the incredible job growth numbers on friday. that's the why now in all of this. if you are selling stock because of a couple of tweets from the president of the united states, maybe you shouldn't be in the market. maria: thank you, everybody. seize the day. stau stuart varney is up next. stuart: good morning, maria. good morning, everyone. hold on tight. the news is coming thick and fast. your money is at stake. president trump unleashes his twitter account and aims right at china. trade talks, he says, are moving too slowly so he's considering a big increase in tariffs, as of friday. there may be more later. he's not happy. he's taking a very hard line. he's backed xi jinping into a corner just as we thought a trade deal was imminent. on wall street, the word is sell. investors do not like any sign that the trade talks are breaking down. we are waiting for china's formal response to that tariff threat. when we get it, the market's

likely to move. as things stand, the dow will be down close to 500 points, about 470, to be precise, and the s&p down about 45. just look at the nasdaq. a really big selloff in progress there, might be down close to 2%. wait for it. there's big news on other fronts as well. the aircraft carrier "uss abraham lincoln" with supporting ships plus a bomber group on their way to the middle east. there have been threats to american forces in the region. john bolton says quote, any attack on united states forces or those of our allies will be met with unrelenting force. meanwhile, a cease-fire between israel and hamas. 700 rockets launched, 23 palestinians killed, four israelis. egypt brokered the cease-fire which as of now, appears to be holding. and the president says he's with israel. 100%. there is a lot to go at this monday morning, and this, too, wait for it, sky news is

reporting that meghan markle just went into labor. "varney & company" is about to begin. stuart: all right. let's get this right. presidential tweets, here they are. this prompted the selloff. here we go. for ten months, china has been paying tariffs to the usa of 25% on $50 billion of high tech and 10% on $200 billion of other goods. these payments are partially responsible for our great economic results. the 10% will go up to 25% on friday. $325 billion of additional goods sent to us by china remain untaxed, but will be shortly, at a rate of 25%. the tariffs paid to the usa have had little impact on product cost, mostly borne by china. the trade deal with china continues but too slowly as they

attempt to renegotiate. no exclamation point. market watcher dennis gartman with us this monday morning. i don't want to delve into the weeds of the china trade tussle here, but we've got a selloff in progress. do you think of this selloff as a buying opportunity? >> no, i really do not, stuart. i'm very concerned about the fact that we have a president who continues to be tweetable and tweeting and breaking and disturbing the manners in which trade and trade negotiations have been done in the past. i'm lucky, i came in marginally net short in my own account and quite honestly, i don't know what to do. stuart: okay. you've got me kind of worried here. you don't know what to do. >> no. stuart: you don't think -- i'm trying to phrase the question right here -- do you think that this trade tussle, this threat of tariffs, does that mean we're

very unlikely to get a trade deal in the near term? in other words, the trump tweet won't work? >> i'm afraid that the trump tweet won't work because in china, concern is always of losing face, and i think that this is a slap in the face of xi jinping. i think he will take it very badly. i could be completely wrong. let's understand that. but i've had enough classrooms and studies in china over the past 40 years to understand that face is very important and i think in this instance, face is being lost and it's going to cost the president, it's going to cost the united states, it's going to cost china to see the trade talks distended, disturbed and probably put down. let us hope that i'm wrong. i really do want to see these things succeed. i would love to be able to see china and the united states make amends with one another and move forward with trade but this i think is very disturbing and i find it disconcerting. as i said, i came in net short in my own account and i'm not quit sure what to do.

stuart: does that mean you're not going to buy anything or sell anything as of right now? you are just waiting to see how this thing pans out? is that where you are at? >> that's exactly what i'm going to do. i'm not going to cover any shorts or reduce the size of any long positions i have. i may increase my goal position marginally but the operative word is marginally. i may just sit and watch. these sorts of activities really are disconcerting. i have been at this for almost 50 years but these things, these sorts of trade disturbances do cause me to put my hands under my legs and sit on my hands for another couple hours, i think. stuart: dennis gartman on monday morning, an honest man. thank you. see you again real soon. i want to stay on the china trade story and the markets and bring in joel ruben, former state department official. to me, the question is why now? why the sudden tweet flurry on a sunday afternoon, why now? >> yes, stuart, that is the

operative question. was it a strategic tweet as part of a real negotiating strategy, or ad hoc. i was just in china for two weeks in april, actually, and met with a lot of people, talked with folks about what it is they're looking at when it comes to donald trump, and quite frankly, the tariffs were on their mind. it's causing pain in china and it's causing them to assess what kind of economy they want and how they want to negotiate with the u.s. so this question is the key one, will this tweet fit into a negotiation this week and help put more pressure on, or does it just, as the previous guest says, put china on the defensive without any clear end point. stuart: what's your answer? is there a strategic point to doing it now? >> i think the chinese do need to hear tough talk. i do believe the president, by being tough on tariffs, it is causing pain here in the american economy and that's deeply troubling, but it is also

impacting china and their calculations. he needs to follow through. the other thing with the president and this negotiation is there has to be a bit more of a broader aperture about how we engage and deal with china economically. the one to one is very hard. china's economy is bigger than ours, it's a harder negotiation than perhaps negotiating with smaller countries like mexico where we can bully them around a little bit. i do think this was intentional leading into these talks to try to get china to concur with some of the things they previously agreed to but seem to be backing away from. stuart: would it be right to say there will be no deal if xi jinping can't walk away from this looking reasonably good and saving face? >> ultimately, both sides have to see it in their self-interest, their national interest, to sign on to these deals. face, while it matters, should not be the barometer by which one judges whether or not a deal is going to work. it has to be whether both sides think their economies will benefit. right now, the pain that china is feeling from these tariffs is

a calculation. we have serious concerns from the american side about intellectual property theft and other sectors of the economy that have been harmed by china that are real. i'm less worried about face and more about some kind of an agreement that xi can walk away from and say he's going to get it cod itcodified in china. ultimately the american and china economy need to work together in the long run for economic global prosperity. stuart: we will see how this transpires. maybe we will get news in the course of the show and that will move the market. we have to take a look at boeing. look at the stock this morning. down ten bucks, 2.7%, back to $365 on boeing. not just because of trade jitters. what else is going on? susan: kind of shocking that industry insiders basically said boeing knew one year before the lion air crash that some of its

safety cockpit alerts were not working and only after the lion air air crash were they a little more forthcoming. they were partial with their explanation. after the ethiopian airlines they finally disclosed one particular cockpit alert, the angle of attack disagree alert, basically if you are not at angle with the ground, with the airplane, was not working with the software updates so this really brings into question what did boeing know before these crashes and how much did they put the safety of the public at risk. stuart: this story says they knew a year ago, the crash, the first max jet crash was in october of last year. they knew before that. ashley: then you have the ethiopian crash and they refused to admit there was anything wrong. it was the last -- u.s. was the last country to ground the max jet, then come out and say yes, we've got a fix for this software problem which is strange if there was no problem in the first place.

stuart: endless stream of p.r. problem. susan: not just that, the fbi is still investigating. there are lawsuits at stake in terms of what they are not disclosing to shareholders. boeing is still in trouble over this. stuart: boeing is a dow stock. it's down ten bucks, 2.5%. that takes a chunk out of the dow as well. that's where we're at this morning. as we said, it's a big day for your money. by the way, we also have this. not just money. there's a lot else involved. democrat presidential dantcandis refuse to give president trump credit for the booming economy. they praise president oh bachlt i think the democrats have a real hard time running against prosperity. what a story. check futures again. we will have a big selloff when the market opens. now we are looking at a loss of 500 points for the dow and over 2% for the nasdaq. the market opens in 20 minutes. we will take you there. has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else?

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stuart: we are going to be down 500 points at the opening bell,

a threatening tweet on china tariffs from president trump over the weekend, that's what's doing the damage. more on this in a second. to the middle east. after days of fighting, israel and hamas have reportedly reached a truce. more, please, ash? ashley: apparently brokered by egypt with help from the u.n. but listen, this started friday after protests over the blockade of gaza. 690 rockets fired into southern israel from hamas. of course, israel intercepted 240 of those with the iron dome. they reacted, israel, targeting 350 sites. four israelis killed, 25 palestinians were killed. we do understand that is a peace or cease-fire in effect as we speak. stuart: it's holding. but there's another development in the middle east and this is one that's a big deal. america's sending an aircraft carrier to the persian gulf. why, and what is john bolton saying? ashley: he put out a very strongly worded statement saying

listen, we are going to deploy the "uss abraham lincoln" carrier strike group to u.s. central command in the region. he wants to send a clear, unmistakable message to the iranian regime that any attack on united states interests or on those of our allies will be met with unrelenting force. this is a very strong statement. intelligence suggests that a specific threat could be imminent with regard to iran, targeting u.s. or allies. there has been movement on land and sea among the iranian forces and because of that, apparently this has been high level emergency talks at the white house to consider our next move and that's what they're doing. stuart: i'm surprised to see the price of oil going down to $61 a barrel. i'm surprised to see the price of gold, down a couple bucks this morning. i would think it go the other way. susan: there's no inflation. that's probably why. stuart: normally in times of international conflict, you might expect a jump up. not today. interesting. i want to move to the booming economy and yes, it clearly is booming.

democrat candidates will not give president trump any credit. watch this. >> the economy is doing well. i'm sure i don't have to give trump any credit. what we are looking at is the ten-year rebound from the wall street crash of 2008. >> we have had policies in place starting with president obama that have aided that recovery. >> you walk around my block, you ask people if the numbers donald trump touts are really making a difference in their lives. people on my block, i'm the only presidential candidate lives in a low income, inner city neighborhood, talk to folks and they will tell you i have to work two jobs just to try to keep myself in housing. i love that trump is taking credit for a recovery that started under obama. stuart: come in, larry o'connor, washington examiner guy. i put it to you, i know you are laughing, but the democrats have a very hard time running against obvious prosperity. >> that's right. think about it for a minute. great news on the economy, great news on jobs, great news on wages, bad news for democrats. that's not a good political equation when you are trying to

win the hearts and minds of democrats. it is remarkable to me, though, that this whole narrative that this is all obama's doing, this economy. i remember the 2016 election. i remember being warned by barack obama that trump would ruin everything, that his policies would reverse everything obama did. i also remember the obama people saying the best we could hope for is about a 2% gdp. obviously trump has done quite a bit and obviously this economy has responded and the american people know that. stuart: it's a very weak response to go back ten years and say this started ten years ago and obama did it. i find that kind of weak. i don't think that's going to hold up until 2020. >> by the way, during the '90s, i don't think they gave credit to reagan and bush ten years before. i don't think they can have it both ways. stuart: i think you're right. what do you make of the hard line that president trump is using on china? very hard line. what do you make of it? >> you know, stuart, listen, i know when your contract is up the fox people give you a blank check and you can just fill in whatever you want. most of us have to negotiate.

when we negotiate, you know, sometimes you actually have to push the envelope a little bit. china is not used to hearing tough talk from this town. we have had a lot of leaders and a lot of trade negotiators who just sort of look the other way and they have enjoyed whatever relationship we can have with china and not focus on the theft of intellectual property and the cheating that china does. i think trump is pushing it. he actually is talking a little tough with them and it doesn't resonate well on wall street, i know, but i think this is brinksmanship. stuart: he's got leverage. >> i agree. stuart: it is brinksmanship, no question about that. at this late stage to come in with that kind of demand, that is brinksmanship. i do think the president's got leverage. we've got a booming economy. the president has political support behind him. senator schumer is with him on this and that's extraordinary. >> i think you're right. stuart: the president has leverage here. >> it hurts china much more than it hurts the american economy. if i'm apple, hp, if i'm any major manufacturer relying on

contract manufacturing in mainland china, every quality system i work under, whatever it is, i've got a plan b, c, d, e and f. how easy is it for a company to move to a location elsewhere in asia and get that manufacturing done? it's not going to be easy. it will drive some prices up. again, china needs that work a lot more than we need china to do the work for us. that's my opinion. stuart: it's just fascinating. i mean, this is brinkmanship in the extreme. you are right on that. larry o'connor, thanks for joining us. i've got to move on. listen to this. president trump tweeting again about china and here it is. the united states has been losing for many years $600 to $800 billion a year on trade with china. we lose $500 billion. sorry, we're not going to be doing that anymore. the china news has driven the market a little lower, couple of minutes ago. now we are down 500 points. this is hard line trump, no question about it. got it.

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stuart: happening now, to britain's royal family, meghan markle just went into labor. confirm that, please? ashley: i will confirm meghan markle has now gone into labor,

in the early hours of the morning in the uk. it's interesting, the couple, meghan markle and prince harry, wanted this to be very private. we know she's gone into labor. we will know when she gives birth. we don't know where. she could be giving birth at home, she could be giving birth in a hospital. all of this is very secret. normally you see the happy couple come out on the steps outside the hospital and present the little baby. not going to happen. stuart: okay. to millions of our viewers, this is not important. far more important is the market and china tariffs. however, there are several million more of our viewers who are very interested in this. susan: and millions of dollars wagering on whether it's a girl or a boy. stuart: what do bookies say are the odds-on favorite girl's name? susan: the favorite is that it's going to be a girl and it's going to -- they have wagers that look like grace and diana and allegra somehow made it into the top three or four.

if it's a girl. stuart: what's the boy's name? susan: according to bet victim, the popular choice is philip, arthur and james. stuart: what's the odds against twins? susan: five to one. i don't think it's going to be twins. five to one is pretty low odds, don't you think? stuart: i would say so. i'm going to move on. i have been told enough coverage of the royal family even though it's of major interest to many people in the viewing audience. look at futures. down 500 for the dow, down well over 2% for the nasdaq. that's 170 points to the down side. we need early commentary before the market opens. jeff sica, keith fitz gerald, ashley webster, susan li with us. without getting into the weeds, jeff, about the trade deal and the tariffs, we are going to be way down at the opening bell. do you think of this as a buying opportunity? >> i don't. keep in mind, we -- stuart: i knew that was coming. >> we hit the all-time high on

friday. now everything in the market is going to anticipate the next tweet, the next move. i think there's going to be a lot of anxiety and i think that anybody who tries to jump in now is getting in prematurely. stuart: what do you say, keith? is this a buying opportunity? >> respectfully, i'm going to disagree a little with jeff. i think it is selectively for specific companies. those are the usual suspects here. the companies are going to grow no matter what happens with the negotiating, big tech, some medical defense, some defense stocks. stuart: wait a second. apple is going to be way down this morning, down about 3%. that is the latest price i saw pre-market because apple, look at it, down $7, 3.33%. keith, apple's got a big stake in china. this is vital to them. >> yeah, it is, but that doesn't even remotely concern me right now. the reason is i think they've got triple the opportunity they've got in china with their medical devices, once the

company successfully pivots to that. when i can buy it cheap i'm happy to do so all day long. stuart: susan, would you take this on? is this a buying opportunity? susan: you know markets tend to move one way or the other in knee-jerk reaction. they oversell, they overbuy. at this point, with apple giving back, what, $75 billion in buy-backs and upping their dividend once every seven years, some say $204 is a buying opportunity. microsoft will also be down as well. given that you were at record levels, some see that as a bargain to get in. stuart: that does interest me, especially apple. it was $75 billion for stock buy-backs. $204 a share, that's cheaper than $212 a share. susan: they might be taking the opportunity, i talked to the cfo, he's looking for entry points to buy stock. when you reduce the amount of shares on the market, that's when the price goes up. stuart: ash, do you buy or month? ashley: i think it's a buying opportunity. it is a very knee-jerk reaction

and a big one, 500 points. okay, this is a shot across the bow by president trump to the chinese. do we get response from the chinese? i think there's been increasing frustration the chinese have been trying to bit by bit pull back some of the concessions they appeared to be making earlier. i think it's frustrated the president. could still get a deal and he could get a good bargain at these prices. stuart: one of the things i'm waiting for during this program today is whether or not china's vice premier will be on board that plane when the trade delegation goes to beijing -- to d.c. susan: i think they leave it to the last minute. the meetings don't start until wednesday. right now they are saying the delegation will still be coming to d.c. will he get on that plane? i think they will probably decide on wednesday morning. stuart: when that news comes, that will move the market. if he's not on the plane, if the man in charge of china's side of the negotiations is not on the plane -- ashley: you can be sure there are phone calls going on right

now. all it takes is another tweet about the headline that perhaps suggests okay, the dust is settling, we are back online. >> keep in mind the biggest concern is not necessarily just the $250 billion. there's the anticipation that there's another $350 billion bringing this up over half a trillion in tariffs. this is nothing to play with. i think that the u.s. has been anticipating, we have been in complacency, we have been thinking and believing that we are getting to a resolution. i think china is preparing for war. bottom line. stuart: you think china is preparing -- >> i think so. i think china is not willing to make the concessions and i am completely on board with trump trying to initiate the intellectual property restrictions and the things that need to happen, but i don't think china's willing to go to that extent. they are willing to do a photo op but i don't think -- susan: i disagree. they have been trying to make a lot of concessions in terms of opening their cloud computing. they have been allowing more

foreign ownership of companies in china. they have been trying to i think make those steps and they need to. you know, the economy has been falling and shrinking for the last few years. stuart: okay. we are on the board. it's monday morning and it is 9:30 eastern time. trading has begun. what you are seeing there, look at that, right from the start, we are down 415 points. boom. right out of the blocks, we're down 426 points. i see one dow -- ashley: chevron. stuart: chevron, the oil company. not quit sure what's going on with chevron. i know what's going on with the rest of the market. we are down. there are three unopened stocks. one is higher, the rest on the downside. the s&p 500, a whopping great big loss there. you're down 1.5%. broad-based indicator, it goes down like that you know you have a sell-off. same with the nasdaq. that's a sell-off and a half, down 2.18%, 178 points to the

downside. all right. keith, let me ask you this. suppose we do not get any kind of trade deal at all. i don't know when that would become obvious or apparent, i don't know, but let's suppose that happens. speculate with me. what happens to the market? >> i think the market continues to sell off. i think you are going to see a lot of al go rgorythmic trading into play. worst case, this is throw the baby out with the bath water. that is my speculation. stuart: if you came to us to watch the opening of the market, the background news is this. you are asking why are we down 400 points. president trump took a hard line with tariffs on chinese goods coming to the united states. he doesn't like the slow progress of the trade talks and says if we don't make some progress, pretty soon, we are going to impose 25% tariffs on $200 billion worth of chinese products on friday of this week. left-hand side of the screen, the big dow losers.

goldman is down 2.5%. cisco. boeing, which has special p.r. problems of its own, that's down. microsoft is down. these are dow stocks. all of them on the downside. that's why we are down 421 points. what have you got, jeff? >> again, i think what we have to be concerned about here is what is the next step, who is going to blink first, and is the next step after the $250 billion tariffs bringing us up to half a trillion and what does that mean to all the incredible results we've gotten in economic numbers. are we going to lose them. that's my biggest concern for the market. stuart: big worry for you. >> yes. stuart: you are very concerned here. okay. let me move on. i want to show you interest rates. we have the yield on the ten-year treasury coming down to 2.48%. if you don't know much about interest rates and the ten-year treasury, i will tell you, 2.48% yield is low indeed. historically, i would call that very low.

can you show me the price of gold, too? i would have expected gold to go up today. i believe it's slightly lower. look at it, down to $1278. why should it have gone up, in my opinion, because of the fighting between israel and hamas, because we are moving a carrier battle group to the persian gulf. you normally go to gold as a safe haven. you have no inflation, but we are actually down two bucks on the price of gold. susan: there are other trades now as well. stuart: keith, what do you make of all this? >> it's collateralized, it's easy to go to cash and it's quick to sell. in today's day and age, all the speculative energy that used to drive went to cannabis stocks, to bitcoin, to crypto currencies. that's why it's down today, because people are simply going right back to bonds, not messing around with gold. that's how serious the situation is. stuart: let me return to apple. they have a big stake in china. the chip makers, they are also

down. apple right now is back to $205, down 3%. we have discussed this in the last nivenfive minutes. you still don't like apple. you wouldn't touch it. you wouldn't touch anything at the moment, would you? >> it's the component prices. ashley: meghan markle. >> go back to the baby. the bottom line is component prices, apple relies on their margins and if the margins shrink, apple will have a very, very hard time. they need china more than any company apple needs china. stuart: we have come back a bit. we opened down best part of 500 points. now we are down 388. not exactly coming back much, but it is a little. i could say we stabilized with the loss of about 4ed h e400 po. are there any stocks as of today you would buy right now?

>> apple, microsoft, probably take a good hard look at boeing but i want that on a short leash. stuart: apple and microsoft, you would buy them at today's price? as of right now, you would do that? >> absolutely. i have no problem recommending either of those stocks because i've got a long-term perspective. i see the value they're creating. microsoft is all about big data. it's cloud computing, it's gaining on google and amazon. you have the other side, with apple, all about the medical technology. the opportunity is three times bigger than it is with the iphones or devices they have made. to jeff's point, i do believe they can protect the margins in that segment of their business. ashley: there was an article the other day, microsoft has more subscribers than netflix and more cloud revenue than google. impressive. stuart: certainly is. ashley: great ceo. stuart: the one stock you would buy today would be amazon? >> yes. ashley: we found one. >> we like the banks, too,

believe it or not. susan: wow. stuart: why? >> tech has taken all the attention. the banks right now, the regulatory restrictions are being pulled back on them. i think they are valuable at this point. i think they're cheap. i think there's going to be a massive amount of consolidation. i love consolidation in sectors. i think the banks look very attractive. stuart: hold it on the screen now. goldman, morgan, morgan stanley, citigroup, wells fargo, all down but is there any one that stands out to you, jeff? as a buy? >> i think goldman sachs stands out right now as a buy. stuart: okay. for the benefit of our radio listeners, we have many of them, check the big board. we are down 377 points. that puts the dow at 26,129. i will tell you now that when we opened the market we were down about 450, 460 points so we have come back just a little bit. take another look at the

ten-year treasury yield. interest rates, very important to stock prices. 2.48% on the ten-year treasury. that is not exactly an historic low but it's down there. susan: your safety trade right there. stuart: that's right. the safe haven. you buy them and that pushes the yield down. that, by the way, might push the 30-year fixed rate mortgage down a little further. you might get closer to 4% even if the decline in yields -- ashley: bond prices go up, yields come down. stuart: right. that's what's happening right now. safe haven. we have to talk boeing. what a bombshell they just received. they knew about the issue with the 737 max jets for a year. that was of course way before the max jets crash in indonesia. they knew for a year. what exactly did they know? susan: they knew there was a problem with one of the cockpit safety alerts, the angle of attack disagree alert in terms of where the nose is pitched relative to the ground.

they knew this a year before the lion air crash in indonesia. even then, they were not forthcoming in terms of the detailing but only after the ethiopia crash did they start alerting pilots, airlines and industry and government officials as well. this goes to what boeing knew, at what point, and why they didn't alert the public and putting their safety at risk. ashley: it's a timing issue. it took five months later, the second crash, the ethiopia crash, that boeing was more forthcoming. then after that, six more weeks before they said yeah, there is a software problem and we've got a fix for it. i think that timeline is very troubling. >> also, what shows here is because they have very little competition and now it comes down to the credibility of the whistleblowers. if the credibility of the whistleblowers that were involved with this is where it needs to be, they are in real trouble. this is a gamble whether or not these are actual truths. stuart: $367, $366, the price

they're at now, is a recent low. when this crisis broke i think they dropped below $370, went up close to $400, now back to $366. an endless stream of bad p.r. and bad image stuff for boeing. i'm going to call this ride sharing week. susan: it is. yes. stuart: lyft on your screens now, back to $61 a share. lyft releases its first profit report tomorrow. it will be after the bell. they went public, what was it, last friday, a week ago friday, i think it was. they're at $61 a share right now. however, uber, they are going public this week. susan: friday. stuart: friday of this week. this is a technology, i would love to be a part of. i would like to buy into it but i wouldn't buy either lyft or uber until they have settled down six months after the ipo. what do you say, keith fitz? >> i say good, stuart. that's exactly what you want to

do. let these companies prove themselves. it says right in their document they may never be profitable. that's as clear a warning as i have ever seen in 30 something years of doing this. stuart: hold on. i have breaking news. ashley: sky news reporting prince harry reporting meghan has given birth to a boy. stuart: okay. okay. ashley: now we know. stuart: it's a boy. susan: it's a boy. stuart: 9:40 eastern time. you know what that means. jeff, noble work this morning. same to you, keith. thanks for joining us. appreciate it. one more check of the big board. now we are down 340. we opened down 450, 460, now down 345. secretary of state mike pompeo will meet russia's foreign minister sergey lavrov this week. they will talk venezuela. i want to know, are we laying down the law with the russians, get out of there? we're on it. president trump's tariff threat, backing xi jinping into a corner. he's being confronted just as a

trade deal looked imminent. our next guest, one of the main china watchers, how does xi respond without losing face? what a story. we'll be right back. my insurance rates are probably gonna double.

but dad, you've got allstate. with accident forgiveness they guarantee your rates won't go up just because of an accident. smart kid. indeed. are you in good hands? stuart: i hesitate to say we're stabilizing, because you don't stabilize with a minus 340 points, but that's where we are. we had been down much more than that. now we're down 345, 26,158. that's the dow as we speak. moving on to china. back to the china trade deal. let's bring in asia watcher stephen mozer. stephen, i think xi jinping has been backed into a corner. i think it's going to be very hard for him to get out of that

corner and save face. is the whole deal in doubt? >> well, we'll see, but remember back in december 1st of last year, he sat across the table from donald trump and he made 140 promises. that's 140 promises on intellectual property, on cybertheft and so forth. now his negotiators have backed off from all of that. clearly, xi wants a soft deal. he wants a handshake, a photo op, then he can go on cheating as usual. trump needs, we need a hard deal, a deal that can be enforced in the chinese courts, for example. but remember, 19 years ago, the chinese communist party ordered its court system in china to rule in favor of the chinese plaintiffs in all cases. so unless we have the rule of law in china, unless we have real reform, not just a legal system but across the board in terms of the free market, we can't trade fairly with china. that's what we're looking for. we are looking for a hard deal. i think china's leaders regard

western politicians generally with contempt. they see them as easily manipulated. a handshake and a photo op, maybe a billion dollars to one of their relatives and they'll go away. i think they miscalculated when it comes to donald trump. stuart: what we're hearing is that last week, when our trade negotiators were in china, they wanted to get back into some of the things which china had already agreed to, and china didn't want to do that. so now, is that why president trump over the weekend, sunday, to be precise, came out with these very, very tough tariff threats? i'm asking why now, and i think it's because of the attempted renegotiation last week. >> sure. i mean, if you're in negotiations with someone and they start moving the goalpost, your natural thought is okay, they're not negotiating in good faith. the other thing that happened was this. a few days ago, donald trump said i'm going to be meeting

with president xi jinping to finalize the trade deal in may, and then the chinese side began putting out noise and saying oh, no, we can't do that, maybe june, maybe july. i think he saw them beginning to play for more time as if they could simply run out the clock on president trump's first term and continue to take advantage of us, you know, across all domains. and trump said no, we're not going to go there. stuart: what do you think -- >> anyone who saw president trump -- stuart: hold on a second. what do you think the odds are that china will turn around and say okay, uncle, we're suffering, we'll meet again and we'll get an agreement? >> well, i think they are desperate for agreement but remember, xi jinping can only go so far. if he gives american companies and american products unfetterred access to chinese markets, he's cutting into the profits of the communist aristocracy that profits from its absolute control of the chinese market. these are the people who prop him up in power. he can't afford to go too far.

he wants a soft deal, trump wants a hard deal. it's kind of hard to see them meeting in the middle. maybe they will work out an arrangement but remember, there's more going on here than just trade and the economy. this is about which country is going to dominate the 21st century. china believes it can cheat its way to the top. trump has said no, you're not going to do that. so this is hardball. we are going to see this play out over the next few months. stuart: over the next few months. that's interesting. so no short-term deal going on here. thanks for joining us, sir, on a key day. we appreciate it. thanks very much. now, switching gears here, the white house is downplaying the latest weapons test from north korea. who is saying what? susan: okay. we had secretary of state pompeo on the weekend talk shows but this is going to take you back to what happened on friday. we had these projectiles, short-range missiles, according to photos released by the north korean state media, and this would be pyongyang's first launch in close to 500 days. they are sticking to their moratorium on longer range

missile testing. we did hear from trump as well, playing down the threats in a tweet. let's bring it up, if we can, on the screen. here's president trump. anything in this very interesting world is possible but i believe kim jong-un fully realizes that a great economic potential of north korea will do nothing to interfere or end it. he also knows that i am with him and does not want to break his promise to me. a deal will happen. now, that's pretty optimistic but don't forget that we did have president trump walking away in hanoi from the negotiations and right now, secretary of state pompeo says that they were only short range missiles, if they were missiles at all. they think it was projectiles. it wasn't a threat to korea or japan or the rest of its allies. stuart: it's pretty soft response. there's a difference in approach right there. back to the market, please. we are on the downside still, 370 points down for the dow industrials. this, too.

look at that. 29 down, one is up, chevron. senator schumer cheering president trump on following his tariff threat on china. what do other top democrats think of the president's very hard line on beijing? interesting story and we're on it. you will get it after this. oh, yeah, that's gonna be a good one. ♪ (playing) did you know that nationwide has customized small business insurance? huh-uh. maybe that's a song. yeah, maybe. (peyton) did you know nationwide is america's #1 provider of pet insurance, farms, and ranches? now that's a song. yeah, maybe. oh, that's gold right there. did you know that nationwide has an interactive retirement planner? (music stops) are we there yet? ♪ (nationwide jingle) ifor another 150 years. the fire going ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind.

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stuart: i'll try not to use the word stability when you have a 300 point loss but that's where we're holding at the moment, down 353, 26,152. more on china. senate minority leader, senator schumer, cheering on the president with this tweet. i will read it for you. hang tough on china, president. don't back down. strength is the only way to win with china. that's very interesting. support, political support for president trump from minority leader schumer. economist jonathan williams is with us now. what's the response of other democrats to the president's stand on china trade? >> well, this is really uncanny, the ability that china has to bring what we thought was impossible, an agreement between chuck schumer and donald trump, and certainly i think other democrats will fall in line to come together to support the president, to stay tough on china here. this is really incredible to see

how this is playing out this week. let's just hope that talks continue, though. certainly the market has responded in a pretty negative way this morning. let's just hope that this is about renegotiation, bringing everybody back to the table. let's make sure that america gets a good deal out of this. stuart: what do you think would happen if we do indeed impose 25% tariffs on $200 billion worth of chinese goods as of friday of this week? what do you think the economic impact on us would be? >> well, i think it's more of a negotiation tool than anything. let's hope, stuart. but i certainly think you would see some reciprocal deals on the other side and a downside on exporters across a lot of american products, unfortunately. stuart: would it hurt our economy that much? clearly china is suffering. they would really suffer royally from that kind of tariff imposition. how badly would it hit us? >> well, two pieces of that is certainly the agriculture states, ag experts have been hit

with previous tariff back and forth between u.s. and china, but on the other hand, you are exactly right. the u.s. economy is booming right now. china's growth is slowing. so president trump has an extremely strong hand in this negotiation. i think, though, just given his past dealings with canada, let's say, on the usmca with renegotiation of nafta, he's proven that he's willing to bring people back to the table. stuart: i'm still surprised that the president should get that kind of political support from senator schumer. hang in there, mr. president. hang tough. don't back down. that surprised me. how about you? >> absolutely. i think that did raise a lot of eyebrows around washington this morning. you don't see that very often. i think perhaps the white house will be framing that tweet and saving that one for the future. stuart: okay. just real fast, got 30 seconds. put the china thing on one side for a second. it is true to say that we have the best economy in a long, long time here in america?

that's accurate? >> absolutely. look at those jobs numbers. look at the first quarter gdp numbers. the consumer confidence, the business confidence numbers across the board, the way that the president has brought back canada to the negotiating table and justin trudeau, really taking it on the chin when it comes to that trade renegotiation. this is a great time for the american economy. there's no doubt about it. tax rates are down. we are now at parity with china with our corporate taxes. we are see some great results. stuart: jonathan williams, thanks for wrapping it up so succinctly. we like that. thank you, sir. see you again soon. now, president trump's tariff threat hitting the market hard, as you can see. the dow is down 320. we are waiting to find out if china's top trade guy will actually get on the plane for talks in d.c. that's an important question. boeing is a drag on the dow. it reportedly knew about the issue with the max jets for a year. could the company be held criminally negligent?

we will have the judge, as in napolitano, on that one coming up shortly. . .

stuart: 30 minutes into the trading session. first off the market is taking a hit this morning after president trump's tariff threats. the dow is down 294. when we opened it was down 434.50. the s&p is down 32. it has come back a bit. as for nasdaq composite, big drop. we're down 108 points but that's less than the 170 points we were down just a few minutes ago. the backstory to this selloff is this. sunday afternoon president trump tweets about china trade. he is is not happy with the slow pace of talks. he is prepared to put 25% tariffs on $200 billion worth of chinese good as of friday this week. china's response not really

clear. we're told that their trade delegation is coming to washington this week but we don't know if their top trade negotiator will be among that team. next one, state of play, xi xinping is in a corner. not a good place to be for china's leader. trump is playing hardball, clearly. also america send as carrier group to the mideast to counter threats from iran. interestingly the price of oil this morning is actually down. you would have thought it would go up. no, it is down, $61 a barrel. next one, cease-fire between israel and hamas. they have been exchanging lethal fire across the gaza border. egypt brokered the cease-fire. it is holding. interestingly the price of gold is down this morning despite escalation of tension on the world scene. on the campaign trail democrats having a hard time responding to the booming economy.

joe biden, bernie sanders, elizabeth warren, they keep saying the boom is not helping ordinary people. there you have it, monday morning, "varney & company" hour two starts right now. ♪ stuart: new tweet in from president trump. just spoke to prime minister abe of japan concerning north korea and trade, very good conversation. perhaps that's why the dow has come back a little bit at least. we're now down 320 points. susan: also adds pressure to china as well. you're negotiating well with japan what about china? you're left out. stuart: well-said. we're down 317 as we speak. next case, the dow's biggest losers. there are 30 stocks in the dow average. on your screen the biggest loser, caterpillar always a proxy for a trade play. that's down.

nike, goldman, boeing. special factors on boeing, united technologies all down significantly. look at the big losers among the s&p 500, big losers indeed. delphi 4%. stanley, i don't know all those companies but they're big losers on the nasdaq. who are big losers among the technology heavy indicator? jd.com. has chinese interests. susan: ctrip is a travel company in china. stuart: clearly there are some big losers in the three market exchanges there. three indicators i should say. market watcher alan -- i blew it, didn't i? >> you did it so well before. stuart: when we were practicing before the on the air. rekshafin. >> perfect.

stuart: i eventually got there. stocks sold off when the president issued this tweet. where do you think we're going? >> we think a basically that a deal is made. how much is "the art of the deal" is a real problem is the question. trying to psychoanalyze what is going on with a tweet, that is beyond what i do. the base case there will be a deal here. we think this is buying opportunity. stuart: a buying opportunity? across the board or any specific stocks? >> look at gdp numbers. incredibly strong that everyone thought was going to be weak. unemployment numbers are strong. fed being more accommodative seems like there is a lot of tailwinds that can make the market go much higher. stuart: so we have leverage in the fight with china, we've got leverage, namely, political support from the democrats for the president, and a booming economy? leverage works? >> curious whether the democrats are now supportive because they also sense that the is the base case, there is a deal here. i think there are real

structural issues the president is dealing with aside from china with the federal reserve, with unemployment that has to be recognized this economy is incredibly positive. there has been a shift in animal spirits since he got elected. with that shift in positivity becomes responsibility that a tweet of his could have a big impact. stuart: to you the tweet and selloff is kind of a blip on the way up for the overall market. >> 100%. there is always the black swans. there is always issues that we can't predict. seems like we're dealing with reasonable players. china is reasonable player. a deal should be made here. the fact that the trump is saying, the president is saying we've been treated unfairly is nothing new. i think that china is sitting down at the table, both i assume are negotiating in good faith. stuart: to repeat, you say this is a buying opportunity? >> base case, the deal gets struck, absent black swans, risk management adjusted, yes, this is buying opportunity, suppose

there is no deal done, there is no handshake, there are no big smiles, they're angry with each other, what then. >> that would be a real problem. at the end of the day you're dealing with reasonable people. the people does not want to hurt the economy of china and the president doesn't want to hurt this economy. he is willing to negotiate to make the economy better, not make the economy worse. if you believe the people are reasonable, base case deal will be struck this is a buying opportunity. stuart: alan, that is interesting stuff. >> pleasure being here. stuart: all right, sir. joining us is the president of the president of the potomac strategy group. president trump if he doesn't get a deal with china, what would be the political fallout? >> one of the most obvious, immediate ramifications would be that potentially the u.s. economy would take a hit. obviously the economy is the strongest point the president has as he heads towards re-election. it is an area where democrats

are really confounded. they don't know what arguments to make against the economy. if you step back, it is pretty clear the president is raising the stakes for this week. he wants and agreement this week. the chinese have been delaying. he doesn't feel they're paying enough in terms of cost of delay. so this, i think about increasing u.s. leverage in the short term to get a deal this week. if that doesn't happen, keep in mind he said the tariffs may stay in place if the chinese don't, if there is isn't certainty as to the chinese enforcing the trade deal. so, you know, this is increasing the cost to the chinese, whether there is a deal or not, at least in the short term. stuart: you're on the political side of of the equation. check out the politics of this. i was surprised to hear such strong support of senator schumer this morning. were you? >> it does go a little bit against what you expect just because generally democrats oppose everything trump says even before he says it.

that said we have seen some overlap between democratic concerns as it relates to china and their economic practices and president trump. we've seen that with senator sherrod brown, the democrat from ohio. also with schumer. schumer has been fairly well-aligned with president on china. i think it is in democrats interest where they want work with the white house. reducing drug prices, that are some areas they could get bipartisan treatment moving forward. stuart: that is a new theme. i had heard that one in a while. the 2020 democrats who are challenging him they find it hard to deal with a booming economy. senator sanders, senator warren, senator booker, they say the recovery isn't being felt by ordinary people. what do you make of that? >> yeah. the data doesn't suggest that. you have wages rising for the middle class. the fastest rate in 20 years. the economic news on friday was very, very strong. to a certain extent i think

there is some belief probably why the president felt emboldened to take the action this morning. he has a strong hand to play given the u.s. economy. over past few days former vice president joe biden said tax law was only benefiting rich people. "the washington post" gave it fact check rating 4 pinocchios. you have more job openings than people looking for jobs. we have a very strong economy right now. there are headwinds as it relates to trade and some uncertainty. but indications are very strong. that gives democrats very little to work with. stuart: what do you make of the election, 2020? does mr. trump win? >> well, we're year-and-a-half out. if you told me who you knew who the democrat nominee would be i would be in stronger position to answer that but -- stuart: suppose it is joe biden or bernie sanders? >> yeah i agree one or the other. i don't see a pathway where

bernie sanders could be elected president of the united states in today's political environment. biden does present more of a challenge. he could flip pennsylvania, wisconsin, michigan and take trump's path of 270 electoral votes away potentially. trump is in increasingly strong position. the mueller report is now behind him. the economy is strong. we're rebuilding the military. he is is delivering on promises. just confirmed their 100th judge in the first three years. so he is moving in the right direction. the democrats i think are increasingly divided. you see that on medicare for all where bernie sanders and elizabeth warren are on one side and number of democrats want something more modest. it is not clear what democrats delivered since they have had congress the first four or five months having trump on this russia stuff which is going nowhere. stuart: thank you for being here on an important day. thank you, sir. >> thank you, stuart. stuart: china's vice premier scheduled to travel to the white house to discuss trade. will this meeting go ahead and

planned? will he be part of the china negotiating team. we'll try to keep you updated what is vital question. secretary of state mike pompeo russia foreign minister lavrov to meet later this week. they're talking venezuela. will we lay down the law with russia? fewer people choosing the medical profession or leaving just as they get started. that's happening. what's behind it? we have a doctor turned gamer. he will tell us why he walked away from his doctor, from being a doctor. ♪ now i'm thinking...i'd like to retire early. let's talk about this when we meet next week. edward jones came to manage a trillion dollars in assets under care by focusing our mind on whatever's on yours.

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screen. i'm dealing with money here. let's be clear. we're down 280 points for the dow industrials. look at the price of boeing's stock, please. "the wall street journal" reports that boeing knew about the safety issue for a year before telling airlines or safety regulators. we have the judge on that issue coming up later this hour. boeing is down to 369. israel and hamas agreeing to a cease-fire. what is the latest on that, ash? ashley: well it is tenuous. it was agreed to, apparently brokered by egypt. this began friday as protests over blockade of gaza overspilled. there were 690 rockets fired from palestine into southern israel. 240 were intercepted by the so-called iron dome that took the things out before they landed. but we have 25 palestinians killed in reaction from israel we know from these cases the

response is swift and deadly. four israelis were killed from bombing attacks into southern israel. we have a cease-fire. we have to see how honk this could remain in place. it was brokered by egypt. assisted by the united nations this is some of the biggest violent clashes we've seen in a number of years. stuart: also on the foreign front, secretary of state mike pompeo arriving in finland today ahead of his meeting with russia's foreign minister sergey lavrov later this week. pompeo is expected to tell russia, get out of venezuela. i don't know whether he will put it in those terms. he is trying to ease the russians out of venezuela. christian whiten former state department official joins us now. what do you know about this? is that what pompeo will say, get out of caracas? >> that is one of the key messages he will make. russians apparently talked dictator maduro to leave the

country. that is what he needs to do to leave the country. it is important to find a mechanism to state our differences with russia and move on in order to talk about other issues. i hope pompeo does that as well. stuart: you know maduro, the disputed president of venezuela, he has been invited to attend an economic forum next month out of the country. i believe it is in russia. if he accepted that, if the russians said yeah, come on out, that would be a way of easing him out of power, wouldn't it? >> it certainly would. that would be a decision to leave power. i assume if he leaves what is left of his government would fold like a house of cards. i'm not sure he would like to be in exile in russia. he might prefer to be in nicaragua or cuba. those are dwindling sources he has. stuart: it looks like he is on the way out, doesn't it? >> it is always hard to tell. these regimes tend to be resilient. you see every new week or every other week you see higher

plateau of dissent from the people of venezuela. whole political spectrum from left to right opposing maduro. yeah it is looking pretty good. stuart: the u.s. is send ising a carrier strike force to the gulf. obviously a warning to iran. are we upping the stakes there, if so why? >> it's a little unclear why the administration has alluded to a non-specific threat, either by iran directly or by its proxies, irgc or other jihadists in the region. it is unclear whether this is a move in israel by hamas or instrumentality of iran by extension or a direct threat to shipping in the persian gulf. if you're a commander dealing in the persian gulf, obvious lay a carrier is better than no carrier and bombing group. it could be a little clearer about what iran is up to. stuart: i keep hearing reports that the iranian economy is collapsing. i know "the financial times," a newspaper, they used that word last week, iran and economy

collapsing, that is what they said. that surely is a plus for america's position in the middle east, isn't it? >> it is. also for all free countries and those who believe in civilization. if you look where they're going from say two million barrels of oil per day that iran has opinion exporting up to last week, week before, when administration says no more waivers. they will go down to one or 200,000 barrels per day on the black market essentially. that is a big decrease in cash that was available to iran to export terror and to undermine the rule of law and freedom throughout the middle east. stuart: hard-line trump seems to work. hard-line trump against china on tariffs. hard-line trump against iran. send battle carrier group there. hard-line trump on israel, saying we got your back 100%. this is hard-line trump on displace, right, christian? >> it is. it is peace through strength, building up military. i had to check the twitter account twice, even chuck

schumer democratic leader complimented trump on his toughness with china. it works. it is a way of being tough without going to war. stuart: christian, thank you for being with us on a very active day. always appreciate it, sir. two tweets from president trump leading today's selloff. that's what happened. we're monitoring from any news from the white house or beijing which could move the market. it has been a big day for your money and we'll continue our coverage after this. ♪ patients that i see that complain about dry mouth,

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stuart: the headline on the market right now is, we're coming back a bit. the low of the day which we hit right after the opening bell was a minus 471 points. look at us now. a minus 276 points. so we have come back over the course of the last, what, 55 minutes. trump's threat on tariffs will particularly affect the farm belt. in fact the farm belt has been suffering big time during this china-america trade dispute. what is happening to commodity prices now as of this morning? jeff flock at the cme. tell us. reporter: in the dumper here at the agricultural pits. this is the soybean pits. you talk about the tariffs, the chinese imposed a 25% tariff on soybeans imported to them. they're the biggest importers in the world. traders on the screens, as well as occasionally open outcry as well, occasionally a live order

comes into the pit. i want to take you over to the pork as well. this is the lean hog pit. walk around here, we don't spend a whole lot of time over here, stuart, right now it's a hotbed. this is the big loser. hogs, just off the lows but we're down almost 3% last i checked. i can't see the board from where i am. that is the lean hog futures pit. again, guys on their screens as well as open outcry trades that come in there. corn is also down. oats is down 4%. because of these retaliatory tariffs. i'll tell you, ante gets upped, i know senator grassley said, we got to do away with these tariffs or usmca will not pass. he is a farm state. he is is farmer himself is. these guys are getting hammered right now. if it comes to good, everybody will be happy. stuart: if it doesn't, we won't be happy. the farm belt vote is very important. jeff, thanks very much. great report. see you again soon.

in my opinion, it is my opinion president trump has backed china's leader xi xinping into a corner. my question is, what does ron paul, former texas congressman, what does he think of this hard-line stance? he is a libertarian? what does he think about this? he is is on our show in the next hour. another hit for boeing. a new report says they knew of software concerns with the max jet a year before the first crash. what a story. the stock's way down. we'll be back. ♪ your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

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stuart: even if you don't know the words -- susan: yes. stuart: we do like this one. john lennon said this was the best song that he wrote. ashley: is that right? stuart: one of the better ones. by the way, ladies and gentlemen, it's a boy, seven pounds 3 ounces. there is big grinning prince harry. he has the look on his face. love at first site. you know that when you see your own child, that is true love at first sight. that is a empty picture. ashley: windsor castle. stuart: the birth was 7 pounds 3 ounces somewhere in london. ashley: maybe in the cottage next to the castle. stuart: you never know. check the big board. we have come back nicely, thank you very much. we were down 471. now we're down 269. that is comeback. we're down 1% but it's a comeback. big question, will china's vice premier. the guy who leads their trade

delegation, will he be on the plane that arrives in washington this week to conduct further trade negotiations. edward lawrence is in d.c. do you have an answer? >> i do. in response to president donald trump's tweets, the chief negotiator for china did not get on the plane in china to come to the united states for those trade talks. vice premier liu he was supposed to be here but that did not happen. a chinese spokesman said they are learning about the situation. the team was supposed to be on the plane. they did not get on the plane yesterday. it was supposed to arrive this afternoon. it will not arrive this afternoon. the situation he is talking about are two tweets from president donald trump says that the talks are moving too slowly. president says the china is trying to renegotiate these talks. the president also adding he will increase tariffs on $200 billion worth of chinese

goods from 10% to 25% on friday. the president saying that these talks were supposed to go ahead on wednesday. again those are in jeopardy now as the trade delegation did not get on the plane. they will not arrive today. stuart: good information, edward. it didn't move the market i don't think but that was good, solid, information. that is a vital detail. edward lawrence in d.c. coming through again. thank you, edward. michael pillsbury is with us, hudson senior institute senior fellow and a big time china watcher. michael, seems xi xinping has been backed into a corner and that is a very difficult position for the leader of china's communist party to be in. he can't afford to lose face. what do you say? >> i don't agree with you stuart. i think president xi is one who caused this problem. president trump's tweet is pretty clear that the chinese at the last minute have been trying to renegotiate some of the terms, you might say take back some of the concessions they made earlier. these talks are secret.

150 pages or so. never has been disclosed, not a single sentence has been revealed to the public. a lot of very general comments what may or may not be in the agreement. this is really between xi and trump. xi respects trump. he made that clear several times. trump respects xi, he made that clear. he made 30 phone calls to xi. he met with him three times for long sessions, mar-a-lago, buenos aires, the forbidden city in beijing, we could have the market take our advice and go up if people realize this is a very important negotiation. ups and downs are important. there is plenty more to be done. not a time to panic. the confidence between xi and trump is the most important thing. so a little bit of lost face whether it is american side or chinese side is not important. what's important is the secret texts continues to be refined. i think that is what is happening. we're moving forward. stuart: we're moving forward? this is not that big after

negative? it is just a big headline about hard-line trump so in some ways you still think it is positive? >> yes, it's positive. the president is saying the pace is too slow. he is saying, he is twice postponed things in china's favor back in buenos aires and then again march 2nd. the chinese have, i'm not going to reveal what is in the talks but the chinese made some important concession is, very important. stuart: do you know what is in, that 150 page document? >> i have a pretty good idea. and i'm impressed what president trump has done. i think it is also important that chuck schumer yesterday, who some think is an enemy of the president on some issues, chuck schumer endorsed what the president's doing. nancy pelosi you may recall, originally was opposed to china being led into the wto at all. so he has got some really strong, heavy hitters on his side on the democratic side. he has got reformers in beijing

who want this pressure. they welcome the pressure from america that they need to stop the intellectual theft. they need to make sure these national champions, these state-owned enterprises don't continue to have massive subsidies. it is not good for china's own growth rate but the hard-liners in china love the national champions. the progress that has been made is what's important. larry kudlow and others revealed a teeny little secret this agreement is 150 pages long, stuart. if that is single spaced, i have a hunch it is, that is a great deal of detailed prescriptions for the next five or 10 years to enhance u.s.-china trade. that is the really good news. stuart: the reason for these tweets from the president was because china wanted to renegotiate some of that 150 page deal and the president said, no you're not. let's get on with it now, is that the state of play? >> yes.

i think he is feeling, president trump is feeling strong because of the performance of his economy. the chinese economy is doing a little bit better but not as well as they expected. so what we're having here is an effort to get a really good deal. i love the president's phrase, stuart, when he called it the granddaddy of them all. this is a comprehensive deal that will last a long time. one thing i don't want, i think you might agree with me on this, stuart, we don't want friction to continue. if we sign kind of a weak agreement, then the chinese cheat, we're in six is months we're back to a really huge trade fight again. that will drive the market down 1000 points. we want a good deal that both sides can adhere too. not one where chinese cheating causes friction in the future. stuart: michael, the very well-informed michael pills bury, thanks for joining us. >> i'm optimistic, stuart. stuart: thank you very much indeed. i wonder if michael moved the

market a little bit. we were down 270. now we're down 250. i don't know if he moved the market or not. let's see if this guy can move the market, shaw ghailani. i want to know if this dip, it is still a dip is a buying opportunity? >> i don't know if it is a buy be opportunity. the market continues to go higher. we got the goldilocks economy we always talk on your show. stuart, i don't think anything changed unemployment numbers, employment numbers everything is hitting it out of the park. this is a blip. the problem will be verification and what will happen if the chinese don't continue to go forward with the negotiation or they don't comply. that is all it comes down to. i don't think the united states or china wants these negotiations to fall apart. president trump has a lot riding on it. president trump has more. i think they will get it done.

stuart: what would you buy? right now it's a dip. i am looking on the screen i see apple a big loser on the dow 30, down nearly four bucks at 207. obviously apple has a lot of at stake with china. would you buy the stock now at 207? >> which already own apple. if i didn't own it yes i would. i would like to buy it on any kind of dips. maybe another five or 10% lower i would add to my position. this company is hitting it out of the park. their services business is increasing expose nextly relative to the hard bear business in terms of phones. i like that a lot. they're more offg more services is subscription type company. with the ecosystem about 1.4 billion users of their phones and devices it is going to be fabulous history, i mean future for apple. it is buying opportunity for a peel here. stuart: is there anything you would pick out you would buy as of right now? >> you know i love microsoft and i have for many, many years. any opportunity to buy microsoft

on a dip. these companies have tremendous hoards of cash will spend it on buybacks, companies no matter what happens in the economy if there is slippage they will buy the stock. they will have support prices underneath their stock. any buying opportunity on happenses now you get a dip you buy more. cash with compah companies withe earnings and growth potential. those are companies you have to own. stuart: we got it. shaw gilani thank you very much. we know you're in sunny florida at the moment. it is spring back up here. finally arrived. next one, this is interesting, china blocking president trump's tweets. what's happening. susan: that is surprising especially with tight censorship and issues that question the chinese leadership. 14 hours after president trump's tweets and threats to raise tariffs own chinese goods, you didn't see it on the news or the even the global times. even china's give len of twitter didn't bring up the president's

tweets. and even tencent we chat, equivalent of whatsapp and facebook all rolled into trump, they were blocking several attempts to post screen shots of the president's tweets. one interesting item made it into social media and china, they compared president trump to thanos to the villain in "avengers: endgame." that he could hill half of china's investors with the snap of his fingers. i thought that was pretty positive. stuart: mr. trump's hard-line on china, we just heard from our l. china's vice premier not on the plane coming to washington with the other members of the negotiating team. vice premier not on it. okay. doctor shortages. we'll change subjects for a second here. this is an important one. why are they dropping out, why are doctors dropping out of the

medical profession soon after graduating? some do you know. what is wrong with the medical profession? we have a doctor that turned into a gamer. he is on the show. he will share his story. ♪ morning. what are you doing? isn't it obvious?

nah. we're delivering live market coverage and offering expert analysis completely free. we're helping you make sense of the markets without cable or a subscription from anywhere you are. i get that. but what are you doing here? nice pajamas. really? i say pajamas. pajamas, pajamas, whichever. good. yahoo finance live. stream free anywhere. welcome to the show. let's make finance make sense.

stuart: "wall street journal" reports that boeing knew about the max jet safety issue well before they reported it to the authorities. jackie deangelis is back with us. how long did they know about it before they reported it to us? reporter: they knew for a while. they knew back to 2017. it was well before the lion air crash. southwest is saying you didn't tell us the operators of these aircraft there was a problem until after the crash so what was happening in that time in between? well boeing says we knew about

it. we were working on the functionality but the actual safety issues weren't necessarily imperative for these aircraft to work the way they were supposed to. they also say the engineers were looking into the issue but upper management didn't necessarily know about that so this is a safety indicator that had two prongs, stuart. basically what would happen to it, one is standard with the aircraft. the other was an option you could add on if you were purchasing it. so some people did, some people didn't. the problem is how they were working together in detecting problems with the plane's nose an obviously that was a issue in lion air and also with the ethiopian airlines crash. stuart: that bold statement they knew before they reported it, that is the nitty-gritty here? that is the problem. >> that is huge. investors will look at it, because the stock is down again today. there are a lot of investigation including criminal investigations the question if you knew about it, didn't disclose it, you may be at fault here. stuart: seriously at fault.

jockky, thank you. i want to run a sound bite from boeing's ceo. he held a news conference, faced questions, kept repeats one thing. here it is, roll out. >> there is nothing more important to us than the safety of the people who fly on our airplanes. i want to thank our team for their ongoing focus on safety, quality, and integrity. our commitment to safety is unwaivering and we do regret the impact that this has had to passengers. we know we do have work to do. >> in the light of the crisis facing your company and in the interests of reearning the trust of the flying public, have you considered resigning? >> i think the important thing here again is we're very folk -- focused on safety. stuart: focused on safety. the hand here, andrew nap n. you made a bold statement, homicide charges are not out of the question. that sounds strong. >> it is.

criminally negligent homicide is the failure to do a duty that the law imposes on you which results in the death of an innocent person. they have a legal duty as jackie pointed out to not only inform regulators but purchases of their product of a defect they found in the safety warning system. to sit on that, not comply with that duty could potentially make them liable for catastrophic consequences like removing cap on, maximum civil liability per estate after dead passenger imposed by the warsaw convention. they could have a problem with their own insurance carrier. you didn't tell us about this. the worst thing that could happen, we happen to believe a criminal investigation has already begun by the federal government is, was this the type of negligence, gross negligence, criminally negligent homicide that is prosecutable. stuart: seems like you're going

to far? >> this is an era where the government wants to come down hard on individuals whose behavior, inessential or grossly negligent, something in between, resulted in death of innocents. the report we just heard is devastating, that they did not tell the people that bought the plane. stuart: who would be charged if this went all the way, would it be dennis muilenburg, the man on the screen not too long ago? >> jackie said, according to "the wall street journal" article, i don't want to put words in your mouth, there doesn't seem to be evidence that senior management knew about it. this zipped lip was kept at some sort of engineering level. unlikely, even though senior management had a duty to know. unlikely that liability would pierce that -- stuart: if it is not individuals, could it be the corporation which is charged with criminally negligent homicide? >> charging a corporation just results in a fine. that is probably not good enough for the government. they would want to charge whatever senior person, not

muilenburg's level, whatever senior person said let's keep this under wraps. stuart: so this is going on a long time? >> yes, stuart. innocent people died. there have to be consequences to that. stuart: the stock now is at 370. that is where it was when the scandal first broke. >> probably impossible to determine. you're an economic genius, why is the stock where it is? because the president and tariffs or because of this revelation in the "wall street journal" this morning? ashley: right. stuart: i'm not sure. >> stuart, we know it. harry name the baby after stuart. stuart: poor jackie deangelis. second appearance on this program, she walked into this. ratings are pretty good. >> [laughter]. stuart: headline news, dow is off the low. we were down 470 about an hour ago. could we end the day on the upside? is that in the bounds of

possibility? ashley: you never know. stuart: let's see what charles payne has to say. he is an eternal bull. he is on the show in next hour. we'll be back after this. ♪ you wouldn't accept an incomplete job from any one else. why accept it from your allergy pills? flonase sensimist relieves all your worst symptoms, including nasal congestion, which most pills don't. and all from a gentle mist you can barely feel. flonase sensimist.

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stuart: we really have come back. down 471. now we're down 213. that is a two-day chart you're looking at. you can tell we're off the lows of the day. now we're at 26,290. and now this, got a new report, it predicts we'll face a major shortage of doctors in the very near future. i want to bring in a guy who is a medical doctor. his name is tian yuan. he is a gamer kind of guy. that is what he dues for a living these days. i have to ask you, what put you off practicing your profession? why aren't you a doctor. >> okay, yes, so you know a lot of shortage in medicine is due to job dissatisfaction. for me speaking personally, some of the reasons what you see actually practice in doctors. there is this kind of trend within the medical industry of depersonalization that has been

going on. it makes me feel like you're sort of a cog in giant health care machine that is easily replaceable. there is a ton of paperwork that you have to deal with. even as a medical student, you're spending so much time within the electronic health records typing in patient histories and physicals. i left after i graduated from medical school. but if you're actual practicing doctor, that kind of thing eats up so much of your time. i was thinking if i was going to practice i will have to deal with all the health insurance companies. they have all of these policies that actually compromise patient care, prior authorization and non-medical switching. just burden you with so much paperwork. i thought to myself, i don't really want to do this i've been in science all my life. i wanted explore the more creative side of my brain. stuart: what about lawsuits? a lot of doctors tell me every patient they meet is a potential adversary in court. is that one of the reasons you're not a practicing doctor? >> you know, i would say about 30% of the physicians actually

express displeasure at that the lawsuits. you're sort of insulated from that if you work in a large hospital. but if you're in private practice the malpractice insurance fees can be pretty exorbitant. what is interesting, the main source of dissatisfaction comes from electronic health records and from, from health insurance. stuart: before we leave you, can you tell me this, do you make more money in the gaming industry than you do if you've been practicing medicine? >> no. i do not. you know. this is one of the sacrifices that you make when you pursue a creative career. but the truth is, i'm actually happier doing what i do now. stuart: we'll take that. next time you're on the show go back to what you do, you're a gamer. we'll interview on that. but that was fascinating, why you are not. >> sounds good, stuart. stuart: good man. appreciate it. president trump, taking a hard-line with china, iran and hamas. is it working? my take on that, top of the hour coming up for you.

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stuart: well, it's an expression we have used many times. hard line trump. we're certainly seeing hard line trump today. he may impose 25% tariffs on $200 billion worth of chinese goods coming to america, and he will do it on friday of this week. the president's not happy about the pace of trade talks. quote, moving too slowly, he says. get a move on. and to emphasize the point, there may be tariffs on additional $325 billion worth of chinese products shortly. that indeed is a very hard line. why now? well, the tariff threat landed just as china's trade representatives were about the leave for what were called final talks in d.c. the president timed his threat for maximum impact. get on with it, or else. he's showing he's not afraid to walk away from the table. he did that with north korea. what the president is doing is

exercising leverage. that is, playing whatever advantages he has. he knows china desperately needs to sell products in america and he knows they are suffering badly from this dispute. overnight, of course, china's stock exchanges plunged. they are indeed hurting. mr. trump has one more advantage. political support from the democrats. who would have thought. senator schumer tweets hang tough on china, don't back down. the president's hard line comes from a position of strength. it's quite a gamble, though. china has been backed into a corner and that's not a position xi jinping wants to be in. perhaps that's why state media has reportedly scrubbed mr. trump's tweets from news feeds from china state media. so here's the state of play. hard line trump threatens more and bigger tariffs on china, the status of the trade talks this week is now unclear, stock markets around the world selling off but america's markets coming back a bit.

it is a developing story. the president is hanging tough and that's a position he's not changing. let me quote from donald trump's book "the art of the deal." quote, i aim very high and then i just keep pushing and pushing and pushing to get what i'm after. he wrote that in 1987. the third hour of "varney & company" is about to begin. stuart: let's deal with your money right off the get-go. we have come back a bit. the dow is now down 227. i keep saying this, we were down 471, so we are off, very much off the lows of the morning. let's get back to my editorial. want to bring in tom lydon, he's an investment kind of guy. tom, do you see this as a buying opportunity? >> it's a great buying

opportunity, because stuart, china stocks are up 30% this year. what trump did this weekend is gave investors an opportunity, opened up the door. chinese stocks are down 7% and there's some etfs -- stuart: overnight. >> that's right. stuart: wait a second. you have a couple of what are called etfs, exchange traded funds, and you think this is the place to put your money now. what are they? >> well, if you want to buy the biggest, fxi, which is the top 50 chinese stock, however they trade on the new york stock exchange and hong kong. if you want to get into mainland china, the ticker symbol is ashr, the csi 300, stocks trade on mainland china, down 7% this morning. they have already come back a little but they are up over 40% so far this year. a lot of people looked at this whole thing, seeing boy, it's happening too fast, i might have missed it. here's the opportunity to get in. stuart: okay. you would be a buyer as of right

now specifically on a couple of etfs. on your screens, as a matter of fact, there you've got it right now. i can't read it. it's down, the one you like is down. >> it is, because china's down. you buy it now, anticipating that this deal is going to go through. we know trump's got a couple things going for him. black belt negotiator for sure but as you pointed out earlier, they have a lot more to lose. they will come to the table with guns loaded. stuart: stay there for a second. that's the money side of this. i want to get into the politics side of it. lawrence jones with us for the political angle. he's a fox news contributor. first of all, hard line trump, on full display today. you think it's working? >> we'll see. i mean, you know, you bring a libertarian on, you know i'm against tariffs. i would quote stuart varney right now, it's a big gamble. look, the president does this with a lot of things, this hard

line approach, then he tries to get somewhere in the center. i think for most negotiations, it actually works but this has been a long negotiation. i feel like the markets are freaking out and also, we know with these tariffs, it's going to eventually be passed down to the consumer so i will quote you on this. it's a big gamble and i'm not sure it's a gamble worth taking at the moment. stuart: okay. talk to me about senator schumer, who came out immediately after the trump tweets with his own, saying strength is the only way to win with china, don't back down. i was surprised at such very strong rapport from the leading democrat in the senate. >> i also think schumer is trying to buy some capital as well. we know last week, there was talk when it comes to the infrastructure plan, so you are seeing a lot of bipartisanship when it comes to the leaders, nancy pelosi as well as schumer. i'm sure nancy pelosi will show some signs of support as well.

but again, doesn't matter for me. it still shows that it's a big gamble. the tariffs are going to be passed down to consumers. you see the market, although there's been some recovery, they are still freaking out right now over this. i think the president should have never gotten into this battle as it relates to china but he's too far in now so he's not going to back down. stuart: wait a second. we have ron paul, the ultimate libertarian, coming up in just a few minutes on this show. you're a libertarian. what's wrong with tariffs? they give you leverage. >> they're taxes. stuart: but you get leverage. that's how you can bend your opponent to your will. you've got to have leverage. >> yeah, and so my response would be that if the trump administration is going to make up the difference for those taxes that are passed down to the consumers, and even if he is going to do that, then you have a problem with government picking winners and losers and i just don't think that's the way america should work. i get what the president is trying to do.

i understand what's happening with china and the currency manipulation as well. he has some valid points on that. i just don't agree with the president's reaction to this. maybe this is a negotiation tool but at the end of the day, this has been going on for far too long. stuart: of course it's a negotiating tool. he's trying to speed things up. >> yeah, but are we seeing any progress? that's the big question. like i said, i quote the great stuart varney. it's a big gamble. stuart: wait, wait. they have a 150-page document with great detail on what they have already agreed to. the chinese wanted to reopen that. the president says no, we're not doing that, come back, get to the table or else. come on. >> well, stuart, this is your show and i know you ask the questions but the big question is this. where does it end? this has been going on for a couple years now, this trade war back and forth, so when are we going to come to some resolution? look, it's great to have this tough stance if we finally get some progress but i'm not seeing any progress.

looks like we're back where we started. stuart: not quite, lawrence. you are totally wrong on that but i will move on. i want to see you sitting in new york next to me. then i can really intimidate you even though you are 6'10" or whatever it is. lawrence, thank you very much. wrong again. tom lydon still with us on money. last word to you. >> yeah. stuart: are we going to bounce all the way back? you think we might end in the positive today? >> it's going to really -- i don't think we will end positive today, but throughout the week it's going to be really important. i think the secondary story here is it's not just the trade deficit. it's intellectual property rights. that's one of the key things we're fighting for. capital markets and companies that support capital markets are really, really firm on this and trump knows that. if he can come to the table and get protection of intellectual property rights for companies here in the u.s. that are doing business in china, we are going to see some brighter days ahead. stuart: tom, thank you very much for joining us on an important day. appreciate it. thank you very much. let's get the latest from israel now.

as of 4:30 this morning, that was local time, i believe, a cease-fire tedeal was reached between israeli forces and militants in gaza. over the weekend, militants from gaza fired 690 rockets into israel, i believe. prime minister benjamin netanyahu says the fighting is not over, however, and that the country is preparing for a larger conflict ahead. that's an important statement. he made it. shortly on this program, we will talk to our mideast expert, david rubin, who will join us from jerusalem. that's later this hour. now, it's a theme throughout the hour, hard line trump, from china to the economy to iran. the markets right now are showing a loss of just over 200 points. stay with us, please. third hour of "varney" just getting started.

stuart: happening now, from the white house, the administration is allowing 30,000 seasonal foreign workers to come back into the country with a temporary visa. that's 15,000 more visas than the administration had originally planned for. they have added more to aid struggling businesses who just can't find workers to fill jobs. to venezuela. over the weekend, opposition leader juan guaido said he would consider asking america for military intervention to kick maduro out of office. secretary of state pompeo said the u.s. is preparing a full range of options and that does include a potential military response. he's set to meet with sergey lavrov later this week. the u.s. has dispatched "the uss abraham lincoln" to the mideast. america has gotten wind of

threats from iran and the u.s. will respond with force if necessary. john bolton says he wants to send a clear, unmistakable message to the iranian regime. the price of oil, i would have thought, would go up on that news but i'm wrong. it went down 30 cents. back to $61 per barrel as we speak. let me get back to the cease-fire between israel and hamas militants in gaza. i bring in david rubin, our mideast expert. prime minister netanyahu says more fighting is on the horizon. in your opinion, are we on the brink of a wider war? >> we are definitely on the brink of a wider war, stuart. the cease-fire and then the fighting and then we have peace for a couple of weeks, not real peace, but quiet for a few weeks, and then hamas starts it up all over again. this time it was 700 rockets. last time it was several hundred

rockets. it's only going to increase until israel hits back and really hits back hard. it hasn't happened yet but it's going to happen. remember, netanyahu is in the process of forming his coalition and that's going to take another couple of weeks. once there is a government in place, i think we're going to see it heating up again. stuart: okay. now, is there a link between what's going on in gaza and what's going on in the gulf with our deploying an aircraft carrier plus a bomber group? is there a link between the two things? >> well, yes, there is. it's all connected to iran. whether it's hamas or whether it's hezbollah, iran is the big troublemaker of the middle east. if you want to understand why anything is happening, all you

have to do is look at the ayatollah in iran, because he is making the decision, he is pulling the strings, and he is giving the funding. so when hamas moves, it's because the ayatollah wants him to move. stuart: wait a second, david. as i understand it, iran's economy is collapsing. the iranian economy is collapsing. doesn't that prevent them giving a lot of resources to hamas in gaza and other forces of disruption throughout the middle east? isn't their style being crimped here? >> well, perhaps a bit, yes. sanctions are a very good thing. but it's not at the breaking point yet. in iran, if they're short on money, they are going to cut back on schools. if they're short on money, they are going to cut back on health care. but if they're short on money,

they're not going to cut back on funding to terrorist organizations because they consider that to be their raison d'e d'etre, their reason for existence. that's been their goal. it always has been their goal since back during the carter administration. that has continued to be their goal. stuart: okay. david rubin, our guy in the middle east today, thanks very much for joining us. see you again soon. thank you. i want to get back to your money. first of all, let's check boeing. look at that. they reportedly, this company reportedly knew about the sensor issue which reportedly caused the 737 max jet disasters. it knew about this issue well beforehand but they didn't tell the airlines about it. the stock's back to $370, down again today. look at lyft. their drivers, and drivers for uber, plan to go on strike this

week, just ahead of uber's ipo which takes place on friday. on wednesday, drivers are going to be off the road from 7:00 a.m. to 9:00 p.m. to protect sinking wages and rough working conditions. lyft is at $60 a share right now. let's update you on the overall market. as i said, the low of the day was a minus 471. we are now minus 230 points. you can say we have come back. yeshg it yes, it is a big day for your money but we have this, too. democratic presidential candidates refuse to give president trump credit for the booming economy. instead they give credit to president obama. we are on that story and will stay with it for you. back in a moment. i'm working to make each day a little sweeter.

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stuart: remember the california bullet train? that is a simulation, i believe. well, parts of it were canceled but we've got a new estimate on how much that thing would cost. e-mac will give it to us. liz: $79 billion. this is more than double the $33

billion initial cost that voters in california agreed to in 2008. so you know, they are going to -- they are blowing off deadlines, blowing through deadlines. now they are talking about a limited bullet train maybe in the los angeles area because people are driven to insanity by the traffic and it's gotten elon musk wanting to build tunnels. know how long it takes on an amtrak train from l.a. to san diego, average time? six hours. that's how long it takes. that's how bad the system is in l.a. to san diego. amtrak is so slow. they are talking about partial sections of it. stuart: much more important news from london. much more important. the royal family, there is a royal birth. meghan markle had a baby boy. ashley: she did indeed. seven pounds, three ounces, very healthy. mother and baby doing very well. this has been shrouded in secrecy. the couple have moved to windsor

castle. there's speculation she had it at frogmore collegastle, just adjacent. we will know the name in the next several days, said prince harry, who was beaming as he talked to the media, saying the child is absolutely to die for. liz: what names are they thinking? ashley: for boys, arthur, james and philip are the top three. stuart: it's not a girl. it's a boy. stuart is not in the running, absolutely not. go ahead, ash. ashley: they said the baby was overdue maybe by as much as a week. which gave them more time to come up with a name. stuart: we didn't know exactly where the baby was being born but harry did emerge with a big grin on his face. ashley: the couple did not know the sex of the baby. they were surprised. i think they were expecting a girl. stuart: seven pounds, three ounces. ashley: everything is good. stuart: seventh in line for the throne. the eighth great grandchild of the queen. ashley: you have it all down. stuart: lizzie is totally uninterested, aren't you?

liz: what's your pick for the name? arthur would be great. ashley: stuart wants stuart. stuart: by the way, simultaneous to the royal birth, the market came back. ashley: coincidence? stuart: cause and effect here. now we are down 186 points. we were down 475. liz: happy times. stuart: royal birth, here we go. now this. president trump tweeting this earlier. just spoke to prime minister abe of japan concerning north korea and trade. very good conversation. it's clear a lot happening at the white house. that tweet, by the way, probably helped the market because it's positive on trade. a lot happening with your money. the market's coming back. now we're down 189. we were down 470. charles payne is coming up next. does he think there's a chance that today, the dow will finish in the plus column? he's a perennial bull, this guy. we'll be back after this.

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stuart: the market's been open for two hours and we've come

back 300 points. we were down 470. now we're down 170. i call that something of a comeback. you're looking at it right now. the story of the day, president trump's tweets about new tariffs on china trade. that sunk the market. come on in, market watcher, i should say china watcher, steve orleans, president of the national committee on u.s.-china relations. we also have charles payne with us. he's going to be talking about the market aspects of this. steve first, are we on the verge of seeing the trade talks break down completely? >> not completely. i think they're going to continue but why did president trump have a public tweet? if you really wanted to make a deal you would privately talk to the people and say look, i'm going to give you until friday. if we don't have a deal, we know you're arriving on wednesday, that gives you about 72 hours to kind of button down everything in the trade agreement. putting it publicly the way he did in the tweet makes it more

difficult to reach a deal, not less difficult. stuart: that's president trump, isn't it? >> it's clearly counterproductive. i think the market reaction was actually accurate. the market had kind of built in a belief that we were going to reach a trade deal. there was talk about president xi coming here in june, having this big signing ceremony, now trump has put that all off, and this public tweet for chinese leader makes it more difficult for him to reach a deal, not less. stuart: if he makes a deal -- >> china 101 teaches you that. everyone knows that. they are ignoring china 101 and economics 101, that this idea the bilateral trade deficit matters is really ridiculous and that should not be the basis upon which we negotiate with the chinese. stuart: you mentioned also something was happening within the state department. >> yes. last week, in the china community there's been this enormous discussion of the head of policy planning, a position

occupied by george cannon, where she said -- stuart: who? >> a woman by the name of kyron skinner said for the first time we have a great power competitor who is not caucasian. that's an extraordinary comment given we fought world war ii with the japanese who were clearly not caucasian but if this is the way we are thinking about it in the state department and in the white house, that's really bad for america. stuart: just because -- >> she's inaccurate. i think if that's what they're discussing, that's going to be really damaging for america. that is really bad to create an enemy that does not exist. that's what they're talking about. they're talking about kind of a plan x similar to what we had when george kennon decided we needed a policy of containment against the soviet union. that's not the way we should be going with china.

stuart: at the very least, you would say that any trade deal will now be delayed significantly. you would say that? >> you just told me that liu he has not gotten on the plane. he can still get on in 24 hours and make the deadline because right now it's monday night. stuart: you don't expect him? >> i don't know. president trump has undermined the chances of getting a deal. that should have been done privately, in the room with the negotiators, not publicly in a tweet. stuart: steve orlins, that's the trade side of it. appreciate you being with us for that. many thanks. let's get to the money side of this with charles payne. we have come a long way back, charles. 300 points back. did you regard this as a buying opportunity today? >> i think for traders, it certainly was. listen, you know, with all due respect to steve, when people say what trump is doing is clearly a mistake, he's not following anybody's playbook but his own. i think it's working. i think, listen, the bottom line

here is that the market was going to fall apart when this trade deal was announced. then the market was going to fall apart when there were counter tariffs. the economy was going to fall apart. none of this boogeyman stuff has happened thus far. meantime, we just saw a 3.2% first quarter gdp, wages are going through the roof, earnings are doing pretty good. also, you know what, i got a special coming up. capitalism versus socialism. the reason why americans are rejecting capitalism is because a lot of big business interests talk out of both sides of their mouth. i don't think there's a lot of people that think big business is against this trade war because it's going to hurt the american consumer. this notion that all the costs are passed on is a fallacy. 388 companies have reported so far. 57% have beaten on revenues, right. that means there's very little pricing power. what really is happening here is maybe the american business will have to eat the cost for a moment and maybe some americans are saying you should do that as part of fighting back against --

a lot of americans with all due respect do see china as a threat. they do think that china -- by the way, made in china 2025 kind of says we are a threat and we plan to get there by hook or by crook. i think a lot of americans want to push back on that and the market kind of knows that. this is why we're not collapsing. we are up huge, to give back 200 points from where we are right now is not necessarily a big deal. stuart: what surprised me was the support president trump received from senator schumer. and maybe other democrats. >> it shouldn't surprise you. the economic policy institute, the left-leaning think tank, put american job loss for unfair trade with china at 3.4 million from 2001 to 2007. 3.4 million american jobs lost because we are in a dumb trade relationship and so-called free traders or fair traders, libertarians are saying we don't use tariffs. what do we use to fight back? when they are doing mma and we want to fight back by, you know,

queensbury rules, they are kicking us in the back of the head fighting us and we're like okay, put them up, put up your dukes. they're like no, we're not going to put up our dukes. we're going to hit you in the back of the head. stuart: whatever you had for breakfast, i want some of it. i want to get into this. the democrats are giving president obama a lot of the credit for the current roaring economy. just watch this. >> the economy is doing well. i'm sure i don't have to give trump any credit. what we are looking at is the ten-year rebound from the wall street crash of 2008. >> we have had policies in place starting with president obama that have aided that recovery. >> walk around my block, you ask people if the numbers that donald trump touts are really making a difference in their lives. you have people on my block, i'm the only presidential candidate who lives in a low income inner city neighborhood, talk to folks and they will tell you i have to work two jobs just to try to keep myself in housing. i love that trump is taking credit for a recovery that

started under obama. stuart: all right, charles, you have some numbers that say they're wrong. >> first, let's do economics 101. these guys are either lying or don't know what they're talking about. we know our economy is elastic. when you have a major recession, it's going to come back. we are always going to come back to a certain degree. that was a given. but what we're seeing now is these numbers going like this and now taking off. this is call a parabolic move. best place to look is wages. you have democratic presidential dantsd ta candidates talking about shared prosperity, shared wages. nine straight months for blue collar workers making 9% or more wage. that is unheard of. we haven't seen that in over a decade. look at that chart. look at that chart. that kicked in, you see that move straight up? that's wages for blue collar workers. that happened last year under president trump. they can try to take credit. maybe they will try to take credit. but if they are arguing for shared prosperity, we are actually seeing it now for the first time in more than a decade in this country. by the way, in six straight

months, blue collar worker wages have gone up faster than the overall wage pace because they are getting a piece of the action for the first time in a long time. liz: fascinating. stuart: charles, i'm going to watch you this afternoon, 2:00 eastern time. i'm holding on to what i got. see you at 2:00. now this. president trump's former lawyer and fixer, michael cohen, heading to prison today. he starts his three-year sentence for tax evasion and lying to congress. he will be held in main ma mini security prison in upstate new york. let's have a look at some of the winners on the dow. 30 stocks in the dow and we've got some winners. that wasn't true two hours ago but it's true now. chevron, dow inc., mcdonald's,

walt disney, all of them on the upside despite the overall downside move of the market. next, we are going to talk to ron paul. what's his take on hard line trump and tariffs? ron paul, libertarian, next. hey, who are you? oh, hey jeff, i'm a car thief... what?! i'm here to steal your car because, well, that's my job. what? what?? what?! (laughing) what?? what?! what?! [crash] what?! haha, it happens. and if you've got cut-rate car insurance, paying for this could feel like getting robbed twice. so get allstate... and be better protected from mayhem... like me. ♪

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stuart: on the comeback trail to some degree. minus 196 as we speak. the dow is at 26,300. look at the price of gold, down this morning. i'm surprised, with all this military action in the mideast, you might have expected it to go up but no, it's down just 30 cents, $1281. look at the yield on the ten-year treasury. a key benchmark interest rate. it's not exactly at historic lows but boy, is that thing

beaten down. it is a safe haven. you put money into treasuries, the price goes up and the yield goes down. 2.48. back to my editorial, top of the hour. hard line trump backing president xi jinping into a corner. at least that's my opinion. come on in, ron paul, former texas congressman and libertarian. so welcome back to the program. great to see you again, ron. >> thank you, stuart. nice to be with you today. stuart: what does a libertarian think about, a, carrot and b, president trump's hard stand? >> well, first, we don't like tariffs. they weren't intended in the free market and of course, the constitution allows, you know, tariffs for raising revenues but not for fighting trade wars. so i would say the trade war that's been going on has a lot to do with all the countries, i don't think the policies of the president in these last couple years has been very good for the economy. it's interesting to me that over the years, hardly any economist

would say oh, we like tariffs but all of a sudden, now everybody is sort of what do we do now, how do we manage this mess. stuart: from my perspective, if you want to straighten things out with china, you want more free trade with china, you're going to have some leverage. the only leverage we've really got, that i can think of, is tariffs. what's wrong with tariffs as leverage? >> well, what you want to do is compete with more free markets. they made an advance in the last decade or so with a freer market compared to communism and they are eating our lunch because -- stuart: sir, i hate to interrupt you because you are a great guy, but you know, they are stealing our stuff left, right and center. you got to stop that. >> i know we are angels so we never do anything like that. but the whole thing is, stuart, the point is that tariffs, even though your intentions are good and you make a point, but the penalty that's put on the american consumer. everybody is saying we are going to punish china but we don't

punish the chinese, we punish ourselves because american consumers pay the tariffs. stuart: we are punishing china. they rely on america, if we don't import hundreds of billions of dollars worth of their stuff, they've got a problem. they've got a problem now because we're not importing as much as we used to. we are exercising legitimate leverage to open them up. >> well, i think that's what happens in a free market. you do it. but we don't have a free market. you know, we have a financial system based on federal reserve system which is atrocious and there's so much protectionism has gone on. stuart, the way i see this is we have 50 states and what we're looking at when we argue about tariffs and all these trade barriers, this is like saying well, there's imbalances between and among our 50 states that we want balanced trade and balanced exchanges between and among all our states, it would be insane. this is what we're doing with

countri countries, we do better without the tariffs. you say well, they will have the advantage but most of the time when things got started, i started looking at this back when the american automobile was trash so they wanted protection. why protect, if we have a problem we can't compete, why protect them for it? you are doing more harm than good. you say we can't compete with so-and-so. well, i don't think there's an advantage but if somebody is stealing something that's a completely different issue. stuart: ron paul, i can't believe i'm doing this but i'm interrupting you so we can bring a royal proclamation. i'm sure you are laughing a bit. i don't blame you for laughing. that's what i'm doing. what you are seeing on your screen right now is the official royal baby announcement. if i'm not mistaken, that is the proclamation on sort of a board there. strange costumes. coming out of buckingham palace to put that thing right on there. i can't read it at this

distance. if we can zero in, those with better eyesight. the queen and the royal family are delighted at the news that her royal highness, the duchess of sussex, was safely delivered of a son. ashley: 5:26 a.m. stuart: 5:26 a.m. today. liz: both doing well. ashley: her royal highness -- stuart: and her child are both doing well. okay. got that out. my apologies to ron paul. he is still with us. i know that you're not a royalist, ron. at the very least of it, i know that. give me your reaction to the royal birth. i will give you 20 seconds. go ahead. >> well, the one thing that i look at is i'm an ob doctor and we always delight in new life. that's why you called it up. that's why you had me here just to be appropriate when this announcement occurred to make the connection. i know you're scheming. stuart: you are good.

you are really good. ron paul, it was a pleasure having you on the show. we really enjoyed your contribution. thank you very much, sir. much obliged. >> thank you. stuart: royal proclamation. ron paul, you get it all on this program. i'll tell you that. now this. another story out of california. you might not believe this. the governor wants big tech companies to pay, quote, a data dividend. what's that? liz: what this is, you know all the data that we give social media? they are now thinking of taxing it, this estate tax on the data we give them, and then they would pay out that tax in the form of a dividend, sort of like how alaska does with its oil dividend from oil resources in the state. now, the problem is, nobody -- consumers don't even know what the value of their own data is so how is gavin newsom, he's going to have all these people research it, to figure out what this data value is and then tax it? ashley: do we need a refund if

our data is stolen? liz: that's the thinking. that's a good point. stuart: wait a minute. liz: they attack social media companies. stuart: that's my private information which is, okay, lifted on to a social network company, then my information, i have to live in new jersey, taxed by california. they get the tax benefit. liz: listen to the democrat in california, state legislator quote, it's a societal issue. how do we create assets that can be enjoyed by the common good. stuart: the common good. liz: the common good of california. what about my data, your data, going up there. stuart: liz, very good story. thank you. president trump taking a hard line with social media, blasting them for shutting down conservative speech. we are going to deal with that in a moment, too. what a big day for news this is. as a financial advisor, i tell my clients

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and it's from the president. by the way, this came out last friday, but i'm using it now. i am continuing to monitor the censorship of american citizens on social media platforms. this is the united states of america and we have what's known as freedom of speech. we are monitoring and watching closely. that comes after several conservative voices, actor james woods, for example, miloian polic ia yiannopolous, were banned. i've got a problem with all of this, allie, because i can't defined hate speech and i don't know anybody who really can. that's the problem here, isn't it? >> yes, that is the problem. i'm glad that we do have an ally in the white house who is monitoring this. now, i don't know what exactly he means by monitoring but at least he's paying attention to it. he did have a conversation with jack dorsey of twitter last week or maybe it was a couple of

weeks ago. maybe that kind of conversation and ongoing dialogue between him and these ceos are all we need. i am very wary of regulation but at the same time, you want these companies to be held accountable to define things like you said, hate speech and actually applying that standard to both sides of the aisle because it doesn't seem to be happening right now. stuart: i mean, hate speech in america, we do have free speech, it is allowed in the public square. we don't allow it to be banned from the public square. but facebook, social networks, that's not a public square. that is a private square. so i guess you could say that they do have the right to ban speech which they find offensive. >> yes. and i do think that they, as private companies, have the right. we don't necessarily have a constitutional right to say facebook, you have to go by my standards or anyone else's st . standard. they can set their own standard.

i think people want to see a little bit of consistency, a little bit of transparency from these companies, and also, that they don't get the privileges of being a neutral platform that they actually have to be held accountable as a publisher if they are going to start idealogically editing what people say or banning people based on the things that they say. they need to be held liable for slander if that's how they're going to operate. if they want the privileges, i think it's section 230 of the communications decency act, then they need to be neutral. i think that's probably where a lot of conservatives would like to see some progress. stuart: agreed entirely. sunlight is the best disinfection. disinfecta disinfectant, i should say. sorry about that. allie, thank you for joining us. it's a very important subject. we value your input on this. really do. thank you very much. there will be more "varney" after this. i'm working to keep the fire going

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stuart: we've gone from a minus 471 to a minus 160. know we're back down a bit more. we're a minus 227. but i want to talk about the royal birth. announced this morning. prince harry and meghan markle were delivered with a 7-pound 3-ounce baby boy at 5:26 this morning. enough of all this stuff. i have a question for liz who is with us. liz is the only native-born person on this set at this moment. ash and i were both born elsewhere. you were born in america. liz: that is correct. stuart: you have 30 second ises to explain with me the american fascination with royalty? liz: with your fascination obsession with footing soccer. stuart: that was a non sequitur.

>> that was given to me by the producer. they like them because they don't talk a lot. that is the royalty reality show. stuart: i best you got for standing up for america. that's all you got? enough. neil it is yours. neil: a quick peek at the corner of wall and broad. the dow is, couple fundamental developments including dow ever so briefly piercing below a 50 day moving average. a lot of technicians, chicken entrails and tea leaves to me focus on these type of developments. we bounced off of that a little bit. we've been since over that. chinese delegation still intends to come to the united states to watch them, more to the point. only thing apparently that the vice premier, does he join them. liu he. if he does not, it might lose some of the initial positive impact. we've also got some averas