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david: donald trump and chinese president xi jinping meeting and discussing north korea, logic and icbm missiles this week. gordon chang is author of northern showdown, north korea takes on the world, you have been warning about this for a long time. the president came out with a frank tweet saying we had to pull china back but it hasn't worked, they have increased 40% in the past six month. i know they have pulled back on cold trade but what have they been increasing trade on? >> violations of security council sanctions, in violation of two the council resolutions. they save people back on trade on february 18th but they wouldn't buy anymore call from north korea, in february after the announcement, in april, may

and june. the commerce and industry underplay for congress from china. david: violating un edicts by doing that but also violating commitments, commitments they made with donald trump when they last met with him. what does he do? >> the first thing donald trump has to do is ask chinese in public how come north korea has chinese and chinese looking missiles and equipment in their arsenal. >> what we found out this week, not only missiles from china but missile launchers, the mobile missile launchers, in north korea. >> and intercontinental

ballistic missile is on a chinese transporter, and the most sophisticated this will test on august 24th, february 12th, may 21st, those missiles look like variants of a submarine launched missile. on april 15th the north korean shoved a big canister on top of a chinese launcher, created through the square, that is chinese canister for the df 41 missile, we don't know what is going on here but we need the president to start asking questions. david: i need to stop you in your tracks, how to turn the screws on china. we just had something happening today, b-1 bombers flu close to the north korean border but this is a show of force. what specifically can be done to hurt the chinese and do something about north korea?

>> last week we unplugged money laundering, a small institution, they can go after bank of china, one of china's big four banks because there has been money laundering for north korea, that was in a un report last year and other instances bank of china has been violating. david: how would china respond? >> they would be really upset because we are taking one of their biggest banks and putting it out of business. david: stopping their bonds which people need to do. >> selling our treasury since the middle of 2014 in order to support the him him be. why worry about that? david: china, their heads are spinning trying to figure out how donald trump operates. that incredible dinner the president had for xi jinping in florida when he was serving him chocolate cake, announced he was

bombing syria. they must be wondering what they have in the white house right now. they've never seen the likes of donald trump. we haven't seen the likes of him either but it must be discombobulated for the chinese. >> they thought they had him figure out until that missile attack in mara lago. trump last week, but he signaled he could end up the pressure. i am sure the chinese are concerned about trump. they are caught off guard. >> absolutely good for us because the chinese have gotten too accustomed to thinking they control american presidents which they have. this is a good thing they are not sure what trump is going to do. david: new york city mayor bill diblasio is in hot water for leaving his city to join g 20

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ainsley: david: amazing how our world and their world collides, bill diblasio just went to hamburg, germany for the g 20 protests. he skipped the police ceremony to be held here. bill stanton joins us. let's be specific. this is what happened in new york. on wednesday new york police department officer miosotis familia was shot to death in her patrol car. the next day, bill diblasio jets off to hamburg, germany. your thought? >> the optics on this are horrible. he is leaving tragedy, what you just said, traffic and

transients. when he decides to go to germany to start trouble with trump, the metric here doesn't make sense to me. prioritize new york city, why are you running outside the country? he -- david: the man who saved new york in the 70s and 80s and part of the 90s was a cesspool, we had a murder rate of 2000 a year. now it is under 400. the man who did that was rudy giuliani by getting tough with criminals. i can't imagine rudy giuliani the day after a police officer is shot as this was leaving town. >> absolutely not along with bill brennan, the police commissioner, they made this place feel safe. it is like we are going to back in time as you mentioned where on every street corner there are people, homeless people coming up to the windows, people sleeping in the street, traffic

is insane. these are the priorities of new york city. david: look where he is going. new york city is the representation of capitalism, on wall street, tiffany's, it is kept alive by the free market system, these protesters are anti-capitalists, they represent the opposite of what new york celebrates. >> back to family. people fight with each other but never talk about family outside the family. and going to germany trash talking the president of the united states. david: trash talking capitalist system on which new york commerce is based. >> as we look at other countries like venezuela, socialism is imploding their country, do we want that here? david: he is going to win reelection. >> my opinion by a landslide. david: why? >> more have nots than haves.

when you castigate, make evil people who are successful, call them evil rich, i call them inspirational successful, when you make that person bad, the get more votes. david: markets don't seem worried about the protests or anything else. tax reform soon, he's manning of independent women's forum joins us with the cofounder of maxfunds.com and gary b smith. let me start with you. markets moving up, jobs still moving up, more jobs numbers, what is to worry. >> the economy is more flatlined than the jobs report indicates. the problem i discussed yesterday was wages are not going up. apart from that, what is to

worry? nothing gets done in this administration. if we don't get tax reform, don't get healthcare reform, a lot of basis of this rally, the trump rally goes away. that is the concern. david: what we also don't have is a president who is interfering with the markets every step of the way as we did in the last administration. we have a president who is a businessman. we don't often get that. this guy, businesses don't have to worry it is another day we are going to get another regulation or another tax or another mandate. >> exactly right, there is some expectation built into our markets the tax reform will come to fruition, single issue optimism. to free our energy sector, unnecessary regulation on the economy, this is broad-based enthusiasm, a lot of reasons to

be hopeful. david: for jobs number looked pretty good yesterday. it does appear business people are planning for the future by hiring more workers. >> a quarter million jobs, if you have a college degree you can't get a lot lower from educated workers with skills. we are hoping for a tax cut but at this point, it might cause inflation, wasting a huge opportunity for tax reform and simplify the tax code, no question about it. not getting anything done means not getting bad things done. we like to have something fixed but business people do not want some of this stuff that is proposed by other people. david: jonas is to be forgiving because he is so young he doesn't remember the 1980s when everybody said the economy -- when we are growing at 7.4%.

what happened to inflation? it started to come down. i am not afraid of stronger growth, are you? >> no. you can raise prices these days. retailers can't raise prices. supermarkets can't raise prices. auto dealers can't raise prices. i'm wondering where this too hot inflation is coming from. so much competition out there, the internet drives everything down. you can price compare across the board, you can go to the costco if you don't like the prices at the kroger, i don't see it overheating. david: i wonder what happens when we do get tax-cut? we had a congressman on saying he understand healthcare is a mess, changing 1/6 of the economy is not easy, paul ryan could have gone with, he things we will get tax-cut so if we do, do you think the market is already pricing in and won't move much or is there another leg to the upside? >> there is always room for

another upside. put more money in the pockets of american workers, to do that through tax cuts, wage growth which we would love to see more of and health reform because people are paying out monthly premiums under obamacare, health reform is a big part of this. david: i am not hopeful that we will get tax reform. with all the republicans republicans have little in getting democrats on. >> i am not expecting big time cuts unlike the 80s. david: i said health reform. i think we will get the tax cuts. republicans are divided on that. >> healthcare is even less likely to get significantly reform to the way people thought it would get reforms. little changes are going to happen, pretty minor in the grand scheme of things but that is the tax-cut if it is done right. in some ways it is both. david: i'm worried because the republicans are saying we can't get rid of all the obamacare taxes. >> they have had eight years

which a lot of them have run on repeal and replace obamacare, they can't get that done i disagree with you, getting tax reform done with all the little constituencies in the tax code, that is a mountain. david: it is hope but it is my hope. got to leave it at that. thank you, have a great saturday. coming up we will hear what donald trump told the president of china just moments ago. we have the tape, stay tuned. fork on the trail led to a new adventure? then keep the tradition going at bass pro shops with great deals-- like the eclipse 2-person dome tent for under $30. plus, free workshops, activities and crafts. looking for a hotel that fits... ...your budget? tripadvisor now searches over 200 sites to find you the hotel you want at the lowest price. grazie, gino! find a price that fits. tripadvisor.

david: we are getting new tape of the meeting between donald trump and china's president talking about north korea, take a listen. >> on behalf of the united states i would like to say it is

an honor to have gotten to know you. we are developing and have developed a wonderful relationship. i appreciate the things you have done, very substantial problem we face in north korea. something has to be done about it. be sure whether it is on north korea or anything, we will come to a successful conclusion. david: before the president said that he told the polish people something that sounded like ronald reagan in europe 30 years ago. listen to donald trump. >> the fundamental question of our time is whether the west has the will to survive. do we have the confidence in our values to defend them at any

cost? >> mister gorbachev, tear down this wall. david: former virginia governor jim gilmore sees a resemblance between those two speeches. i know the comparisons a lot of people don't like those comparisons, trump was reaching more than material things. >> core values were a major part among major themes, i encourage viewers to get at the speech. to look at it on youto, one of the best speeches i ever heard, sounded like reagan, even had

little echo of jfk. he talked about russians significantly. he is this over 20 times. >> the need for and the right to certain guarantees some governments don't provide. we can't force -- your own ways, it is not up to us to tell you what to do. >> the trump administration and american foreign policy toward europe, a blowback on the russians, reminded the polish people there was a warsaw

uprising allowed nazis -- in the speech he was specific about condemning the russians in ukraine. amazingly he announced we were putting patriot missiles into poland to protect the country. there was a strong affirmation of the united europe, article 5. everything appropriate for american policy toward europe was expressed. david: and explanation of europeans that america first doesn't necessarily mean we abandon our allies. we stand by our allies. america first means simply we are not going to be dictated to by bureaucrats 3000 miles away. >> it is not a united europe. this speech reaffirmed the importance of europe, a europe that is entire and free in this speech. he is not against europe. what he is against is over bureaucrats eyes to --

david: we thank you very much for coming in. former governor of virginia jim gilmore. the president is getting ready to leave the g 20 summit in germany. some comments before he leaves happen in the next hour. a lot to come, we will be right back. number smart bed. the only bed smart enough to change sleep as we know it. it senses your every move and automatically adjusts on both sides to keep you comfortable. and snoring.... does your bed do that? right now save on sleep number 360™ smart beds. plus, it's the lowest prices of the season with savings of $500 on our most popular p5 bed. ends sunday.

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like access your id card, file a claim, or manage your policy. it's so easy it's almost scary. let's get outta here! that's auto and home insurance for the modern world. esurance. an allstate company. click or call. >> there were protest he is and riots. i think it's fair to say you had both on display in hamburg, germany at the g20 meeting there. our greg palkot was in the thick of things. they've calmed down a little bit now, but you never know how they can heat up again. >> you never know, david. we've been watching for the past couple of days, there could be trouble. so far there's peaceful marches and peaceful protests and we're a half mile from where the g20 summit has been held. my cameraman has given you a walking tour of the police presence here. this is the no-go zone. police in place