exposure to a trade war with china starting to get some exposure. not bad. >> and jobs, best jobs market we've seen in 50 years. i would say that participation rates best concerned. charles: you got a rally. take it away. neil: we are following this. how long this can last is anyone's guest. it's surprising a lot of folks, concern that the formal escalation of trade tensions, the $34 billion this tariffs that we slapped on chinese goods, slaching bac slapping bar goods. that is 800 goods between the two countries. that's expanded from aluminum and steel to hundreds of items and it's not bumping the stock from the time being. the expectation is that the cooler heads will prevail and too the chinese, little ed of that so far but we're keeping a close eye on it and no closer

that blake burman with the latest right now from the white house. blake, steady as she goes. reporter: a couple major head liernheadlines today. 213,000 jobs created last month in june. that beat expectations. a win for the trump administration. the unemployment rate did tick up to 4%, though. that is in part because of how many people are trying to get back in on this economic upswing, trying to get back in the part of the labor force. this is a win for the trump administration to say hey, look, we're on solid economic footing. however, many are questioning what might happen in the future and whether or not trade could potentially stymie this. the trump administration at midnight last night went through with its promise to slap $34 billion worth of tariffs on the chinese because of intellectual property theft. china responded in kind with

$34 billion in tariffs, 25% tariffs on certain united states products. and the chinese is saying this is all because of the united states. they're putting the onus squarely on the trump administration. a spokesperson for the commerce industry saying the following, quote, the united states violated the wto rules and launched the largest trade war in economic history to date. so that is their take. but the president saying last night that he feels that the u.s. holds all of the cards in the equation and the president, one of his top economic advisers with this morning saying on "varney and company" that this administration will not back down. they will not blink. listen here to kevin has et. >> he's called the bluff of other companies that have been abusing our firms and workers for a long time. he wants better deals. as you're worried about the short vun stretch, the long run goal is an extremely worthy one. reporter: china describing this as a trade war. the trump administration has not gone that far just yet.

however the $34 billion could be a tiny fraction potentially in the overall equation of this because there is another $16 billion that is likely to come next month as well. which would get you to $50 billion. and last night on air force one as the president was making his trip to montana and back, he told reporters that there could be much more to come saying, quote, then as you know we have $200 billion abeyance and after the $200 we have 300 billion in abeyance. we have 50 plus 20 200 plus almt 300. that would seem like peanuts if it ends up going down that track. neil: to your point, even 34 billion, the largest trade war this country has seen reporter: morfor the moment. neil: strong jobs growth offsetting any concerns about

trade because it showed a nice pick check up in activity. 213,000 jobs. may and april were revised by an additional 37,000 jobs. 37,000 more than we originally reported. now the unemployment rate, that ticked up to 4%. but i should add here, a lot of that to do with 601,000 more americans sort of peeking around in the job market, thinking conditions are good and that's a bullish sign, one of the reasons why all of the major sectors in the s&p 500 are up. it's the good news getting ak sen waited here. gary is still very cautious, dan mitchell and the washington examiner reporter. gary, if i can go to you and get your concern. today's gains no notwithstandin. what are they? >> tariffs. tariffs and tariffs. look. that is a cost of the consumer in business and if it continue

to escalate and gets ratcheted up, it will affect the economic, the psyche, affecting earnings and sales and eventually the markets. the good news about the markets is you still have the three things that work well for them, strong earnings, strong economy and interest rates from ten years back to 2.82% which brings mortgage rates down and all lending rates down. the three good things are still working and p good to see the market doing what it's doing. i hope the president doesn't see the market up saying we're in good shape, let's do more tariffs. neil: what's interesting about the markets though. we've had our wear hiccup days, in fact severe tumbling days. but by and large, nothing like the reaction of the asian markets, specifically the chinese stock market that's careened into various territories. the lowest levels now than in a couple of years. 20-plus percent. where numbering stocks are 35%

off of their highs. nothing like the relatively mild reaction we're having. what do you make of that in. >> well i think that's why you hear this administration consistently saying that china has more to lose than the u.s. in a trade war. and that's why they continue to push these tariffs, regardless of the retaliatory measures that we're seeing out of beijing. they feel as though the u.s. can continue along this path, that it's sustainable for a longer period of time than china is able to with stand. that's one of the reasons why president trump mentioned last night they're going to continue to push this. they see this as a response to chai noo'china's unfair trade pe intellectual. that is not consistent with how the administration view this trade dispute as they call it and it is one of the reasons why president trump is continuing to push this issue regardless of the fears that some republicans on capitol hill have on the impact this could possibly have

on their reelection chances cha. neil: dan mitchell, how do you feel about this? >> let's start with some good news. compared to the 1930 we're nowhere close to the tit for tat protection we had then pep when you look at the 34 billion here, 16 billion here, it's still relatively small. but the concern is, is what if it goes to, as you were saying, $200 billion or 300 billion dollars and when other countries start responding. the damage isn't just to consumers. it to american manufacturers who use imports and it's damage to american exporters who are getting hit and hurt by the fact that other countries are retaliating. i just hope that kevin hassett is right that at the end of the day this reduces trade barriers. because if we repeat the 1930s, then good-bye stock

market. neil: how would kevin know. l. he's not negotiating the deal. a very smart economist. but really. i'm looking at this -- again, as i say, this all started with aluminum and steel. if you look at what we're targeting now, electrical equipment, manufacturing equipment, electronics, general motors, motor vehicles, optical and railroad equipment. china targeting jet making equipment, medical instruments, better than 800 items between the two countries when all is said and done. that seems like an escalation that might be dialed back. and of course we're not factors in the $16 billion in in addition tariffs we're considering early next month. i do worry. what about you? >> that's my main point. it seems like this started with one little raindrop and then it starts to drizzle and then it starts to pour and then a

torrential rainstorm and that's the big worry. so far all evidence in is that none of these countries are backing down. and there in lies the worry. we talk about these individual, you know, industries. soy bean farmers, china's politically astute. they're going after areas that can affect the election. it's really hurting them. when you speak to these people, the association already said 6 to $8 billion has been lost and the bigger problem for them. they can't even plan for the future. they can't plan for equipment, for crops, you know know for future contracts, nothing. and that's happening to a lot of industry and that's where the worry is, not what happens today but how long it lasts, how far it goes and how big the numbers are. and as the other gentleman just said, if it escalates, all bets are off on what the market can do. and if you lose the market, you lose wealth effect and then you can affect the economy and then all of the house comes down. i'm not saying that's going to

happen. i'm saying there's always potential for that to happen. i hope they get it light. neil: the markets don't seem concerned and that probably is one of the reasons why the president is expressing that they will come to the table. a lot of the countries will come to the table before we're tempted to do the same. gabby, how do you see all of this playing out? who is right, the markets invariably like to brag that they are becaus but they've oftn wrong. what's your sense? >> the longer that we see a steadiness too the markets, the more the president is going to feel emboldened and move forward with this policy of enacting tariffs and placing these penalties on different countries. but i do think that there are a lot of republicans and members of his party that is growing increasingly concerned on the impacts this will have politically in november when weapon reach thwereach the midt. there's only so much of a cushion that can be provided that will counter act job

losses, consumer layoffs that will target and hurt the rust belt republicans who have going to be needed to keep the house majority in november. neil: dan, the message to a lot of farmers has been be patriots first, this will work out for you. a lot of farmers have been pinched long before donald trump coming into office, a lot of the prices of their goods collapsing because we have a lot of them. and that's been something that accelerated with this potential trade war but in effect long before donald trump became president. nevertheless, is there a sense that this does reverberate in the mid determine elections and that we're just not seeing it yet or that people can't think beyond something they hope will be short lived when in fact it can be many months 0 and maybe years? >> in the short run i think there are plenty of people, farmers, factory workers and ceos who are giving trump maybe the benefit of the doubt thinks he's going to bring the other country to the negotiating

table and get better deals for america. if you have faith in trump, you're thinking, okay, i'm willing to sort of buckle down and bear some cost to get the long run benefit. here's my concern. i don't think trump understands trade. he thinks a trade deficit is a sign that somehow you've lost even though it's the flip side of a capital surplus. it means other countries are investing in america because they think we're a better long run bet than they are. until trump gets the principles of trade right i worry he's going to be constantly tempted to make bad decisions. neil: you're going to get a presidential tweet and you deserve it for that remark. thank you all very much. have a safe and wonderful weekend. farmers are the epicenter of this. they're taking it the most. if you just look at how their products are traded in the futures market, tariffs don't have to be in effect for the market to pounce on them.

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farmers may get one paycheck a year when they sell their crop. and when there's a 25% cut in that paycheck like there has been for soy beans in the last month, that changes the situation from making a profit to having a substantial loss for the year. because this isn't a gamble between a little profit and a large profit. for some farmers, this is about survival of their business. neil: indeed. that was a soy bean farmer saying, you know, the survival of farms are at risk. the trade war has been in effect for them for many months. it's just the threat of taking action against our foreign poll partners, specifically chinese a big buyer from everything from wheat to soy beans. the american farm bureau president on whether farmer consist deal with this now. you know, it's interesting, you think of where we are now, it's only official now. but the pain has been very real

for farmers for many many months, hasn't it? can you hear us? >> it has. i can. i can. yeah, the pain has come on several months ago. and you know, we started this trade war and farm income was down 52% before we started this war. so we're not starting at a good level. we're already in very bad farm economy. neil: what do your members say? what are they saying now? obviously they would like this wrapped up sooner than later. i don't know how likely that is. how much can they absorb? >> well what they're saying is nathey're real proud of this president regulatory reform, tax reform. a lot of things they're very supportive of him. we're concerned about what's going on in the trade arena and the tariffs are making the markets move prematurely. they're very concerned because the crop is in the ground, it's growing. they got operating loans out there they're going to have to

service when the harvesters start and we're real concerned where the market is going to go. neil: the president is famous for saying farmers, i've got your back, got your interest at heart. what does that mean? has he offered any guarantees or protections in the event this does drag on? >> well, we know that this is high stakes and we know that there really are no guarantees. i know they have discussed, you know, maybe doing something through the department of agriculture to help get us through the difficult time. but th the farmers want to make their money in the market. not any other way. so our message to the president is we're patriots. we want to be there to support you. you're our president but we have to get this done in a timely manner. every time the combine starts cranking and starts harvesting this crop, the patience of the farmers gets narrower. and he's coming up on the time he's going to have to service the operating loan.

fortunately we're not in a harvesting stage right now. there is some harvesting going on in south texas and as the months and days go on, the harvesting will move north into the heartland of america and that will be a difficult time if we don't fix or find solutions to our trade issues. neil: let's say you lose the chinese for a good chunk of time. are there any other markets or any other countries who could compensate for that? >> well, you know, we're discussing renegotiating nafta now. and nafta is a huge trade agreement for us. and we're looking forward to the president finishing this up real quick because that would give us some certainty in the future. so there are other markets around the world, but they're looking to take advantage of while the price is down, you know. and we can sell a lot of product at a low price but still lose or farms. we need to open up the markets, we need to have good trade. trade gives us certainty in the

future so that our farmers can make a profit and keep their farms continue to operate. neil: all right. i wish you well. thank you very much, the u.s. farm bureau president. right now as he was speaking here, the strength of the markets continues with 140 points. as i mentioned earlier. with virtually all of the key s&p 500 sectore advancing today. if there's concern that this drags on a while, there are no indications that that would be the case or hope that that will not be the case. we shall see. more of this. ♪ you shouldn't be rushed into booking a hotel. with expedia's add-on advantage, booking a flight unlocks discounts on select hotels until the day you leave for your trip. add-on advantage. only when you book with expedia.

my twhe didn't have anyas an autisfriends as a result it broke my heart. ♪brother let me be your shelter♪ that was the inspiration behind my non-profit "score a friend" go! educating people to include the people with differences is so important because when jacob's included he feels like he can succeed in life and he feels like he actually has a purpose. >> we have $151 billion in trade deficits with the eu and on top of that, they kill us with nato.

they kill us. we're paying for the whole thing. so then i -- by the way, i have to say this. since i came, which is a year and a half, almost $33 billion more is projected to be paid by those nato nations. but it's not enough. do they ever tell you that? no. neil: all right. not everyone is paying up or committing themselves when it comes to nato. 2% defends. now four countries, chief among them, germany and belgium the that are not boning up. and he sent them letters saying pay up. to "wall street journal" editorial boards member, larry kesler. so this could be another interesting meeting coming up. what do you think? >> it should be. either we're schmucks paying for

the whole thing or nato is on the right track in spending. the president is confused in his messaging. the president should take credit for the fact that nato members are contributing more to their self-defense, more than half of them are on track to reach the 2% defense spending limit by 2024 and that's absolutely terrific and i think the president could take a victory lap there. but just as important, neil, is what we're spending the money on. not necessarily the overall level. and in one area i think is a big concern is germany's readiness. that's something that you should watch for during the summit discussions. neil: we have kind of threatened if they don't upo pony up we mit have to take actions of ur our own. would that include removing our troops, that we would pull some of them out? >> that logic presupposes that we get no benefit out of nato when in fact we get huge benefits out of nato.

a stable secure europe gives us massive trading opportunities. and frankly, neil, it's worth spending a little money up front to avoid a war later. and nato is today extremely relevant, given what vladimir putin has done invading his neighbors in georgia and ukraine. the u.n. ambassador to nato says that there is no talk of pulling u.s. troops out of nato. i believe her. i would be very surprised if that came out of this summit. neil: you know, he did this to remind a lot of folks -- it's something that barack obama raised as president too. more of the countries could pony up, more of them have. how is it affecting the mood when all of these guys get together next week? >> i think president trump has been tough on nato. i think the alliance has some diplomatic strains. that being said, president trump has welcomed mon tanay gro into the alliance, backed deploying

troops to the eastern border of the appliance because of russian aggression. it as not as if the united states has abandoned nato. we have recommitted to it and we're changing it to meet the new threats of the new age. and unfortunately i think nato is now more relevant today than it was 5, 10, 15 years ago because the threat levels are higher. neil: all right. the president's argument for paying up level. the threat level is higher, you should be giving more, right? >> it's not just more money, it's what we're spending the money on. it is cybersecurity or more air missions because of the missions that russian sha is flying over. is it dealing with the migration issues of north africa. nato cooperates a lot with the african union. is it fighting terrorism. is it the deployment to afghanistan. there are a lot of issues on the table. it's a very important discussion that the president is about to engage?

neil: thank you very much in the meantime we're focusing, up 157 points. another development here that could be a worry longer perm, w. we like to let you decide if it's something that warrants immediate attention. susan lee has been looking at the yield curve. you hear about this gap and it's getting mighty fine. >> yes, yes, yes. they are getting closer and closer. let's look at the short end first of all, the two-year note were higher because we're talking about higher interest rates. and you have to fund the taction cuts in government spending. an on the longer term, the 10-year yield, inflation isn't rising as quickly as the markets indicated and there's a bit of a distortion because of the policy. also in a twist as well. so let's throw in and show you what's happening with the yield curve flattening and very very close to inverting. and that means when shorter term yields are higher than longer term yields are higher -- i just

illustrated with the red line we've been talking about at zero and that's when it inverts. the last time we were this close was august 2007. you know what happened in 2008. so yes, that is something that the markets are watching very closely at this point. and the federal reserve as well. yesterday you heard them saying that we're watching the yield very closely and they are concerned about the distortion effect with the monetary policy and the easing that we saw with quantitative easing during the 2008 years. but they say maybe this is not what it used to be in terms of the recession indicator because of the distortion effect as well. trade tariffs and trade tensions not helping on the longer end as well. but you know, neil, since we are just about 30 points away from it inverting, going below the zero line, it has receded of course. the last seven recessions going back to the 1960s. we have to keep a watch on this. neil: what is the time frame for

that when that does happen? >> there's bhn a lag. been a lag. it's not immediate. during the times the federal reserve has continued to raise interest rates. i'm sure that's something they're weary of as well. neil: great stuff as always. susan leon. also keeping an eye on a pretty nice run for stocks right now. might have seen the employment rate tick up but for all of the right reasons. americans eager to try out the job waters here and we are better than expected job gains, we're up by 37,000 american workers in the last two months nap is the wind at the back of the president and why he feels so confident that the world will come to him. he needn't go to the world. copd makes it hard to breathe. so to breathe better, i go with anoro. ♪ go your own way

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at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. neil: all right.

when stocks are up people tend not the worry about the impact of a trade war. they think it will be short lived. and that's the market sentiment right now. but for folks looking at retirement all of the sudden they're fearing a trade war buffeting their hard earned money. and then what to do. what do you tell folks? >> well today we're not seeing it, right, neil? jobs number was great. and even though the unemployment number ticked up, that's good news because it means more people are coming into the workforce. generally what i tell people is you just don't -- i know you hate that copout but i do it to you every week. you don't know what's going to happen. unanimously economists say trade wars not good for the economy. you lose jobs. gdp goes down. but who knows? maybe this is a brilliant poker game. maybe we'll end up getting a better deal. so i say generally the answer to that question depends on whether you like donald trump or not. and you should not make

retirement investment decisions based on what you think of the president. so look at thi this it this way. if we have a trade war, if the market take as hit we know certain sector wills do better than others. small capses generally have less exposure to sales overseas and they tend to overperformed. we've seen that big time in the market. the small cap market is up, the general market is flat on the year. that's one place to hide. and you know me i like to take risks sometimes, so emerging markets for instance are doing pretty badly in the past few months as we've gotten a strong dollar and rising interest rates but emerging markets are an interesting play and if you use a strong dollar to buy the stocks right now, that's an advantage. so make sure you have some exposure there. diversify portfolio. once you've got that, try not to think about the trades war and the other things. because over the long term if you try to make bets based on what you think is going to happen you'll always be a step

behind. neil: i think it's not as black and white and simple as it used to be in the pass when it came to trade back and forth. while this is unique in that china has responded intended tariffs of its own, unlike japan during the reagan era that did not. there are alternatives. americans will have the option either not to buy the specific products in question or to seek them out elsewhere. that doesn't mean there's a robust market for all of those alternatives. but more options than we know. and hence the effect on our economy might be less than we fear. what do you make of that? >> i would say yes but. and the but is the global supply chain is far more integrated than it was back when say, japan was selling a tv for less than we could make it. so right now, you know, a car can be in china, it can be in south carolina, it can be in mexico before it hits your dealer's lot. and so do you hurt that south

carolina factory worker because of something that's going on in china or mexico makes the parts more expensive. the iphone, a lot of the parts are made in china. soon they might be made by fox kon in kentucky which is a good thing. but maybe the glass was coming from japan but it was invented by congressing in upstate new york. you just can't tell. and i think a lot of the unforeseen consequences of a trade war are where the damage will come. the fund manager is upstairs chatting with a colleague of mine and he says that he thinks a lot of this is actually priced into the market already where we know, for instance, you know, a company that uses a lot of steel, their prices are going to go up. that stock is probably down by now so you can't play that. it's the things where we get caught by surprise where you might see some volatility in the market. neil: if you wanted to be a real

optimistic person about this and see the very very very big big big picture, jack, you could make -- t the goal longer term s to get country to think long and hard. our own included. we put significant tariffs on products coming from abroad. if we all made them bras cli less akrod cross the globe, that could be a construct tiff development and could change the equation going forward to sort of a global free and unfettered market for goods and services. what do you think of that? >> absolutely. that would be far better for the economy and it's what economists say is the dream. so that every country does what it does best. here's the problem with that. if you are a low-skilled american working in a job that in another country they can do a lot cheaper, in a world with zero barrier to entry, that job goes away and that product will be made in another country.

so while i agree theoretically, i agree 100% getting there could be painful. but it would certainly be good for the stock market and it would be good for anyone who is working in a job that's hard to do in another country. it's a great goal but it would be painful and it says that in order to do that we need to work right from early education to make sure we have people qualified for the jobs that are likely to stay here and realize those are better jobs. you make money more in those jobs. we'll have a stronger economy. but again for somebody who has been doing something for decades and might be resistant to more training or we're not efficient enough to get them the training they need, that's a painful adjustment process. and it speak to the broader issue with all of the trade issue. free trade is great in terms of across the board, everyone benefits a little bit. and the people who get hurt by free trade get hurt badly. in other words the benefits are spread broadly, the pain is

acute in small areas. neil: i still see the half full glass young man. you're depressing me with your view of the world. we shall see. there are a lot of unknowns. good seeing you again. all right. by the wie, just a reminder here. we should have the president's supreme court pick on monday night. we'll be on it and automatic over it beginning at 8 p.m. on this fine network. i believe he's going to make the announcement shortly after 9:00. we'll take it to 10:00. at a minimum, the impact of the decision could go like the neal gorsuch pick went. the president saying he wanted to go to the wow factor, enough to win over conservatives and to placate those who have doubts of whether he can have the same success the second time in a row. we're on that after this.

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so call now. remember, medicare supplement plans help cover some of what medicare doesn't pay. you'll be able to choose any doctor or hospital that accepts medicare patients. whether you're on medicare now or turning 65 soon, it's a good time to get your ducks in a row. duck: quack! call to request your free decision guide now. because the time to think about tomorrow is today. neil: all right. we have a leftist in charge of mexico here and that is much of the central south american region, confident that one of their on is back in and going to be calling the leftist shots here. what does it mean for venezuela and nicaragua and all of the hurdles that each country faces as it is looking to revisit some of these far left-field policies

that we daughter were dormant and put to bed. apparently not. david asman, his take on this. what do you make of this? >> well, you know the leftist push, if you will, in lateen america has been going on for 100 years now and it continues to come along. i mean the mexicans should know better. they know that socialism didn't work. we've had plenty of examples of it from cuba to venezuela. venezuela is the classic example. should be one of the richest places in the western hemisphere. has more oil reserves than any country in the world and yet it is terrible. then you have the place that they use to supply with a lot of free oil, nicaragua. nicaragua is done by a guy named danny ortego, when he took over at revolution there in 1979, he ran the country for six years,

seven years, ran it directly into the ground. he was vot voted out in 1990 bye came back in because he bought off the opposition and he's run that country into the ground as a result of his socialist policies. two months ago the country exploded. he fought back with these debt squads that have killed 250 people just in the past two months. and as of yesterday anyway, the state department inconnected the mag nis ki act allowing him to sanction individuals in a foreign government that has terrible human rights abuses. that country, it's fair to say that something is really about to explode in nicaragua. whether there will boil over to other countries in central america is anybody's guess. it's such a tragedy because they've tried so hard to get rid of this guy so many times and it's failed.

venezuela, do you know how much a haircut costs in ven vens ven? five bananas and two egg ps that i have 25% annual inflation. they've gotten rid of the currency. the only way to buy anything is by bartering with eggs and bananas and live chickens. this is a country that's one of the richest in the world in terms of oil. it just shows. if you want any exnl exam. example of why socialism doesn't work, given the best odds available for it to work, it's failing miserably and the people are suffering. neil: you realize the case that brought a left-wing entity to power in mexico was wa because f the corruption of the existing party system and then you hope it doesn't go to the way of scraidiness but that is a worry. let me switch gears if you don't mind on this trade war or

battle. the stocks don't seem to be too too worried. i'm more surprised by the republicans' reaction to it. this is the so-called party that the government hands off. of course we no in retrospect when it came to money center banks in trouble they were rescued. and helping out was very very different. having said that. it's remarkable that the republicans by and large are going along with this. maybe this experiment, whatever you want to call it, trusting the president to get it right or take him on. i don't know what it is. david: i was a part of the whole free market trend that was taking place when i was with the journal in the '80s and '90s writing editorials about how important it was to get china in the mix of the world economy. it's been good for china and us. but china took advantage of so many things, neil. the theory was back then if you open up the market to china, china will become more democratic and get away from its

commies past. as you know very well, the president of china has become more dictatorial than ever now and essentially appointed him to be head of china for life. so the old theory that i bought into, and i think a lot of my conservative friends did, that if you total open up the doors for fre trade to china, they'll become more democratic. it didn't work out because they were lying and cheating. they were lying in terms of their stats. you and i never trust the stats that come out about their economic growth. they're cheating with regard to the wto and they're stealing. they're stealing our intellectual property and they're stealing a lot of the companies that try to do work there and become invested with commies party members. you can't own more than 49% of any company there. that's why the co conservativese cutting him a little break on the free trade issue right now, at least until they see how far this goes. whether slapping back to china and all of the bad things they've done is going to force

them to change. and china is suffer tremendously as a result. neil: no doubt about that. i guess where you and i -- david: their stock market is in the tank. neil: take with applying it to canada. david: i know. neil: there i have a hard time understanding. and you can mention individual cases as a different country, in the case of lumber in canada and you know the dairy industry. they do, you know. but when i look at this statistics on what average tariffs are in each country and i see that canada's is at 4.5% and we're at 3.5%. we have our own ano anomalies. so we do the same thing. i guess that's what bothers me. china by all means, you and i for many decades decided we can't trust their data or numbers or anything top but to lump canada in with that. their maple syrup is delicious.

david: one is remember his trade team has a lot of free market tiers in there, including larry kudlow. hopefully he'll be okay after the slight heart attack. there's a give and take. they're not all protectionists in there. there are some and they actually worry me as well. neil: they're fighting with everybody and it's ridiculous. david: if the goal -- again, what he says is one thing. that's what we've learned about trump. the results might be different if, for example, you've talked about this before, if we manage instead of raising auto tariffs, to get down to zero auto tariffs for everybody, not only cars going out but cars coming in, i think that end result would be terrific. now that might be pie in the sky, but that's what i'm hoping is the best case scenario. neil: you see the bright side and you see the method to the madness. i'm looking at this saying, sometimes it's just madness. sometimes it's just crazy.

and his response in lumping friend and foe alike is crazy. that's my opinion. david: and the one thing i would agree with you on is that sometimes these things spin out of control. and as smart and strong as trump is as a president, he cannot be the master of economic cycles. and if the economic cycle spins into this sort of out of control wave of trade wars, then we are in trouble. neil: but the history of such battlebattles is they don't end. david: usually not. look at the tariffs back in the 1930s. i mean they really, i think, were more of a cause of the great depression than the stock market crash. neil: and we didn't go after canada or maple syrup. david: no the canadians were our friends as far as i can remember. i was just a little boy back there. neil: always good seeing you my friend.

david: happy friday. neil: a good read or things. that is a fear that i have, that sometimes, you know, maybe for all of the right reasons we get to be so unreasonable we lose all sense of reason. see what i'm saying? because i'm trying to figure out what i just said the dow up 120 points. . i'm a four-year-old ring bearer with a bad habit of swallowing stuff. still won't eat my broccoli, though. and if you don't have the right overage, you could be paying for that pricey love band yourself. so get an allstate agent, and be better protected from mayhem. like me. can a ring bearer get a snack around here?

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. neil: all right, jobs win. at least over trade fears for the time being, with 11 sectors, the s&p 500 all up now on confidence that maybe that is what's the real story here. the economic fundamentals are sound. an employment report that was better than expected, 213,000 more jobs, revised upwards by 37,000, unemployment rate though it did tick up was due to 61,100 new entrants into the labor force. here's edward lawrence to talk to us. >> sort all of this out, neil, the chinese have instituted their own tariffs, matching our tariffs, 25% on a number of goods, including soybeans, suvs, crude oil. the minister of commerce for china in a statement said president trump, and i'm going to quote here, launched the largest trade war in economic history to date.

this taxation is atypical seriously jeopardizing the global industrial chain. china is stealing u.s. companies's intellectual property. they are not opening markets to u companies and have the tariffs and on u.s. products. mainly on technology goods. $34 billion worth, another $16 billion of goods will fall into that in the next couple of weeks. this tit-for-tat has not affected the economy just yet. yes the unemployment rate did go up to 4% but the president's advisers did say that's not necessarily a bad thing. >> on the unemployment rate side, it did go from 3.8 to 4. that was all because of increased labor force participation. that's the best sign there is in this jobs report, right? we want to reconnect people discouraged by the bad economy that president trump inherited and want to bring them back into society, get them jobs,

get them back to work. >> the 601,000 people added to the workforce here. president trump said he has $500 billion in more tariffs, ready to go on china. he has not made the official announcement yet but the tariffs are there. the national association of manufacturers says that the president needs to sit down with china, try and work this out. in a statement they said, quote, tariffs, though, have not and will not solve the existing problems in china. tariffs bring retaliation and possibly more tariffs. no one wins a trade war and it's america's manufacturing workers and working families who bear the brunt of continued tariffs, in retaliation, the chinese have also cut the amount of soybeans they're buying from the united states, the same with cotton. i'm hearing u.s. companies getting more snap inspections at the border there trying to get goods and delaying it going to markets and perishable foods have gone bad. neil? neil: thank you very much, my

friend. what about a four scrap them altogether or limit them. germany is considering that. angela merkel of all people, the one spearheading the effort. this out of the big nato meeting coming up next week. let's get the read from fox business' connell mcshane. >> the president told part of the day spent prepping on the big nato meeting, when you think about it, europe is a potential western front in a trade war, while as edward is talking about the firing in the east, there is hope we might avoid all-out war in the west. merkel, the german chancellor is open to the idea of zero tariffs on all autos crossing the atlantic, whether they go here to there or the other way around. the catch is, always a catch, whatever deal is worked out might have to be global in nature, include the asian nations where president trump has talked about more bilateral agreements. in the midst of all this. the president taking another swing at europeans in his rally in montana last night.

>> they kill us on trade, other things, they make it impossible to do business in europe, they come in and sell the mercedes and bmws to us. reporter: what the president does not mention there, ever mention at all are the tariffs the u.s. imposes on imported trucks. the way the numbers work out, when you look at all the numbers, the u.s. only does charge a 2.5% tariff on passenger cars but the tariff on the imported trucks is 25%, doesn't get talked about as much. the eu is 10% across the board. the proposal we're talking about would bring all that to zero. long way to go but hope at least, neil, that something gets worked out with europes at tensions seem to be only escalating with china. neil: buddy, thank you very much. i want to start on that angle what connell got into. the goal ultimately the president says is to find a world where there are very low if any tariffs at all. would change the game plan. the read from charlie

gasparino, deirdre bolton and nyc council minority whip along with deneen borelli. if the president were to succeed in changing the equation, mutual disarmament, what do you think of that? >> isn't that the stated goal of everything he's been talking about since beginning on the campaign trail. >> i had no idea what his goals are, it always changes. >> talking about fair and reciprocal trade. frankly, i think you saw angela merk merkel blinking. neil: would he blink on the 25% tariff on light vehicles? >> talking about certain u.s. industries, if you protect certain u.s. industries like steel, that are highly automated, you're going to increase tariffs, right, on foreign manufacturing, and hurt u.s. manufacturing in other areas, so remember, trump's trade, sort of philosophy is constantly in flux, almost

contradictory at times and, of course zero tariffs would be great. he's not starting from there, he's starting from putting on tariffs. neil: the force fact, and force that issue. >> and driving the wedge between our european partners and us which we need to combat china. >> one of the interesting angles is europe saying okay, angela merkel this is going count for everybody, so there's been a lot of sourcing saying europe, asia i.e., china may work more directly. neil: that's what the chinese leader was saying this week, forget this guy. >> we don't know how much is posturing, how much everybody is willing to put into effect. i hope we blink on the 25% potential tariffs on the auto sector. we've talked about how interconnected and international the manufacturing of the supply chain is. so the parent of mercedes invested a billion dollars in a plant outside of tuscaloosa.

i was looking for bmw and michelin together have a 75,000 workforce in south carolina. so at this point, there's so many connected parts, peterson institute say if you put a 25% tariff on imported cars, you lose 100,000 u.s. jobs. >> what dived deep into the unemployment report. it was good, it wasn't great. i will say this, you look at the wage greth, not great again. we pumped tremendous amount of fiscal stimulus into the economy. we kept most of the loopholes and took the corporate tax rate down immeasurely, yet still producing jobs at the clip of the obama administration. neil: well, it's six months, six months. >> but we're still doing it. where is the hiring? >> on the silver lining to that stubborn wage inflation is the idea that the fed will probably do as expected. that is to say two more rate hikes this year. >> because the economy is

better. neil: gentlemen, can i ask you something here, maybe back to the futures market trading is for farmers, the price of products is tumbling. that was happening before the president came into office, it is accelerating with the trade talks. are you worried with a base probably the most loyal of anyone, this goes on very long, that's going to start fraying. >> i'm not terribly worried, especially not in the context of the upcoming midterms. if you take a product like soybeans. >> wouldn't have impact by that. >> look at soybeans and pork, the u.s. da ranks on the productivity of each product and the top pork and soybean districts, same three are toss-up districts. where does it have the impact, derail the trump agenda inside of the house of representatives or the senate. it's unclear. on the topic more broadly, president trump, when the wheels were first spinning on

the tariff issue in late may, early june, poll numbers never dipped on job approval in the economy. he was seeing double digits. neil: you are right, they are getting enormous ratings. >> approval is 42%. neil: huge latitude, you follow the markets very closely, why are the markets sanguine on all of this? they don't think this will erupt? >> look at the dow at december 22nd. i can't remember the number. look at it today. not that much different. december 22nd when he signed the law. neil: look at the chinese market in december, look at it today. >> i don't know. neil: down 18%. >> the chinese market is down. neil: my only point and the president's point is we might hiccup. they're careening. >> my point is investors are saying not so fast on -- neil: not out of the woods. >> i'm not saying it's true.

>> i think the worries are showing up more in the bond market. >> the fear of the slowdown. >> there's a debate. clearly there's a debate amongst -- listen, i trust investors more than donald trump, okay? that's the bottom line. investors look at this incredibly rationally and logically. neil: don't you think investors are giving the president the benefit of the doubt. >> the the point i'm trying to make, there's a debate what his economic policies will do. some think the trade stuff will hurt the economy, that's why the dow has flatlined. some think that it's not that big a deal, and we shall see when we come out and the numbers come out. i will tell you the employment numbers today are not that much greater than what obama produced. >> i think bringing it back to the tariffs, feels like most investors can absorb or imagine the absorption of the 36 billion. the next needle to move is if we go up to the 200 billion that is threatened -- neil: this is small. 36 billion and then we add 16 billion to it next month, you

are quite right. >> nothing but a scratch. neil: you are quite right. joe hit on something here, for republicans worried about this, i don't know if it registers by november. >> no, it probably doesn't. talking about aluminum tariffs and a fraction of a penny on each can. neil: but joe, you just hit on it. talking about steel and aluminum and now it's over 800 items. >> sure, but use the can example because that's what wilbur ross used. some states have a 5% deposit tax on cans, already, off the bat. and those state legislatures get re-elected every single time. neil: very, very good side business for charlie. >> i love aluminum, recycling and garbage. >> i think i saw him on the block going through the can. >> that's right. >> voters don't take these things into account until it hits them in the pocket. >> you don't know. this election is at the margins, who knows what's going to swing it.

one thing i find fascinating is i haven't heard trump say one word about the stock market lately. he's not talking about it because he knows this thing is crazy and it's flatlining for a reason. >> and have you tariffs, you have higher energy prices and you have the fed that is going to raise rates, at least two more times this year. that's an unknown as well. the three parts come together. >> i think the fed is not the problem here. i think the big problem here is this tariff thing. neil: one of the things i've heard by the way is the federal reserve goes slow on rate hikes precisely because of the trade war, what do you think of that? >> that's what showed up. >> think about this. if the fed started raising rates dramatically, bank earnings would go up for a lot of reasons. >> they make money from lending. >> that should drive the market higher. this is about trade. neil: could i ask while you're here, what did you say about the president exactly when he

harangued journalists and their anonymous sources? >> i am paraphrasing. >> i think you remember exactly. >> because it went viral, dude. i said, you know, i think i said he was being hypocritical because he has been an anonymous source and i've spoken to him for years where he used the words, charlie can we talk on background, i'm certainly not the only one. neil: you just violated that confidence. >> no, i didn't. i didn't say what he said. the white house speaks on background all the time. you know that. you know sarah sanders -- well, i can name about a dozen of --. >> you think the president is being a hypocrite? >> with the anonymous source thing, he's doing it to jazz up his base and foment hatred of reporters. >> neither the first nor the last politician to lambaste anonymous sources. >> we're talking about when donald trump was a businessman in real estate and he was

fending off reporters and looming reporters. neil: i had an nonnews given to me about your statement, charlie is a pathetic liar. >> is that from john miller? who is the other name you used. neil: i did want to know more about that. thank you very much for doing. that always endearing himself, pennsylvania avenue are charlie gasparino, i think -- >> bill shine might call me? neil: getting lots of calls. >> bill yelled at me for years, he should yell at me again. neil: can you count on that. thank you very much. we're up 140 points, to charlie and panelists' point, make they're look the other way or saving the worries for another day. more after this. nah. not gonna happen.

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. neil: well, monday we will know. monday night we will know, which is why we are live monday night beginning at 8:00 p.m., taking it right to 10:00 p.m. when the president announces his choice to replace justice kennedy on the supreme court. we're told it's down to just a few names right now. blake burman with the latest what we might be looking for, what the president might be looking for come monday night. reporter: you will remember

there was a process going through all of this last year when the white house, the president ended up nominating neil gorsuch to fill the seat of antonin scalia. at that point, the vice president mike pence was very much involved with the process and sources tell fox that the similar playbook is playing out this time around as it relates to the vice president because he has interviewed the top three candidates that president trump appears to be down to at this point. brett kavanaugh, the vice president interviewed him here at his residence, that makes sense because he sits on the d.c. circuit court of appeals, former staff secretary to president bush. and the vice president met with the other two in indiana. raymond kethledge was appointed by president george w. bush to the 6th circuit, president trump said to have had a great interview with him. and amy coney barrett on the 7th circuit appointed there by president trump. but the white house is preparing for the possibility that thomas hardiman could be

the selection, that would make sense if tends up being that because hardiman was the runner-up to neil gorsuch last year. president trump has only spoken in generalities about the particular candidates. here he was last night in montana. >> you turn in monday at 9:00, i think you will be extremely happy with the selection, right? they're all great. they're all great. [ cheers ] >> and i want to thank justice kennedy for his lifetime of truly distinguished service and he had confidence in me. reporter: president trump right now, neil, is in new jersey, he'll be there for the weekend. the vice president mike pence will join him shortly, and we're told the two will sit down, meet later tonight and will compare notes from the interviews. neil? neil: blake, thank you very much. blake burman at the white house. we're also focusing the side stocks, the jobs report, at least, concerned about trade,

notwithstanding, not weighing on them. look what's happening with oil right now. of course, we have been talking about the saudis and russians increase production the recent run-up the president is concerned about it. to oil associates president andy, good to have you. what is going with oil. what's driving this? >> well, oil is going up on the variety of supply outages that we have seen, whether it's been in libya, venezuela or in canada, and combine that with iranian sanctions taking oil off the market. we see oil prices going up. neil: so we don't accept iranian oil but the president wants to make it next to impossible for anyone to get their hands on it as well. if he were to succeed and punish those countries that do get oil, then what? >> well, to put it in perspective, iran is exporting about 2.2 million barrels a day of oil, half of which is going to china and india and about

20% going to europe, and we're already seeing the european refiners really decreasing purchases down to zero. at the same time, the koreans are not going to take any. if he is successful, we're going to be dependent on saudi arabia as well as russia and other members of opec to make up the 2 billion barrel a day difference and the market is concerned there isn't that enough of a cushion in saudi arabia to make it up. neil: what is driving it? i mean, we hear a lot about global demand, we hear about other countries beside our own that might not be doing as well as we are, apparently everyone is doing well enough to foster this demand, right? >> well, exactly, and to put it in perspective, if i look back to 2012, the last time we had iranian sanctions, world oil demand was 89 million barrels a day. today it's about 99 million barrels a day.

of course a difference in increase in demand has to come from somewhere. the good news is that the u.s. has provided a significant amount of that increase as you see from the shale revolution. neil: so spell it all out for me right now. if we were to get the saudis to increase production by whatever the figure is, i think two million barrels a day. russians to do half that, what would be the effect of that? >> well, certainly, if the saudis increase by 2 million barrels a day and the russians by another million barrels a day, oil prices would come under pressure because we wouldn't be worried about the future supply, but on the other hand, i think the market is really concerned that neither saudi arabia nor russia can increase supplies that much, and as they see world oil demand continue to grow, they'll worry about declining inventories and support higher prices. >> andy, i always understand

things a lot better after we talk. thank you very, very much. have a good weekend. >> thanks for having me, neil. neil: oil is up right now. you know it's amazing in the tit-for-tat on trade, the chinese have targeted tariffs of their own, a host of american products, including chip making equipment, medical instruments, that whole technology arena that you think would be under enormous pressure is not. so what does that tell you? after this. i'm ray and i quit smoking with chantix.

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♪ learn how you can give independence and give a dog a job® at cci.org . neil: do you think mark zuckerberg should still be there? >> well, we're not advocating for mark zuckerberg leaving the company. we think he has a role in facebook, we just don't think he should have the two roles of ceo and chairman. bring in an independent chairman. mark zuckerberg can still run the company but we think there should be independent oversight, just like in most

major corporations in america. neil: that was illinois state treasurer making the case that changes have to come to facebook because we keep getting embarrassing incidents whether compromising data, privacy, you know the drill. i want to get his read on this, this is beginning to proliferate, this type of talk, someone has to pounce on facebook, get a better sense what it's doing. my only worry i raised with the treasurer, gene, good to have you, be careful what you wish for, i don't know if i want the government in my business, you know? >> yeah, i feel the same way, and i will just leave that aside my feelings about this. as far as regulators are concerned, facebook obviously a huge target, everything that happened with cambridge analytica recently and it is clear the government is going to have some role in terms of more regulation, maybe special new person that would be appointed or facebook would have to appoint inside the

company to watch them having to create some new development, a new group inside facebook, but this concept of having a split role for mark zuckerberg, for him not being ceo or not being chairman is highly unlikely. mark zuckerberg is passionate about this company, and he simply is not going to give up the reins. answer is going to lie in between what is being proposed about him giving up the chairmanship and the current status quo. neil: do you trust zuckerberg, we keep getting surprises, revelations, people's privacy is compromised. every time he promises he's on top of it. new allegations come out maybe he wasn't, and that, of course, gets the government officials involved saying we should separate the chairman and the ceo's duties.

for a variety of reasons, not the least of which is that it's simply neater and cleaner way to do things, but how do you feel about the heat that facebook is taking, that it has compromised not only people's privacy, but their trust? >> so i think if you look at the platform itself, i have strong views about does the world need facebook, does our people in a better place after using social media and how is the data monetized? i feel strongly we should have less of that, people capturing data and making money off essentially selling your profile. i don't like that. that's one side of it. but i'm also old, i'm 47 years old and i think i don't live and breathe on the sites. just because it's not good for society doesn't mean there can't be a big business around it. setting aside my personal opinion about social media and the broader role of social

media, i think zuckerberg is an honest person, he's out to do good. i think things got out of control and he's trying to reel it back. i think he's a good person in a business that i'm not so excited about. neil: by the way, if you're old, i'm noah. but leaves that aside, gene, i'm curious about the reaction of investors who, right now, bid this up to $202 a share, seem to be look the other way. you and i have gotten into this before, the privacy concern is a paramount concern but must not be the only concern, even among young people who shrug their shoulders and accept it as something that can be compromised and convenience offsets that. what do you make of that? >> i think that's the generation that is the future is post privacy generation. neil: you're right. >> not that they want to be taken advantage of, not that they want credit card information stolen, but i think

this is a generation that as you said, that the utility, the value of being able to connect outweighs the risk of their privacy, their data being sold for profit. i think it's just a slow turning of the baton to the next generation, i think that's how they view. it makes for a very different landscape, but i think that's just the reality of it. neil: you know, while i have you here, this trade war that is officially on with our slapping $34 billion worth of chinese tariffs, the tariffs on our chip making equipment, medical instruments, the technology sector you would think is feeling the pinch. to be fair, many are selling off ahead of this news, this might be a case of selling on the rumor and buying on the fact or reverse, what do you make of the sense how vulnerable technology might be this trade war goes on? >> so let's assume that the

trade war goes on. if there is there, is consequence, you are going to see products like the iphone, that could inch up. few more percentage increase in the cost. apple will likely carry that cost themselves, not pass it along to the consumers. that might have cost a few percent negativity on profitability. it could push out profitability by a quarter or two. there is some potential if this trade war comes, ends up remaining, but i think the more important story here is they're not going to remain. i think what donald trump is doing is dashing himself out as modern day teddy roosevelt. 26th president, 1901 to 1908, he was about breaking down trade barriers, you lower the prices and increase sales velocity. my bet is we're going to be here six months from now and donald trump's approach is

going to work and ultimately we're going to have lower trades and off to the races and that should be good for overall demand. neil: we shall see. i covered teddy roosevelt doing all of that. [ laughter ] >> see what happens. gene, thank you very much, always good having you, my friend. >> all right, neil. neil: the economy doing just fine, 213,000 jobs added to the economy with promises of more to come. this is the quarter we could see the numbers for the prior quarter looking strong indeed. how about 4%, how about better than that. the wind at the president's back and right at the republicans as well. we'll be back after this. (♪) i'm a four-year-old ring bearer with a bad habit of swallowing stuff. still won't eat my broccoli, though. and if you don't have the right overage, you could be paying for that pricey love band yourself.

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. neil: all right, the president and republican friends, with the job market continuing to strengthen with 213,000 more created. the unemployment did tick off a little bit. for all the right reasons.

601,000 americans decided to try the labor force and see what's going on, what all the buzz is about? let's get the read from axios congressional reporter, taxpayers alliance and philip wegman. what do you make of what's going on here, whatever you make of the vagaries on trade and the back and forth and the nastiness, something optimistic of work out, the underpinnings are just fine and the underpinnings are going to bring other countries, notably the chinese to the table to make deals, what do you think? >> i think it's interesting we have such an optimistic job report on the same day trump fires first salvos in the trade war. if the trade war gets nasty, if the games of tax reform are wipe out by some of the negative effects of this back and forth with other nations, i don't think any amount of deregulation, i don't think a second supreme court justice is necessarily going to be enough to remind republican voters of

the good times. look, the stocks are up today but make no mistake, trump is betting the u.s. economy and also republican majorities in both houses on old tiny discredited protectionist policies. it's a big gamble. neil: what if it works out, caitlyn, what do you think? >> we're in an interesting time. when you look at historical trends, typically presidential approval ratings go hand in hand. economy is doing well. people have a positive outlook on it. president trump's approval ratings are not so good. so i think that even if things hold up with the economy, it's going to be those two numbers, trump's approval versus view of the economy that voters have to -- those are competing numbers, right? voters take both of those to mind. it's unclear which one will win out in november. neil: you know, david, he who is angriest goes to the polls, or she. and we had a lot of angry

democrats after the election, and they were fomenting and waiting for the moment. now my view is there's a lot of angry folks, i don't want to minimize it, but not as many, and maybe the economy holds onto that, maybe this market they know can go up or down on a moment's notice, but it has changed the dynamics ahead of the midterms. what do you think of that? >> a lot of positive news the last six months in particular, ever since the tax cut. people see more money in the paychecks, small businesses, big businesses are expanding. that's great, but we're hoping that trump doesn't snatch victory or defeat out of the jaws of victory as we go to the polls towards november. and i am reminded the song, trade wars, what are they good for? neil: that had been much better you had sung that. i remember the song quite well. >> if you look at the cost of automobiles, if we have tariffs in automobiles, we're going to

increase the cost by 4,000 to $5,000. the average family of four got a $2,000 break with taxes. you can wipe that out. if you're a family and need a new car, that tax cut is wiped out. the previous commentator was talking about there's good news now, what about in a few months when the tariffs are in full effect and we're deep into the war. >> you know, i had a guest earlier, philip, mentioning the teddy roosevelt analogy, that's what's going on here. a president populist by design, very different than the traditional republican here, and that he will find and carve a new way that people will respond to very, very favorably. the jury is still out, i agree, but certainly the impact, pro or con, is impossible to discern for november, and i don't know if we would know in november. so all things being equal as they are now with no trade

repercussions, especially if this dragged out, i don't know what the impact could affect the equation. having said, that what do you envision? what do you think is going to happen in november. >> all things being equal, i think they should remain equal. if you're an incumbent republican, you can go back to your districts and if the trade war isn't going on right now, you look downright magical. growth is approaching 3% like you said earlier in the segment. unemployment is ticking up, 4%. that's good. you have more people entering the market force and looking for a job. in states like iowa, they are approaching full employment. this is completely night and day from what we saw during the obama administration. which is why it's so interesting that trump is willing to move forward with this trade war. it's a big gamble. if he can pull it off, maybe he'll end up looking like teddy roosevelt. maybe historians will make that

comparison. right now i'm worried about the effects of, you know, these tariffs in light of the past tariffs that we saw. smoot holly is infamous because it had a horrible impact on the economy. neil: no, no, you are quite right about that. caitlyn, i'm wondering whether republicans looking at this, all calling for the president to help him out and speak on behalf and attend rallies on their behalf. that's a very different cry from a week ago when they kept their distance. how instrumental will they be, this trade war notwithstanding, where tends to give the benefit of the doubt. how do you think they'll be going forward? >> neil, you got to remember is the house and the senate are very different beasts. the senate race, the republicans who are running to unseat democrats in red states that voted for trump. they love trump. they want him to be in their state, want him to be staying jon tester, claire mccaskill, you are not for trump, thus the

base turns out to run for the republican opponent. trump is popular in areas. house on the other hand, these swing district, purple ones or districts where hillary clinton won yet the republican won the house seat, trump is more questionable there, you know, the suburban moms, you need them to vote for the republican. they don't tend to like trump. it just really depends whether you're looking senate or house and then which district. neil: you are right about that. david, another crackpot prediction of mine, always hazardous is republicans will certainly lose seats in the house. i just don't think enough to tip the balance. i think they'll hang onto it. what do you think? >> don't underestimate the populist appeal of the tariffs, because we're getting a lot of comments from members saying the tariffs are good. we disagree with our own members but there's a lot of populist appeal to the tariffs, and i think --

neil: that is how they feel it, until then they feel it, right? >> when the dishwashers are more expensive and the cars and the electronics are more expensive, they'll start complaining, it's a populist thing. neil, there's a difference between trump and the republicans, republicans are pushing back hard on this in the house and the senate. so this is not a universal thing, and bernie sanders is pushing back on these tariffs. what kind of world do we live in when bernie sanders is to the right of the president. a lot of strange things happening this summer. >> we'll watch closely. guys, thank you very much. have a safe weekend. in the meantime, that supreme court issue. finding a replacement for justice kennedy. the president will let the world know monday much as he did with neil gorsuch. almost exact the same drill. we'll cover it monday 8:00 to 10:00 and foreign market reaction, there will be that as well as there was with mr. gorsuch. all over again.

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. neil: all right, we're focused on the president's supreme court pick next week, we'll get to that. i want to get to the peter strzok thing. next week they want him to

testify on capitol hill. he's resisting because it could be a cabal after him. i want to address what's happening with him, what's happening with the supreme court pick. kim strosel, the strzok testimony a, whether he will testify and what happens if he doesn't and the drama that builds. where do you see this going? >> lawyers are being clever, neil. they're suggesting he shouldn't have to testify publicly because he spoke to the committee privately. people i talked to on the hill said it was always made clear to the strzok team that they both wanted to meet with him ahead of time in private session and that there was going to be a public hearing. that's traditional in washington, when you're conducting an investigation like this to actually have the key figures come and explain themselves not just for the members but to the country as well, too. i think if he doesn't

voluntarily agree to do this, he'll be subpoenaed to come in and take the fifth. neil: he spoke for 11 hours worth of questioning last time. do we know whatever came of a lot of the points that they were bringing up at the time? >> well, i mean, other than a broad disputation between republicans and democrats just how forthcoming he was, or whether he was reticent. whether he was fulsome. they had a fight over that. we haven't gotten the details what he explained. don't worry there are plenty of questions and a lot of pieces to this puzzle here that peter strzok is in a perfect position to answer. he is a key and central figure here because remember he ran not just the hillary clinton investigation, but the donald trump one as well too. neil: speaking of donald trump, the president on monday will make it official, his next supreme court pick, great good fortune with neil gorsuch. how do you suspect it will go

this go-around? >> well, look, one thing i think if you are someone that cares about neil gorsuch-type judges and having them on the court, that constituency has to be thrilled with the broader list that the president touted all along but also with the three front-runners that emerged. brett kavanaugh from the d.c. circuit, raymond kethledge from the sixth circuit and amy coney barrett, no question they are talented and good enough and qualified enough to sit on the supreme court and will be very much in the mold of a neil gorsuch or antonin scalia. neil: now one thing getting a lot of scrutiny, she stands out as the only woman mentioned is amy coney barrett. i'm wondering when they start talking about how many kids she has and all that and don't do that for the male justices being considered, i think we've gone into the twilight zone again. how do you envision this

process going? >> well, here's the thing, if you're a democrat, you are desperate to make sure that you derail this nomination, if you can. neil: no matter who it is, right? >> doesn't matter. it does not matter who is chosen at this point. they will be subject to vicious attacks. the problem for democrats is that, again, you cannot argue that any of these from a jurisprudence standpoint are not qualified for the court. the only thing you can do is instead suggest somehow they are out of mainstream. so you are going to see a lot of the attacks on personal aspects of these candidates' lives, their religion for instance, their personal choices, how many children they have. some focuses on specific decisions suggest that maybe they are not like your normal average american. neil: right. >> i think it could be hard to make it stick, and has the risk of turning off americans, especially the religious attacks. i don't care if you are a democrat or republican, people

don't particularly like religious tests when it comes to judges. neil: very good point. kim strassel, thank you very much. and one of the guys didn't like it running for president of the united states in 1960. john kennedy, catholicism shouldn't be an issue then, now it's an issue now. more after this. jardiance asked: when it comes to managing your type 2 diabetes, what matters to you? you got a1c, heart, diet, and exercise. slide 'em up or slide 'em down. so let's see. for most of you, it's lower a1c. but only a few of you are thinking about your heart. fact is, even though it helps to manage a1c, . . significantly reducing the risk of dying from a cardiovascular event and lowering a1c,

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neil: all right. up 147 1/2 points right now. we're, 29 of the dow 30 stocks

are up or unchanged. dupont was unchanged. caterpillar the only one down. if you consider so many of these stocks are world dependent, safe trade dependent doing this well, its remarkable. something no doubt adapt adam shapiro in the next hour. adam: thank you, neil. after rhetoric from both sides, president trump standing firm, hitting beijing with first round of tariffs. first round is 34 billion. i'm adam shapiro, welcome, everybody, to "the intelligence report." tariffs on $34 billion of chinese imports went into effect midnight last night. china retaliated with its own tariffs, bejon, this is a quote, largest trade war in economic history. the market