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tv   Cavuto Coast to Coast  FOX Business  May 31, 2019 12:00pm-2:00pm EDT

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we're around 2.17% on the 10-year treasury. >> flight to safety. stuart: flight to safety. 218. but that is still a flight to safety. >> close under 25,000 on the dow, under it would be psychologically for consumers -- stuart: connell mcshane. it is yours. connell: stuart, have a great weekend. welcome everybody, "cavuto: coast to coast". i'm connell mcshane filling in for neil on this friday with stocks selling off after the latest trade bombshell came in last night with president trump, rattling markets with threat of new tariffs on mexico. he says all because of illegal border crossings. the dow is now down for six weeks in a row. we're on pace for the longest losing streak we've had in eight years, in terms of weekly declines. we'll get to that in a moment. we're off the lows, down 229 at the moment. start with blake burman on the news from the white house. happy friday, blake? reporter: away we go now with
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mexico as relates to likely tariffs it is safe to say. president trump laid out thinking on twitter. the reason why he is going forward with the planned tariffs at mexico, 5% at the beginning, come october. he wants to stem the flow of illegal immigration at the southern border but also wants to stop drugs from coming over the border as well. on a conference call last night when the white house rolled out of this out, acting secretary of department of homeland security kevin mccall lien the path to take to avoid tariffs, mexico needs to tighten up southern border, target criminal organizations and work with the u.s. an asylum. when the white house was stressed for specific levels or specific target mexico needs to hit, they didn't necessarily give those figures. here is press secretary sarah sanders a while ago. >> repatriation of thousands of
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people coming from central america. they could return them home. that would be very first big step we made progress on asylum but we need to do a lot pour on that front. reporter: mick mulvaney tried to make the case last night, this is a immigration matter, totally separate from the usmca deal which he described as a trade matter. the political reality this is now very much intertwined. for example, iowa two republican senators, chuck grassley, joni ernst thrown their support for the usmca deal in doubt because of these tariffs. i asked sanders earlier today why members of congress should support the usmca trade deal, a deal between the united states, canada and mexico, if the president is willing to go forward with putting tariffs on mexico which would mean mexican goods would be more expensive for consumers back at home. this was her response. >> go through with the
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program -- it is good for farmers. it is food for units, it is good for everybody. it's a great deal, something everybody should move forward with. reporter: as of 10:00 this morning we were told with president trump and mexican president lopez obrador had not yet spoken. the two teams are in contact. mexico's president says the foreign minister would be heading to the u.s. today. reuters is reporting that will take place shortly. that the foreign minister will leave shortly. do math on the plane flight. we did hear from the mexican president earlier today. said he is going to be prudent, going forward. he also took a shot at president trump's america first slogan, saying that slogan is quote a fallacy. these don't go into effect until june 10th. right around the corner, a long way away. connell: isn't that always the
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way. hard to be surprised anymore, but people were surprised by this particular move he especially mexico. blake burman on the north lawn. look at one particular industry hit hard as a result of all of this, as a result of fears surrounding all of this, right? general motors down 4%. ford, fiat chrysler, seeing their stock prices decline. mayflower partners larry glazer with us, brandywine global portfolio manager jack mcintyre is here. jack, if you look at if you're general motors or ford this puts you in a tough spot. the number in the "wall street journal," 17% of the cars sold in the u.s. from detroit's big three are built in mexico. what do you make of the move? >> so to me this is another example of trump weaponizing uncertainty. it is interesting, we're using
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tariffs as an economic policy too to try to affect non-economic policy response. migration from this standpoint but it has got implications as you point out. the supply chain between u.s. companies and mexico are so integrated. this will be very complicated. if it continues, and they escalate it, it will really ultimately impact the u.s. economy, u.s. consumer. i think one of the reasons why equities recovered off the lows, it will get the fed to have to cut rates. that is what the market is looking at a little bit. connell: we were down three something in the dow, larry, to jack's point, we're down 230. the idea, hey that is a silver lining, maybe the federal reserve will have to step in here. if you add this on top of what we're dealing with in other places, china being the prime example? >> look no doubt. stocks are in for a long, hot, volatile summer. i come from a school of thought we believe tariffs are a bad
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thing, because they are a tax on u.s. consumers. they get passed through. companies don't ultimately absorb all that. the mexican surprise does have a silver lining. look for the positives. silver lining the economy would be getting a too hot. personal income was too hot. fed was on watch. fed was trying to address inflationary concern. now we have cover. connell: where is that line? you go over between being. >> sure, we're kind of accidentally cooling off a too hot economy if you're right and larry's right, jack, but at the same time you don't want to -- you want to be careful that the one thing we have going for us is a strong economy. are we very close to it? >> forward-looking things stress the economy is weak. i don't use q1 growth as proxy for growth for rest of the year. there was inventory buildout,
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u.s. is economic island. we're susceptible to a slowdown. the round of tariffs creates more economic uncertainty. and that is going to help slow the u.s. economy. look for positives on friday summer weekend, recognize lower interest rates will be great for mortgage refis in the coming weeks. connell: rates are rid includely low. >> they will help the consumer. summer driving season will be great. consumer 2/3 of u.s. economy. this will ultimately prolong the recovery but create volatility in the near term. connell: i don't want to tell larry this but jack is shaking his head. >> we can agree to disagree. >> real incomes are hit.
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u.s. treasury market will slow down. it will eventually help u.s. housing that could be way off. if u.s. equities come under pressure there will be wealth destruction. connell: as i said to blake, this one in particular came as a surprise to a lot of people. we'll see how everybody adjusts over next few days, few weeks, few months, whatever it is. have a great weekend. what mexico can do to get out of tariffs. they have data out, january of 2018, and august of 2018, mexico deported more central americans than the u.s. you can see that as their comeback, hey, we're already working on this. border patrol council vice president art del cato joins us. can they do more?
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what does the president want mexico to do specifically in order for the tariffs never to be put on or too to be taken off. what do you think? >> i think definitely need to take it more serious. they know that these individuals are crossing through their country illegally. it is impossible for them to say they don't know and what's happening is, a lot of the cartels are benefiting, a lot of businesses in mexico are benefiting. face it, with the huge numbers coming through, they're purchasing goods through mexico to further their trip into the united states. it is obvious who they are. they know who they are. they could be doing a better job. just recently, i was in el paso recently, i was in el paso recently. we picked up a group of cuban individuals, cuban citizens, coming in seeking asylum, i asked them how many more coming through? we come in through panama. take a bus through central america. we enter mexico. when you go into mexico, the mexican authorities were telling us, this is coming from them,
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they said they tell us, as long as you're going through and not staying here and your intentions to go to the united states, about ahead and continue. mexican authority would hand pick some individuals, say certain one of we have to take in and we have to deport. connell: should we have better metric, seems like we didn't put a number on it, maybe that is on purpose but should we put a number on all of this? this particular report i cited, mexican government would use something like that. we're deporting more people to central american countries than the united states is. you could skew the data anyway you want, because more people are coming through mexico, i get that. should we put a number from our side, listen, here is the number we need to see from you guys. you are hear. need to be here. what do we need to see from them? >> i think it is obvious you said it best right now.
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you can mess with the numbers. so the number, it's a numbers game. we need to see is, obviously not thousands of, upon thousands coming into the united states. they just made the largest apprehension a couple days ago. it was well over 1000 central americans. what the american public needs to ask themselves is, of those over 1000, how many will be sent back to their country? how many will be released into the united states. how many will never show up to the court date. that is what people need to understand. connell: no doubt. the last chart showed it. there is an issue at the border, those apprehensions. they are way up as the chart showed at the end. art, good to see you. thanks for coming on. we'll continue to follow this. >> thank you for having me. connell: move on to another one of the big stories we follow on a daily basis. there is new threat looming from the chinese side. signs that the economy in china is not so hot.
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not as strong, maybe weakening. we'll talk about what it means for the talks. back with you later in the day. we'll look how markets end this month and this week after the bell when melissa francis joins me at 4:00 p.m. eastern time. right back on "cavuto: coast to coast". om any. 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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connell: treasury yield is at 20 month low in nearly two years. july of 2007 is the point where we have the inversion at. so the yield curve in version, that is the widest inversion we have had since july of '07. the low on the 10-year is almost two years and then you're going back to 07 for the yield curve inversion. some people say signs, warning signs are coming in the economy. stock market is off a bit. but bond market seems to be signaling things could be slowing down here here. speaking of slowing down, new data out from china, not good for the chinese economy at all. the chinese economy certainly weakening. that is what the factory data
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showed. currency following 2 1/2%, coming up on end of the month. factory employment gauge, lowest level since 2009, imports from china, down 14% this year, which undoubtedly speaks to the trade tensions. a number of companies looking to shift operations out of china. it has been a list we've been kind of putting together piece by piece. it's a list continuing to grow. whether, vietnam, cambodia, what have you. former u.s. ambassador to china, gary locke, joins us now, on kind of what's next. there is new warning out, ambassador, china wants to blacklist a number of american companies. what did you make of that? >> obviously these trade tensions can get out of hand, as the previous guest was talking about the possible mexico tariffs said, it will be consumer ultimately pays. it will hurt american companies and ultimately passed on to american consumers, whether the stuff you buy at costco,
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walmart, china, the list goes on and on, even automobiles. some of these tariffs on china will be on small parts that come in from china, put into american-made automobiles, that will raise significantly cost of american-made automobiles. so it will hurt the average household anywhere from five to $800. if you're planning making a major purchase, whether lawn furniture or barbecue set or an automobile, it will cost you even more. connell: so the question throughout this whole near term question, whether or not they, the chinese hurt more than us, the americans. we're past the idea china paying tariffs. we know american companies are, to your point, passing along to consumers. there is certainly pain here. we've seen that. china's economy, the manufacturing number is rough. in contraction territory overnight. import figures is interesting. import figures from the united states into china is down 14%.
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other countries are benefiting. vietnam up 40%. cambodia, 24. taiwan up 21%. south korea up 18%. there is shifting of the supply chain. how will that play out? you know will we still get low cost products from asia, not just from china? >> i think you will still continue to get low-cost products from asia but also still getting the bulk of it coming from china. some companies will be able to move their supply chain to other companies. in fact other countries. in fact that is a good idea. you don't want to be overly reliant on any one country for the source of your materials. at the same time china is doing the same thing with the penalties and ban on american companies selling anything to huawei. huawei makes more than just 5g equipment or, you know, switching equipment for our cellular network. they make inexpensive, cheap, cell phones, not in any way competitor to iphones.
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these are low cost, cheap, cell phones affordable to people in developing countries. when the united states says that no u.s. company can supply any equipment to huawei, not even the glass that is used on a cell phone, that is forcing huawei and china to say, okay, well, we don't want to be dependent on american suppliers and technology. we're going to have to really focus on developing our own homegrown companies and semiconductors and glass and everything else. connell: much more, ambassador lock, than just a trade dispute? is it some suggested a cold war a new tech cold war? what is this? >> i'm very concerned that it is going to escalate and it will get out of control. whether it spills over into rare earths. china only mines about 30% of the rare earths in the world, but they process all of the final products that are used, even by our american military,
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made by, used by u.s. companies, that then are put into components for the u.s. military, very sophisticated equipment. american companies can't readily substitute those supply chain products. connell: right. >> so this is going to have deep repercussions in terms of global trade and economic and supply chain relationships between the united states, china, rest of the world. connell: we could be making changes for bet or worse that may never go back the way they were, interesting part of all of this. ambassador lock, thank you for your insights. >> thank you. connell: we talked about mexico. now we talked about china. what about north korea? this is some story, the failed summit between kim jong-un and president trump, there is a report out that led to executions of top officials in north korea. what might mean going forward. we'll have that when we come back.
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connell: new report is out that says the kill regime in north korea executed five top officials after the failed summit with president trump in vietnam. benjamin hall now covering the story live for us from london. benjamin? reporter: hi, connell, if true this really shows how much of a failure the north koreans in fact kim jong-un personally saw the hanoi summit. their negotiators went to hanoi hoping to get sanctions relief. they went empty-handed. they misread president trump and refused to budge on denuclearization. a senior envoy who led the working level negotiations at that summit was apparently executed at field by firing squad along with four other officials including the translator. but the purge went further. kim yong-cho foreign secretary sentenced to hard labor. he was sent to hand deliver a
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letter to president trump, who met regularly with secretary of state mike pompeo. it is always hard to verify news out of north korea, but the regime has executed people for political flops in the past. and the hanoi summit was an embarrassing failure for kim on the world stage. there remains though growing concern that the diplomacy which blossomed since early 2018 could now be reversed. since that summit in hanoi north korea tested weapons. it boosted its angry rhetoric toward america. it is unclear if there will be a third summit between president trump and kim jong-un but all eyes are now on japan where the g20 will take place at end of june. where president trump will meet with president xi of china. suddenly thought north korea will be high on agenda there. the subject at moment is really a crossroads. a breakthrough needed soon. connell: good stuff as always. add this to the list not just trade when president trump and xi xinping meet.
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we don't know if it is true but certainly crazy stuff, what do you make of it? >> these rumors of about purges and executions of the negotiating team have been swirling around for months, connell. they increasingly seem likely to have occurred but we do need to confirm them because we have had instances in past, we had these kinds of reports, months and years later, the officials we thought were killed off show up alive and well. i would say in the first instance if this is true, it is again a very useful reminder if anybody needed it about the murderous nature of the north korean regime. this is not run of the mill dictatorship. the kim family, a crime syndicate in a class by itself. one of the most dangerous jobs in the world is being a high
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level north korean official. connell: is president trump's language, even recent language around north korea is it too friendly in the way he handled this? >> almost certainly it has been. let's face it if these reports are true, kim has wiped out his entire negotiating team. it may not matter what president trump is saying. there is literally no one in north korea at home for u.s. diplomats to talk to. instead what we've seen since the collapse at hanoi they have reverted to this old playbook, issuing extreme threats, insults and of course starting to test those ballistic missiles again. connell: we're back to square one, even, past that somewhere, right? >> yeah. no, i have got a real fear that it is hard not to see this as potentially a fatal setback for the negotiations. connell: so what do you do?
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benjamin says they may meet xi xinping, chinese president, president trump will talk with in japan at g20 n addition to trade i'm sure they will discuss this. but what are the options? >> i don't think any of the options are good. the u.s. needs to remain very steady with all the turmoil happening on other side of north korea. we have leave out the prospect still wanting to move forward with a productive negotiation on denuclearization and sanctions relief. meantime keep up the pressure on that regime. connell: what would be the point of talking to the guy again? is there a point if you're president trump? >> the point is, obviously in the first instance you want to avoid a blowup in northeast asia, war on the peninsula, a north korea continuing to perfect long-range missiles capable of holding the entire north american homeland in jeopardy of a nuclear strike. so that is well worth trying to keep open the prospect for negotiation. we have to keep pressure.
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we have to keep our allies, south korea, japan, strong. we will rally the rest of the world saying the same message to the north. your only path forward is through negotiation, not escalation. connell: right. i have should emphasize, john already did, we don't know for sure whether this is true. secretary of state mike pompeo said they will look into it and we'll see. it came from a south korean newspaper at first. boy, but if it is, what a story. john hannah, good to see you as always. thanks for coming on. >> thanks, connell for having me. connell: we'll shift to the record flooding we were talking about. a levee breach in arkansas the latest development matt finn is joining us from that state. what is the latest from where you are, matt? reporter: connell for days now we've been reporting about the compromised levees up and down the arkansas river, how concerned officials were about them. here in ard a daniel.
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this we were able to water is steadily, pretty much violently, in some spots rushing consuming these fields. the city and emergency officials there tell us that -- 350 homes to evacuate. they say that the center of town, ard daniel, right now, immediate -- [inaudible]. connell: i think we're losing matt a little bit there. the shot. obviously. i don't think have to explain this too much. when you're in that type after situation with the weather they have had, all the water, it is difficult to get a shot up there, using, have to get internet connection basically what it takes. matt finn is doing terrific reporting. we'll try to get back to him. main point the levee being breached. that could cause a whole new set of issues out there in arkansas.
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in a moment the new tariffs we're talking about being put on, being threatened to be put on mexico. what does that mean for the new nafta, usmca? is it in jeopardy? we'll talk about congressional leaders, what they are saying, speak to one of them. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade. no matter what you trade, at fidelity back then, we checked our zero times a day. times change. eyes haven't. that's why there's ocuvite. screen light... sunlight... longer hours... eyes today are stressed! but ocuvite has vital nutrients to help protect them. ocuvite. eye nutrition for today. my body is truly powerful. i have the power to lower my blood sugar and a1c. because i can still make my own insulin. and trulicity activates my body to release it like it's supposed to. trulicity is for people with type 2 diabetes. it's not insulin.
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connell: so president of mexico, president obrador, his government is likely to ratify the new nafta, usmca, despite the tariff threat posed by president trump. what about here and congress? arizona congressman david schweikert is our next guest. thank you for coming on. >> thank you for having me. connell: let me start with here, the move the president is making on the tariff threat. does that make it more, you know, does that make it more difficult to get this deal passed? what do you make of it as a strategy? >> it doesn't help because it just creates more noise, particularly those of us from the southwest that have benefited from trade
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particularly with mexico are trying to just march forward and see if we can get some of our democrat brothers and sisters to come along to the party. connell: okay. if you were, just looking at this, we don't know if it will go into effect yet, say it does, would you defend the policy? some other republicans have spoken out about it today. the main question if you're upset with mexico, and agree there is issue on the border, something should be done, why tax americans? why put the tariff in place? is that your issue? >> in many ways you phrase it almost exactly as i would have. there is a crisis on the border. it is great that our democrat friends are finally now admitting that, but now we need solutions but a lot of those solutions have to come through congress and yes, the mexican government needs to help us in locking up their southern border. connell: right. >> but taxing my family and friends an constituents and
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arizonans, remember, mexico is a huge portion of the arizona trade economy and for the tomatoes you will go home and cut up tonight, should you pay 5% more. connell: same with mexico and all of us when it comes to autos and auto parts. before i ask you another question, would you have done something else? do you have another option? >> i think actually you had to come up with something, it had to have lots of layers but the real barrier right now is the inability for congress to even move forward on something you would even consider humanitarian aid. the democrats so staked out during the government shutdown there was no crisis. remember the term, manufactured crisis? connell: yes. >> well it turns out for a lot of them it has been very difficult to swallow those words back, to say there is legitimate issue. connell: that is the president's point. you guys in congress are not doing anything. this is all i can think of to do
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on my own, right? >> right. how do you come up with a world where the president at least has to deal with a dysfunctional house of representatives right now because the democrats are in control, deal with the mexican government, but also reach out to honduras and el salvador and those countries down there. connell: you don't want to harm the economy in the process. that is the concern. >> exactly. connell: what about the trade deal, is usmca going to pass here? what do you think? >> i sure hope it does. the fact of the matter, the white house in many ways negotiated a lot of concerns, to those concerns of working men and women of the united states. labor issues, even environmental issues. but i'm on the trade subcommittee in ways and means. you would have thought there would be a sense of joy coming from the majority that so many of those issues got addressed in this agreement, and i can't get any of my democrats, brothers, sisters, to look me in the eye
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and say they will be a yes vote. connell: what is interesting last night i looked at comments from the white house, mick mulvaney made, they did check in with some republicans on this tariff issue, they had some support. you're not the only one saying we have issues with it. did they talk to you, what about other colleagues you have had a chance to speak with? is there republican backlash? does the president have support in his own party? >> that i have not gone out and done a census. mick mulvaney is brilliant. he is genuinely one of those off the charts i.q. people. if this is an attempt to get the mexican government to understand their part of this partnership, they also have responsibilities in protecting their own border and therefore helping us protect ours. in that case, this is a powerful message. if this is really a policy to tax you know, our folks in arizona on the goods as a way to punish mexico, i'm not sure that line of logic completely works.
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connell: i hear you. good conversation, thanks for coming on, congressman. we appreciate it. congressman david schweikert out in arizona. to charlie gasparino as we have other news not to do with tariffs, has to do with the media world. charlie what do you know about cbs and viacom? >> they are moving forward. let's be real clear about this story. fox business was first to report, they are in official talks between two boards to merge two companies after off and on for the last three years. connell: moonves stuff and everything else. >> les moonves didn't want to do it. shari redstone who controls both companies through national amusement, her father's holding company controls cbs and viacom, pushed for it. reached some sort of settlement. didn't preclude doing it. now that les is out on the -- connell: didn't she say she wouldn't talk about it until
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2020. >> she doesn't have to force it. my sources say, it could happen soon, even in weeks if it does happen. here is the interesting backstory. i'm not the only person to get thrown out out of the allen and company conference. connell: that is food. >> bob backish, the ceo of viacom has been black balled from the conference. connell: what did he do? screaming to security guard. >> unlike me, trying to pick a fight -- connell: charlie a couple years ago, charlie was out in sun valley big thing. to his credit he was sticking up for somebody. >> one of our producers who security guard got very nasty with, i got in his face. bob bakish did not do that he have thrown allen and company off a deal. they have black balled him. they didn't invite him last year. we were asking did they invite him this year. the list is out. he is not on it. connell: does that mean anything? >> yes. here is what is weird about this. look at it this way. this is why it is raising
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eyebrows, the guy will be, if they merge the two companies together it is not just ianniello who has the inside track. he might get it. joe is ceo of cbs. connell: cbs. >> it is bob buckish is likely to get it. they are black balling the ceo of one of the biggest media companies in the world. i'm thinking of their market cap. it will be a 30 billion-dollar company something like that. they are black balling him because of a childish stupid diss he took them off some teal. connell: right. it will not affect all this? or are you saying might? >> i don't think it affects whether he becomes the ceo. basically, let's be real clear here, this conference is huge. connell: i know. >> allen and company is the biggest investment bank, most prominent boutique bank in the media space. they do most of the media deals. connell: shame we can't get in to cover it. >> right. they are black balling one of the biggest ceos in media.
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its absurd. it is crazy. it is raising eyebrows. people are talking about it. my guess if cbs does anymore deals when they combine, suppose they want to sell themselves, allen and company will not be on the deal either if they don't invite the guy. connell: bottom line the deal might happen in next year. >> next year. connell: next few months? i don't know, i'm asking. >> next few weeks. connell: really? >> they have been talking a lot. connell: i didn't know it was that far along. >> how much more do they have to talk? they are literally locked into discussions. the question is price, cbs has fiduciary responsibility to shareholders as does viacom. can they get a better deal. cbs is shopping itself. doesn't look like anybody wants to buy it. looks like the best deal is viacom. outstanding question who runs it. it is backish based on relationship with shari redstone. connell: not just from sun valley. >> allen&company is persona
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non-grat at that. just like me. i like bob. connell: enjoy the conference this year. that was one of your highlights. sell-off in the markets, what it means for politics everything else. we're down 278 on the dow. we'll talk about battle ground iowa when we continue, president trump and former vice president biden will be in the state on same day. maybe they will have lunch. how does that play out in terms of trade conflictss. can biden take advantage. we'll get into all of that when we come back. 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...
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connell: talk about iowa. market continues to sell off today on trade concerns and that state is at the center of it all. always at the center as it always is of the next presidential race. beto o'rourke planning a new major iowa push we're told. meanwhile president trump, former vice president joe biden are heading to the state on the same day. they're likely to be in iowa on the 11th of june. constitutional law attorney jenna ellis joins us. "politico" white house correspondent and democratic strategist, jon summers.
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after the tariff threat in mexico, seems for republicans in iowa that seems it is not going over so well. is there political implication for 2020 or too early to tell? >> there are many politcally implications to this. you saw this in the remarks that senator chuck grassily made yesterday following announcement that president trump planned to move forward with the tariffs. he says this jeopardizes the usmca trade deal which was on track to reach congress at some point this summer. now seems that might not be the case. but also there are republicans who are saying privately that they're concerned on impact it has on negotiations with china. if chinese officials are looking at president trump and now questioning whether he is reliable trading partner, will they be, will they be hesitant to move forward or return to the negotiating table to work out a deal? as we know president trump is sort of eager to reach a deal with china because of the sway that would have in 2020. connell: jenna, let me ask you
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if you can make a argument for what the president is doing here? i should add to what gabby reported, there is news alert on "dow jones newswires," robert lighthizer, trade rep, is said to have been opposed to move to threaten mexico with tariffs because he thought, it may have threatened the usmca. with all of that said, jenna, is there a political risk here for the president? >> well the report just came out about robert lighthizer, you know it is going based off statements he made not today or specifically about this particular tariff so i don't think we can really say that is his position. he just been pro-usmca. overall president rum campaigned in 2016 and won over the hearts of the american people saying he is strong for the economy and strong for the american worker and he followed through on that promise. rural america is largely ignored by the democratic party who in 2020 are just anti-trump, campaigning more on identity politics than anything else. so really here if people are
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going anti-trump, what are they really for? so what president trump is doing here is playing the long game. i think that rural america, farmers understand that. let's recognize that the fluctuations in the market day-to-day aren't really going to have an impact overall on farmers. it is really about what the market prices are and overall impact it has. connell: that is an impact, policies with regard to china already have. it's a tough time to be a farmer in many parts of the country. some of that is weather-related, we understand it, but a lot, jon, is related to trade. jenna, however, brings up a good point this, is one of the big questions heading into 2020, will the american farmer generally speaking stay loyal to the president those who were supporting him even if their own bottom line is hurt by some of his policies in the near term? there are reports indicating, yeah, maybe they will. maybe they will. it seems to me, incumbent on democrat or anyone else to offer some sort of an alternative.
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what is the alternative on this issue, on trade, on the democratic argument? >> that's a good point, will they continue to support him? as we have seen all throughout his presidency he has a base of about 37% who support him. obviously he is tremendously popular within his party but with respect to farmers being overlooked, farmers are being hit very hard right now by this administration. connell: right. >> particularly as it relates to tariffs. connell: that may be true. they don't seem to be leaving in droves or do you think they are? some may be, we get anecdotal stories about it, but i think it is an interesting thing many farmers seem to be loyal to the president. they like him personally. they like his policies, even getting hit by them, what do you make of that? what is the democratic response? >> that is true, as it relates to base politics we know we're not going to win over that 37, 40% people solidly in the president's corner.
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we know we will get our base out and win over independents by creating a very clear contrast between this president's policies and our vision for the future. as we're seeing with this president's policies he is taking some positions however well intended they may be are actually hurting people. when they go to the polls, to vote on election day, they're not going to have a microscope on the stock market or gdp or unemployment numbers. will be in here. how are they feel, right. >> if they have been laid off in the job from the timber industry hit hard by tariffs or automotive industry, trips to target usually cost $100, now $125, those things start to hit home they feel the impact. that is what they take to the polls. connell: i want to interrupt you one minute, gabby, talking to people within the white house, the lighthizer report brings up questions, what about you had kudlow and others? was there a lot of pushback internally on the mexico tariff threat or do you not know? >> there is a lot of pushback on
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any trade issue in this white house, there are split mentalities what the president should and shouldn't do with terrorists. we haven't seen public comments by larry kudlow. i haven't spoken to him privately but i want to know, back to the issue of farmers, i wrote about this a couple weeks ago, the president has sort of been very crafty with his messaging on farmers in a way almost shows he is aware of the problem that they're facing financially, he wants to make sure they don't leave him in droves heading into 2020. if you look at language he is using when he talks about sort of economic pain farmers are facing, he says this is national sacrifice. connell: i have to go. i'm up against a hard break. we'll be right back. let me ask you something.
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connell: back here, another busy day. it's good to be with you. i'm connell mcshane filling in for neil. stocks continue to sell off today. we are now on track for the first down month of 2019. the trade tensions have certainly been ramping up. the dow earlier had been down 300 plus points. it's down 284 as we speak to you now. 1:00 eastern time. as always, we have all the angles covered. we will get back to the markets in a moment. edward lawrence, though, is in d.c. on the white house, reportedly divided on the issue of mexico tariffs. lauren simonetti in the newsroom here in new york on china's plans to hit back at the u.s. over the trade talks. busy day. edward, let's start with you.
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reporter: a very busy day and swift reaction to all of this. the administration split a little bit on this. the "wall street journal" reporting that the u.s. trade representative robert lighthizer is not favorable towards this move and adding tariffs on mexico. lighthizer has testified in the past that any further tariffs on mexico will complicate ratifying usmca not just here in the united states but also in mexico. consumer groups, automotive associations as well as national association of manufacturers say they support the president but not in this case. they say this might be the wrong direction to go. the business roundtable released a statement saying they represent 15 million people or companies that employ 15 million people. they say quote, imposing unilateral tariffs on mexico imports would be a grave error. business roundtable strongly urges the administration not to move forward with these tariffs which would create significant economic disruption and tax u.s. workers, farmers, consumers and businesses. now, the white house pushing
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back. acting chief of staff mick mulvaney says quote, the president asked congress to help. congress failed to help and they went on break. now we're asking mexico to do what it can because congress will not help. the acting homeland security secretary laid out a path on how mexico can avoid these tariffs going forward. three points related. first, operational security. do interdiction. second, target trans-national smugglers, arrest them. this includes illegal commercial bus lines that are bussing those illegal immigrants to our border. third is to align the asylum policy with the u.s., that the president wants to do, specifically allowing the u.s. to have asylum seekers to wait in mexico as they wait for asylum. vice president mike pence says his boss has to fix this crisis. >> we are on track to have more than a million apprehensions at our southern border and yet congress, some in congress
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continue to focus on investigations, baseless allegations, while literally last month alone, more than 118,000 people were apprehended at our southern border, and congress continues to refuse to act to close the loopholes that are being used by cartels and drug traffickers to entice people to make the long and dangerous journey north to our southern border. reporter: that was an exclusive interview with the vice president on "mornings with maria." some republican allies of this administration in congress questioning this move. senator chuck grassley saying that the tariffs and immigration policy should be separate, saying that immigration and tariffs don't need to be merged like this. the mexican president sent president trump a letter asking him not to undertake this step, saying he would defend mexico, saying the mexicans do not want a confrontation with the u.s. but they will stand up for human rights. the mexican foreign minister is expected to be here in washington, d.c. according to the mexican embassy here.
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however, we don't have any travel plans as it stands. we do know, i can report he will not be meeting with u.s. trade representative robert lighthizer and that jibes with the feeling we are hearing from that office. connell: lighthizer might have an issue with this. kevin brady was a little more careful but he just said a few minutes ago that the two sides should find common ground before the tariffs take place. doesn't sound like he's a huge fan of it either. number of republicans weighing in in that regard. edward, thank you very much. edward lawrence at the white house today. let's talk about china for a moment. china, tariffs on $60 billion worth of u.s. goods are kicking in tomorrow. lauren simonetti has the story about that. lauren? reporter: a slate of retaliatory tariffs on imported american goods kick in at midnight tonight. it's 5200 items, getting slapped with tariffs of as high as 25%. let's show you the hit list. fo food, tequila to sneakers, furniture, umbrellas, even blow
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driers, headphones and coffee makers. beijing slapping on the tariffs after president trump put tariffs on $200 billion worth of chinese goods and then threatened to target everything remaining. here's the thing. the tariffs are having an impact. two new reports today show softer consumer sentiment here in the u.s. and contracting activity in china. neither side is backing down in this trade battle. tariffs are not the only weapons of war. china is threatening to stop exporting rare earths, 17 chemical elements used to make smartphones, engines, even medical and military equipment. that's a big deal because beijing controls nearly the entire market, and shifting supply chains, it takes time, it takes money, but it's happening. blue mine corporation in texas and a company in australia are teaming up to mine and process outside of china. i asked the ceo what happens if china does pull its minerals from market.
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>> i can't say never, i can't say it won't happen. i think it would not be a good thing certainly for our industry because there is certainly demand destruction the last time folks found ways to use less of some of these materials, they stopped using materials. reporter: there would be an effect. demand destruction, maybe higher prices but overall, he said customers are excited to get this only source outside of china up and running, but it could take two to three years. connell: that's an interesting angle. thank you, lauren. in addition to what lauren reported, there's new data showing that u.s. imports coming from china overall are down year to date by 14%. so what's happening to that? other countries are picking up the slack. we bring in dennis gartman, gartman letter editor and publisher. i know dennis is not a big tariff guy. a lot of people aren't. other countries are picking up the slack.
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i mentioned these numbers earlier. vietnam, the imports from there up 40%. cambodia, 24%. taiwan, 21%. on and on. so there is a shift happening here. there is certainly an impact from this trade war, good, bad or indifferent. what is your takeaway when you hear numbers like that? >> when i hear numbers like this, first i think obviously trade wars. it's not great for commerce, as we see reduction in products coming from china. i know some people here think it's a really good thing but the truth of the matter is, we have to find substitutes in places where it costs more money because now you have to compare the price of these substitutes made and looking good compared to the chinese goods plus tariffs and the other thing that's worth noting is that this is why economists always say bilateral protectionism in the name of reducing the overall trade balance doesn't work for
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precisely this reason. also worth mentioning is our exports with china are down. so when you take all of these things together, the original objective of the trump administration to reduce our overall trade deficits is definitely not going to happen. connell: the original conversation, the original conversation was how are we going to solve all this, when is this going to go away, particularly from the investment community. now i think people are coming to the realization some of this is never going away. some of the supply chains maybe change forever and whatever we are in with china, trade war, tech war, cold war, dennis, is that here to stay? what's your take? >> first of all, let me say what an honor to be on with miss de rugy. she's one of the smartest people in the country when it comes to economics. just an honor. getting back to the topic, this is going to go on for some period of time. i fear this is a slippery slope that's become even more
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slippery. the president has added grease to the slippery slope. this will be protracted and for example, we will see brazil will be a far greater exporter of soybeans to china than we shall be. connell: that market share won't come back, right? >> yeah, that's the great fear. once you lose that market share, it may come back ten years from now. you do severe damage for a protracted period of time. this is not to be taken inconsequentially. this is very severe. this is going to be with us for some period. connell: make your last point, then we have to go. >> investors know it. this is why, as you've said, we will end up in the negative the first of the month. we have an inversion in the yield curve which is a sign that investors are worried about the future growth in this country and also, the dow transports is trending down, which means actually, there is some serious worry about commerce in general. connell: no doubt. thanks to both of you for coming on. great discussion. i want to talk about retail
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for a few minutes. shares of gap just getting hammered today, 10%, down by 10% after the company posted its weakest sales in three years. then you have costco. costco warning of price increases because of trade, after the u.s./china trade tensions have hit their business. they are going to raise prices. barron's associate publisher jack otter is here. people are like well, it isn't hitting the consumer yet. well, it looks like it's going to get worse. >> these are two very different stories, however. gap is kind of a commodity retailer. it's a retailer from a few decades ago. they have got a lot of issues. their same store sales were down 10% and i think that's a function of some operational mistakes. there is always the weather excuse. the biggest point is disruption in this economy. and costco is very worrisome. that's a company that's managing through description. their online sales have higher
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margins than their store sales. it's an almost unique model with their membership portion. they are doing a lot of things right and are still hurting. their margins are paper-thin. if suddenly there's a tax on those goods, they can't afford to absorb that. they will have to raise prices. the consumer will feel that. connell: it's hard for these companies and has been for some time, but particularly now, if you look at the headlines over the last couple of weeks to really plan for the future. because you know, i mentioned this to you but if you are looking what we were just talking about with china, you can see strategically what the administration is trying to do. you can disagree with the methods, but with mexico, you are saying why are we now using tariffs for this issue. whatever the issue is, at least in recent kind of history here, the president has said you know what, let's do tariffs. that's got to be worrisome for companies. >> the argument with china is short-trm pa short-term pain and long-term gain if they change their policies. if you start throwing tariffs around as a tool of foreign policy, what's the metric?
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how do you prove success? the markets are going to be worried any time we have a dispute, tariffs are going to be the solution. this also causes frankly, it comes all the way around to causing a problem with china. the way to go about solving real problems with china, intellectual property theft, dumping of steel or whatever, would be to band together with all of our allies so that we can isolate china as somebody breaking global trade rules. connell: put letters on it like tpp. >> yeah, exactly. connell: that's what that was designed to do, right? i don't know if that was the best. maybe it wasn't perfect but that was the idea of that trade deal, right? >> precisely. connell: the president pulled out of it but you know, hillary clinton was president, apparently she would have, too. everybody was suddenly against it. >> politically that seemed like a loser. i hope people are starting to realize now that the way to win, i mean, worked in world war ii, it will work now. if you ban with your allies and isolate china, it will work. one more point with negotiations, the key to negotiation is you have always got to give the other party a
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way to save face so that he can declare victory, in this case xi can declare victory, so we need to be thinking about that behind the scenes. what's his out so that donald trump can win but xi can at least declare victory to his people. connell: maybe if you are optimistic that happens at g20. i don't know. good to see you, as always. thanks a lot. in a moment, if all these issues aren't enough, we have iran. iran acting up as north korea tensions are also rising to put it mildly. we will bring alan west in when we return.
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connell: more pushback over president trump's plan for tariffs on products coming in from mexico. a lot of that pushback is coming today from his own party, the republican senator chuck grassley calling it a misuse of presidential tariff authority as part of a wider statement that he put out about the issue. and there is senator joni ernst saying this is not the right path forward, calling on democrats to work on a fix but asking the president to reconsider. our next guest has experience using executive authority to counter illegal immigration. it's the former republican governor of new mexico who joins us. governor susanna martinez. good to see you, governor. this step the president is threatening, tariffs on mexico, is that the right way to go or were there other options
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available, do you think? >> what i'm grateful for is that the president is looking at every possibility to resolve this issue that's a crisis on the border. when you have the democrats in congress, they're unwilling to resolve this problem, to solve it immediately, it cannot be done at the end of 2020 or after the election. it has to be done right now. we are being impacted right now. so the fact that he's looking at every possibility is a good thing for us. however, i do think that mexico is a great partner economically, a good neighbor. i'm grateful that he's looking at them to be a part of this. however, mexico has to realize we have the usmca and that usmca is an economic deal between us and mexico and canada, and how will these porous borders impact that economic deal. i'm just so disappointed in the democrats in congress. connell: i hear you. i think there is definitely a strategic element of this on the white house as well, trying to
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highlight that congress has not done enough. but in this action, it's being reported by our colleagues at the "wall street journal" today that even the president's own trade rep, u.s. trade rep bob light hiez lighthizer didn't want to go forward with these tariffs or had questions because of what you mentioned, usmca. this is kind of a rough time, may put that trade deal in jeopardy. what do you say? >> i think that's why it's a good thing the president of mexico is willing to come and have a conversation with the president of the united states and to make sure we can do this without harming that deal and make sure that mexico can step up as well. they are the first country. they border guatemala. they need to be able to do what the laws require. mexico has stronger immigration laws than the united states. that is not something that is good for congress, the democrats to sit back and say we have a crisis but we're not going to act. connell: how do we measure this, or do we. that's one thing i noticed, i think a lot of people noticed in the president's threat of the
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tariffs, there were numbers, 5%, 10%, eventually get up to 25%, but no metric on what mexico actually needs to do. it will be up to the president's own discretion here. what is mexico not doing specifically right now where it needs to either do or something it is doing that it needs to do more of? how can they avoid the tariffs? >> the border between mexico and guatemala, that is an important border, a chokehold, where at this time mexico needs to return people who are not asylum seekers to their countries. they cannot be coming through honduras, el salvador, eventually guatemala and into mexico and allowed to go through. they need to be arresting individuals who are illegally trafficking these individuals through the country of mexico and bringing them and allowing them to simply cross into the united states, then within a matter of very short period of time, released into the united states, dropped off at bus stops. mexico has to be able to act and
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allow these people to be returned to their country and do so actively. i'm hopeful also that congress will act. i mean, it is insanity, insanity for the democrats in congress to allow this to be happening. i'm not saying we are not open to immigration, we're not open to having our labor forces full with people who want to work and contribute to our country but there has to be a process in doing that. connell: we will see if this tool works in terms of getting some of the change that you talked about. good to see you. thank you for coming on today. >> good to see you. connell: governor susanna martinez. if it doesn't work, the auto companies are the ones who will be very very upset about it. their shareholders already are today. ford, general motors and toyota tumbling on the threat of tariffs being imposed against products coming in from mexico. we will take a deeper dive into this and look at maybe what drivers need to know about it. don't miss "after the bell" as the markets are on track to close out the first down month of 2019.
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melissa joins me at 4:00 p.m. eastern time. we will see how we close. down now by 255 on the dow. (ding) 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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connell: a bunch of stocks under pressure. oil is now on track for its biggest monthly drop in six months. the trade conflicts have something to do with what's going on there, too. phil flynn joining us, price futures group senior analyst, good old fox business guru. i talked to phil on the air yesterday or the day before, he says you've got to embrace the volatility. lot of embracing to do. what's happening today? >> you are getting hugged, right? it is incredible. you look at this oil market, right now it's under a lot of pressure. a lot of it is about mexico and president trump's thing about new tariffs obviously concerns that it's going to slow the economy. not so much directly because of mexico but because a lot of traders are saying it's going to
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make it a lot more difficult to get a trade deal done with china, right? it looks like the trump administration had a deal with mexico right on trade, now they seem to be, you know, moving the goal line a little bit further saying hey, not only do we want to deal with trade, we need to deal with immigration. mexico has to do the math and decide if it's cheaper to build a wall and pay for it or get no a trade war with the united states. the other thing about oil is iran today, i think we talked about this earlier as well, you know, the oil industry is not happy with donald trump today. yesterday of course the "wall street journal" did a report, you know, that basically seemed to suggest there was this unknown quote in the market yeah, you could buy some oil, we don't know what that number is, ten million barrels, 12 million barrels, but they could still buy more oil. that was a surprise to the market yesterday because we were under the assumption that the trump administration was serious
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about zero exports -- connell: oh, okay. stock's only down 1%. oil is 4%. i was wondering why so much more. is that why? >> that is part of the story. you have a double whammy right now. you not only have the trade war, you also have this concern that there is going to be waivers granted on iranian oil. we know what happened last time. connell: yeah. you have to be able to trust what's actually coming out of the white house or anywhere in washington. all right, phil. we will talk to you later. thank you, my friend. phil flynn. stocks are down as well. a lot saying it would be worse if it weren't for the assumption the fed will cut interest rates. the white house is dealing with threats from all over. phil mentioned iran and china. then there's north korea and, well, why not add mexico to the list with the trade tariffs being considered there. retired army lieutenant colonel alan west is our next guest. boy, that's why they say that's why you get paid the big bucks
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if you're ceo or president, maybe not necessarily in that case but it's why the job is so important. there's a lot to focus on here at once. of those, which is standing out to you as the biggest threat? >> well, it's good to be with you. i will tell you that from a foreign policy and national security strategy, i would really focus on china and also iran. the reason why i focus on china is because they have a long-term strategic vision. they also have a strategic capability, capacity, because they have that strong economy and when you look at what they're doing with the one belt one road strategy and what they are seeking to do, in many of these different areas such as east africa or building facilities in pakistan and the military islands they fortified in the south china sea, that's where we need to focus on. the other side, iran, got to make sure they are not able to continue to fund all the islamic terrorism groups you see out there, hezbollah, hamas, iranian guard revolutionary corps. you see both of those countries
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engaged in our hemisphere in venezuela. connell: yeah, that's true. venezuela is part of it. people wonder whether mexico also is intertwined with all of these stories because does it make the china trade deal more difficult. i don't know. let me follow up on iran for a moment. i think phil does bring up another interesting point in his oil market report, said there are going to be waivers or not, playing into kind of a larger narrative around iran, is everybody on the same page within the administration about what to do, say for example john bolton more hawkish than president trump or his other advisers. what do you make of the strategy being implemented now and is it a clear-cut one? do they know what they're doing? >> well, i think the most important thing is that we are no longer providing the iranians billions of dollars in the iranian nuclear agreement, that has been taken back. the most important thing with iran is isolate them economically. we have to work with our european partners. i would say we don't want to grant any waivers at this time because i don't want to see us going in trying to occupy iran,
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but i think that we have to be able to reduce their ability to become a regional hegemonic dominant power in the mideast and that's what they have sought to do. connell: are you worried about potential for military conflict there or do you see that as a low probability event? >> i think that iran does not want to go into a head-to-head military confrontation with the united states of america. it's very important that we show that we do have a strategic military deterrence and i believe that what you saw with the recent surge of troops into the area was to show to iran that we do still have the strategic and operational maneuverability and flexibility to respond to them. connell: i almost forgot to ask you about north korea. i'm so into all these other issues. boy, really is amazing how everything is coming together here at once. but if the reports are true, there's a report in south korean newspapers where it began that there's a purge going on in north korea of the people involved in the trade negotiations. there actually had been,
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according to this report, executions of people that were involved in the hanoi summit between kim jong-un and president trump. if that's true, now what when it comes to north korea? >> well, again, i think the key with north korea is how we deal with china, because that's their major benefactor. if we can continue to reduce the economic prowess and capability of china, it will affect north korea. look, we tried with north korea, kim jong-un is a maniacal dictator, a murderer, and i don't think you can get that zebra to change its stripes. connell: probably not. is this the point where you say hey, we gave it our best shot, now there's no point in having a face-to-face meeting at least between the leaders again, a third summit? >> no, absolutely. i would agree with you whole-heartedly on that. once again, we have to show that we will stand and we will be ready for any of your, you know, possible military exploits and let's start getting tougher on the fact that we don't want you to be firing off any of these other missiles.
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so it's important to work with the south koreans, with the japanese and also i think it's important we build our relationships with vietnam. millenia old disagreements between north korea and vietnam. something we can exploit. connell: we talked about some of that production that was happening in china, now supply chains move, more and more imports coming in from vietnam. we have seen a 40% increase. always good to see you. thank you. >> always a pleasure. connell: one of the things when we are in a world like this, people are worried, you see them start to buy bonds and interest rates start to go down. we talked about it with the government bond market. look at this. mortgage rates, if you are thinking about buying a house, we have mortgage rates now on a 30-year fixed coming in below 4%. why one housing expert says we can expect to see rates fall even further. we'll be right back. ♪ ♪♪
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connell: we do see the 30-year
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fixed below 4%. what does it mean for the housing market? transformational mortgage solutions founder is our next guest out of austin, texas. are we going even lower from here? what do you think? >> i believe we are. contrary to what a lot of economists predicted, even our own within the mba, this market is surprising everybody. interest rates are below 4%. that came out of the freddie mac rate survey. i think there's more downward pressure. what's anchoring us to lower rates is what's going on in europe and also the emerging markets. they cannot afford higher rates. i think the feds are anchored to those circumstances, so rates are going to be heading lower. connell: i mentioned earlier the stock market might be down even more today, lot of wall street talk about this, if it wasn't an expectation that the federal reserve would come in and cut rates. we are down 236 with the tariff threat and all the talk about it, but there seems to be an expectation that that's what will happen. do you think that's what will happen? >> well, when you look at what trump has been tweeting, the feds need to come down, then they say well, maybe, then he
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goes and says i think it needs to go down a full point. there is definitely pressure coming out of the white house with the tweets but i think it's really the global situation. you look at the instability, when there's bad news out there in the market, how do mortgage rates respond? it responds by lower rates to hopefully stimulate things. connell: kind of that silver lining in all of this, if you are looking for a home, maybe there's an economic slowdown, maybe that's what the yield curve is telling us, i don't know, but if you are looking for a home, i would think there's kind of a temptation to lock in this rate. it is below 4% on 30-year fixed. would you advise people to do that? >> absolutely. if you are always playing the market and trying to bank on lower rates, come on. this is such a good time to be locking it in. a lot of lenders now have a float-down option so if you lock in at this rate and you work with the right lender out there, they will actually give you the lower rate at closing if it does
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drop. then it makes economic sense to refinance if you see as much as a three-eighths point drop. we could see people, like we saw last cycle, interest rates falling and people can make -- it can make economic sense to refinance twice in one year. connell: ever think we would be back talking about these types of things again? >> i really didn't. i thought that was the floor. but with what's going on in the world, as you were talking with your previous guests, all the segments you have had, you are doing a great job filling in for neil, you look at these topics and there's nothing but -- there's nothing that's going to say interest rates are going to be going up. then you look at the housing market, the pending home sales numbers yesterday were off slightly. that would suggest maybe that pending home sales was a forward-looking number, those loans are sales that have yet to close, is that a forward indicator? i think i would encourage everyone to focus on this one economic statistic as it looks to the future of the housing market and that is household
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formation. household formation are almost at a record high. so that younger generation, the millenials that are finally hopefully coming back into the market, this is a perfect time for it. it's a perfect situation. connell: makes sense. david, boy, one of our best all-time guests. you are doing a great job filling in for neil, i'm quoting. we will have david back each and every time. thank you. crazy world. let's talk about uber for a moment. it is out and it is down, uber, after its results, down by 4%. the company blaming competition for the heavy losses it had in the first quarter of the year. kristina partsinevelos joins us from the new york stock exchange. reporter: heavy losses. usually when a company loses a billion bucks, it's a disappointment. yesterday, you had investors reward the company. it's a sell-off today. but after the earnings call, you saw an uptick higher. the company focusing on its long-term strategy, diversification, focusing on uber eats as well as its delivery service.
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you had the ceo on the conference call and in the past say that it wants to be a leader in all forms of transportation. this was the first quarterly call that we had for the company and the ceo just like you mentioned, the fact he is talking about tight competition in the market. but there's a little bit of a change according to the wording, competition has become more about the brands and the products versus incentives. what you are seeing right now are some of the biggest competitors when it comes to delivery. what they're saying is it's no longer just about price. people are driven towards branding, the service offering, the quality, and that's leveling the playing field. very similar sentiment echoed by lyft in their earnings. lyft, though, just over the past four days, you have seen that plummet quite a bit. but up higher today on the uber call because they are talking about a more rational competitive environment. i'm going to end on this. what do we see for the future of uber? a lot of optimism. you are see some analysts say this is a big first step, a long
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vision is working. similar comments from jpmorgan. i just spoke to a trader who heard i was going to be talking about uber and he told me that on the ride home, he does uber and lyft because he's addicted because it's easy to make an easy hundred bucks and his car is always clean so why not. he prefers uber because the app is easier. i will leave you with that anecdotal message from the floor. connell: floor traders making a little extra change. interesting. thank you. just to be clear, that chart we showed, it was since the ipo, declines in tubb the uber stock price. not today. decent earnings, especially on the revenue side compared to expectations. this was predictable. chipotle, it would be a company that would feel the impact from this tariff threat and the plan the trump administration wants to put in place on products coming from mexico and the stock is down.
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down by 2.25%. that's a $15 drop given where it trades. we'll be right back.
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connell: so the fda is in the news today, taking first steps in setting new regulations for
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cannabis. hillary vaughn live outside the fda facility in maryland and joins us with the latest on this story. hillary? reporter: hey, connell. cbd is derived from cannabis and congress approved that for consumers in december. ever since, cbd products have popped up in drugstores, big box stores and everything from dog food to lotion, makeup, different consumer products. it's not approved for food but a lot of people buy cbd oil and put the drops in baked items or even their coffee. today, consumer watchdogs warned the fda that the cbd industry is kind of like the wild, wild west and that the fda has neglected to regulate this industry for consumers. >> little regulatory oversight, recent testing of compounds that are obtained online or from dispensaries of edibles and other things have shown they are not accurately labeled and less than a third actually contain even some of the products they say they do. reporter: two samples from the
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family of a 79-year-old woman who was convinced to take cbd by her grandchildren to relieve pain from rheumatoid arthritis, 17 of the 18 samples received contained a dangerous synthetic cannabinoid. this unregulated industry with high public demand and no requirements and oversight for quality that is skirting the edge of legality has ample room for nefarious activity. reporter: cbd projected to become a $22 billion in just two and a half years from now. we heard from scientists and doctors who say they still don't know the impact ingesting cbd could have combined with other cbd products like using a cbd lotion and eating cbd candy. that's a problem because they think it could end up hurting consumers. connell: interesting story. could be a lot of money on the line. thanks for that. speaking of interesting stories, how about this for
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unlikely allies. the democratic congresswoman alexandria ocasio-cortez and republican senator ted cruz working together on a new fight. who would have thunk it. jackie deangelis with more on that. reporter: that's right. they agree on something here. it was an exchange of tweets yesterday back and forth. it started with aoc. she tweeted from a study and said that 60% of former legislators had taken jobs as lobbyists. she then said if you are a member of congress and leave, you shouldn't be allowed to turn right around and leverage your service for a lobbyist job. cruz responded saying in part here's something i don't say often. on this point, i agree with aoc. cruz talked about how he's called for a lifetime ban on this issue and aoc says if he's serious about a clean bill, then quote, i'm down, let's make a deal. cruz responded by saying quote, you're on. so opinions on this issue are split. some will say that aoc and
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senator cruz are certainly right on this issue because actually, there's a period where you are supposed to register and not lobby for two years after you leave congress, and a lot of people get around this by shadow lobbying. then there are others that say well, what's different about it than a president giving speeches, writing books and collecting big paychecks, although you could argue of course that that's not policy influencing. so very spirited debate on this topic but the two seem aligned on this. connell: you never know. maybe there's hope for all of us. jackie, thank you. it's interesting, jackie's story comes in a larger context where we seem to be talking day after day about whether anything can actually get done in the congress. i don't know if it's up to aoc and ted cruz but the daily caller joins us on that angle. that's kind of been the story, impeachment talk and all the rest of it, forget about infrastructure for awhile and this whole usmca situation, which i do find interesting, because we did this story
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earlier. will this new trade deal get passed in the congress when you have the president threatening these new tariffs against mexico? there's a report from our friends at the "wall street journal" today that bob lighthizer, the trade rep, is not too happy with the tariff threat against mexico because he's worried about usmca. let's start there. will that get done? >> there's a lot of upheaval here. nancy pelosi likes to say they can walk and chew gum at the same time but right now it just kind of seems they keep stepping on gum and can't get moving. the usmca is obviously a very important piece of legislation. it's a rewrite of nafta and you've got all three countries, mexico and the united states and canada preparing to or already have sent some component of this to their legislatures to advance it, just including yesterday in mexico. right now, it's a bit of a standoff between nancy pelosi and the president of the united states. she's seeking some worker protections she feels like aren't there, but the truth is if you care about worker protections, you should care about getting control of the immigration system, because right now, we have a wide open door and some 100,000 central
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americans coming in every month, then ultimately once they get into the economy, competing with american workers. that's something that has to get fixed. connell: right. >> i think there's an appetite to pass the usmca in the united states congress, but this latest announcement by the white house of putting tariffs on mexico which is a key partner means that this may be up in the air at the moment. connell: to me at least, little bit of a head scratcher why we would essentially tax americans if we are upset with mexico, unless maybe, i think someone suggested this earlier, maybe the idea is really to put pressure on our own congress, that the president is very upset with congress for not acting, couldn't get anything else so this is the idea to say if you don't want these tariffs, why doesn't congress act. you think that's the strategy behind this? what do you think? >> i do. i think that's a really important part of this strategy. i don't think you will hear the white house say this is designed explicitly to pressure congress, because that would be pretty outside the bounds of why this presidential power exists. connell: right. it would make chuck grassley, right, that's basically what
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grassley said, it is outside the bounds of presidential tariff authority. >> sure, but what the president is saying, what they have said is that they want to pressure mexico which is obviously true as well, and the spillover benefit here is that you get american congressmen who have districts where dependency on mexican economy really matters, and they will be under pressure to come up with a fix for our immigration system, because look, whether it's mexico or the united states congress, this is solvable. congress, you have lindsey graham just last week, he wants to present this legislation that fixes our asylum system, makes it so we don't have to separate families when they arrive here, we can detain them together, serves as a deterrent and also to make it so that mexico can be considered a safe third country so that when people are coming up from central america, they will be required to claim asylum in mexico, which is safer than the central american countries they are coming from. connell: is there any real chance of rational dialogue or
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when congress comes back will it be all about impeachment and all the rest? it's the walk and chew gum analogy. is that legit? >> i don't think so. it's hard, i mean, this is election season and election season in a world where nancy pelosi is speaker of the house and donald trump is president of the united states. that means it's so unlikely anything meaningful gets done. but i think if the president ups the ante enough and members of congress sweat enough, that might put enough pressure on nancy pelosi to move things forward. that's why she's not moving forward with impeachment, by the way. she feels pressure from the moderate democrats in the house not to do that for fear that they lose their seats and she loses power. connell: that's not how you win pennsylvania, right? >> not at all. connell: with that kind of push. there is part of it, i don't know if you agree, the president's got to be careful here, too. if the economy is your best issue, you have fairly low approval ratings, given a strong economy, but that's your best issue, you want to be careful not to hurt yourself, you know,
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to shoot yourself in the foot, in other words, with these tariffs. real quick, then we got to run. >> that would be an unforced error on the president's part. luckily for him, the economy has been so good that he's purchased a lot of runway space to have these trade battles. connell: good to see you. got to run. we'll be right back. after a quick break, we will come back, take a look at the markets and the first down month of 2019. the only fda-approved 3-in-1 copd treatment . ♪trelegy. ♪the power of 1-2-3. ♪trelegy 1-2-3 trelegy. with trelegy and the power of 1 2 3, i'm breathing better. trelegy works 3 ways to... airways,... ...keep them open... . .
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connell: we are down 240 points on the dow. there is talk on wall street, things could be worse if there was not expectation that fed might cut interest rates. there is we'll see you on "after the bell" with melissa at 4:00 p.m. eastern time. right now over to charles payne. charles: thank you very much, connell. good afternoon, everyone, i'm charles payne, this is "making money." breaking knew, stocks are sliding are we previousing perfect time to buy? you know the buy low axiom? plus the crisis at the border getting worse as president trump announces new potential tariffs on mexico, calling on the country to stop illegal immigrants coming into the country. fallout from the trump tariffs, gop split in the reaction to potential tax on mexico with several republicans saying this


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