>> happy birthday. stuart: ashley, happy birthday. friday birthday. get out of here and enjoy yourself. >> is still young. stuart: times up and ashley happy birthday, neil, - >> i love the store i love that you had to remember it was her birthday. [laughter] what do we do again? stuart: wait to get to my age. [laughter] >> you are more with us than anybody. have a happy birthday. neil: it's your birthday. all right. have a fun one. celebrations to all. a little bit to celebrate were up 32 points but we picked up on it this notion that not only is

this president free to go after the federal reserve and i was getting news and concerns yesterday but now as the interview aired realization on the treatment that is ready to go to war and that means all half trillion dollars plus of chinese goods so be it. deidra has the latest. >> we imported or exported $500 billion worth of goods last year to china and we are going to show you so far with the tariffs have been imposed and we will show you in a few minutes these are us products targeted by china. chinese people or chinese businesses want any of these american products they have to pay up. i want to focus on soybeans. all the supply but particularly soybeans. if you look at the two sticks from the usda this was our biggest graph export last year and $20 billion is what left the us in large part for china.

there are 11 key states that produce soybeans, nine of them voted for president trump. when you speak with strategist about the chinese strategy in the way they are trying to punish us goods they are saying they are essentially making a bad against the growers or the manufacturers of all of these products so essentially the tariffs and up hurting these businesses and therefore, her that the businesses in the states that voted for president trump and we know from the us side quite simply they call it a bad bet. here are the second five. that's the first round. i wanted to highlight the importance of the soybeans. electric vehicles, seafood, cotton all these products have more or less been taxed in china. chinese people and businesses want to import all of these and they have to pay more. on the flipside, we show you if this tariff war does accelerate

you will see americans having to pay more for apple watches, fit fits and speakers. one of the reasons is the manufacturing in the assembly is done in china. collectively, these companies sold to a half billion dollars worth of goods last year so, if in fact, the trade tips become the trade war these are some of the products for which americas will have to decide just how much they love them because they are assembled in china. neil: and is already happening now. that's what wild. >> yes, we know reciprocal 50 billion on either side in the course china saying whatever president trump does will match dollar for dollar. neil: back and forth. you are on top of this. thank you. the president hitting the strong dollar and raising it interest rates and doesn't like the fact that in this interview with cnbc why does the cap economy picks up steam federal reserve decides to whack it with a hike. other presidents bemoan the same

thing but i think they discussed it with her aides not seen the multiyear whether it's a good or bad thing and it feels how you feel about this but the ceo all-around business market genius and taxpayer protection alliance and david, didn't are you what president trump saying what he did about the federal reserve? >> it really did. when president is trying to influence the federal reserve and here is a president - remember this is guy who built his empire on construction and low interest rates. neil: i can well understand prism through which he sees. >> right, but he has to look at the bigger picture of the economy. higher interest rates means that we will have more investment in the country so when the economy is chugging along interest rates will go up. look at the mid- 90s.

interest rates were three-6% and we had good economic growth. the president needs to take off his construction hat and look at this. currency is completed, neil. he needs to take a step back and realize there different things happening. deficit and the debt, yes, interest rates going up will balloon the interest on the debt. that is a problem but this is a skirmish in the trade war. the trade war is a bigger thing but this is a minor skirmish and, as you said, cost of items are going up not in the distant future. neil: they are joined at the hip. to your point, one of the things i asked is with the president saying he will go full throttle on this trade stuff and willing to consider going after every good the concert china in this country what does that mean because he is arguing that we have the edgier saying in the interview with joe kiernan that we are playing with the banks money. he feels free to do so. >> i would disagree.

the market disagrees. if they thought this was going to stay on, once you threaten trade tensions in the trade war something but once you start implementing them that's completely different. the market believes it will be taken off but this could negate the tax cuts. this is self sabotage that is unnecessary. it could do long-term structural damage to the economy. look at how the eu is negotiating with our neighbors, canada and mexico, trying to get a trade back. they have one with japan and their promoting isolationism not america first. it's a mistake. i don't think it will get solved and that is dealing with the theft of intellectual property from china. neil: i want to bring [inaudible] into this but of bring your attention to the market itself. this has seen its losses pick up here or from the gains cut down to one third of what we were on this report from the new york times that his former lawyer

michael cohen might have secretly recorded the president talking about a payoff to the player point model. any anglican jar potentially hurt the president and hurts the market. i must stress this is a minor development in a minor dip in stocks and i'm not - and letting you know about it and it happened and had a minor impact on trade. where we end up, i have no idea. christina, on the trade, nation what are people telling you? >> right now i want to agree with john that we should not see this is a small deal. when talking about the currency comparison between china and here because the largest corporate default in china and we could see monetary policy happening in china and that is for further depreciate which could create a bigger discrepancy between both

currencies. uncertainty in the market . neil: that would make the situation worse, right? >> exactly. we talk about it enough but it is uncertainty amongst american companies. they don't know where to go see that reflect in the wage growth occurs it's not climbing china and its increased but it's not were to be in nursing productivity levels too low of a level at this point in time so it does have a big effect. you can say is a tiny part of the economy when you talk about the goods for importing into the united states but it still affecting investor sentiment, business owner sentiment and that's why i think it's a bigger deal. neil: david, one of the things i'm noticing as a backdrop or earnings we're still early in the process with fewer than 20% where the s&p 500 or companies reported eight out of ten of those with much more expected numbers in seven out of ten of those i understand

better-than-expected guidance. so, that is a nice backdrop and maybe that is what the president goes back to when he talks about playing with the banks money and taking on trade from a stock position. what you think? >> i think what is happening is the president plays one-dimensional test in the economy three-dimensional trust. so many moving pieces . neil: i'm very good at one-dimensional chest. when you add others i cash out. explain that. >> what he's doing is trying to protect us jobs and protect us consumers. now we see the repercussions. he's accused the eu of current treatment ablation are you going to tell me the eu speaks is one voice when you have germany and greece? i don't think the eu is manipulating their currency when you have such diverse voices in the eu. what he's doing is responding to the threat of more tariffs i

think there manipulating their currency. as my concern is that is taken this to the next level and still he one-dimensional chessboard. neil: if you got two checkers i might've had a better shot it understand. john, i don't want to skip all over the place but this michael revelation in the new york times is the only one reported that he recorded the president talking about a payoff to the playboy model i did notice the markets sliced their gains there and without saying that specifically there was a catalyst in markets don't like the uncertainty but how does this play out as an effect on what you see going forward? >> i don't it does. it hurts the president and the ability for those like the president will like them and those who just like them. this like. neil: i understand that but from the traders perspective - uncertainty, right back.

>> absolutely. presidential scandals have had almost no effect on the market .-dot history. look at the monica lewinsky schedule . neil: i remember you are so right. christina, he did, he did - christina, there is so many variables to this market and the ongoing investigation and the potential for trade war and president jawboning the fed and going after drug companies and oil companies and you name it and he can be unforgettable right now things are going his way and he is reassuring folks that stick with me on this. how is that being greeted when you talk to guys on the street? >> do you believe that things are going his way? yes he's creating a stir. neil: through the prism of the market. >> but he's trying to start things. we need to know where you want

to go with it. when you bring up china and the trade war, is he going after made in china 2025? is he going after the theft of intellectual property? or the trade imbalance? or with the eu, what does it take for the united states to stop this trade war? is a no tariffs or removing the 25% tariffs on suvs that entered europe? feel like there needs to be definition. that seems to be what you're saying with investors. the guys i've spoken to their still can't figure out how to price in the president of the united states and that's what you see volatility when the headline comes out right away and it is a summer time so lower volume. neil: david, one of the things that come up is the notion that the market likes to assume everything will work out when we been worried about the president in the past and things have worked out in stocks have overcome their doubts in a way to go but to christina's point you can only so long pull on that string and i'm wondering what you wonder about and how

you play - i thank you can't predict uncertainties or , too her point, what is included in the things we will demand of china and the eu and canada and mexico but how do you play all this? >> i wonder when the euphoria of tax reform will wear off. six months into it and seen amazing things with tax reform but what happens and when does the tariffs and when do these catch up to tax reform in the war for tax rate and the investment coming back into the country? i'm concerned as a taxpayer group we will see revenues take hit into the government because of these trade wars. he's had success in the first six months but what will happen from here and what will the market adjust to the terrace and put the text as a side? neil: thank you all very much. look at the dow and this is one of the catalyst year and publications confirming that online financial that when word got out against the near-term support that the president was

secretly reported by his then personal lawyer michael cohen, a couple of months before the presidential election, talking about paying off a playboy model who claimed he had an affair and this is out and lead to people selling out. briefly, another sort of unknown or variable we can't finish out but we just throw it out there because everything was looking hunky-dory until the word of that. after this. what about him? let's do it. ♪

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another issues. the easing of sanctions can be discussed in due course. in other words, something that could happen and i'm taking this with proof of cooperation on part of the north koreans. the retired four-star general we will see what he makes of this. the idea, general, is getting everyone on the same page or they will go the same route but the united nations, how would i go back. >> i think the secretary pompeo going it makes a lot of sense. after all, the united nations the past three resolutions that impose significant sanctions on north korea, actually historic those three resolutions and had the sport of china and russia in doing so. he wants to keep the one involved here. no one knows for sure where this will come out in the president does not know and neither does secretary pompeo but he wants to keep all those nations collectively together as we move forward. we truly do not know, despite

the verbal commitments that we received from kensington and his people around him that they intend to do with christ but we do not know that. neil: the one thing i caught with the secretary's interview with john brennan is that he's satisfied with the trips he had to north korea and after his last one they were bemoaning his gangster -like style and the position of the united states so two different rings on this but what you make of this humic. >> i said before that visit showdown is coming which secretary pompeo in the north koreans because he wanted them to clearly understand that we needed to see some tangible from them. neil: tangible being what - >> here's what they want to know. the number and location of all the nuclear weapons in all the activities around that. fuel sites, storage sites, weapon sites for research, test

sites and the things for ballistic missiles. tell us where they are. then we want to be able to go there independent investigators to be able to verify those locations. we know where some of that is the manual, so you can check veracity pretty quickly. we don't know where all of it is. then he wants to see a timeline for disarming and dismantling which would come later the first step is that. unconfident human in there and put that on the table and pointed at them and figuratively speaking this is what i want to see. that is what got that reaction because now we have a demand on the table and if pompeo believes we are moving forward and we make progress it's because they will call that up. we will know in a matter of weeks whether they do that are not. neil: you illustrated it by pointing your finger but among many agent under an eating societies that is interpreted to

be a rude gesture. >> oh, it is. the media was complaining about the long dinners but in asian culture trust is something you earn overtime anywhere in it to social engagement and getting to know another. you go to a four or five hour dinner and i have been to these - it's the normal. it's getting to know one another. neil: are you eating the whole time? >> drinking the whole time. [laughter] neil: i just keeping up with them - general, as a weight we will hear from our ambassador nikki haley under secretary of state mike pompeo but there are others there as well. i should stress the ambassador from japan and south korea and others could show up with the secretary general. that might not be at this particular event but they hold the meeting back and forth on a variety of issues of everything from how to deal with north korea and getting ready for the un general assembly in october. what do you think of our relationship with foreign

partners and players, of course we quit a key committee and then i nations and we set the word out my would be support you if you constantly stick it to the us so among the friends you talk to in the international committee, what do they tell you? >> carpenter president is controversial and anywhere you go in the world whether the lease or europe which i will do in a couple weeks the first question is what goes on the president? neil: is that right? >> he fascinates them. listen, after eight years of obama's national security and foreign policy that disengaged from the world and despite the controversy that surrounds the president who treats on a regular basis the fact of the matter is, the united states has reach out to our alliances to strength in them. you see what he's doing and nato and he's trying to strengthen it. same thing on the parties. china is traveling art over our

allies and were trying to sort the relationships and develop strategy to stand up against them. in the middle east he went in july of last year and said i stand with you against the number one strategic enemy in the middle east which is iran. i will be there with you and help you with the islamic extras problem and despite the controversy surrounding tariffs and economic warfare in china and others the alliance is out there and they believe their back on the world stage again exercising global leadership and that is a fact. neil: to the president dial any of that back with the putin meeting humic. >> monday was probably the low point of his presidency. he misspoke and the tone was right he should have been firm, not conciliatory and certainly, not appeasing, on the world stage like that. that should've been that appendage to the summit and the

summit is the main issue but that appendage which was called a press conference should the effort involved should've been is great as the summit and one of the outcomes we want from this two or three outcomes, rehearse it, scripted and what is the tone through the whole thing? i don't believe that was done and they give this to get to the president went out there in said go. neil: he did indicate in the interview to cnbc they get along with vladimir putin and he said the same thing the last time it's not a bad thing to talk to a leader or adversary or whatever you define russia to be and he says if things do not work out i'll be the worst enemy he is ever had referring to putin, what you make of that? >> i think he's right. talking to . neil: but what does workout mean? >> he knew from the campaign that president trump would take a totally different path than president obama did who

disengaged. i think president trump, and you look at the policy, but the rhetoric aside, just the policy - the of the president who is tough and demanding unproven in russia since ronald reagan. no one has come close. what am i talking about? the trump defense buildup comparable to the reagan defense buildup strengthening the defense budget and nato, deploying extra troops on the eastern border, which is russia's western border, pushing back on russia and ukraine with antitank weapons, these are things obama did not do and he was a principal in a declaration of our defense budgets. attacking russia's stooge a sod for the use of chemical weapons in the russian tolerated that. pushing back on iran which is also russians ally that is what is keeping some score on if you want to talk to as president

because there's more to come. i believe there are sanctions and we discuss people and closed on sites and the president is right. if we don't get this worked out that he will be tougher and he is right now. neil: general, good seeing you again, my friend. neil: nice to talk to you, neil. i'm going to singapore and taiwan. neil: very nice. thank you very much but in the meantime, the dow is up 29 points so a bit of a get back were waiting to hear from the secretary of state and waiting to hear from ambassador to the united nations, nikki haley. the general indicated to try to get the same page when it comes to crucial issues like north korea and keeping the peace and trying to keep everyone on the same page. after this. you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable.

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>> welcome back to cavuto "coast to coast". i live on the new york stock exchange. what is going on with microsoft after the quarterly report. it wowed wall street and pushes

the stock to an all-time high and the stocks are up 2%. it surpassed the 100 billion annual revenue mark for the first time. the analyst when you wonder if it goes higher, it is number one in the dow jones industrial average up 25% and visa, nike and boeing is behind it. goldman sachs, over there that is heather says it has 10025 dollar price reading on that one in price target, loving were seen in the cloud. loving what they're seen in software with office 365, two other analysts have 130 targets and on amazon, by the way, analyst say 2200 on amazon. let's check out amazon and apple because they are jumping. were watching to see which of the two hits that trillion dollar mark. they're both getting closer missing apple cross 950 and look at that 942 right now. the word is amazon stocks that

will get to the 20 pastor if apple is great quarter that will get to the: pastor - i don't know which one but everyone thinks it will be by the end of the year for both of them. neil: microsoft beats them all. i'm basing that on absolutely nothing. thank you very much. meanwhile, keeping track of deals that come and go seemingly settled and unsettled and now who knows what could happen. >> it looks like there's an obstacle in this sinclair had to buy tribune. essentially, it looks like tribune is at least considering dropping out of the deal itself after the fcc basically gave it a no vote of confidence and gets pushed to an administrator judge which is a heavy lift after the fcc weighs in. sinclair has another problem. it has the fcc basically saying they don't like the deal . neil: is that not unusual? >> which part?

neil: the fcc is spearheading this. >> right, because it's a positive to donald trump in this is the fcc of control. donald trump has applauded their coverage like crazy. that is unusual for this is now getting to the point where it looks like tribune has second thoughts about staying in the deal and it was interesting that we reported that tribune was dropping out and they put out a statement right after we reported that said yes, we are considering it and we are weighing our options. what was interesting as they do not run the statement by sinclair. tribune did it separately. it shows there's divergence between the two companies and some separation. so, they may not drop out in the end and they may we had here but it looks like the steel if you're reading the tea leaves the steel is starting to fall

apart and not just from the government standpoint but inside the company. again, the player may pull a rabbit out of the hat and the ceo of sinclair came out with a new proposal for the fcc and what some people would say is a more aggressive divestiture of the stations he needed to sell in order to make the deal work. neil: who needs who more chemex. great question. i don't know. tribune is apparently listen, it's selling for a reason. it has an issue with the business model. they are selling it. neil: sinclair needs a larger platform. >> and they want to grow and compete against us, fox news and foxbusiness. more on the fox news site because they do local programming with national conservative commentary that is piped through it. it would be more fox news. you can make the case that they both need each other and that tribune, from what i understand, heavy levels of debt and sinclair paid up for it and

there was not a huge bidding war for these properties. sinclair wants to grow so, if they both need each other for the fact that tribune is thinking about bowing out and i'm not saying they are, they may roll the dice but the fact that their thinking about it shows the uphill battle regulatory -wise. it will go before a judge and again, if the fcc is weighing in thing we don't like it often the ministry of court judge rules with the fcc. neil: do you mind if i - the support now in the new york times said michael: stickley recorded donald trump talk about paying off the playboy model and i know that we think we don't know the exact numbers but we've cut that by in half and about three quarters and i am wondering what this does to the so-called uncertainty aspect that wall street typically abhors? >> i like mr. mayor a lot and

he's donald trump's lawyer and said this exonerates trump because it shows that he is asking him to do something and he said something like trump said in the recording paid by check so there's a record and everything. neil: by the way, as long as campaign funds were used and giuliani has always said it's not an issue. >> that's what he's always argued. one thing, it shows that as late as 2016 that michael cohen was not the loyal bodyguard for donald trump if he secretly recorded him. it shows that if you got this this is where he might have a lot more on him in terms of recordings or what he knows we want if it is even true, but if it's true you're saying where there is smoke there is potential fire - >> here is the difference between - this is with the southern office and mueller's

office doesn't leak the us attorney for the southern district leaks a lot. i'm just saying. if this thing starts heating up in a major way all the stuff will come out. the us attorney for the southern district is a safe to the new york times, a lot. everybody knows it. they deal with the press a lot. neil: are you getting any sense that this is wrapped up or a report is made? >> everyone says october. neil: before the midterms. >> yes, sometime in october and you know, we will see what he has. i will tell you, i've never seen this before. it was hard for me to believe that donald trump acted or colluded with the russians. it's hard for me even though there's sprinkles of evidence here and there. don junior in russia and this and that. when i saw the performance heated and that's the best way i can put it with performance with putin it made me think - you can't walk away from not thinking is there something

there. it does not mean there is something there and i'm not the only one. conservatives i talked to now are like, maybe he has something. neil: they called me on the carpet for this insane meal, you have to understand it's routine for the president to get nasty either behind some of back over there not with them with angela merkel, teresa may, vladimir putin and to be different with them one-on-one but i don't remember him criticizing vladimir putin when he was not in the room or when he was with them so. >> some of his rabid followers just want propaganda out of you and me and they want to the positive. that was about performance and human nature makes you think why neil: the people admit the fact that he pivoted that he knows he should have said that. >> i'm just telling you not saying they have anything on him and maybe it's simple that in the future he wanted to do business in russia but human nature says why do you kiss up to a guy like that that

blatantly unless you want something he has something and i will tell you, it makes me think robert mueller has something. neil: you are just a simple country reporter. >> just a simple country reporter. neil: you are the best of the desperate charlie, we are waiting for mike pompeo and nikki haley and they will be at the united nations and talking about the commitments about north korea and the strong warning that you have to start ponying up your we talk about our gang start methods and he would not deliver the goods. this could be a godfather reenactment right at the united nations. charlie and i are the only ones who will understand that analysis i can do more to lower my a1c.

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neil: nikki haley and secretary state mike pompeo at the united nations. let's go there. >> it's been evident here this morning and we have a great team behind are helping. thank you, nikki. the main reason i came here today to meet with members of the us could cancel. south korea and japan as well to detail i work on the trip to north korea earlier this month and the progress made there. i also have the opportunity to meet with your secretary general to discuss the topic and other topics as well.

the countries of the security council are united. on the need for final, fully verified the new violation of the korea and as agreed to by chairman kim. strict enforcement of tensions is critical to our achieving this goal. members of the un security council and by extension all un member states have united unanimously agree to fully enforce nations on north korea and mixed them to continue to honor those commitments. when stations are not enforce the prospects for the successful denuclearization of north korea are diminished. right now, north korea is evenly smiling petroleum products into their country at a level that far exceeds the quotas established by the united nations. these illegal transfers are the most common means by which this is happening. these transfers happened at least 89 times in the first five months of this year and they continue to occur. the united states reminds every un member states of its response

ability to stop illegal ship to ship transfers and attempt to step up their endorsement efforts, as well. we must also crackdown on other forms of patience including the smuggling of coal by sea, over land borders and the north korean guest workers in other countries. north korean cyber theft and other criminal activities are generating significant revenues for the regime and they must be stopped. president trump remains upbeat about the prospects of the denuclearization of north korea. so do i. as progress is happening, it is a trump and magicians hope that one day the d prk could be intermixed here at the united nations, not as a pariah but a friend. imagine un security consul meetings in which the dpr k are not the agenda time and time

again. we will be able to focus our energy on so many urgent problems that face our world. i believe this reality as possible and so does president trump. it will take full enforcement of stations for us to get there and take chairman kim following through on his personal commitment that he made to president trump in singapore. the path ahead is not easy and it will take time but our hope for a safer world in a brighter future for north korea remains our interactive and hope indoors. thank you. ambassador haley. >> thank you so much. i'm grateful to my friend secretary pompeo for coming out and meeting the security council today. this is what we know. eighteen months ago when i came in our biggest concern was north korea. everyone was wondering when the new test would happen and everyone wondered when the new threat would occur in the entire international community is something that to happen. it was a herculean task by the security council to pass three massive sanctions packages,

getting rid of all exports, 90% of their trade, 30% of their o oil, expelling all labor workers and scheduling that in making joint venture stops and all of that combined with the international community coming together and expelling diplomats and stopping the medication and with the president tough stance, all of that, was accommodation that brought north korea to the table. now, north korea and the us started to have talks and as those things are happening we discredit council and the international community to support those talks and the best way we can support those talks is to not loosen the sanctions. what we have been seen is certain countries wanting to do waivers and certain countries saying sanctions and certain countries wanting to do more and what i preach eight hundred

pompeo coming up and we continue to reiterate is we can't do one thing until we see north korea respond to their promise to do gries. we have to see action so until that action happens security council will hold tight and the international community, we ask you to will type and we go forward. the problem we are encountering is that some of our friends have decided that they want to go around the rules and he saw there was violations of the oil pan and we have a secretary pompeo said seen 89 times where that has happened and we have photographs and proof of ship to ship transfers. our friends, what we decided was, let's come together to make sure that the stops. the us but yesterday a halt to all additional refined petroleum shipments to north korea. china and russia blocked it.

for china and russia to market what are they telling us? are they telling us that they want to continue supplying the soil? they claim they need more information. we don't need more information. the sanctions committee has what it needs and we all know what is going forward with the pressure today on china and russia to abide and beget helpers through the situation and to help us continue denuclearization. this was a day of very frank talk between the secretary, the foreign minister of south korea, our japanese friends, as well, as well as the security council to say if we want to see success we have to see a response from chairman kim and we have to continue to hold the line until that happens. very successful day again promising that the security council has remained united and continuing to put pressure on her members do not fall through on the process. thank you.

[inaudible conversations] >> is russia reneging on the agreement made and what did they agree to when they met? >> so, horsemen of sanctions is a continuing process and there are many places where the russians have a noble. certainly, since the beginning of the time of the un resolutions we've enforce these relations and were deeply appreciative of that but what we need now is to continue that. we need to make sure the world does not begin to see the spirit is not an american demands the north koreans to do gries but the world's demand. we need the world to continue to

participate. refine issues with any country with russia or another country not doing their part to enforce it will provide information so they can see it in the world can see it and demand that every country in the world do their part. reporter: [inaudible] why is it a good idea for the president to invite vladimir putin to the white house and what does the us have to gain from that visit? >> i'm happy that the two leaders are continuing to meet. the meeting takes place in washington i think it's all to the good. those conversations are currently important and we have our senior leaders meeting all across world with people that have deep disagreements with an adequately valuable to the people of the united states of america for the president putin and president trump continue to engage in dialogue to resolve the difficult issues we face.

it makes in a sense and i'm hopeful that meeting will take place this fall. >> final question. [inaudible] [inaudible] >> i will take the second one first. lots of discussions taking place and there was a discussion between president trump and president putin about the resolution in syria and how we might get refugees back. the president shared with me the conversations they had and it is important to the world that at the right time through a voluntary mechanism these refugees are able to return to

their home countries. some even working on in the un been working on. president and president trump to discuss that. there's lots of work to do to figure out how to implement that denies it's on to be help to achieve that resolution in syria. make no mistake about it. your first question was about what we need to see. it's straightforward. [laughter] it's not my description of what needs to take place. chairman kim made a promise, chairman kim told, not only president trump but president moon, that he was prepared to denuclearize. the scope and scale of that is agree to. the north koreans understand what that means and there's no mistake about what the scope of denuclearization look like. what do we need to see? german can do what he promised the world he would do. it's not very fancy but it is the truth. neil: short and sweet.

nikki haley and mike pompeo are answering or aligning themselves with what will be the key foreign policy priorities for this in ministration going forward and working in coordination with the un to make sure they continue to follow through on promises and commitments made to president trump to eventually denuclearize. you might recall from the the last visit to north korea the government branded him acting in gangster style to the demand for the haley was indicating that a lot of the sanctions that were already in effect will remain in fact until such time as we see progress on these key areas. it includes more signs of denuclearization and more signs about releasing the remains of americans killed in the war and more than a half century ago and signs that families are going to

be reunited between the north and south and efforts will continue in that regard to make sure they do. separately we came to the controversy over the president and how he handled vladimir putin secretary of state that is always a good thing when the president and mr. putin are continuing to meet. again, it refers to the upcoming second powwow plan for the fall. the president inviting, we are told, vladimir putin to come to the united states. let's get the read in on this. vince, i guess this is about getting everyone on the same page, are we? >> yeah, in terms of watching nikki haley and mike pompeo stepped to the microphone, 89 times they violated in the first few months with the oil imports is important that they do hold russia and china accountable. russia and china agreed to the sanctions but they're the ones who joined on the un circuit council announced the but stopped to united states attempt to punish north korea for bringing them in the oil that they should not.

russia, china, this is toughness from the trump in ministration heading in their direction and their calling them out publicly . also, i think a message to north korea that they need to, you know, even though there's been nice words to north korea this is a clearly tough message. they will maintain sanctions on the country until they live up to the promises the chairman kim made. neil: was there a timeline given on that, vince? i don't see the north koreans moving in rapid fashion but what you think? >> the text of the agreement suggests the north koreans will take advantage of it being an open timeline. they did not give clear indication of how much speed with which they will move toward denuclearization and start coming in our direction. that's been in open? mike pompeo has been trying to resolve there is continued interaction with north korea and visits to the states. the trying to get a quicker timeline in place but north korea will still have to come to

the table as usual. neil: the issue of vladimir putin and the russians came up as well. when dan coats was surprised by a question about this plant invite to have vladimir putin come to the united states in the fall it was disconcerting and mike pompeo said that he thinks the two talking is a constructive development but what do you make of that and the top officials seem to be divided and some of them unaware of rapidly changing events here. >> it would not be the first time we seen people who are close to the president, disagree or caught by surprise them up by a decision he made. he is the president and advises and he relies on them for counsel but he gets to make the decision. over looking forward to is if you rise and fall what date does that mean you make is that before or after the midterms

because the fall midterms fall in the middle of that. i would think the white house may want to wait till after the midterms and give the members of congress senators attending to run for the seats neil: you mentioned on their issues they seem to be very consistent that is a lot of these prominent republicans including i recall the house saying russia is an enemy. they're not nice guys they're an enemy of the united states. the president seemed to have a slightly different view. what do you make of all of that? >> what i make of it is theres been a lot of analysis that suggests this is all wrapped up in the president's personality and whether or not he's offended about the election. i also think he cares a lot about dialogue with russia. in his mind he's trying to have a nice relationship one on one with putin just to establish a dialogue. meanwhile his administration has been tough on russia, so it does suggest that there is something

of a strategy here, as his press conference may have been earlier this week i think he's looking to strike the balance between the toughness on russia and keeping that ongoing conversation with putin going. neil: when he was saying with his interview yesterday with cnb c, if things don't work out referring to ongoing talks and discussions with vladimir putin, i'll be the worst enemy he's ever had referring to mr. putin. what do you make of that? >> what i made of it is he's responded pretty forceful it to media response and criticism from both parties this week. i think he wants to remind americans and the people here in washington who have been crawling about this that he is tough and that he will take a tough stance when necessary and so right now, it's just a matter i think a mixture of a public image campaign and figuring out what the path forward with russia is. neil: thank you very very much vince always a pleasure. before i get to my next guest just want to let you know the republican party has picked charlotte, north carolina for its 2020 u.s. presidential nominating convention so

charlotte, north carolina, obviously good for charlotte will get a lot of revenue and excitement around being a host city for a party's convention so that's happening in 2020 a few years ago, couple years away. what's go on with time? that's a sign maybe you're getting old when 2020 is like tomorrow. meanwhile the president is threatening to up the ante with the chinese better than $500 billion worth of all their goods every single good that comes into the united states to wack it with tariffs here. china though, so far, not blinking, not offering any measures of its own to counter that, indications are that it might respond to that with tough measures of its own. it is a mess ed lawrence outside the white house on where this is going. hey, ed. reporter: good afternoon, neil and economically now china may have more to lose than we do. they os reseeing it a little bit more in their markets than we are at this point. china for their part may be seeing political pressure on the

inside of the u.s. mounting against the president with some of these tariffs specifically with the comments of some members of congress have made, though specifically on china. the president is saying he's ready to go all-in. last week the administration looked they listed 6,000 items from china to possibly be tariff ed we're talking about $200 billion worth of items and the president now saying that he's willing to tariff everything, basically china sends to the united states. that's another 300 billion for total of 500 billion items of goods being taxed or tariffed coming into the united states. that's because the president says that he's not seeing china change, and protect any intellectual property from the united states companies or lower their trade tariffs. now, china is standing firm. in fact using harsh words, a statement from the chinese foreign minister today said that "the u.s. has been rudely threatening and coercing china and engaging in flip-flopping and back pedaling which is the direct and root cause for the escalation of this situation."

the president again maintains that china has been taking advantage of the u.s. for a very long time. he wants to change the situation and he's using these tariffs to bring china to the table, to try and get them to talk and level the trade playing field. now on that vein, he's also going to possibly add up to 25% tariffs on autos and auto parts being imported into the united states from every country, including china. now, the commerce department has until february 15 to finish the report from the public hearing yesterday. once that report is in the president can then impose those tariffs if he wants to. i'm told that report maybe done before february 17. back to you neil? neil: edward lawrence thank you very much my friend at the white house here. meanwhile, this doesn't sit well when any foreign leader hears this sort of thing and this is before angela merkel heard about this slamming the president's plan for auto tariffs on the european commission, is unfair, unjust, and something that just hurts everybody on the planet. club for growth president the wall street journal editorial

jillian melter and best selling author evening edit. >> love that. neil: so what do you make of this, it's getting nasty? liz: yeah it is getting nasty remember back in 2014 the eu said we want to break up google and now they're still bearing down on this fight. it's really interesting that the eu talks a big game about global ism, free-trade, but when it comes down to it they sure erect their border fences, built on regulations and fines. it does give an incentive for companies in the u.s. to pull stakes and move their operations to europe so they don't get hit with those fines. neil: i know, jillian the president came rushing to google 's defense and probably no big fan of the leadership that veered slightly to the left but that this was a travesty and another sign the europeans are just out of control. reporter: they're certainly going for the money and what's

ironic is technology is moving so quickly there's competition that arises. it's a little bit too late on this issue but i do think talking about this in the broader picture of tariffs, this is kind of cutting off your nose despite your face. i think on many of the things we're doing to protect u.s. industry particularly with the autos, we're seeing automakers say we don't want this kind of protection. we're afraid of what it's going to go for jobs and investments and we need to be careful in the same way of the eu, not to penalize businesses. neil: that's a very good point. david i'm wondering where this all goes because the president upping the ante saying how about everything that china sends us slapping tariffs on now. no one is blinking in this and maybe the chinese are eventually going to cave given their currency is careening their markets have been careening, we as the president pointed out in this interview have all from the table and we're using the bank's money to wage that war so to speak. what do you make of that?

>> what i'm worried about is the tariffs themselves will continue to cause job losses here in the united states and 400,000 for aluminum and steel and another 130,000 for the round of tariffs that we did with china already. neil: none of that's happened yet but you argue it will happen >> well it's starting to happen you're hearing reports already of companies that are not expanding. they're laying off people. you're seeing companies that build considers here make plans to build them overseas so they can avoid the counter tariffs. the win here for the president is to focus on the zero zero goals that he laid out and the german automakers have said we're willing to reduce tariffs where merkel and those guys come privately probably the president needs to push for okay, let's show that this works, that we don't have to just keep escalat ing. we can actually reduce on both sides that'll be fair for america and everybody will benefit. neil: what do you think? liz: you know what's really interesting and i agree with

what jillian and david are saying. even before with the president saying today about slapping china even harder. when you mass out and i've been working on this with wall street sources what the president wanted to do in reducing the trade deficit by 200 billion, he's saying there's a 374 billion deficit, trade surplus, deficit with china. when you math out and you figure into factor in the supply chain for our products here, meaning cars, meaning everything silicon valley, that's about 180 billion so even before with the president saying today he effectively was slapping tariffs on all of what china is in the trade surplus with the united states, so this is what we're talking about, i think it's an important point and that is that our prices likely will go up. we are, they are really playing hard ball right now. they're playing hard ball before now they're playing even harder ball. neil: when people look at this, we always have to remind them

that governments don't pay those tariffs, we do. >> yes. >> right. neil: so we have an option to seek out alternative products i guess but sometimes there are no alternative products for those and for our farmers trying to ship let's say soybeans off to china, their biggest market, there aren't other markets to adjust for that, compensate for that so what happens? >> well i think the lobster industry is a great example of this. so it should be a really good time for the lobster industry. american lobsters doing great but because of the way -- neil: well the lobsters themselves. >> [laughter] the lobsters aren't happy but china is a big growth market so they're getting cut off there losing their price advantage and losing like a third of their business. neil: that's already happened. >> it's already happening and on top of that you've got the european union decreasing canadian lobsters and the u.s. is subject to the tariffs so this lobster industry is los ing two-thirds of its market and these are little boats.

they're like one guy with his crew of two and it's really going to hurt them. neil: you're right. and along comes this move on the part of the europeans to go after google with this $5 billion fine. i know this sort of is a back helicopter type question for you so swat it away, feel free. would this have happened if we didn't have this nasty trade atmosphere? >> who knows. you know, you know the google, right? liz: [laughter] >> but the panes are in this for the long game. they're signaling no cut deals with china, if trump goes after europe and china, but i think we've got -- neil: and china with them, right >> yeah and liz's point is a good one. the people who are affected are the u.s. producers, the lobster folks, agriculture. china's already said if you're going to do that we'll slap tariffs on u.s. ag products and we'll setup contracts to buy from your competitors and other

countries and that just hurts us neil: you know, what i notice with the president though, every time a country or region respond s, it just gets his goat all over again because he says well what good is that going to do because then we're back to the whole problem is you've rigged your market or you've rigged your trade gap and then you do it again. liz: it's in his nature to win. he just wants to win. win win win but that's, go ahead david. >> oh, sorry. this is where trump, the art of the deal, needs to step in. i worry that navarro and those guys they want high tariffs and fortress america from the 1950s. i don't think the president wants that so it's time for him to step in and say okay, i've forced him to the table. now let's cut a deal. liz: because the countervailing forces -- neil: why can't they change it? i think his idea was very good to say all right, i envision a world where we don't have tariff s which is a good goal.

president cavuto which is very scary. liz: [laughter] neil: but i digress. liz: [laughter] neil: but what would happen if we just do you know what? we're going to cut all our tariffs, all of them, and we will trade with you if you do the same, end of story? >> i would be all for that i don't think that gets at the issues of china stealing their intellectual property. sorry i would be all for that. neil: but if you start like that , do you know what i mean? liz: go ahead. >> i think it's important when we talk about the cost to consumers. when this started out trade wars were easy to win and good and when it started out it was tariffs on aluminum and for the sake of the industry it's like less than a penny on your beer can and now we're looking at autos where if you buy a foreign -made auto half of the auto industry or auto sales between 1,000 and 7,000 dollars. liz: it feels like -- >> i think it's kind of eliteis t for these politicians in washington to be saying consumers need to suck it up. liz: but this policy feels like

that old game with the ball that you tilt it so it doesn't fall into a hole. it feels so slip-shotted all over the map. what they should have started out saying is sanction. sanction those chinese companies who are stealing our intellectual property. >> it's easy to get away with it. liz: and then say this is our tariffs. it feels like this is a policy that changes by the hour and i don't know if it feels like havoc. neil: you're right. real quickly david what's your thinking on how far this goes whether cooler heads prevail. you've been asked this question a lot but what's your latest sense? >> so i think the turning point could be coming with the auto tariffs where the german automakers signaled that we're willing to let europe reduce its tariffs and compete. the fact is they make a lot of their cars here in the u.s. and sell them abroad, bmw and the german companies so that's a possible turning point where we get back to a real deal. by the way the chaos, that's the way the president operates.

he creates a lot of chaos and out of it tries to get a deal. neil: yeah, all right thank you guys very very much. we'll wrap all of that 29 points scary thoughts i wanted to leave you with and meanwhile the president is pushing for that fall meeting with vladimir putin how would that go especially right before the mid-terms? after this. >> i'm happy that the two leaders of two very important countries are continuing to meet if that meeting takes place in washington i think it's all to the good.

neil: i'm happy that the two leaders of two very important countries are continuing to meet and if that meeting takes place in washington i think it's all to the good. those conversations are incredibly important. we have our senior leaders are meeting all across the world with people that we have deep disagreements with. it is incredibly valuable to the people of the united states of america, the president putin and president trump continue to engage in dialogue to resolve the difficult issues that our countries face between each other and this makes enormous sense. neil: all right, so we had mike pompeo to the list of top trump folks and republicans in general saying it's better to talk than not talk. it's better to be nice to someone than not be nice to season.

to former cia station chief on all of this, and dealing with russian intel officials so we'll get his read. scott what do you think of what he's saying? whatever you might think of how the president performed with vladimir putin and we don't know what was going on behind the scenes, better that they're together and better that they're talking about getting together again than not. >> that's certainly true and i think we need to look at the entire picture, what we're see ing now with today's discussions at the united nations, pompeo's speech tomorrow about iran as well is that we have a u.s. foreign policy that's more unified and coherent than it has been in a very long time and i believe that putin sees this as well and i believe he's starting to perceive the united states as being more and more the strong horse in the world. that's very important for a pragmatic and opportunistic guy such as putin he's seeing that the strength is now with the united states and the momentum is with the united states and i

believe that will air to the odd s of success at the forthcoming summit in washington neil: do you think this effort, i think largely in the senate, to setup sanctions ahead of time , if the russians were to get themselves involved in north u.s. election, is the way to go because the president hasn't endorsed this. it doesn't really have any teeth in it right now and it doesn't address what we already know they were doing in 2016 so your thoughts? >> it may be appropriate if they can find a solid intel to support that that may be appropriate. remember we went into north korea negotiations with sanctions against north korea and so it would not be inappropriate to do the same when they met in helsinki -- neil: but they were already in place right? weren't they already in place, scott? >> exactly. neil: this is something that the senate is contemplating in addition to and something the president is not apparently in favor of but he hasn't rejected it but radio silence. >> right. i think that's something that should be looked at and may be

appropriate. i believe right after the helsinki summit russia was conducting some of the very high profile weapons test so this is another negotiating ploy that the russians are doing so it may be appropriate for us to do the same thing. neil: scott real quickly the north korea situation, both nikki haley, michael pompeo seem to be saying that we were criticized for being with north korea it was really leveled at michael pompeo in his last visit , we expect a timetable for doing the things you promise to do and you haven't done it, which feeds this argument that maybe the north koreans just might not do it. what do you think? >> it is possible they won't do it; however just as important is the message that is being sent out to the world at large, iran is certainly taking notice of this, as is putin, so u.s. strength on this, on these matters is always a good thing

because even if north korea negotiations are unsuccessful putin will once again see that the united states has a coherent foreign policy and is willing to speak the tough words and do the diplomacy necessary to get the job done which will ensure increased success on a broad front with a variety of nations. neil: real good to see you thank you for taking the time. my buddy is back with us we always get every time when lee is on because he takes on conventional positions this notion for example, russia whether it's adversary or not. lee your view is whatever you think of russia, nato is worse? >> [laughter] well let me put it this way. first of all i think that president t was brutally candid with putin and their private meeting and i think he wanted to offset that by being kind of kind and having a pleasant press conference and maybe he over did it but the truth is that our

friends and allies in the nato and the eu have been bleeding america dry in terms of under spending on defense, causing us to have to spend at least $100 billion a year more to make up the difference and at the same time, conducting trade policies that are costing us $150 billion a year and millions of american jobs so in terms of direct harm to the united states in recent years, there's no question that china and nato and eu countries have inflicted far more on the u.s. than it has russia. that doesn't mean russia isn't a nefarious country. it doesn't mean putin isn't a villainous leader but let's look at the reality. we have to work with russia because that is the only other nuclear super power in the world but they are not hurting us directly anything close to the way china and the eu have been economically. they are bleeding us dry and

they're bankrupting the western alliance. neil: all right, there's a lot to disagree with you on there but i'm not going to go there. i will, though, raise a comment about when the president xis for all nato members to beef up their military spending. to get to the 4% level, it would mean the germans, the germans keep in mind, spend almost four times what they're spending now on the military, afterworld war two for obvious reasons, as you know. the germans themselves said you know, we're going to cool it on this, and now we're asking well, uncool it and i'm just wondering as a great student of history you are, on any level, does that bother you, germany spent four times, germany, four times what you spend now on defense. >> well i would say let's start with two times. let's have them get up to the 2%

of gdp defense spending that they agreed to. we didn't hold a gun to their head. this happened many years ago at a nato meeting. neil: but are you comfortable giving germany a green light to beef up its military? >> of course i am. i certainly am, but nato is the greatest alliance in human history and the united states saying that we want other rich countries like germany to pay their fair share which by the way is still considerably less as a percentage of gdp than the u.s. strengthens that alliance. it doesn't weaken it, of course they will squeal like pigs. they don't want the gravy train to stop. they've done very well by this system and what i call the hose america and expect america to like it paradigm, that isn't going to happen any more. president trump isn't going to allow that and by the way it's unsustainable anyway so it's time that our nato allies led by germany began operating in a

realistic and sustainable fashion and that is what's going to strengthen this alliance, and we cannot counter russia or any other threat around the world unless all of these countries pull their weight and by the way talking to previous guests spoke eloquently about an integrated foreign policy that does have to include trade because right now, neil our country is borrowing half and/or selling valuable american assets to the tune of half a trillion dollars a year just to offset our trade deficits. neil: this is all trade back historicallily is making it worse like the chinese one is tumbling so it's actually going to make it worse in the interim because our dollar gets stronger so are tough talk and i know you hope that eventually it leads to concessions on the part of these countries and you're quite right many of them are china first and foremost but we're actually improving their trade posture vis-a-vis the united states because of this very phenomenon. >> well they're starting to but

they've got a long way to go and of course there's a rebalancing that's going to affect exchange rates and other things but as i've recommended and it sounds like the administration is moving toward we should just have a tariff on all imported goods and an additional 15% which by historically standards is not very high. neil: do you think americans are willing to do that, lee? >> you bet they are. neil: but leaving people like you out of it do you think, i'm kidding but do you think that americans when they realize wait a minute i thought this was something, they're the ones that have to pay it and it dawns on them and then we have to make a patriotic pitch then to say that this is well worth the sacrifice here. do you think americans are willing and ready to do that? >> i don't just think it, i know it. a leading republican poll -- neil: saying you're going on a diet and going on a diet you don't have to worry about these things. telling the americans or

americans telling you that they are willing to absorb this punishment and then absorbing it are two different things, my friend. >> well let me tell you first of all the entire tariff will not be passed on to americans, because importers will compress margins and find other ways to cut costs. it's a brutally competitive economy. number two no one talks about the other side of the equation. we're going to have millions of americans with either better paying jobs or better incomes because this -- neil: you will. >> this importing and offshor ing orgi that we've had over the past decades has imploded american middle class incomes. obviously when you can access workers overseas making $6 a day , that's going to hurt american workers. neil: okay. more companies can build here in the united states. they're already doing it as you pointed out in the previous segment they can do a lot more of it. there are no reason for large scale manufacturing imports in this country and we need a

tariff to advance that process, to make our economy stronger. that is a national security issue. that is the only way we're going to be able to afford funding our military and be able to stand up neil: i love you to death, lee. i love you to death and especially when you use words like orgi when we're talking about trade but be careful what you wish for, i'm telling you because you just might get it. we'll see, mr. smarty pants. very good seeing you again, lee thank you very much have a wonderful weekend. just kidding back and forth there but i know i'll hear from people and i'm vulnerable this week but you're still doing it. in the meantime the race for the first trillion dollar market cap company on the planet, everyone is focused on amazon. everyone is focused on apple. why is no one focused on this company? after this.

neil: you know, microsoft hitting an all-time high its been on a roll here much better-than-expected earnings, revenues everything it's doing, the cloud everything else is getting everyone's attention, so what if i told you this is just me saying this not smart reliable people like my next guest saying this, that it beats amazon and apple to a trillion dollar market cap. it's a long way from that right now, and quite a ways behind both those concerns but i'm telling you it's going to happen and if it doesn't happen, adam lashinsky will not remember this conversation, the best selling author, the fortune executive editor. what do you make of this so what's going on, i think microsoft still doesn't get the respect it should command for what's been happening for the last couple of years. >> i agree, neil. microsoft is the single-greatest business reinvention story in the business world, period, right now and i'm not just talking about among technology companies. it was and the reason it doesn't get the respect is that it was

relatively speaking a loser for the better part of a decade and now, while it was a loser, it was minting billions and billion s of dollars of cash from its existing business but that didn't get people excited as you rightly point out. neil: now you know, to get to the trillion dollars, it doesn't matter in time probably for all of these guys it would be more of a leap for microsoft but one thing that does amaze me even with the $5 billion fine for google alphabet, it doesn't seem to deter buyers who look at this group in the aggregate and say, you know, every time these stock s have dipped we've been punished dipping out of them. so what is driving this? >> well, i'd make a similar argument for those other companies, so apple had the most amazing reinvention before microsoft in that it was a computer maker and it made mp3 players called the ipod and now

it's a phone company so this company has shown an ability to reinvent itself. amazon has reinvented itself from being a big online marketplace to this prime delivery thing that's just another leg up in their business so what investors see is that these giant businesses with giant cash flow and hundreds of millions of customers can leverage their strengths and reinvent themselves the way microsoft most recently has donald as long as there's confidence they can do it again, there's safer bets than not let's say. neil: do you know what, you're a good reader of all things technology. there was the president normally not a fan of some of the leadership of these technology companies who tend to lean a little left but they do recognize the value of green, whether they're red or blue and they've been making a lot of money and the president not at allen thousanded with what he's seen out of the europeans with this $5 billion fine, and they're concerned about it. is this a new microsoft, you

know, separate your browser from windows thing? >> if anything, yeah, i think the europeans are leading the way, let's say, in once upon a time california led the way on fuel emission standards and i actually think what you'll see happen is california and then the rest of the united states mimick more what the europeans are doing. i understand the president doesn't like that. the tech companies don't like that but legislators of all types and regulators of all types do like it so i would look to europe as a direction of where things are going there, neil. neil: the whole trade stuff as well, how will that impact microsoft, all the others? >> it's not good. i mean, apple is particularly vulnerable if the u.s. /china spat starts to affect iphones in china and the supply chain for making iphones. microsoft and google and amazon

far less vulnerable because the first two have almost no business in china and amazon has a very weak business in china, so it's not good for anybody but that's sort of the stack ranking of how this will affect them. neil: adam always a pleasure my friend thank you very very much a adam lashinsky he is the bible on all thins technology. the dow up 4.5 points. how do you win at business? stay at la quinta. where we're changing with stylish make-overs.

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neil: all right, tax 2.0 making voters forget, well i don't know , trump/putin 1.0? that's what a lot of republicans are hoping regardless of what you thought of that powerful pow wow earlier this week the focus should be on the improving economy and improving markets and obviously a lot of money in people's hands here so more of that and more the focus on taxes , tax cuts, more to the point the tax foundation president scott hodge, and

member ken blackwell. ken what do you make of the idea the republicans were a little concerned about the president's performance in finland but not at all about his performance with the economy on tax cuts, zero in on that, focus on that, let that be the winning message what do you think? >> absolutely. that's smart politics and it's sound policy. you and i have talked about it on a number of occasions getting that capital back into our economy, looking at a quarter where we're going to probably hit 4% economic growth, job creation, you have corporations talking about investing more in their workers, and now we're talking about making the tax reform, tax cut that the middle income taxpayers realize on the first go-around permanent and that's a good news proposition and the democrats can run against that if they want but i

think it would be very unproductive politically speaking for them. not just good for the american people. neil: scott, apparently whatever enthusiasm might exist for re visiting the tax cuts, not so much in the senate but in the house i guess the leadership fears that it will just help a couple of those democrats who voted against the tax cuts and the last go-around, giving them sort of a lifting vote this go around so where is this all going? >> that's exactly right, neil. they don't want to give some of these democrats and those red states a free vote, having voted against it the first time, so really this is kind of a political statement on the part at least of the members of the republicans and the house of representatives but they're putting down a marker that as ken said major portions of this tax bill begin to expire in five to eight years and they don't want the economy to hit a hiccup or a speed bump in that time, so the sooner that we can lay down

a marker that we want these tax cuts to be permanent, the better that is, and of course, this is a political statement right before the election, so there's nothing wrong with that either. neil: the more immediate thing for republicans and maybe you'll disagree, ken, is the trade thing because whether you're for or against them the impact they could have on the tariffs could have before they resolve if they're ever resolved is right away. already we're getting word that senator orrin hatch has shot a letter off to the administration saying he's very very concerned with what's happening on the tariff front, and that he's urging the president to reconsider and if he doesn't, he would move to curtail presidential trade authority. what do you think of that? >> i think in the final analysis, orrin and the president are on good terms. while they don't always see eye to eye they can get to a common strategy. look the president is operating from a position of strength.

when we have our economy growing and folks making investments in our businesses, he isn't out there fighting in american self- interest that is making sure that the trade deals are fair and equitable and folks are caring and pulling their weight. i think you're going to see more and more of our european allies coming around to understanding they better get on the good foot so that we can continue to have the sort of coalition in the marketplace. neil: well they're not doing that. if anything, ken and scott will raise the view that some of them are cozying up to china, china with them, doing joint or bilateral deals that don't involve the united states because they're running out of patience regardless of the politics does that offset whatever is happening on the tax cut front because those tariffs are coming and they're here, a lot of americans are already paying this and it's only bound

to get worse before hopefully i know the administration trusts it will stabilize. >> that's certainly the danger, neil. in fact our models say that if this escalates, in europe raises its tariffs to match ours, if china goes nuts and starts taxing more of our products, then that could reduce the benefits of the tax cut plan by at least 25%. that's not good. the last thing that the economy needs, as it's picking up steam and more and more people are getting jobs and getting higher wages is to see a stumbling block here drawn down by the tariffs. that would be a bad bad thing. neil: do you think and you know the president very well, ken so just as a friend and someone whose worked with him, does the president firmly believe that the chinese will blink? that there's no reason for us to worry about this because we're using the bank's money per that line of the cnbc interview that we've got that going for us and

the stronger markets and he's fully convinced of that? >> i think he is and one of the thins that you and i have always talked about is that this president operates better than most folks in chaos, and the reality is is that this is a disruptive move. it changes the status quo but the status quo is not good enough and so i think this president is a smart wheeler and dealer and a smart negotiator and i think china understands that there is so many fronts that they can't afford to have us mad at them that they'll come around. >> what he's asking for is he's asking for them to stop cheating he's asking them to stop steal ing. it's a pretty straightforward -- neil: does that apply to us slapping 20 plus percent tariffs on vehicles? >> i think it applies to us

when in fact we cheat or steel and i don't think that we cheat or steal. >> but don't forget who actually pays for these tariffs. neil: that's right. >> it's american consumers and taxpayers so the pain is ultimately on us, not them. neil: well ken is an elitist. >> [laughter] neil: guys seriously thank you both very much have a wonderful weekend. all right, now ever since the president started talking about the federal reserve and hiking rates in this environment obviously he's frustrated by that but then think about this if you're on the federal reserve what do you do about that? you try to be beyond the appearance that do you actually go the other way and actually raise rates more than you otherwise would? it's a real concern, after this. ♪

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neil: all right if you all of a sudden think the federal reserve has to prove its independence by not even appearing or not even give the appearance that your president doesn't like you raising interest rates do you raise interest rates more than you otherwise would? to parents.com associate publisher jack otter on that risk. i do know that every move it makes now will be scrutinized among those who will think it

has and does and will. what do you do? >> exactly. i don't think that this pushes the fed over some border but if you have to weigh it, it is a tiny little nudge in the direction of raising rates to prove and maintain that independence which it needs to make sure the economy has faith in the fed, and i love even talking about the history behind this but you need to look at the history to understand why this is such an issue. lyndon johnson famously bullied the fed allegedly shoving chesney up against the wall in his ranch, nixon was in burns who kept rates really low which seemed to help witch on win the 72 election and the result of course was horrible inflation and we didn't get rid of that until paul voelker resisted politics and massive pressure and broke the back of inflation by hiking interest rates so high and what do we get in return a

wonderful 20-year bull market so the independence of the fed is very important. neil: you know, jimmy carter was president when it all started that carter chose voelker to do that and knew full well what he was getting into we're told and some of the biographies that appeared since. he didn't criticize what the fed was doing his age did. they were concerned that it was handing the election over to ronald regan, i'll let historians decide or judge that, but there was then a respect for the feds independence but in this case the president is saying why is there a knee jerk reaction any time the economy picks up a little bit you squash it by hiking rates. whatever you make of the wisdom of questioning the fed, he is questioning that response isn't he? >> sure well that is because what the fed is charged with doing is maintaining low unemployment and stable rates, trying to keep a lid on

inflation and right now inflation is more or less where most economists and certainly the fed agree it should be around 2%. the economic growth is picking up a little bit and the back drop is incredibly low interest rates, so really, there's nothing to complain about. now, everyone in the white house always wants ultra-easy money, super low rates. it's not a left or right thing. if you want to be re-elected you want a humming economy but there is the danger of overheating and we saw what that did to carter. donald trump shouldn't want that either. a little bit of hiking now is really not going to, i don't think, squash the economy although a lot of people say generally what causes recessions is too much hiking by the federal reserve, but i don't think we're really close to that and of course you do want dry powder eventually the economy will turn south and i'd rather have the fed have that latitude to lower rates when that day comes. neil: this friction between the president and the fed, is there a market history to that?

>> oh, absolutely, because again, they have different mandates. all elected officials on their watch want the economy to be surging ahead and the fed has a different mandate which as i said if they keep a lid on inflation and certainly to keep the economy moving but not necessarily charging in a way that will overheat so that tension is totally natural and we should want that in a government of checks and balances. we want the fed to be thinking long term what's in the best interest five, 10, 20 years out, and understanding that politicians will have a different point of view and we should maintain that separation so they can't win the day. neil: well put, jack. associate publisher so much more , all right in the meantime we're looking at the dow up all of 15 points right now so this is having people second guess everything, markets as i always like to say have a funny way of showing it. microsoft right now among the dow 30 is the top performing stock and also the one that's

racing ahead. maybe the first trillion dollar market cap, after this. . . ♪

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♪ neil: dow up 19 points. good day for technology as it has been. at thistit-for-tat between ourss and europeans, europeans comes to google 5 billion-dollar fine. google indicating, not so fast. president also saying not so

fast. we'll explore this with leon panetta and the trade fight and former defense secretary. and chairman mccaul what he makes of the back and forth between president and chairman putin. right now to trish regan now. trish: thanks so much, neil. president trump doubling down on america's trade policies is as he blasts china and blasting the eu for treating america unfairly when it comes to the issue of trade. it is costing us money. it is costing us jobs. the president is vowing as long as he is in the oval office no country will take advantage of america or our workers on this issue. market pretty much the flat line, nonetheless positive territory on all three indices. i'm trish regan. welcome, everyone, to "the intelligence report". ♪