tweet, which looked more favorably on the discussions might change. whether we get that i haven't the faintest idea. as of now we're down 400 points and falling. neil, it is yours. neil: stuart, thank you very, very much. to your point we're dropping to the lows of the day. this surprised a lot of feelings especially when they heard china's vice premier is coming with 100 chinese officials to keep the talks going. something i noticed here, the revelation this is far wider than we earlier thought. a lot of us look at the dow, focus on these multinationals exposed to this but again, as i like to stress. this is something we all paid for. governments don't pay tariffs. you and i do. it is very interesting when you see how broad-based this is. i want you to look at something before i get to my buddy edward lawrence here, the tariffs will affect everything from

furniture, clothing, electronics, even luggage, to hardware, shampoo, perfume, dishes. we're also seeing bedsheets, bicycles, meat, cereal. i could go on to say there are better than 5000 items that will be indirectly or directly affected by this. and of the s&p 500 companies, forget the fact that 400 of the 500 have direct chinese exposure. of the russell 2000, close to 1400 of those, largely small stocks, have access to the chinese market, do business in china, have people in china. you see where i'm going here. this notion it is sort of like a boeing impact, a caterpillar impact, the deere impact, the ge impact, they're all getting impacted. hear me out, all dow stocks are

down. the revelation this spread far and wide. a lot of businesses it is one thing to absorb a 10% hit, try not to pass that along to the consumers and customers. it is quite another when it is 25% which it will be bright and early at 12:01 a.m., if the president has his way and rushes this keep in mind that the $200 billion worth of goods we're talking about, a lot of people got it wrong yesterday. we were raising it today as a possibility possibility $325 billion of chinese good affected, that is government 200 billion. that is not taking the 200 billion raising it to 325 billion. it is in addition. people are crunching numbers, whoa, this is bad stuff. we have to get over this fast. edward lawrence has the latest on the chinese delegation and what if anything can he can expect when they arrive. edward? reporter: any minute the u.s.

trade representatives office will file the initial notice to raise tariffs from 10% to 25% on $200 billion worth of chinese goods. barring a miracle, those tariffs will go up 12:01 a.m. on friday morning. u.s. trade representative robert lighthizer, and treasury secretary steve mnuchin say the chinese rolled back agreements in multiple sections of the trade agreement, that led the president to raise the tariffs. within the next 36 hours the trade representative's office will add 25% tariff on additional, additional $325 billion of chinese goods. that is is everything that china imports into the united states. the president still has supporters for this policy on capitol hill. listen. >> they have been cheating for decades now. this is the last, best, chance in my lifetime to get china to change their business practices. so when it comes to china pay

now, pay later. i'm willing to do whatever it takes not only a good deal, a great deal. anything short of that would be a mistake. reporter: for their part the chinese hinting that the u.s. is one that needs to make the compromise. spokesman for the chinese foreign ministry says, raising tariffs would not resolve any problem. we hope the u.s. can work with china to meet each other halfway and and accommodate each other's legitimate concerns. liu he is coming to the united states for a trade delegation meeting. they are talking forward a trade representative stressed that the talks are still ongoing. liu he is the deal-maker for china. so if a deal can be made he is the one that will have to make it. back to you. neil: great reporting, edward. the fact that liu he is coming back here is is seen as encouraging development. overnight when the futures pared

down to mid double digits and we got the reports how widespread these latest tariffs we're slapping on the chinese and the added goods affected. of course it was katy-bar-the-door. national taxpayers union mattie duppler and brian wesbury. mattie, i apologize, what are you looking at as far as what is really behind this? the fear it is bigger than thought or it will be nasty err than expected? >> neil, there is initially two ways to look at this tariff threat. one the united states is trying to save face during a negotiation that won't produce a deal that americans would be able to stand behind. the second it's a negotiating tactic. certainly the beginning of this week the markets reacted in a way though they're down, they're not down as much as you would expect if they think a deal is off the table as a result. certainly i think the markets are viewing this as a negotiating tactic. what that means for americans of course is that tariffs are going to go into effect. those are not a negotiating

tactic. as you mentioned at the beginning of the show. this will have widespread effect on consumer goods. something to keep in mind when the trump administration started this threat of tariffs back last year in the spring, they cultivated a list of tariffs for, cultivated a list of products for 10% tariffs carefully so it inoculated from americans having full increased cost on those goods. this next tranche of tariffs will not have the same kind of effect t will impact consumers and downstream services that import inputs from china. that will have economic effect. i don't even know the full extent of that yet. neil: we don't. brian wesbury, one of the thingses that is interesting, a lot of businesses had prepared, were prepared for the 10% hit, they stockpiled on a lot of chinese goods, they weren't prepared for this dragging on or that it would extend to 25% and additional $325 billion worth of goods. that might never come to pass i

get that. the message from them is help. >> look, neil, there is no doubt that this affects some companies more than other the but when we look at the broad macro economy last year, in 2018 consumers spent $14 trillion on just goods which is mostly what we import. it was $4.4 trillion. so even if we were to put a 25% tariff on all $525 billion worth of goods, it is 2.3% of all spending on goods. that's about where inflation is. so the bottom line is, from a macroperspective i don't believe that even if we went all the way, first of all, i don't think it would start a massive trade war around the world like smoot-hawley. and second of all, i don't think it would affect consumers as much as people think. and companies will find work

arounds. there is south korea. there is taiwan. neil: right. a good many of them are doing that. they're changing their production facilities to other points in southeast asia but they all haven't been doing that. >> no. you're absolutely right. i mean farmers are very worried about this. neil: right. >> but you know one thing to remember is, i mean who knows, we'll find out on friday but a week before the canadian mexican trade deal president trump threatened canada too. then four or five days later, boom, we had a deal. and so this is partly the way he negotiates. and we know that china back stepped first. they were reneging on some of the promises that they made. he is coming out and saying, no way. you're not going to renege. then don't forget -- neil: that is what we've been charging. the chinese say that was not the case. we're at the point we're at loggerheads so we'll have to see.

i do want to thank you both, very, very much. we have breaking news developments. i want to bring in congressman mike kelly from the beautiful state of pennsylvania, the pittsburgh area directly affected certainly from the manufacturing side what could be coming down as soon as 12:01 a.m. on friday. congressman, are folks in your district ready for that? >> you know what, neil, i don't think they're as concerned what we hear sometimes. you and i have the conversations before. we finally have somebody can go into a trade, not trade as a politician, willing to give up market share, but a guy who understands only keeping our market share an increasing it can we continue to produce jobs. there is no doubt last 2 1/2 years when you have a strong business person running the business you see positive results. pittsburgh, with resurgence of steel, what happened in the steel community is incredible. neil: you might be right, congressman and you're quite right to point out if all of this, 10% cuts, even when put in

place, 50 billion, 100 billion, where re are now, closing to 200 billion. the impact has been minimal. has not been much of an effort on businesses impacted on this. governments don't pay the tariffs. those businesses, i.e. us, do. one thing when it is at 10%, but quite another when it is at 25%, right? >> it is true. again i watched over the years, i just reference a company in new castle, pennsylvania, called blair steel. when i met with them, i said how critical if this is going on, the answer was yes it will hurt our business. it will not kill us. what could we have done differently? which need this president in office 39 years ago because we lost market share year after year after year. there is old saying, neil, you can't forfeit the game because

and cry because you lost. we're allowing other people to drive the policy. that is is absolutely crazy, when you have the strongest hand, play it. neil: all right, again we've been able to absorb these body blows. i don't know how reliable some of these numbers are coming out of the trade partnership, other groups like it, trying to quantify the potential hit of tariffs. they said it will cost the average family just where we stand right now close to $800 a year. if they go "the full monty" so to speak, up to 325 million, 25% on top of that. now you're talking two million jobs and likely an impact that could shave half a percentage point off the gdp. i don't know how they come to that. >> i don't note either. neil: if that were the case, many in your district would be crying foul, right? >> i can tell you the people, i'm an automobile dealer. for years i sat across from a table with people who wanted to buy something. it might come down, for a

negotiation to take place you have to have two parties that want to get to the same end. closing of a deal in the positive way. the biggest impact of the families. they have seen rising wages. they have seen job opportunities. we're in such a deficit right now having enough talent to fill the open jobs space. i say to people, listen, there is nothing harder to get done than to sell a car or a truck to somebody not working or making enough money. neil: that is a good point. you are very good, very wealthy doing that. i assume it wasn't because you were snookering your customers. the fear a lot of people have with china that it will try to snooker us or take advantage of loopholes, wording in document the and not honor those documents. what do you say? >> i think they have a history of that usually your past performance is an indication of what your future actions will be. i say we hold the strongest hand at the table. don't be afraid to stay with the hand and the negotiation. the greatest challenge, i see

americans saying back off, make a deal because it is hurting us. here is what i say to people. stay strong, stay with us, stay on board and take back market share we ceded to the rest of the world. maybe in the hopes somehow we'll make better friends. i say look where we are, look who we are. look what we do. when america is strong the world is safe. when america is not strong the world is is in grave danger. right now we have the opportunity to take advantage of the situation with a negotiator that knows how to win. neil: you don't think the chinese are thinking we're nuts? one thing one day and another thing another day and 10% one day and 25% another day? it is $200 billion worth of goods. all of sudden total of more than $500 billion worth of goods? that we're not keeping our word? >> here is what i think about china. if your biggest customer says to you i don't like the deal you're proposing to me, i'm going to walk away from the table, you better scurry in a hurry to come to a situation where you can come to agreement. believe me, because of who we are, what we are, our ability to

consume goods, i think china should be very alarmed right now. they're walking on thin ice with their economy. i would be a little careful saying we'll walk away from doing business with the united states of america. i think that would be a very foolish ploy on their point. stay strong. stick to your principles. you know this is about grabbing market share back we ceded because we had politicians making trade deals and not people that understand how business works. neil: all right, congressman, we'll see. good seeing you again. >> thank you, neil. thanks for having me. neil: sort of the next deadline to watch is is the friday 12:01 a.m. when this all kicks in. that seems like an eternity now. with the japanese, i'm sorry, chinese delegation in pace, the japanese are urging in their papers, the two of you, will you just make a deal. the effect on our stocks they're negative. in and out of session lows. interest rates are low. oil prices are falling off. that in of itself is rather

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neil: this broad-based selloff at or near session lows is is remarkable on these chinese developments when you consider the fact that even companies who don't have over the top exposure to china are feeling the pinch. it is one thing, caterpillar, boeing, fall in excess of 3%. that would be expected. but when chip-makers, even those who don't have direct exposure, even double-digit exposure, start feeling it, a lot of etfs, such as the semiconductor is etf, that sort of mirror the performance of these stocks are dropping three to four to 5% in a single day, you have to wonder, is this getting beyond reality? where does this all go? retired army lieutenant colonel allen west. a former florida congressman as well. always good having you. we're sticking it right back to the chinese. the chinese say we're going to far. where do you see this ending? >> i think it ends with the

united states of america having a very strong hand and first and foremost we need to tell china we'll not allow them to be a economic adversary which lent them to also be a military adversary. think about what china has been able to do. the building of those man made islands in the south china sea, in violation of international law. implanting military for at thisifications, including surface-to-air missile systems. their one road one belt, shows the plans for next 30 years. we show reactions in the next 24 hour cycles. that is what the chinese depend on, we don't have wherewithal or stamina to go head-to-head with them overall for the long haul. neil: this is economic and military issue for you than one or the other? >> yeah. i think it is hand in hand. anyone will tell you there are four elements to nation's power, diplomatic, information,

military, and economic. what china has done is leverage themselves implanting themselves in the world economy. they have used that to grow themselves is militarily. if you look at china's newest fighter jet, it has close resemblance to the f-35 system here in the united united statef america. when we talk about the forced transfer of technology, intellectual property theft, it has very real and has national security implications. neil: spiking of national security implications, we beefed up our spoons in the region where we said was iranian plan to attack u.s. force in the region. where do you think that is going? >> at some point in time we have to show a military deterrent to iranians. 1983, the largest islamic terrorist attack against the united states was bay -- beirut bombing which is backed by iran. look at rockets and missiles being fired by hamas in israel.

that is being supported by iran as well. when i was stationed there in iraq and afghanistan, explosive force penetrator, ieds, those were developed in iran and sent to islamic terrorist. that caused a incredible amount of loss of life and maiming of our soldiers airmen and marines. we have tried to dismiss it but we can't do that any longer. neil: another international development what is happening in venezuela, juan guaido put inferences aside said we knee military help. your florida senator, rick scott said they should get our military help. where do you stand on that? >> we have two different models we can look at interventions in the hemisphere. we can look at bay of pigs type intervention we try to train up a insurgent force to go in. that was an utter failure. operation just cause, we went moo panama and secured manuel

noriega. i think we get with the lima group and develop a coalition in the western hemisphere. china and iran have a hand what is happening in venezuela right now. i think that is the course we should take. neil: congressman, always good seeing you, my friend. >> a pleasure, neil. neil: looking at the dow 30, i see one red block after another. 30 of them. all dow stocks are down at the moment. every major s&p 500 sector are down. there are 11 prominent ones. technically there are 20 of them. but 11 big categories are down right now. a look at boeing, home depot, goldman sachs, apple, all dragging the dow down decidedly. all to do with something that samed like limited possibility, expanded trade war between ourselves and china, now has gotten to the point where it is roping in a whole lot of other players, featuring everything from furniture, electronics,

clothing, luggage, meat, cereal, cars, pcs, the numbers of items affected? better than 6,000. that number is going up as we speak. more after this. ♪ to give every idea the perfect soundtrack. ♪ to make each journey more elegant. at adp we're designing a better way to work, so you can achieve what you're working for.

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neil: well the company behind "usa today" is is today in the battle for its life. gannett facing a clear takeover bid. no one knows how this is going to end. fox business's jackie deangelis has more. >> neil that is exactly right. this is really interesting, a new bit of news, ceo robert dickey, he told us he would retire at the end of last year. according to sec filings, his departure is effective today. barbara wallace will be the interim coo and chief legal officer as the search process for a permanent ceo continues. the management changes cannot come at a worst time. gannett rejecting a hostile takeover bid for $12 a share.

gearing up for a big fight ahead of the may 6th shareholders meetings when crucial seats. digital first media, backed by hedge fund alden global. largest shareholder of gannett with 7 1/2% stake. gannett has a large and diversified newport foal, over 100 names, most notable, "usa today," the "detroit free press" and indy star. the meantime it is really important to see that the shareholders meeting will be critical. the transition to digital, gannett is is trying to do out its own strategy. that they failure by the board to successful conversion of the business. may 16th a big day for all the companies. neil: ceo up and leaves days before that meeting? reporter: it's a tough one. it was expected.

not a shocker. but at the same time the timing couldn't be worse. neil: you got that right. jackie, thank you very, very much. in the meantime china might be a focus off the markets right now selling off but the house judiciary committee is setting to hold a vote on attorney general bill barr whether to hold him in contempt or even worse. fox news contributor byron york, whether they're getting their priorities mixed up. obviously, byron, to your point, much of the world is focused on how the two major economies on earth are at war with each other but you think this is a risky move by democrats? >> it is. it is kind of a dumb fight when you look at it. there are really two issues. on the issue whether attorney general barr would come and appear, testify before the house judiciary committee, the fight is all over format. the democrats demanded that norm icen and another lawyer they hired should be able to question the attorney general for extended periods of time and the

attorney general said, no, i'm coming before the house judiciary committee. i will take questions from the members of the house judiciary committee. that is what the fight is over. so that is kind of weird. then you have the fight over the full mueller report. you have to remember the attorney general offered some top members of congress, that includes the house judiciary committee chairman jerry nadler, an opportunity to look at unredacted copy of the mueller report, unredacted, except for the grand jury material. they refused to do that. the ranking member, doug collins, the republican on that committee, did go over to look at, he has seen more than we've seen. but jerry nadler won't do it. they seem to be having a standoff that doesn't have a lot of substance to it. neil: i'm wondering too, no matter what is redacted or not, how people feel about it, 92% of the report is out. most of the vital information is

out. they're trying to intimate more we don't know, administration is hiding is something, more to the point the attorney general is. how much juice does this have for democrats to keep pursuing this, even party leadership seems to be concerned about that it gets eye off the economic ball? >> we have a couple of indicators. one on the campaign trail democratic nomination campaign trail, just not popping up that much. the candidates themselves are not talking about it. so much because the audiences are not bringing it up all that much. on the other hand, in the polls, you still have a significant is number of democrats who say they want the house to impeach the president. a majority of democrats. a large numbers of independents and huge number of republicans don't want that to happen. still, when a, when lawmakers have a majority of their voters wanting them to do something, they often will, which is why

nancy pelosi who is very cautious about this has been trying to put the brakes on it but it is not clear she can put the brakes on it forever and ever. neil: thank you very much, my friend. byron york of the "washington examiner." >> thank you, neil. neil: it is an ongoing saga here, the end of which does not appear to be anywhere near, much like the china trade situation. meanwhile google is trying to crack down on online tracking. you might like that. advertisers, not so much. morning. what are you doing? isn't it obvious? nah. we're delivering live market coverage and offering expert analysis completely free.

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holiday inn express. be the readiest. neil: i don't know if this is so much an alert as moody's, the ratings folks, saying the obvious, across the board tariffs on imports from china would weaken the global economy. even without them, moody's has been talking about a slow down in global growth toward the end of this year. i believe it was toward the end of this year. not exactly a herculean leap

saying something like this would agitate the environment. we'll keep you posted as the u.s. and china come to the brink. stocks are dropping right now. but the president's approval rating going the other way. a new "gallup poll" showing his approval at a new high for his presidency. campus reform media director cabot phillips, we also got former harry reid communications director, jon summers and hadley heath manning. hadley we're at levels this president has not enjoyed, particularly buoyed by the economy where he gets high marks consistently. how much of an impact a trade war that erupts and gets nasty hears on those numbers? >> well, certainly has the potential for that effect but today's news about china, notwithstanding, economic on optimism in this country is 15-week high. we had two straight months of

economic o mitch. consumers, small business owners have done very well under the trump administration. they do give him credit, as you mentioned. the messaging from democrats, particularly on the so-called trump tax reforms, they're truly cac cuts for the vast majority of americans. that is something that i think is widely misunderstood. a lot of americans don't recognize they did in fact get a tax cut due to the jobs act. that will be critical for voters going into 2020, if that is his signature legislative economic achievement. of course his deregulatory agenda that has largely been through the executive branch, those things affected the vast majority of american workers and families. it is something that makes it hard, even for americans who dislike the president personally, makes it hard for us to hate an incumbent when the economy is doing well. neil: the facts might be on his side about the tax cuts, the perception is not. most people think they still

didn't get a tax cut. we can go back and forth on that. jon summers, i find it interesting on the trade deal chuck schumer came to the president's defense regarding china to hang tough and maintain that posture. what did you make of that? >> well, schumer has always been tough on china and always had problem with administrations who weren't. he took obama to task. he has taken trump to task as well, particularly as it relates to currency manipulation. he is doing the right thing here. we'll see where the president lands. i don't think tariffs are really where we want to land, that is what, as i understand it, is really what is going to help lead into another situation where the chinese further ma -- manipulate the currency. people view tariffs as taxes that are paid by americans who buy these goods. neil: cabot, keep in mind the chinese have had tariffs in effect for quite some time for american goods going their way.

we're responding in kind. some say too much in kind the other way. i'm wondering it is one thing to absorb 10% tariffs. quite another to absorb 25%. one thing to talk about $50 billion worth of chinese goods affected. quite another, half a trillion dollars worth of chinese goods affected. that could be a game chinger and hurt the president, could it not? >> trade war on china, implementing more tariffs on them will play well initially. the idea of putting american workers with these tariffs. feels like you're sticking it to the enemy in this case, china. ultimately president trump's base are ones most often impacted by the tariffs. they will have to pay more when getting an lg refrigerator. they will pay more for products with high rates of steel and technology. it may fit well this tariff battle, trade war initially. the idea of america first but in the long run tariffs are a tax on consumers.

they will make prices higher for goods in trump's base. they will not see the dip in the market but they will see the affect after trade war picking up everyday goods. neil: hadley, that hasn't happened to a large degree because a lot of businesses with operations or extract revenues in china, have not passed those increases along. they will be hard-pressed not to, if the edict is suddenly double what they're dealing with now. that could be a game-changer as well, right? >> that's right. i think, when it comes to both the tax cuts that i mentioned and the tariffs that we've been talking about, the game is really perception versus reality but when reality hits it will be all more important when we saw in the last jobs report, not only are nominal wages increasing but real wages increasing. wages are taking inflation into account. if price inflation on particular

household goods, consumer goods increases as a result of a trade war, as a result of tariffs that is certainly not good for american families. not good for our household budgets and the bottom lines. the question will be whose feet do we lay the blame? this is more than an economic struggle with china. we have to keep in mind this is power struggle on a world stage where the chinese want to appear strong not in just their own state media and their own people. it is a about a power struggle and a new world order we're debating, many countries are watching who is really in charge of the global economy and the global power structure? whose national security are we going to put first? neil: jon, it is uncanny how much the u.s. china trade talks affect the markets. better they look, the better the stock market looks. the worse they look, worse the market looks. say they get a deal. it's a substantive deal. they stick to the deal and there are built-in measures to make

sure they do. would you as a democrat worry about the political fallout from that? that would be a huge victory and also a huge leap but we're not there yet, but what do you think. >> no. i think democrats and republicans alike want what is best for the country and for me i'm not concerned about the president getting a political win or not getting a political win. neil: you are a little bit, right? i know -- >> not as it relates -- neil: maybe the day after election day, right? >> there are certain issues i think that rise above the political fray. i think this is one of those. neil: cabot, young people, you're in touch with them yourself, because you're young yourself, i'm wondering the back and forth with this, does it register with young people? do they say, you know the president's right, the chinese have been hosing us, we have to do is something. >> there is is a big misconception with american college students. millenials are into the adulthood, late 20s, mid

'30s. they have grown up in a time of economic uncertainty. this is the first time they see economy thriving, that is strong. results of a strong economy, confident economy go against the rhetoric they're hearing about how horrible things are going with president trump. i think there is some confusion from a lot of millenials when they see the strong economy and see the strong rhetoric from the media how horrible things must be. that is playing a role. remains to be seen how much of this china struggle will impact millenials. it will start to when they buy cars or other larger appliances, they see results from the tariffs. i think it is important to discuss how we talk about millenials as well. neil: bottom line. you're all young. there is that agitating fact. seriously, thank you, guys, very much. we're learning the president is indeed discussing an immigration plan with republican senators. you might recall the criticism is he received, even off the record from republicans who had said, you know, about touting a

health care plan we're not quite ready with. don't do that. but an immigration plan, you can go ahead and do that. after this.

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neil: all right. apparently republicans are very close to an immigration plan

trying to work with the administration on that. the administration working with them. blake burman with all the details. hey, blake. reporter: neil this is plan jared kushner has been trying to orchestrate up on capitol hill to put together a immigration plan that republicans senators are working on. coming over this afternoon to discuss it. i'm told the area of 10 different senators or so. already today the president is warning democrats as it relates to immigration, he sent out the following tweet just a little while ago, writing quote, democrats in congress must vote to close the terrible loopholes at the southern border. if not, harsh measures will have to be taken. now it is unclear exactly what those harsh measures may or may not be. to be clear the white house is not commenting in the lead-up to the meeting what exactly may or may not be in this immigration plan. they are trying to put the onus on democrats to act. >> the question is are the democrats serious about it?

they keep saying we need immigration reform. be serious about it. come up with a counter plan. they can come up with a counter plan. but you have to come to the table to be serious about it. reporter: nancy pelosi is trying to draw attention to the one-year anniversary of the zero tolerance policy the trump administration once had and received criticism for. she just put out a statement, past 30 minutes, says quote the democratic house will fight this i am administration's anti-family and anti-immigrant agenda. we will hold congressional republicans accountable for their complicity in the president's failed policies at the border. earlier today in a question and answer session, she was arguing that it is democrats who fall in line with the mainstream thinking as it relates to immigration. >> whether it is about stopping taking babies out of the arms of their parents, these are, well, we advocate from the left on

them but they are right down the center. reporter: so, neil, you see the stance there of the administration. the democrats need to act. you just heard from the top democrat on the hill says they will fight republicans at every turn on the immigration proposal. again we don't know the details in here but that's the starting point. when you consider that this meeting is taking place this afternoon, when you look at what may or may not come down the line. neil? neil: so they're not on the same page on an issue. blake, thank you very, very much. let's go to yuma, arizona, the epicenter in the border crisis n state of emergency, that city's mayor, douglas nichols is with us. mayor what do you make of the back and forth? looks like republicans will try to cobble together an immigration plan, hope they have success with democrats on it, but what do you think? >> that is a great step forward. that is where it has to be begin. someone has to put the first

proposal out there so ewhere we get with the stalemate who will flinch first doesn't help anybody. we need leadership. we need people that will put ideas forward. figure out exactly the path forward so everyone can get this approved. neil: mayor, your state of emergency, when you first enacted it, you and i have been chatting. what did you base that on? i assume you're still in that state of emergency? what do you get when you declare such a thing? can you explain? >> yeah. we based it upon the number of releases that were happening in our community, directly from border patrol. these are family units everything from little babies to, they're all, there is kids in there but they're all family units. there are not any unaccompanied minors. looking at numbers we had coming in based upon how many people we can process through the shelter system, it was just going to overwhelm it which is already has. we are over 50% capacity right now. there is more coming today. we don't have any way to relief

that situation. neil: mayor, the president has already been pushing for 4.25, $4.5 billion in additional merge funding presumably at the border. the democrats say it better not be for a while. there are indications from the white house it wouldn't be for that. if you had your druthers, got your hands on that dough, or some of it, what would you use it for? >> a lot of would be for transportation. from our side of the issue where families are released where i'm focused. making sure they're not staying in a shelter system for long if at all. really transportation to the whoever the host family is. really to stem the flow. if we could get judges deployed to the border or video judges that could then help process people because right now, we're seeing less than 10% of those coming in present for asylum. so, if we could mitigate those, or process those claims earlier, we would relief the whole system

of having to deal with the migrant families, what to do. neil: mayor, we'll watch closely. thank you very much, sir, for taking the time. >> i appreciate it. neil: as mayor and i were speaking, we're getting word from disney. it was the only stock that was up. it is back in the red now. it is delaying "avatar" ii, the sequel to the original hit. the release date is around december 2021. it set new "star wars" films for december '22, '24 and '26. that means there will be at least three more star war films. oh, help. i'm working to make each day a little sweeter.

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brandywine global portfolio manager jack mcintyre and sean o'hara. sean, what happens then? >> i think you are going to continue to see volatility. i don't think we have seen any of the pass-through costs of potentially higher tariffs than those that are currently in place come through. somebody is going to pay that cost, whether it's china or the manufacturer here in the u.s. or distributor in the u.s. or the end consumer. so far, we haven't seen that. you would think we would see rising prices as a result but all of the numbers on inflation continue to remain relatively muted. i think this is going to be an interesting time. if you watch the president and his cadence on these issues, he's always been negotiating like this throughout his entire presidency. this is no different. it's just more extreme and there's more at risk because the numbers are so much bigger. neil: i wish i could remember the name of the trader quoted. one of the papers i was reading today was saying something to

the effect buy in the china dip. in other words, if you missed an opportunity to buy in when stocks were getting hit hard on the prospects of tensions building between or selves and china, you missed enormous buying opportunities. what do you think of that? >> yeah, but that's kind of looking backwards. i actually think it's counterintuitive but a very strong u.s. equity market might actually be a bad thing because it means trump is emboldened to go back to weaponizing this uncertainty as a trade negotiation. i say it's on the china side, too. their economy is actually showing some signs of stability. you know, i'm a little worried here because you've got u.s. equities up 26% since late december. the battle of fear and greed, i say greed has been winning out. now you have this potentially wave of uncertainty. i'm a little more cautious on equities here. certainly in the near term. neil: you know, it's always who

needs this more, and the argument has always been, certainly coming from the administration, unsurprisingly, china needs it more than we do. we've got the wind at our back, they don't. as jack pointed out, their numbers have been picking up. they have been able to find other customers for a lot of their goods. certainly not to the degree of making up entirely for those they sold to the united states, but maybe our assumptions are wrong. what do you think? >> well, obviously i don't think the president thinks that's the case. i think he thinks he's got the strong hand based on the numbers that came out last week on unemployment and wage growth and as we are rolling through this earnings season, things being a little better than maybe most people had expected. i think now i disagree with the previous comment. i think now is the time to apply the pressure while we do have this momentum because i think we can absorb some of the volatility in the meantime. in the long run, i think both sides will ultimately come to their senses and make some kind of a deal. neil: you know, jack, the worry is, though, that it does start having an impact beyond places we thought it would.

we always have to remind folks and i probably sound like a broken record saying governments don't pay these tariffs, you and i do, what's passed along by these businesses that can't absorb the shock of this on their own. it's one thing if it's 10%, quite another if it's 25%, one thing if it's aluminum and steel, quite another if it's 6,000 items having anywhere to do from cakes to record players. yeah, record players. i'm wondering what you make of that in that we have not appreciated that magnitude. >> you know, they always start, i'm not saying we are going down the path of smoot hawley but trade wars always start out small, we will put tariffs on a few things, then all of a sudden it escalates. i'm not quite there yet. neil: the hope is it never drives to that point, right, but if it does, then what? >> then you're talking about a global recession. you know, okay, so on the surface u.s. economy looks like

it's doing really well but that 3.2% gdp number, but look down below and i don't know, it's not quite as strong as that. you know, i just think we are going to see uncertainty around this trade unless this is, again, just negotiating. i think there's a reason why u.s. treasuries are doing well. neil: good point. >> people -- the big risk to china here is people move their manufacturing out of china to some of these other asian countries that would be happy to have the business where they're not currently in a trade war. that's the part nobody's talking about. it's talking about our economy versus china economy, who's going to win here but businesses are not going to sit tight. people will make contingency plans and start to be reactive. neil: some of them are. to your point, some of them are. some of them are. >> it's going to take time. neil: yes. all right. guys, thank you very, very much. to both of these fine gentlemen's point here, this has been a good backdrop for the bond market.

remember that old wall street saw, if you're nervous in stocks, put your money somewhere to protect it or keep it safe, a ten-year note is providing a big draw to investors, as it was yesterday. the yield last time i checked was around 2.45%. make a liar out of me. 2.5%. i'm reading slightly different numbers depending on what you're looking at. the fact of the matter is, interest rates have been staying pretty low on the belief that no matter what happens, there aren't going to be inflationary pressures building and that would assume any price increases passed along would be absorbed by these businesses unable to pass them along. again, that's the possible case of wishful thinking. "bulls & bears" host david asman on what happens now and if the chinese do in fact make good on some of these promises that they put on the table, off the table, i don't know what the real skinny is. but that's one thing we have to check, right?

david: well, it is. i pick up on an old phrase from the reagan administration, trust but verify. he was using that to refer to his negotiations with the soviet union, who of course violated all kinds of rules for the years and all kinds of treaties regarding nuclear testing and weapons, et cetera. but that applies here, because it's clear the chinese have violated a lot of the things that they have signed on to over the years, over the decades, in fact, dealing with many administrations. republicans and democrats. and this administration wants to change that. maybe not once and for all, maybe not 100%, you will never get anything through 100%, but they trust but verify. that's the way they are dealing with these people. they laid out these inventory of laws and regulations that they want changed, particularly with regard, we did, that is, laid out these inventory of laws and regs and at the last minute they were saying no, no, no, we don't want to specify to that degree and that's when lighthizer, who is one tough cookie, our chief negotiator, said no, no, no, no

good. then came those numbers, picking up on what sean just said, the numbers came out on friday showing our economy going great guns with low inflation, just a perfect time to really stick it to the chinese and say look, you agreed to this before, now you're trying to pull it out. we are going to increase the tariffs unless you agree to what you already had agreed to. now again, both sides are saying different things about that. i trust that u.s. side more than i trust the chinese side. i believe they thought they had signed on to -- that the chinese had signed on to this inventory of reg changes and they tried to pull that at the last minute. we had to do something. again, the administration after administration has let these things pass. this one is not going to do that. neil: it is hard to know who to believe on this issue, so at the risk of -- david: i'm putting my money behind the u.s. before the ch a chinese. neil: i don't want to alienate anybody. i know the chinese were surprised by our sudden move to up the tariffs and increase the

number of materials covered. i'm wondering if that was more a reflection of the president just tired with this thing dragging on. david: i think so. i think so. look, there is also of course politics involved. you and i have talked about that before, how perhaps the longer that they delay f we come to an agreement with the chinese, clearly the market will not only make up the gains it lost today, but it could go far beyond -- neil: but let's say we don't get a deal and the additional tariffs go into effect and the number of items covered, you know, dramatically rises. you could have that same economy on election day in a potential world of hurt, right? david: you could indeed. if the president doesn't know that, he's not half the man he appears to be. i think nobody knows that more than president trump. that's the irony. for all of his talk about the deficits and so forth with china, this is a guy who has dealt with china not only

selling real estate but doing all kind of branding deals with the chinese. he knows the chinese. i was talking to steve forbes about this and he said before the election, the chinese wanted trump because they felt they could deal with him. he's a negotiator, they knew he was hard-nosed but they also knew he knew the chinese. not only is lighthizer really well-equipped to be dealing with the chinese and yes, he plays hardball. nobody plays hardball like lighthizer. but it's the same with the president. at the same time, to your point, look, china is our largest trading partner. 21% of all of our imports come from china. but again, picking up on sean's point, if the chinese don't sell us stuff, we can get many of the same things from korea, from taiwan, from other places in that region that are now supplied by china, and just in time, you know, we have all this new high tech mechanisms for switching over from one chain to another chain. yes, it's cumbersome, yes, it costs money but we can do it a lot better now with our high

tech inventories, et cetera, than we could 10 or even two years ago. that kind of switching is already being done. i don't think it's going to be quite as bad as some of the people who say the worst is going to happen if we do have these tariffs go through. there will be switches and again, the chinese, if they counter with their own tariffs, their people, the chinese people, are far less equipped to deal with an increase in prices if they put tariffs on our goods going into china than we are. our consumers, because of low inflation, are in pretty good shape right now and we saw that in the numbers on friday. neil: they're not in bad shape, you know. david: the chinese? they have ton wedone well in th month but part of that is because of the fact a lot of people thought we would be able to squeeze them to accepting some of our rules and regulations. normal trading rules and regulations that they violated in the past. they are shooting themselves in the foot if they walk away from this. clearly it seems like now the vice premier is coming.

he will be arriving here on thursday, an advance delegation will be coming in tomorrow. i think they are aware of that. and they desperately want a deal. again, we are in a far better position to be squeezing them than them squeezing us. they really need a deal more than we do right now. as we get closer to the election, that might change a bit, as we get closer to our election. neil: you still sound like a mob figure the way you're talking. you think it would be a very good idea to sign a deal. david: listen, you're talking about a new york real estate president with chinese communist leader. neil: you're right. you're right. tailor-made. david: that's right. neil: david asman, thank you very, very much. speaking of drama, secretary of state mike pompeo was supposed to meet with the german leader angela merkel and others, canceled it at the last second. no one knows why. but everyone is wondering if it has something to do with iran. after this. my dream car.

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neil: all right. venezuela, juan guaido is now asking for u.s. military intervention, saying that might be the only thing that changes who is in the presidential palace. fox news correspondent steve harrigan in caracas with the

latest. reporter: juan guaido is back at work today here in caracas as head of the national assembly and the man recognized by the u.s. as interim president of venezuela. he crossed through some riot police in full gear to get into that national assembly. they let him through but blocked the media who was following him in. it's an unusual situation where one week after you have a man who called for a military uprising still walking free and carrying out his business. it's clear the maduro regime, not daring yet to arrest juan guaido. it's tough to imagine here just how bad things are as far as the economy goes. 10 million percent annual inflation is hard for people to imagine. here's what it looks like inside a typical grocery store here in venezuela. typical caracas grocery store, empty shelves over here. we have dish washing liquid. over here, some more dish washing liquid. those are your choices. one pound of meat sells for a

two week salary. it's rotting because of no refrigerati refrigeration. 20 years of socialism means venezuelan stores look like soviet union, 1989. so you are walking through a grocery store, have yyou have t choices. rotting meat or diswashing liquid. that's hard for people to understand. if you were in the soviet union in 1989 it looks very familiar. empty shelves and usually one crumby product on all the rest of the shelves. people have been coming out for three months to protest and it's clear just how hard that is when they are so desperate just to feed their families in venezuela. back to you. neil: incredible. this country once had a feast of riches, oil and commodities that were the world's envy, all gone. reporter: 20 years of socialism. that's what did it. neil: incredible. steve, thank you very, very much. have yyou have the venezuel

developments. you have the latest back and forth with the koreans. now reports that secretary of state mike pompeo has reportedly canceled the planned meeting with the germans, particularly angela merkel, to tend to something else. we don't know what the something else is but we do have with us the former national security adviser to dick cheney, john hannah. john, what do you think's up? john, can you hear us? what do you think's going on? >> well, it's very hard to know, neil. as you say, the secretary left finland but we don't know where he's headed to next. my best guess, and it's pure speculation, is it has to do with these rising tensions with iran and specifically what looked like confirmed threats now that we've had by iranian-backed militias in iraq against u.s. forces in iraq. therefore, the secretary may be making a trip to baghdad to show the flag, show up at the embassy and maybe with our troops to say

that we're standing behind you and if the iranians dare do anything, we are ready to respond. neil: would we likely stay there awhile? waiting this out? or what? >> my guess is the secretary will make a quick in and out visit, if in fact he's going to iraq. again, we don't know where he's headed. we've got a blackout right now. reports are that he's headed on to england tomorrow to continue with a planned european schedule. neil: when you read the english version of the iranian press which is state-owned press, we should stress, they say this is the u.s. being provocative, that the u.s. is trying to justify military action against tehran, not the other way around. what do you think? >> well, my guess is that the u.s. argument is right here, that in fact, the squeeze we have put on the iranians, particularly now this decision to withdraw all waivers for the sale of iranian oil, we are going to try and drive their

exports to zero. their main revenue stream going to zero on an economy that is already on its knees. this is a death match right now, and to imagine that at some point in time, the hard men of the iranian revolutionary guard corps and the theocrats in tehran are not going to try to lash out and hurt the united states, i think is kind of whistling past the graveyard. neil: do you think the added angst we have with venezuela, now juan guaido talking about look, i need u.s. troops here, i need some help here, that's right in our hemisphere. what do we do? >> yeah. on the venezuela thing, i'm very, very leery about the u.s. sort of substituting itself now for the will of the venezuelan people, and for the venezuelan opposition to keep working this problem. it's been three months. it seems like forever, but it's not a very long time in the life

and death of a hardcore socialist regime like maduro's. i think that regime really is in trouble. i think the united states can still do a lot more diplomatically, economically, to support the opposition, to hurt maduro, and to rally the international community behind juan guaido. i think that's where we've got to be rather than giving maduro the excuse of a yankee invasion. neil: all right. thank you very, very much, john hannah, former foreign national security adviser to dick cheney. we are down at session lows more than 515 points. a lot of this, in fact all of this, is built on concerns about china and this situation escalating. that despite the fact that everyone from the vice premier to a delegation, we are told, runs up to 100 chinese officials, is en route to washington to try to keep the talks going. apparently there's little faith that much will come of them. more after this. i'm working to keep the fire going

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gerri: welcome back. i'm gerri willis from the floor of the new york stock exchange. trade worries dragging on the dow with boeing leading the index lower. the world's biggest plane maker down as barclays downgrades the stock to equal weight, cutting the price target to $367 from $417. one analyst says they are likely to avoid 737 max planes for an extended period of time. also down home depot as its price target is cut to $217 from $223 after a cold, wet spring depressing home sales and upgrades. goldman sachs down, too. the company easing up on underwriting consumer loans, focusing instead on launching a credit card with apple. apple falling on china trade worries. the company depends on china for around 20% of sales. 3m suffering as a result of the trade deal as larry robinson

says he's shorting that stock. let's take a look at the chip makers. they seem to be down pretty handily today. the index down more than 2% as chips suffer on the china trade news. tough day in the markets as we see the dow down more than 500 points, 523 points right now. neil? neil: gerri, thank you very much. all 30 dow stocks are off and these are close to or at about the lows of the day. we should also point out a unique development, talking about oil prices slipping away. the yield curve, the gap between shorter term treasury securities and longer term treasury securities, in this case, the gap between what you get on a three-month bill and ten-year note, has narrowed to two basis points and a lot of people look at that as sort of a presaging event to a slowdown. remember when you get more for your money on the shorter end than on the longer end it could telegraph a recession. many argue that is out of whack

today given the fact interest rates globally have been so low for so long that that equation has been kind of confused. i know people say it's different this time but it is a justifiable distinction to make. real clear politics white house reporter is with us. all of a sudden the markets are trying to [ inaudible ] but i'm wondering if the fears are getting ahead of themselves. this is working under the assumption that not only is there no trade deal but tensions actually rise. what do you think? >> i think what's interesting right now is that we see china and these trade deals overshadow the current presidential primary that's happening right now and this is a problem for candidates like joe biden, who recently was seen as out of step with his own party when he told union voters not to worry about china. you saw bernie sanders slam him for that remark. then you see minority leader chuck schumer tell even

president trump to hang tough when it comes to negotiations like this. you have candidates who are watching the market very closely because the economy is the best argument the president has for re-election right now. and right now you have the democratic candidates who are biding their time figuring out what's going to happen. neil: i wonder if they will be so cavalier if this leads to continued selling or companies that are under pressure because they are absorbing these higher tariffs but will not be able to do so if they go dramatically higher and pass it along to consumers. you know the drill, this leads to slowdown and all that. will they be as hospitable? >> for a long time we have seen president trump t take credit for this economy. you have seen people on the left and the right say these trade wars and tariffs are not something we should pursue. you have a lot of economic data saying trade wars don't work out for people. it's going to be interesting to see whether or not trump is going to win the argument and at the end of the day the argument

is whether or not the economy is doing well. there's a long time between now and election day in 2020. neil: i'm glad you mentioned that. the president's position on this, whether or not you like him, whether or not you agree with him, there's been a trade war going on. we have just not been responding. the chinese have been warring with us and we have to respond to that. be that as it may, if there is a significant delay here, that's to get a deal that's verifiable, provable, i get that, but that i would imagine would lead to democrats to start pouncing. >> i think this is an important moment here, especially when you look at the comments that were made by joe biden, who is the indisputable frontrunner. not long ago he told voters not to worry about china. you had former gop nominee, now senator mitt romney say that's a terribly naive take, a terrible thing to say right now. we are at this point -- neil: so did bernie sanders. >> exactly. bernie sanders did as well. it was from both the left and the right. the question here is, is biden correct, is china not that big

of a threat, or is trump correct that china has been eating our lunch for a long time and which of these economic policy platforms are going to serve voters in the long term. and we are going to see, i think, in the long run who is correct based off of the moves president trump is making right now. if it works out well for him, i think he will say that's a strong argument for his re-election. neil: all right. well put. good seeing you again. thank you. meantime, just look at that again. the dow down about 545 points. that represents about a 2% hit. just to put that in perspective, how far we've come from the days when a 500 plus point hit would be a huge deal. that doesn't mean it's not a huge deal. october 19th, 1987, the dow fell over 580 points. at the time it represented about a quarter of the dow's value, 22.8%. here today, 2%. that doesn't mean i'm minimizing this. giving it perspective. more after this. [ telephone rings ] [ client ] - hey maya.

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neil: all right. all on fears that we see a deal slip away with china or at the very least, significantly delayed, the dow is down about 535 points, in and out of session lows. that represents about 2% of its value so in percentage terms, it's not a huge issue, but it's certainly one that hits traders who heretofor thought our comeback yesterday from our lows was a sign of better things to come. that is apparently not the case. all 11 s&p 500 sectors are getting hit, disproportionately so in the technology arena because as a group, not to an individual stock, but as a group, very much exposed to china. for example, intel gets 24% of its revenue from china. apple, 20%. western digital, about 22%. micron technology, 51%. qualcomm, 65%. you get the drill here.

something looks like it's falling out of bed with china. kind of different story with google. there are other factors at play there. it is dealing with a lot of political and other issues including trying to limit online tracking. easier said than done. robert gray is at the google developer conference going on and how that's all sorting out. robert? reporter: hey, neil. the keynote has been under way for about a half hour so far. we heard from sandar pichai and he was talking about they wanted to make products based on a foundation of privacy but we haven't really heard him filling in the blanks a whole lot. hoor here's a little snippet of what he said. >> our goal is to build a more helpful google for everyone. when we say helpful, we mean giving you the tools to increase your knowledge, success, health and happiness.

reporter: so they have unveiled so far 3d and augmented reality effects for mobile search, some translation and other interesting augmented reality features for the phone, letting you book rental cars and movie tickets using ai instead of having to fill in all the forms yourself, continuing to go through some of the new updates. but really, at the heart of it you are talking about privacy and talking about the ability to track or limit others from tracking you, and that is one of the issues today. the "wall street journal" reporting that they are going to make it harder for other companies to track you so things you googled a week ago aren't going to start turning up on your banner ads, on your page, suspiciously or not. but it could also help google because they are the digital heavyweight, if you will, as far as ad sales online that may make them be able to make more money because they will have the data, they will continue tracking your data but supposedly making it harder for other companies. we haven't heard exactly how that's going to play out just yet. we are still listening in. that's definitely something we are waiting to hear, more on the privacy concerns because as you mentioned off the top, they have

been feeling pressure from a lawsuit and lawmaker, and certainly seems like it's going to continue and investors wanting to hear more about increasing the ad revenue because just a week ago, that was a big disappointment and the stock sold off on that news from the quarterly report. back to you. neil: i never thought of that. whatever individuals like, advertisers maybe don't like it so much. interesting reporting. thank you very much, my friend. robert gray at the google conference. meanwhile, we told you about the threat of expanded tariffs coming. perhaps nowhere is that seen as a group than when you consider clothing and luggage and ha handbags and the like. american apparel and footwear association ceo says that consumers are going to bear the brunt of that. very good to have you. i always forget that so much of this stuff particularly shoes and a lot of apparel, particularly women's apparel, makes its way from china to here and there's only so much

businesses can absorb before they have to pass it along, right? >> you are absolutely correct. we could barely survive the 10%. 25% is not survivable. the problem is we are locked into china. 41% of all apparel, 72% of all footwear, 84% of all accessories, come into china. we can't escape it. with the imminent rise this week from 10% to 25%, our members have goods on order. they are going to get hammered. you know, 25% is scary but in our industry, we represent 6% of all imports coming into the united states but we already pay 51% of all tariffs collected. you know, neil, you actually called this out in january 2016 when you were the moderator of the debate and you asked the candidate about a 45% tariff on china. think about this.

my shirt currently comes in at 20%. add 25% to that, you have 45%. the president is doing what he said he was going to do, and the fact that the markets are surprised is scary. just saturday we were in bob marley land, don't worry, be happy, everything is going to be all right. not so on sunday night. neil: how much is getting passed along, if you had to look at this now, the belief is 10% is not as if the industry can handle it but it can certainly handle it better than 25% or 30% or 35%. on $200 million worth of goods rather than half a trillion dollars worth of goods, apparel certainly among those goods. then you're getting into crazytown, right? >> we will be in crazytown. 10%, we can finesse. remember, they only nibbled at our edges. what scared us the most sunday night was when he talked about the next $325 billion which hits

us squarely in the head. we weren't allowed to grieve on the $200 billion. the next tranche, who knows. but we can't pass it along and we are stuck, and we can't escape. you know what the market's really reacting to? something they call bumper car inflation. because our members will start rushing out of china, many of them have already left, and they go into another country and they have to bump somebody out. so there goes your product integrity right out the door, and prices go up. you bake inflation right into the system. you know what happens? prices go up, sales go down, jobs get lost. this is what scares us the most. neil: all right. what do you think of the notion the president is using this as a gambit, in other words, to get the chinese to respond? we heard a lot of that. what do you think? >> well, you know, we respect that a lot to the extent that look, he tried to do something

no one has done before and he brought it we were thinking almost to the finish line, then we were assuming these tariffs would go away and we responded to that quite frankly very favorably. oh, okay, well, we've got a better deal with china and all these tariffs go away. so we were all happy. but retail, think about this, two-thirds of the gdp is consumer based. 10% of the jobs in america are retail. you know what? in the first four months of this year, more stores have announced closings, closing doors, than all of last year. so retail is not in the best shape. this will jolt it severely. it will jolt the brand. it will jolt the manufacturers. and we are very hopeful and that's what the market was looking at yesterday, that maybe it is a negotiating tactic. that would be wonderful. but we are fearful and if the

tariffs click in, thursday night midnight which they said they would, there's going to be another -- we are cooked. we are cooked. neil: once they kick in, it takes awhile for them to kick out. rick, thank you very, very much. >> thank you. neil: let's get a read of what's happening certainly in the treasury market. there's a little bit of flight to quality going on there. we're not noticing oil doing much of anything. in fact, on fears of maybe a slowdown, those prices are dropping. phil flynn is following it all very closely. phil, what are you looking at? >> you know, i'm amazed that oil is holding up as well as it is, with the stock market under pressure. i think part of that is the market's starting to realize that in the past when we heard reports that a trade war was going to slow down oil demand in china and the united states, it never really happened. in fact, the demand for oil continued to stay strong. we had record demand in china, near record demand in the united states. so i think the market's getting more of a bid but there could be

more at play here. we are hearing a lot of reports about the increasing tensions with iran. the markets seemed to get a little bit of a bounce off of a report that the united states has actually sent some b52 bombers into the middle east. that's increasing those potential real war tensions with iran. that could be really big deal. right now, there have been reports that iran has been making some very strong threats, perhaps to the strait of hormuz which is the world's most important oil checkpoint. if that ever happened, if there was some kind of conflict there, it could be very bullish for energy prices. so it's one of the factors out there that's giving oil a little bit of support. neil: but it's not helping oil prices now, maybe the market's way of saying we don't see this happening, right? >> no, i think there's a lot of doubt there. listen, if iran actually made an

attempt to do that, they wouldn't have a friend left in the world. trying to shut down an international waterway, you know, now they're not just the united states conflict, it's conflict with the rest of the world. i don't think the market believes that. at the same time as a trader, when you hear these reports on the radar, you have to adjust your risk a little bit to see if this worst case scenario happens, you better be prepared. nl neil: well said, my friend. phil flynn following it all from chicago. lot of investors click on and see something like this, they see oh, boy, what do i do now. ben stein with reassuring words. how to handle a panic when it comes upon you. even if it comes upon you very quickly. after this. heading into retirement you want to follow your passions rather than worry about how to pay for long-term care. brighthouse smartcare℠ is a hybrid life insurance and long-term care product. it protects your family

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neil: all right. lot of anxiety at the corner of wall and broad. the dow down 521 points. a lot of people saying what do i do, what do i do. one of the kindest, smartest people i know on the planet joins me now. ben stein, author of so many bestsellers i don't have time to get into it because he makes me look bad. very good to have you. how do you advise folks when they see something like this on a day like this and they get nervous? >> don't do anything.

just hold on. hold on for the ride. rarely do these things turn into the total crises that the market would seem to be predicting. we are huge trading partners with china, they are huge trading partners with us. neither one of us wants to do anything to super-escalate this until it becomes a giant supercrisis and it's not going to be. the chinese are terribly smart, capable people. they are not going to allow this to become a real crisis and the u.s. is fairly smart, fairly capable. we are not going to allow it to become a huge supercrisis either. neil: but in any trade negotiation, what was it ronald reagan used to say, both sides should come out with their dignity. i'm wondering if the administration maybe for perfect sound and valid reasons sort of locked china into a non-face saving corner. >> well, i think if he did, it was a terrible mistake. i don't think -- there's no doubt whatsoever that china is violating all kinds of international rules and norms

about technological transfers or technological theft, frankly, but in terms of just prices of exports, we do very, very well with china. they send us good quality goods at very low prices and i think they don't want to stop that, they don't want to stop taking our money. yes, they take our money and then use it largely to buy u.s. treasury bonds, not always, but largely. they don't want -- the deal is working out very well for both of us. i don't think there's any reason either one of us wants to stop it and i don't think either one of us is going to stop it. there's a lot of benefit for the traders in terms of making the markets fluctuate wildly, there's no particular benefit coming to a crisis and crashing the cars. yes, the cars can play chicken with each other but we don't want them to actually crash. nobody wants them to actually crash. neil: you're right. you hope that cooler, calmer heads prevail, but maybe just using the volatility index, the

so-called vix, it's at its highest level since january, up over 30%. as you remind me, that's a fast-moving barometer if ever there was one, but it does represent a sentiment for the time being. people are scared. should they be? >> well, they should be scared, if they are speculating on the vix, they are tougher and have nails -- nerves of steel, and they are tougher than i am. but i don't think they -- neil: no one is tougher than you. >> no, no, everyone is tougher than i am. i don't think people need to be speculating on the vix or trading on the vix at all. just hold on, hold on tight. things will get calmed down and you're not going to be able to outsmart the market. you're not going to be able to outtrade. just hold on and let the market go find its level. the market will be back. look, we have an enormous amount to gain by continuing good trade relations with china. they do with us. we're not going to throw that away. neil: you are very brave because

you are an economist by training, a genius and also an actor. i think that alone. who would have advanced into that field, right? >> i say very stupid. neil: modesty, i don't know. but let me ask you about this. we talk about the point of the coming year and i always think a lot of times, markets will look for an excuse to sell. if you've had an un interruinte runup, since december lows we are up 20%, this is a good catalyst to do that. people will pounce in, valuations will get down to maybe a more historical norm and off to the races we go again. what's your view on the markets now? >> my view of the market is it's fairly priced. it's not really wildly overpriced as we have seen it at some points in the past. it's a market that's sensibly priced at this point and there's no reason for it to go down a great deal. it's just like there's no reason for it to go up a great deal. it's a sensibly priced market at

this point. the pe ratio is not particularly high or particularly low. just hold on and watch the market go up over a long period of time, now if you are in it for a day trade, i don't know what to tell you to do. just don't do it anymore. if you are in it for the long haul, just hold on and -- neil: what's the long haul to ben stein? what's the long haul to ben stein? >> five years. neil: wow. okay. there you go. long haul for me is tomorrow, lunch. i was hoping you could be a little more -- >> actually, i was hoping for lunch today. i'm looking for a mcdonald's cheeseburger for lunch today. neil: duly noted. mcdonald's could be a good investment. ben stein, great seeing you again, my friend. be well. >> great seeing you, my friend. god bless you, sir. i'm working to keep the fire going

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. . neil: all right. the dow down about 515 points here, represents a loss of 2% here. virtually all major sectors are betting hit hard. the dow jones and s&p 500 right now are on track for their biggest intraday percentage drop since back in early january, january 3rd. that came after december, a big selloff month. what is otherwise looking like a positive year, then we had the christmas selloff and period before it. but again, intraday, this is matching that level soon after the holidays, on january 3rd. doesn't mean that will hold, but across the board major issues

are taking it on the chin. apparel makers, technology stocks, semiconductors stocks, those with ample exposure to china or the fear that they're exposed to china, they're all getting caught up in the same way. charles payne, right now. charles: neil we have heavy lifting to do, good afternoon, i'm charles payne this is making money. neil laid it out. renewed trade tensions continue to drag on investor sentiment. as the united states and china are scheduled to resume talks later in the week. we'll go live to google's conference as the tech giant reveals new products and promises for companies harder to track you on line but will this lead to new regulations. president's approval rating ticking up to a new high, 46%. economy and jobs are on fire. the markets are not right now. all that and m