to go back to business as usual the way it was before and that's one of the things that i find interesting, because the status quo isn't the most likely scenario any more. it's either we are going to see some negotiations or we're going to move forward and we'll have better relations with north korea and no trade war with china, or it goes the other way,

where back to square one with north korea and now we're in a trade war with china. neil: and we're all in a mushroom cloud. now, gary b., for gold bugs this is the world is their oyster, right? there was a great deal of activity anticipating a little bit here but a flight to quality or suspense, whatever, what do you make of that? >> i think it's ill-advised and here is the reason. i'm surprised the market didn't go up, straight up, after trump sent the letter and here is the reason why. rebecca was saying and you disagreed and i think rightly that obama said well no deal is better than a bad deal if you will and yet every other past president seems especially in dealing with north korea said okay well we'll take a bad deal in hopes to get a good deal. trump is really the first president that said look here are my terms either we get a good deal or we're walking. he finally, he backed that up

with his words and actions. i would have thought the market would take that very positively that as jack said, now we have a new status quo. i felt that was very positive for the markets to erin's point i think the markets will continue to go up. i think trump is finally the first president in quite a while at least the last let's face it, 10 years, to actually draw that line in the sand and not have his, the other countries step over it. neil: all right guys thank you very much. so much breaking news i do want to let you know that the chinese of course have been busy in their own right working behind the scenes they launched a satellite that's heading to the dark side of the moon yesterday, so they are reassure setting themselves in space. they dramatically beefed up their defense spending. there is talk as well about mill tarrizing the peninsula south and all those islands along the south china sea that they say they have rights too, so whatever we ultimately agree to do about north korea, it's that guy on the right we have to worry about, big time.

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accepting that china is integral to all of this. it was the chinese president's meeting with kim jong-un, the second time that had the president wondering what changed here. why did the north koreans position become more argumentative, even bellicose since that and then the chinese suddenly getting very very tough in these trade talks so the point that remember late yesterday the president imposed or wants to impose tariffs as much as 25% on imported cars that would lift their price 25%, so what happens then? jeff flock has all the details right now from westmont, illinois. sir? >> well you listen to the automakers they say it'll l be a huge mess. we're in front of an audi dealership here in the chicago suburbs and audi is one of the few overseas automakers that don't make cars in the u.s. although their parent vw does. toyota makes a lot of cars here they just tweeted this, just got this, we've got 136,000 employee

s in the u.s. we contribute to local economies, tariffs on auto imports that hurt american jobs, and raise consumer cost, that's toyota for you. if you think anybody would support this you'd have to think it was the uaw, right? auto workers, jobs here in the u.s.. well, actually dennis williams we heard from him from the uaw this morning and here is what he said. he said actually he kind of supports the president on trade in general. he says when i say i support president trump's policies on trade if they do what they say they're going to do we'll be with him but don't say i support president trump because i don't. as i said the auto industry in general the analysts think it's bad for everybody including auto workers. we talked to jeremy acevedo. he said a tariff on overall vehicle costs would be an absolute gut punch that would destroy the profitability of imported vehicles, the luxury segment particularly, german brands will be the most hard hit

that's true, i mentioned audi, neil, also mercedes makes a lot or sells a lot of cars in the u.s. 37 5,000 of which they make most of those here in the u.s. , u.s. plants, u.s. jobs, lexus also sells a lot of cars in the u.s. , they only make about 50,000 of the 300,000 they sell here, as i said audi all 226,000 that they sold here last year, the folks that audi did not make any of them here, but i tell you this is a complicated industry neil. you start to get into this if it's a threat it's one thing if they really impose tariffs, it's a mess. where it goes i don't know. neil: yeah, but you're right. it's a mess and we pay for that. governments don't pay for that we do. we're going to pay that 25% tax. >> bottom line, there's no other way around that. you could say that's fine because it creates u.s. jobs but there's no way around the fact it would definitely cost, you're

absolutely right. neil: and the hope is it doesn't come to that but that's the reality if it does. all right thank you very very much my friend jeff flock in the middle of it all so what are we to make of this right now as the chinese upped the ante may be helping to destabilize the north korean and of course on the trade front let's go to former deputy assistant secretary of the army and the other day i said navy and he almost killed me with his bare hands, it's very good to have you on remote today. >> and i'm not going to let you forget that neil. neil: i know, i know, very good to see you my friend. what do you make of this now and the role that the chinese are playing and how we deal going forward? >> well the chinese there's no mistake there they're pulling the strings and they're making the calls, so but i think i mean look, this president, i like what he did today in terms of the tone of that letter, because he held out promise for the future, if kim jong-un gets his act together, i think he pulled one step too many, but there's

several things we can do with regards to the chinese. let's go back and look at the sanctions that worked, the ones that didn't and the ones we had trouble with china on. i'm specifically talking about all oil embark o where we cut the imports of oil into north korea by 30% we wanted 100% china would only agree to 30%. i think we need to put full attention on that, call china out on the stage and let me tell you why it's important, neil. the north koreans cannot sustain a significant military operation beyond 30 days without more fuel and more oil so we need to focus on that and look we have the uss aircraft carrier in vietnam recently. a port call for four days in march, that sent a message to the chinese that had not occurred since the sigh gone fell. i would keep that going, might be good to even have a port call in taiwan. we need to show them that we're holding the cards on this. neil: well do you know what's interesting when you look at what the chinese have been doing

and maybe beaten out by bigger headlines or appear to be bigger headlines they launched this yesterday that's going to the dark side of the moon, interestingly enough on their dramatically beefing up their expenditures on space, they say for peaceful purposes, and once again looking at these islands in the south china sea and re militarizing them whatever you want to say they take them and they're not making condos out of them so all of this has been going on at a break neck pace as they're working on this artificial intelligence government-sponsored program that and the next five years could eclipse anything the rest of the world and its countries are doing combined. that's a pretty aggressive posture. >> you're so right and neil this concerns me probably more than anything else when you talk about artificial intelligence. to go along with that quantum science. we're talking about computing neil that's millions of times faster than we have in this country. we're getting outspent 30:1 by china. north korea has a quantum

encryption device, this is a great equalizer on the battlefield. i could have far superior military technology but if your cyber technology is millions of times faster what i have my stuff doesn't work, your stuff does. this is dangerous but i want to say one good thing that came out of congress, has not gotten much play of the house of representatives in the last few days, they have mandated that secretary mattis present the congress asap, a plan for military operations and requirements built around quantum science. neil this is a race america must win. neil: all right, real quickly then on the north korean thing, do you think it will be back on soon or do you think this is delayed and does it make a difference? >> again i like the president left the door open. the ball is in kim jong-un's court. i did talked to to a very senior former intelligence official with our government who studied north korea for many years and been right about 95% of the time and he told me something pretty interesting and it goes along with what you and i talked about with kim jong-un training at the

bodyguards with agents and that is this. that there is internal discord in north korea, and that kim jong-un is very concerned about that and that he was trying to buy time and pulling these stunt s to get this thing on purpose so he could buy time without losing face, so and he went on to tell me their response. look at north korea's response that's going to tell us a lot. neil: thank you very very much, my friend. again way too early to tell where this all goes but for the time being it's gone. there is no meeting. things can change but right now it doesn't look that way. we're down 78 points a little more after this. into retirement. and market volatility isn't top of mind. that's because they have a shield annuity from brighthouse financial, which allows them to take advantage of growth opportunities in up markets, while maintaining a level of protection in down markets. so they're less concerned with market volatility

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neil: all right, i want to show you something that was very interesting in the white house a short time ago, the president with the late boxer jack johnson i guess it's fair to say he was sort of like the muhammad ali of

his time in the early 1900s the first african american heavyweight boxing champ but he made the mistake at the time of having an affair with a white woman later deemed to be prostitute even though that's challenged taking over state lines got him in trouble and spent a year in jail after fleeing to europe before coming back and getting thrown in jail. a lot of people since said that wasn't fair that wasn't right there have been an effort over the many many decades to say that it was racist and it was wrong. this was petitioned through a lot of jack johnson to have him pardoned but nothing materialized under president george w. bush, under barack obama even attempts were made we're told that sylvester stallone said "you've got to do something." >> [laughter] neil: really bad isn't it? >> do it again. neil: guess what the president did. pardoned him today so i see sylvester stallone there, i think the former british boxing

world champ, memorable fights there all there to recognize something that was unfair, but if you read the history on johnson he was a bigger than life figure, flaunted his wealth , i don't know whether like after 5 this guy will fall, regardless, he sort of greased the skids for what will be controversial athletes and players many many years later including muhammad ali. today officially pardoned by the president of the united states. all right, a couple of big developments we're watching here including the justice department , already holding briefings and a lot about north korea and you name it, so first on the north korea figure the implications of a president who is saying do you know what? i'm in no rush to have a meeting and that means i don't get a nobel peace prize i can deal with that. lee carter is here, national political reporter kaitlyn, lee surprised? >> i'm not surprised i thought this is going to be a rocky road i was surprised it went as smoothly as it did up until now

and we've seen this president very high threshold for chaos. he's not going to take any nonsense. my big question is whose blamed for this disagreement we're having right now is it north korea for not keeping their promises or is it john bolton and mike pence for likening north korea to libya which is depending on where you sit whether you support the president or not, is how you're going to view this so at the end of the day i don't think this talk is over. i think things are going to continue and have a lot of debate over whether or not the president handled correctly. neil: you know, the north korean s also had a lot of nutty things they were doing, right? and the president was very careful in his letter to single out the north korea leader and not blaming him necessarily for this stuff, so what are we to glean from that? >> it was an interesting letter because on one hand he was saying i'd still like to work this out don't hesitate to call or e-mail or write to me, on the other hand he said, you know, you say that you have a huge nuclear arsenal, wait until you

see ours, we have the strength, so really kind of balancing between that wanting to make this happen but also revving up the rhetoric that we saw was tamed down in the lead-up to this. remember all of the talk of rocket man and all of that was tempered in the lead-up to all of this. neil: what if we go back to that kind of language between nations >> does this change? right now you're hearing from some lawmakers on capitol hill saying look this is a time for our allies to be on the same page as it pertains to south korea as it pertains to japan, so keep an eye on those relationships too and how they're working out also with china of course. neil: what do you think? >> listen i think that the rhetoric in this is very trumpia n. up front he's going to take a hard stand and be a tough guy i thought the letter was very much you imagined he wrote it himself neil: last night, yeah, i think the talk is still going to happen so something happened unless he -- what happened? >> i don't know exactly what

happened. neil: oh, i think you know you're just not sharing it. >> oh, exactly i had a conversation with the president. but i think the problem is that there's been these broken promises by the north koreans over and over and over again leading up to this and i think the president got fed up with it and got some advice but it's time to walk away and take a tough stand so you can come to the table and get what you want. now i think the question now is kim jong-un, they got rid of their supposedly got rid of their test site for as the first step for denuclearizing. neil: how can we prove that? >> we can't and that's the question. neil: but there's a great challenge you're reading the prompt but how can i tell if i'm in there looking at the destruction of this whatever it was, this site, i wouldn't know what is going on. >> well, sure, i mean, there are a lot of experienced journalists who have been cover ing old conflict for a long time. neil: oh, stop. they got rid of the nuclear. >> but this does raise the question of you do have the journalists right at the moment

announcing this kind of thing while journalists are in the country. neil: that was by design. >> that does raise security questions though about them and that's something i would be concerned about. >> my question is why are you inviting journalists and not our people who are your trying to have -- neil: well my concern is that we go forward when we're threatening tougher sanctions now on the north koreans and they're tough already, that's a good cop bad cop thing at the same time. >> surely and you've heard from lawmakers too saying we need to step up that pathway. neil: but are you surprised? we're down almost 300 points, i don't like to glean much minute by minute but maybe they're collectively rethinking? >> and i think you've heard the president say just a couple of days ago that this might not happen he's said from the beginning it might happen or it might not i kind of hope it does but if not it's not a big deal so he's been hedging the bets a little bit so perhaps the markets are reacting to that and it's also notable too they did secure the release --

neil: indeed he got a lot of stuff ahead of time but i'm looking at this something still watching china and still looking at the tough trade stance with china, his suspicion the president's suspicion and he's probably right that that second meeting that kim jong-un had with the chinese leader things did change after that so the president might be thinking you ruin this deal for me and now you're getting tough in these trade talks with me, and low and behold we get 25% tariffs announced potentially on imports something is going on here, that involves china and growing anger at china, frustration. >> there's definitely something going on and none of us know what it is because there's such inconsistent stories coming out of our administration on what the deal is with china. every official has a different story they talk to mnuchin he says one thing. neil: what if we don't get talks at all from months to come at a minimum then what? >> i wish i knew exactly what, but i think this is all going to work itself out.

i think everybody right now -- neil: because people booked hotel rooms. >> i don't think it's going to happen by june 12 and i'm optimistic because we've seen a lot of it at the very end. >> who knows right? i mean, every day, they've changed their minds it seems, so i wouldn't be surprised if it continues. the president certainly wants it to happen at some point. neil: well the president did want something to happen. jack johnson the late great heavyweight champion in the early 1900s has been pardoned after his only sin back in the 1900s was dating a white woman and taking over state line he spent a year in jail for that and this travesty that the president said should have been addressed much earlier, was championed by none other than sylvester stallone, a man who played a boxer, vindicating a boxer. >> [applause] neil: is this a great country or what? >> [laughter] alerts -- wouldn't you like one from the market

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neil: all right, the dow is now down only 79 points from off more than 250 earlier, ge shares are recovering after that big drop yesterday to charlie gasparino whose way way way ahead of this charlie? charlie: well, they are off their highs, because senior ge official has now confirmed to fox business that the dividend, the almighty dividend of ge that every investor that's in the stock counts on every quarter that the dividend could, could be cut, the senior official says , if the cash flow situation at ge does not improve, if mr. f lannery, ceo, the plans to sell stuff, reduce the footprint of ge, get more money in his pocket, if that doesn't materialize, the dividend is basically on the table, we are told and confirming our earlier report. we should point out that john fl annery closed his store yesterday when he essentially

side-stepped the question about the dividend saying basically everything is on the table. i won't tell you what's going to happen but i won't take anything off the table. stock went down 7% and recovered when cnbc reported there are no plans to cut the differ didn't but we're told by senior people inside ge that while there may be no plans that the possible dividend cut is on the table clearly if this situation for cash flow at ge does not improve. now another sort of interesting situation at ge, just tells you some of the pressures that mr. flannery has among these, his employees, his senior executive team and even some people, some former ceo's where when i heard about a month ago he held a meeting with senior executives and former ceo's, former executives at ge who are now ceo's of other companies and he was basically given a warning that he has to move fast with his cost cutting plan because there are real problems at this company with cash flow. high debt levels, cash flow problems, and on top of that, neil a massive pension fund

liability so clearly what we're hearing today is everything is on the table, mr. flannery could turnaround and break the place up but that dividend is not off the table. that is on the table, if things don't improve. that doesn't mean he'll do it but it's on the table back to you. neil: that is precious to the widows and orphins right? where do they go? thank you, buddy as always. meanwhile nancy pelosi saying in this whole north korea stuff, kim jong-un is doing okay. take a look. >> i think it's a good thing for kim jong-un. here, he has a thug, a person who killed his own family members, a person who runs a police state being legitimized by the president of the united states. they were on par with each other and he got the low ball recognition and regard. he's the big winner and when he got this letter from the president saying okay, never mind, he must be having a giggle fit. neil: all right, media president

that you've got that, right, that democrats are playing this as an opportunity for the president. >> yeah, that's reprehensible that speaker pelosi said that. i mean, that is worse than the media reacting when president reagan walked away from gorbachev and people were acting like the world was ending. this is part of a negotiation obviously and for anybody, in a democratic party or anybody in the media to portray this as some kind of catastrophe or the end of the world with north korea is ridiculous and they're going to have egg on their faces why would anybody even risk something like that when it changes not only day-to-day but can change hour by hour. i mean just it was reprehensible in terms of being a good citizen , a good american and it was a terrible political strategy. neil: yeah, i could imagine that when barack obama who was

holding back on talks with the north korean leader, i don't think the reaction will be the same from nancy pelosi, having said that, is it your sense that these talks can get back on and how important is it to north korea and us that they do? or is it? >> well i'll tell you who it's important to is china and frankly what we need the maximum pressure campaign needs a whole additional dimension and i would if i were president trump and it's easy for me to say i'm not privy to all of the intelligence but just the top line from where i sit is we should say that the president should say, you know, i love you president xi, but if you don't get this straightened out and get them to denuclearize and get serious, the unthinkable is going to happen and i would slap, i would say we're going to slap a 40% on top of the military threat we're going to slap a 40% tariff on all chinese exports to the united states

until this is resolved. we're going to sanction your largest banks that lander money for north korea, meaning that they can't conduct business in dollar de nominated dollars which would be catastrophic for those banks and for the chinese economy. you know, we've got to get serious and work this in my opinion through china, because i don't think north korea really listens to us. they do listen to china and we have a lot more cards to play there. we have a hell of a lot more leverage with china than we're currently using, and that's what it takes and it's very very important to them, and one reason they're not talking a lot right now is that this is happening at the very time that we're, that the president is discussing putting tariffs on imported cars, which i think is fantastic by the way. we need to do that. i'm in favor of a 15% tariff on all imported goods but for china , until this north korean situation is resolved, it should be 40% if they don't step up and make a commitment to make that happen and if we don't see -- neil: but do you think americans

would react positively to something that means the cost of the cars they're going to buy say they buy anything, europeans model, japanese car and it's 25% more, it's 40% more if you extend it to the degree you want , that's on them, washington isn't paying that. >> well do you know what? buy american and number two most of these automakers already foreign automakers already have a sizable american manufacturing footprint, they need to expand it. they're also going to compress margins and do whatever it takes to minimize the impact of a tariff like that but i'm endorsing 15% not 25, not 40. you know at the end of world war ii, we had a very high tariff even afterworld war two, we lowered it dramatically to help our allies rebuild after the war , and now we're way past that , and so we need the jobs, we need the revenue, there's no other way we're going to be able to raise the revenue that we need over the next 10 years

unless we have a dramatic increase in income taxes or a politically impossible cut and entitlement programs and even discretionary spending. this is crucial for the revenue and a 15% tariff by historic standards is very little but it would yield $3 trillion in revenue for our government and enable us to make the income tax cuts that were just put in place neil: i don't know. you could make the same argument that could push us into a recession, right? >> no, you know what, neil? look at the history. we have never in american history had an economic contraction following a tariff increase. not after the tariff of obama nations. neil: yeah, but i know it wasn't the only reason, and the depression an all that. >> no it wasn't. actually -- neil: yeah, it was. all right, thank you my friend very much. we disagree on this but always fun having you. all right the south korean

president is vowing to continue to try to pursue dialogue. i thought the most interesting thing in his statement though on this disappointment and the fact that he was perplexed, perplexed means he wasn't given a heads up that is a big deal? after this.

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>> over the past many days we have endeavored to do what i agreed was to put preparation teams together to begin to work to prepare for the summit, and we had received no response to our inquiries from them. i think the american teams fully prepared i think we're rocking and i think we're ready. i think we're prepared for this meeting and i think president trump is prepared for this meeting. we were fully fully engaged over the past weeks to prepare for this meeting. neil: all right, earlier today secretary of state mike pompeo responding to very harsh democratic criticism from a number of senators say you weren't ready for this and you didn't see it coming and he of course had a very point of view that was walking out of these talks scheduled for next month and what happens now is anyone's guest is the heritage foundation james carfano. the democrats at least in this hearing was trying to say you botched it, you didn't read the

tea leaves correctly. you say what? >> so i'm really shocked they hit the spin cycle. here, i think the flat answer is is trump is an unconventional president. when people said to them and said look, we don't think kim is honestly interested in serious denuclearization talks, the president's response as it was on afghanistan as it was on the embassy in jerusalem as it was on whole other issues he says do you know what? i will give this guy the benefit of the doubt convince me the conventional wisdom is wrong so the u.s. allowed kim the opportunity to try to come and negotiate differently, kim decided not to do that and the president unremarkably pulled the plug. neil: and to be fair to the president and his secretary of state the questions come from new jersey democratic senator bob menendez were a little rich seeing menendez was damming the administration for talking to kim jong-un or not talking to him. either way it was a no-win situation and say saying that the miss reads and inconsistenc ies from the foreign

policy team were tanked. i would say more inconsistencies from the north korean leader himself especially after that second meeting with the chinese leader anyway what do you make of the role china played in all of this? >> man this is like a soap opera with nuclear weapons. neil: i like that. that's very good. that has not become my insight congratulations. >> i think, look, and let me back up so there's two things. first of all you can't say that we're just winging it making it up, the president has been dealing with this issue since day one. he has been working on this issue for 18 months so it's very very difficult to say that they haven't been deliberate and haven't thought about this so that's just a phony criticism and just put that aside and the other thing is is the maximum pressure strategy was brilliant. nuclear deterrence, missile defense, sanctioning and conventional because it works regardless of what north korea does, right? we could protect our interest

regardless of what north korea does so they can bounce around all they want and our interests are still protected so the president prepared exactly like this if the north koreans weren't serious about negotiat ing it doesn't matter because we could still protect our interests. neil: you know, i still think james, that the chinese are behind everything here and i could be very very wrong but that's what i'm going with and i think the chinese now might not have expected that the president would pull the plug, assuming that they didn't, and that's a big leap maybe they're playing a couple of moves ahead. what do you think they tell north korea now? >> oops. hey, the other thing i think the administration has done right is they weren't stupid enough to try to link north korea and the south china sea and the debate over trade. they run all of those on their own track and that's really smart because that keeps them from getting tied up in knots because if they were so concerned about north korea, they wouldn't have turned around and bounced the chinese from their impart exercise for example, over the south china sea. they wouldn't be tough to

negotiate economically so look at the end of the day, the chinese don't want north korea to go away, but they don't want the problem to get bigger. they're just going to do the minimum they can to get by and our strategy has to be designed to assume that the chinese are going to be as least they could do like the college student that as long as i get a c and pass, i'm good. neil: were you following me in college? so in the end, in the end you see the good likelihood that talks resume just a matter of when? >> well the most important thing remember i think because i never thought we were on a path to conflict here. the diplomacy was to give the north koreans an alternative way to get out of this, right? the opposite of talking is not war. the opposite of talking is we're not talking, and at some point if the north koreans want to change the conditions that they're under and the chinese can't solve that for them the russians can't solve that the south koreans we're the only people that can solve that the alternative of not talking has got to be talking.

neil: james, a soap opera of nuclear weapons brilliant. brilliant, thank you very very much. we'll explore that the nuclear weapons part as well and the fallout for stocks right after this.

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neil: all right, so-called gang of eight meetings on capitol hill. republicans democrats, intelligence officials and fbi director wray and rod rosenstein

and to discuss a lot of russia documents in closed off senate room we're told where they can't share that with anyone. sometimes things leaker out. trish regan will take you this the next very busy hour. stuart: indeed, we have a big one up ahead. trish: these documents may actually shed some light on whether the fbi sent and informant to infiltrate the trump campaign in system -- 2016. all of thises is market is lower. not as bad as has been. down 80 points following president trump's announcement that the north korea summit is off. i'm trish regan. welcome, every one, to "the intelligence report." ♪