Gov. Rauner: I'm concerned about a tariff war

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Gov. Rauner: I'm concerned about a tariff war

On 'Your World,' Illinois governor warns high tariffs could devastate the his state's economy.

This is a rush transcript from "Your World," June 26, 2018. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: They say timing can be everything.

And the odd timing of remembering a World War II hero, Garlin Murl Conner, gone decades now, but his wife still here to accept an honor, a unique honor bestowed upon very few Americans, a Congressional Medal of Honor.

And if you think about it, we have had a week of squabbling and throwing out powers that be from restaurants and chasing others with harsh words, harsh comments, hearkening back to a time where we didn't do that sort of thing on the right or left. He was the genuine article, a reminder that it's still in us and is in our DNA.

The greatest generation, as it's been called, and properly so, but a reminder that we are the children and the grandchildren of that great generation. So it is in our DNA, not necessarily to be heroes, but to be human beings.

Welcome, everybody. I'm Neil Cavuto. And you're watching "Your World."

And what a fitting way to begin the show where we take a look at the drama back and forth and put it in perspective, beginning first and foremost with some big news out of the U.S. Supreme Court essentially saying that the president's travel ban was, as implemented, OK, that it didn't violate the Constitution.

But it was within the narrowest of votes, a 5-4 vote.

Shannon Bream at the Supreme Court on all of this.

Hey, Shannon.

SHANNON BREAM, FOX NEWS CORRESPONDENT: Hi, Neil.

Well, the president is celebrating today after months of legal wrangling, losses in the lower courts, and now three versions of this executive travel ban. They call it the proclamation, the White House does.

The president saying today he feels vindicated after all of these fights, after months of what he calls hysterical commentary from both the media and Democrats, who he says are unwilling to do what it takes, he believes, to secure the border.

Writing for the majority, the chief justice backed him up in today's 5-4 decision -- quote -- "The proclamation is expressly premised on legitimate purposes, preventing entry of nationals who cannot be adequately vetted, and inducing other nations to improve their practices."

And while the conservatives found the president was lawfully within his executive powers based on both the text of federal immigration law and the text itself of this travel ban, there were two separate strong dissents, including one by Justice Sotomayor, who said the majority was wrong to ignore the statements that President Trump had made on the campaign trail and when he was a candidate and also after being sworn in.

She said this -- quote -- "The president's statements, which the majority fails to address in its legal analysis, strongly support the conclusion that the proclamation was issued to express hostility towards Muslims and exclude them from the country."

A lot of demonstrators here at the court and critics are speaking out.

(BEGIN VIDEO CLIP)

NIHAD AWAD, EXECUTIVE DIRECTOR, CAIR: Today's Supreme Court decision is extremely disappointing, disappointing to Muslims and to all Americans, all people who believe in equal protection and equality.

(END VIDEO CLIP)

BREAM: OK, so this case actually is not over, because what the court was ruling on was this idea of an injunction to stop the travel ban.

So now that they have outlined the contours of their reasoning, they're sending it back to the lower courts, so it will actually now be heard and decided on the merits.

And, Neil, I won't be surprised if it ends up back here at the Supreme Court once that is done.

CAVUTO: Wow. That's incredible.

Shannon, thank you very much. See you tonight.

In the meantime, we have got Fox News chief judicial analyst Judge Andrew Napolitano.

You know, Judge, by a 5-4 vote, as Shannon pointed out, the court apparently rejected this argument that this represented an unconstitutional religious discrimination. What did they mean by that?

ANDREW NAPOLITANO, FOX NEWS JUDICIAL ANALYST: They meant that they wouldn't take into account what candidate Donald Trump said he would do when he was running for president.

And the dissent said, you cannot fail to take that into account because that's what his motivation is. So if his motivation is to keep people out because they are Muslim, that changes the court's analysis and it requires the government to jump through a much higher bar in order to pass constitutional muster.

But if the purpose of the proclamation is to, as the chief justice said, secure the nation's borders, further the president's ability to use congressional tools to keep people out, to force the countries from which they engage to engage in better vetting for people leaving there, all of which are all legitimate government roles...

CAVUTO: Right.

NAPOLITANO: ... then the government's bar is a much lower bar.

The dissenters said, wait a minute, he's so much a part of what he says, how can you overlook it? The majority says, if we keep looking at everything politicians say before they came into office in order to address the constitutionality of what they do when they're in office, there will be no end to our research into their words.

So, that's the divide that was confronted in this case to get today. And, as Shannon reported, it was decided by just one vote.

CAVUTO: Yes.

Justice Sotomayor was among those saying this reminds of us a decision we might regret, as she referred to the Japanese internment decision back in 1944, I believe.

NAPOLITANO: Yes.

CAVUTO: That this was similar to that.

NAPOLITANO: This was a -- the only way I can describe her dissent was -- and I know her well -- was a fierce dissent. She's passionate about these issues.

And she's predicting that this opinion...

CAVUTO: She is saying this was a bigoted decision.

NAPOLITANO: Yes. She is saying it was a bigoted decision, because this will rank with Korematsu, which is really one of what we call the dirty dozen, one of the 12 worst opinions in the history of the country, where the Supreme Court upheld the right of President Roosevelt to detain Japanese Americans without proving fault, just on the basis of their ancestry.

The chief justice -- this rarely happens -- for the majority to address the dissent, the chief justice says, look, you used nice ruffles and flourishes. We all know horrible the Korematsu decision was, but this case has nothing to do with Korematsu.

This isn't about locking people up. This is just saying go home until your country vets you better.

CAVUTO: Did people buy that distinction? I know, on the left, people on are going to have one view. On the right, they are going to have another view. But...

NAPOLITANO: I don't think this case is...

(CROSSTALK)

CAVUTO: The fact that he went out of his way to say that in response to Sotomayor's argument, what did you make of that?

NAPOLITANO: I think he was aware -- the chief justice is very concerned about legacy and image. How will this opinion be viewed after he's no longer chief justice?

I don't know if Justice Sotomayor's prediction will come to pass. But the chief justice was obviously concerned enough about it that he chose to address it in the majority opinion.

It's a relatively narrow opinion. And, as Shannon pointed out, this is an opinion on a preliminary injunction, meaning, tell us what the law is while we try the case. So now it goes back to the trial court for people to say, OK, it's constitutional. Here's why it doesn't apply to me.

So whoever wants to come in the country from one of the -- into the U.S. from one of these countries, whether they enter here in Brooklyn or whether they enter in Honolulu, gets a chance to get a trial now. They can't challenge its constitutionality.

But they have an opportunity to demonstrate to a trial court judge, a federal district court judge, why this ban doesn't apply to them. And, as Shannon predicted, this is going to go on and on and on and eventually will come back to the Supreme Court.

But the president's executive order remains in play, and is fully enforceable during the pendency of these trials.

CAVUTO: Right. Amazing. I actually kind of understand it, with the emphasis on kind of.

NAPOLITANO: You're smarter than you give yourself credit for. I don't think Gasparino believes that. I know it to be so.

CAVUTO: No, he doesn't. He's just jealous.

NAPOLITANO: He's in Italy watching this now. And it's 10:00 at night.

CAVUTO: Exactly. He's at the Venetian Hotel. Who is he kidding?

(LAUGHTER)

CAVUTO: Judge, thank you very much.

The judge has been like on every single show. I think he was on -- you name it, he's on and explaining it to all of us.

Let's get the read on all this and the fallout from conservative commentator Jenna Ellis, The Wall Street Journal's Shelby Holliday, Democratic strategist Michael Starr Hopkins.

Michael, I will begin with you, because you have the view that this is one of those few decisions the Supreme Court, you know, makes that it will regret, that it will have to come back and address, right?

MICHAEL STARR HOPKINS, DEMOCRATIC STRATEGIST: I do.

I think this is going to end up going down in the realm of the Dred Scott decision, like the judge said, in the realm of Korematsu.

I think the court here failed to look at intent. I think, now, in this third iteration of the executive order, I think there are some legitimate arguments about the constitutionality of it.

But I think here the court failed to look at, what was the intent of the Trump administration? And when you look at that bake -- the cake baker's case, there, they did look at intent.

CAVUTO: All right, that might be the case here. But they obviously separated candidate Trump from President Trump.

Jenna, what do you make of that?

HOPKINS: They did.

JENNA ELLIS, ATTORNEY: They did.

And, you know, unlike what Michael says, intent here doesn't matter. It matters what the rule of law says you can and can't do. If we're playing a chess game here, it doesn't matter what your intent is. It matters, can you move the knight to a specific position or not, according to the rules?

So, the political fallout here is going to be a freefall up for the Trump administration, because this was a win for the rule of law, for the Constitution and for every American family. And because it was such a narrow vote, 5-4, and both in the travel ban decision and in the NIFLA case today, this is telling every American family who voted for President Trump that they made the right decision, because Justice Gorsuch is now on the bench.

And at the James Dobson Family Institute, we hear from millions of families daily from our constituency and our network that talk about why families are important, why the rule of law is important, why their vote matters.

And the Supreme Court today played by the rule of law, not by the politics.

CAVUTO: All right.

Shelby, looking at this -- and we have this great immigration debate back and forth on the controversy over the separation of these kids from their parents at the border and then reuniting them, does this move the needle there?

SHELBY HOLLIDAY, THE WALL STREET JOURNAL: Well, I think, politically, this is an extremely important decision for -- basically for what you mentioned. Yes, this is a huge wind in the president's sails.

He sees this as a huge victory for the White House. It certainly reaffirms the president's power when it comes to issues of national security and immigration. It also just underscores the importance of elections. Elections have consequences. And this was an extremely close decision that was decided by a justice that the president himself picked.

So, it is likely to rile up the president's base. We also have seven states going to the polls today in primaries. So, it's unclear how it will play out on the ground and how it could play out in midterms, but it's certainly seen as a victory.

And the president can turn, and he's already turning around and saying, hey, look, Democrats, I do have this power. I do have the authority to implement the rule of law and to crack down on illegal immigrants to secure our borders.

And he sees this as related to his policy on the certain border. So, politically, yes, it will have consequences and it is important for the president.

CAVUTO: Michael, you see it just the opposite. Right?

HOPKINS: Yes, I mean, actually, I think that this is -- and I think Shelby is correct that the president believes that this is going to help him.

But I think this is also going to get Democrats out to the polls in 2018 for the congressional elections, because now we're already hearing about Democratic groups coming together for protests over the weekend, not just now regarding immigration, but also regarding this Muslim ban.

And so I think what we're going to see is Trump is going to feed his base. But this is going to be used by Democrats to also excite our base.

CAVUTO: I don't know about that.

Jenna, I can't see a decision, big and momentous as this is, moving the political needle one way or the other. But what do you think?

ELLIS: I think it's going to move the political needle in terms of all of the people who voted for Trump in 2016 as kind of the lesser of two evils.

This is going to reinforce that that was a right vote. And they are going to be actively support him. And even though Democrats -- the only thing they can complain about is that the politics actually don't matter to the Supreme Court. And so if we're looking at the people who do care, this is going to help President Trump.

CAVUTO: All right, guys, I want to thank you.

And I apologize for the abbreviated -- all the breaking news stuff as well. Good takes on all of this.

Also, Harley-Davidson, you remember, the company that came to the White House just a couple of weeks after the president was inaugurated? Everybody was getting along fine just then. Now Harley-Davidson in the middle of all this, says, we're leaving, taking a lot of jobs with us overseas. We don't want to be slapped with these tariffs.

The president says they're using that as an excuse, they're lying. He's not happy. It's nasty.

After this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

QUESTION: Harley-Davidson announced that it's moving their plant to Thailand.

(CROSSTALK)

PRESIDENT DONALD TRUMP: Harley-Davidson, John, was going to do that -- they announced it earlier this year. So, Harley- Davidson is using that as an excuse.

And I don't like that, because I have been very good to Harley-Davidson. And they used it as an excuse. And I think the people that ride Harleys are not happy with Harley-Davidson, and I wouldn't be either.

(END VIDEO CLIP)

CAVUTO: All right.

Be that as it may, Harley-Davidson is taking a lot of jobs with that and taking them overseas to buttress itself against European Union tariffs that are coming its way.

A lot of people -- and the president isn't alone among them -- saying it's using that as an excuse for what had been a difficult period and difficult sales and having nothing to do with the tariffs that haven't even taken effect yesterday.

Illinois Republican Governor Bruce Rauner joins me right now.

In his state, Caterpillar and Deere two very big multinationals.

Do you have ever fear, Governor, that they're going to follow suit?

GOV. BRUCE RAUNER, R-ILL.: Well, Neil, great to be with you this afternoon.

CAVUTO: Thank you.

RAUNER: I am concerned about a tariff war.

It has massive consequences for manufacturers in Illinois and across America. It has huge ramifications for farmers in Illinois and across America. I hear from my constituents every day about it. They're deeply concerned.

Most of us -- I certainly am one who supports trying to change the trade agreements that we have had in place. They have been unfair, particularly with China. We need to make trade more fair.

But we have got to be careful. Everyone loses in a trade war and tariffs. And high tariffs could devastate the Illinois economy. And I'm very concerned about it.

CAVUTO: So do you believe Harley-Davidson that these approaching tariffs were what prompted this decision? The president seemed to argue -- and others have said as well, sir -- that this was kind of baked into the leaving America cake already.

RAUNER: Well, I will say I'm a Harley rider. I'm a motorcycle advocate. Have been since I was 14.

And I'm troubled by the announcement. I don't know all the history of their decision. I can't really comment on that. I can say that I have heard from manufacturers in Illinois that they are hurt by the tariffs and the tariff discussions.

Some of them are contemplating significant layoffs. Some of them are looking to move their production to other places. So, I know it's having an impact.

CAVUTO: So they told you that, Governor, that if these were to go through, they would have to take serious some action?

RAUNER: Yes. I have heard from manufacturers specifically in Illinois who said they would have to do layoffs and move production if some of these tariffs came about.

CAVUTO: Do you agree with some of your Republican colleagues at least in Washington, I'm saying those Republican senators, Governor, who say that this should be checked by Congress, that whatever action the president wants to take with regard to the tariffs, it needs their OK?

RAUNER: Well, I will say this.

America has lost jobs and been economically harmed by unfair trade deals for decades. China in particular has taken advantage of our technology and our companies and played unfairly. Other countries have as well. So, we need to try to change those.

But we have got to find a way to do it that doesn't cause massive disruptions, huge trade war, massive tariff fights, because everyone loses when that happens. Hopefully, we can find a middle ground.

CAVUTO: The president has argued -- and given the markets -- and they have been volatile of late, as you know, Governor -- the markets seem to trust him that cooler heads will prevail that there's a method to his strategy scaring the you know what out of folks and getting them to come to the table.

(LAUGHTER)

CAVUTO: What do you make of that?

RAUNER: Well, the president has his style of negotiating.

And it has clearly worked for him through his career. Other people have different styles.

Certainly, you look at what the administration and Congress have done together to reform our tax code, it's helped the American economy boom and it's certainly helped Illinois. Look at what the administration and Congress have done to reduce regulatory burden on American businesses.

The American economy is very strong. And Illinois is doing much better as a result. So, you have got to applaud that. And clearly we have had unfair trade deals with many countries. And trying to change that is important and we should support it.

Hopefully, we can find a way that we don't get into a trade war. Tariffs are devastating and can hurt America. And we can lose American jobs. We got to try to avoid that.

CAVUTO: Governor, thank you for taking the time. We appreciate it.

RAUNER: Hey, good to be with you.

CAVUTO: Governor Rauner of Illinois.

In the meantime, Peter Strzok has already agreed to testify before the House Judiciary Committee tomorrow. Unfortunately, it's a closed-door session. So, you will never find out what's going on.

The Republican congressman, Matt Gaetz, who says the doors should be open for everybody, he's next. He's here.

(COMMERCIAL BREAK)

CAVUTO: All right, we have got Florida Republican Congressman and House Judiciary Committee member Matt Gaetz. He is going to be at this very, very big hearing tomorrow featuring Mr. Strzok.

And a lot of people are wondering why he can't all hear it, because he can. He's concerned as well. He thinks everybody should listen to what Mr. Strzok has to say, just for fresh air.

Good to have you, Congressman.

REP. MATT GAETZ, R-FLA.: It's good to be on, Neil.

And I absolutely agree. The lack of transparency has not served the country well in any of these matters. And so I think that, when we have got the key people available to tell their story and respond to questions, that we ought to do it in the most open and transparent way possible.

The president holds that view. I hold that view. But, unfortunately, it's a minority view here in the Congress.

CAVUTO: What happened, though?

I'm told that there were those in the FBI, including the present FBI director, who was concerned about Mr. Strzok speaking this way or in an open forum and that some secrets could be compromised.

So, whose idea was this?

GAETZ: I don't know.

I do know that Mr. Strzok is scheduled to come back to the Judiciary Committee in July. So, it will be a pretty aggressive schedule, with Comey and Lynch and Strzok as potential witnesses that we want to hear more about, also Lisa Page, who was Strzok's girlfriend at the FBI.

(CROSSTALK)

CAVUTO: So, she is testifying in the follow-up one, right?

GAETZ: Correct. And we hope to have Mr. Strzok in an open hearing as well.

So, I don't know whose idea this was. I think it is a bad idea. I think Mr. Strzok will be asked initially about the August 8, 2016, text message, where he said, "No, no, he won't, we will stop him" regarding the Trump presidency.

You will recall that it was just nine days before that that he opened up on Papadopoulos and just six days after that statement that he said there was an insurance policy against the Trump presidency.

One thing that we would like to really get to the bottom of is whether or not July 31 was truly the moment when the Trump investigation with Russia began or whether or not there was intelligence collected on the Trump campaign previously.

Those are questions that Mr. Strzok is uniquely qualified to answer. And I hope we learn more tomorrow.

CAVUTO: So, Congressman, just to be clear here, there was a threat of a subpoena for him to testify. He volunteered. He came.

So someone -- you don't know who -- decided it would be best that this be a closed-door affair. But it's your hope, just to clarify here, that in the next appearance, it's not that, right?

GAETZ: I hope all appearances are in the open.

I opposed the Andrew McCabe deposition behind closed doors as well. I just think that doing things behind closed has served the country well. This is something Americans are focused on. They're smart. They know the facts. And we ought to ask the questions in front of the cameras.

CAVUTO: One of the questions a lot of folks want to get clear from Mr. Strzok is what he knew and when he knew it.

For example, in the context of his very disparaging remarks about then candidate Trump, was he privy, was Lisa Page privy to any information beyond their whatever personal contempt for then presidential candidate Trump was, that were they saying what they were saying in the context of some Russian rumors or collusion such that would prompt this type of comment?

What do you think?

GAETZ: Well, you're right.

The question goes beyond just personal bias. The question is whether or not the bias of Peter Strzok manifested itself in the form of investigative decisions.

Remember, Strzok was the lead investigator on the Hillary Clinton e-mail investigation. He was on the FBI's investigation into President Trump and Russia. And then he was drafted on to the Mueller probe.

So, that is going three for three. And we ought to know whether or not there was bias in terms of the prioritization of the Trump-Russia investigation over the Hillary Clinton e-mail investigation.

You will recall that the inspector general said that he wasn't sure that it wasn't bias that resulted in a tamping down of the investigation of Hillary Clinton and acceleration of the Trump investigation. That would be very improper. And only questioning will fully illuminate that fact pattern.

CAVUTO: Congressman, I know you have a tight schedule, but I'm curious.

I know a lot of comments and texts and individuals, obviously from Strzok to Lisa Page -- now we know about Andy McCabe and all -- who didn't think very much of Donald Trump and all these other unidentified agents who similarly didn't think much of Donald Trump, so had a clear bias against the guy.

I have as yet to run into in all the study -- and I haven't read nearly the volumes on this as you have -- but in anything that I have read, not one agent that seemed to have a bias toward Donald Trump, liked Donald Trump.

GAETZ: I have not seen that either.

And it's not just the agents, Neil. It's also the attorneys. You will recall one attorney who also was on all three investigations was saying viva la resistance, literally associating himself with the resistance movement to the Trump presidency while he was serving at the Department of Justice and -- at the FBI, I should say.

And so I think that we need to expose who these people are. We need to find out what evidence they handled, developed, what interviews they conducted, because you may see a lot of the evidence regarding the president as the fruit of the poisonous tree if it was collected improperly or in the absence of compliance with the law.

CAVUTO: Congressman, thank you. Very good seeing you again.

GAETZ: Thank you, Neil.

CAVUTO: All right.

You heard a little while ago from the Republican governor of Illinois, who is very concerned about the president's ongoing tariff tension with a number of countries, including our friends and our enemies.

Meet Barack Obama's economic Svengali, who is just as concerned, maybe more concerned. Austan Goolsbee is next.

(COMMERCIAL BREAK)

CAVUTO: All right, well, at least it wasn't a tumble of more than 350 points.

The Dow trying to claw back today, hoping that a trade war isn't in the offing, but, by late in the day, concerns that it very well could be.

The fallout for you and your money after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: Other countries are negotiating. And, without tariffs, you could never do that. And if they don't want to negotiate, then we will do the tariffs. And just remember, we're the bank. We're the bank that everybody wants to steal from and plunder. And can't be that way anymore.

(END VIDEO CLIP)

CAVUTO: All right.

Well, if you're looking for someone blinking on this trade war stuff, it's not the president of the United States so far, indicating that the world needs us a lot more than we need them, particularly when it comes to China.

So he's holding tight to his plan here to stick tariffs on any country that doesn't bend on this issue.

Former chairman of President Obama's Council of Economic Advisers Austan Goolsbee on that.

Austan, always good to have you.

He says this will work out, we will be better off for it. What do you think?

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: I hope he's right, but, boy, it doesn't really seem like it.

Nobody wins a trade war. And I perfectly understand he's not the first person to have an objection about the Chinese taking the intellectual property of American companies.

President Bush, President Obama, President Clinton each tried different strategies to address that. I know that if you take all your allies and alienate them by threatening trade war against your allies, that doesn't help you negotiate with China to get them to do what you want on the China front.

And it's actually more likely at this point that China is going to go to our own U.S. allies and get them to unite against us at the WTO than it is that we can get them to join our side.

And I never thought I would have to say that, because it seems crazy. But I think there's a real danger that if we get in a hot trade war, that we're going to be talking about recession, not just in the United States, but for the -- for the whole globe.

CAVUTO: Well, the argument has always been that the Chinese recognize all of the above you said. As for teaming up with some of our allies, that might be debatable.

But they have seen their market tank. I think it's technical -- the Shanghai has moved into the bear territory, in other words, fallen more than 20 percent off its highs, multiyear lows. Their currency is getting smacked around.

Now they're doing everything they can to stimulate an economy that is hiccupping. So, they need us, to the point of the president, more than we need them. And they need to do a deal. They just don't want to lose their face here on this.

What do you make of that?

GOOLSBEE: Yes, look, maybe. But, you know, we need them, too. That's how the trade works. It's definitely not a zero sum situation. So...

CAVUTO: Well, the president says not as much, Austan. What do you make of that?

GOOLSBEE: But I think the president, Neil, as we have talked about before, clearly does not understand what a trade deficit.

This is not like a bank. He's saying the U.S. is a bank that they're robbing. That's not how trade works. And when you look at China, how does putting tariffs on Germany and Canada help us to negotiate with China? It is backward. It's completely confused.

CAVUTO: No, I know what you're saying.

But his argument has been that they gouge us, too. They have special, cushy deals as well, so much so that the German automakers...

GOOLSBEE: No, I know that is his argument. But there's no evidence of that.

(CROSSTALK)

CAVUTO: No, I hear you. When you're fighting with the world, it can be a zero sum game.

But his argument has already prompted the German automakers to say, well, we will drastically cut tariffs here. Hopefully, the German government will approve it, the European Central Bank will go through with it, the European Union.

But they want to avoid this. So, where do you see this all going?

GOOLSBEE: Well, right now, where I hope this goes is that the president, like with some of his other Twitter announcements, just kind of backs away from them and doesn't actually do them, when he starts to see the impact, like this Harley-Davidson or a number of other manufacturing companies, who say...

CAVUTO: Do you believe, by the way, the Harley-Davidson thing, Austan, that that was just a setup, it's blaming tariffs that haven't even happened yet to exit?

GOOLSBEE: Yes, look, I'm not sure, but let's say it was a setup. The president says it was an excuse.

Then I guess my question is, why, when we pass the tax cut for corporations, did we include the provisions that are going to -- depending what country Harley-Davidson decides to move these jobs to, the Trump tax bill is going to give them a tax cut for doing this.

So what were they thinking when they designed those provisions when they passed the tax bill? So, either way, it doesn't seem like it's good news.

CAVUTO: All right. Well, you could flip it around. I'm sure you have heard the administration flip it's around to say, whatever we lose on these Harley-Davidson jobs, if it's a few thousand, we have gained millions over the course of this 17, 18 months of the Trump administration that dwarfs whatever impact we're seeing here.

You say?

GOOLSBEE: OK. No, wait, hold on. There's two things.

First, the tariffs destroy thousands more jobs than they save. There are way more than steel users than there are steel-producing jobs in the United States.

CAVUTO: But it hasn't happened yet. Your fear is that it will. Right?

GOOLSBEE: Correct. And let us hope it never happens. Let us hope it never happens.

But if we get the 50, 100 or now the president is talking about $200 bill of tariffs on China, and China is saying they're going to embrace $200 billion of tariffs on the U.S., we get that, hundreds of thousands of people are going to lose their jobs.

So, let's hope that doesn't happen.

CAVUTO: OK.

GOOLSBEE: Now, it's true the economy has been going well. That's the irony of this.

Donald Trump's strongest point is that the economy continues to recover, continues to do well. Why jeopardize that? I don't understand it.

It violates the gunfighter's credo, which is, don't pick seven fights while carrying a six-shooter. And that's exactly where we are on this. We're going to pick our seven best friends, fight with them.

CAVUTO: Unless it works out. Unless it works out.

Have you talked to President Obama about this and all this other stuff?

GOOLSBEE: I haven't talked to him about this, no.

CAVUTO: No?

How is he doing?

(LAUGHTER)

GOOLSBEE: He seems to be doing pretty well. I think he's happy not to be in Washington, D.C., at this moment, as a lot of us are.

CAVUTO: All right, well, I thought I was going to expose a vulnerable moment for you there.

(LAUGHTER)

CAVUTO: Austan, it's always good have you. Thank you very much.

We will see how it all sorts out.

GOOLSBEE: Yes. Great to see you again, Neil.

CAVUTO: Austan Goolsbee, the former economic Svengali for Barack Obama.

All right, you have seen the protests. You have seen the confrontations. You have seen people getting hurled, abused in restaurants, outside their homes.

What is going on here on the left or right? Doesn't this just seem very, very wrong?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. MAXINE WATERS, D-CALIF.: I am very, very upset and concerned. I have had sleepless nights, because I believe in peaceful, very peaceful protests.

If you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd.

(CHEERING AND APPLAUSE)

WATERS: And you push back on them. And you tell them they're not welcome.

(END VIDEO CLIP)

CAVUTO: All right.

So, Maxine Waters did tone it down a little bit here, but to hear many critics on the right and the left, not enough.

Let's go to the GOP strategist and author Kevin Paul Scott, Democratic strategist Antjuan Seawright, and CRTV host Allie Beth Stuckey. Allie Beth, to you first. Was it enough? She said she wasn't advocating violence. Some must have been taking -- heeding the advice of party high- ups to say cool it. What do you think?

ALLIE STUCKEY, CONSERVATIVE BLOGGER: Right.

Well, she is just trying to stick toothpaste back into the tube. And that's not going to work with her. But I'm actually less concerned with Maxine Waters and more concerned with the bigger picture here.

And that is that this is becoming the rule, instead of the exemption for political discourse on both the right and the left. And this kind of incivility is fine for liberals who think that the government has to regulate every part of social, cultural and civic life.

But it's not OK for conservatives who believe in self-governance. Self- governance, in the absence of civility, is anarchy. It does not work.

So it's OK for the left. I'm fine with them taking that road. I actually think it's better for us in 2018. But I don't want to see conservatives and Republicans going down the same path.

CAVUTO: Yes, I think you're right about that.

And, Antjuan, I was thinking of you, knowing that even party leadership was wanting to rein the congresswoman in a little bit, Nancy Pelosi a little less so, indicating in a tweet that Trump's daily lack of civility has provoked these responses.

But Chuck Schumer, he was almost like Winston Churchill, saying: "I strongly disagree with those who advocate harassing folks if they don't disagree with you. If you disagree with a politician, organize your fellow citizens to action and vote them out of office. But no one should call for the harassment of political opponents. It's not right, not American."

What did you make of that?

ANTJUAN SEAWRIGHT, DEMOCRATIC STRATEGIST: Well, I think that this is an example of manufactured political outrage by the right to a certain degree, because I'm old enough to remember...

CAVUTO: No. I just quoted his outrage. That was his response, Chuck Schumer.

SEAWRIGHT: I get that.

And I think that everyone kind of governs themselves differently in these situations. I don't think she called for anyone to be -- to incite violence, as the president did in many of his political rallies.

She never body-slammed a reporter, like we saw one GOP candidate, and still get elected.

STUCKEY: Oh, my gosh. She called for harassment. She called for aggression. She should have called that out and said that that's wrong if she actually wanted to take the moral high ground.

(CROSSTALK)

STUCKEY: ... and said God is on her side.

SEAWRIGHT: Are you going to let me -- are you going to take over me? I gave you your liberty to talk. So, let me do mine.

STUCKEY: Go ahead.

SEAWRIGHT: The bottom line is, I would have conducted myself a little different. I may not have used the same words she had.

But at the end of the day, Donald Trump set this precedent and this environment. It's up to the GOP to call out their side.

STUCKEY: No, no, no.

(CROSSTALK)

CAVUTO: Let's step back for a minute.

(CROSSTALK)

SEAWRIGHT: And I think Chuck Schumer should call it out on our side.

CAVUTO: Guys, I just ran into this yesterday. And sometimes it's like separating my two teenage sons.

(LAUGHTER)

CAVUTO: So, Kevin Paul Scott, my basic treatise -- and we started this show at this Congressional Medal of Honor ceremony for the late Garlin Murl Conner.

He put his life on the line in an act of bravery, the likes of which is almost inhuman. It's so over the top. But he did that.

And I hearken back to the greatest generation, that generation. There's ways to advance the debate and ways not to. And I think both sides have cheapened the discourse here.

So, how do you change it?

KEVIN PAUL SCOTT, REPUBLICAN STRATEGIST: You're exactly right, Neil.

What we do -- we have got to elevate the level of discourse. What is happening really is, what perspective are you looking through? Maxine Waters is looking through the lens of trying to do what is most popular in her district. And it throws out red meat and it gets people excited.

Chuck Schumer, he is really looking through the lens of, he needs to get some Democrats elected in some red states. So he's trying to broaden this, trying to pull back a little bit, so this is not used in campaign fodder against Democrats.

But what we all need to do is look back at a wider lens and say, what is best for the country? What is best for the United States of America?

(CROSSTALK)

CAVUTO: Does that apply to, you know, Trump loyalists and Republicans who shout down a CNN reporter...

(CROSSTALK)

SEAWRIGHT: You left out Donald Trump and his disciples.

SCOTT: It applies to every single one of us.

CAVUTO: To everybody, right? OK.

SCOTT: It applies to every single one of us as Americans.

CAVUTO: Fair enough.

SCOTT: It should be held across the board. Same standard.

CAVUTO: All right, so, Allie, what I worry about -- and you always hear of those who are of one mind-set and hate the other party, another that -- in that other party that hates the party lecturing them.

I just want to see a civil discourse. I want to see middle ground on getting things solved, because each get kind of locked in their positions.

STUCKEY: Exactly.

CAVUTO: And nothing will get done. Immigration is a good example.

There's more agreement than you know between the parties on this issue. But they're both captives to their bases. And nothing will get done. That's what I worry about. Your thoughts.

STUCKEY: Exactly. Exactly.

And this republic was founded on this I don't want to say aggressive, but this very spirited discourse and dialogue and debate. It's OK if we disagree. But let's come to the table with ideas, not with personal attacks and tribalism.

And that's especially true for conservatives.

(CROSSTALK)

STUCKEY: Obviously, I'm a conservative because I believe that we have much better ideas than liberals do.

All liberals have is personal attacks. That's not true for conservatives.

(CROSSTALK)

CAVUTO: No, no, no, no. Don't say all liberals have is personal attacks, because I have heard conservatives too.

(CROSSTALK)

SEAWRIGHT: Allie, have you forgotten who the president of the United States is?

CAVUTO: Antjuan, Antjuan, I want you to think about what she just said. What do you like about her?

SEAWRIGHT: What do I like about Allie?

STUCKEY: I'm very fair.

SEAWRIGHT: I like the fact that Allie is very loyal to the team.

(LAUGHTER)

SEAWRIGHT: I like the fact that Allie is very loyal to the team.

(CROSSTALK)

STUCKEY: Oh, that's not true. I have called out both sides.

(CROSSTALK)

SEAWRIGHT: She will not call out the president of the United States.

(CROSSTALK)

STUCKEY: Yes, I will. Yes, I will. You haven't been following me. I'm not a Trump loyalist. You don't know me at all. It's fine.

CAVUTO: Guys, I want to thank you all. You weighed in on a lot of stuff.

Kevin Paul, one quick comment here. Lessons we have going forward. Just to be nice and hug, or what?

(LAUGHTER)

SCOTT: Yes.

The lesson is that everyday Americans are most concerned with tax cuts, with the economy, with what is happening in North Korea. They're not really concerned about Sarah Huckabee being thrown out of a restaurant. That's what it's really all about.

CAVUTO: All right, guys, thank you very, very much.

STUCKEY: Thanks, Kevin.

SEAWRIGHT: Allie, I love you.

CAVUTO: All right, group hug.

STUCKEY: You too.

CAVUTO: More after this.

(LAUGHTER)

(COMMERCIAL BREAK)

CAVUTO: All right.

Well, if it's Tuesday, there must be primaries, seven of them across the country, one involving Mitt Romney and a battle to settle who is going to be the Republican nominee to replace Orrin Hatch in that state of Utah.

And we have got a barn burner of a battle going on in Staten Island, New York, for a congressional seat that might be swapped out by the incumbent who won it back from the guy who had to go to jail. It's a fascinating drama playing out in one race after the other.

We have got The Washington Examiner's Emily Jashinsky joining me right now.

Emily, what are you particularly keeping an eye on tonight?

EMILY JASHINSKY, THE WASHINGTON EXAMINER: Yes, I think South Carolina and the Michael Grimm race up by you guys in New York are the big ones to watch tonight.

And really what we're looking for here is to see to what degree the Republican Party is becoming the party of Donald Trump. And I think most people will say that has already happened. But what is really interesting is that, when you go into places that favored Donald Trump in 2016, like this borough up by you guys, or in South Carolina, his approval rating remains really high, is actually extremely high in some of these places among Republican voters.

And so what you see then is sort of a race to out-Trump each other. And I think we have had this happen in South Carolina. I think we have had this happen in New York. So, what we're going to see happen tonight is whether that successful.

And I'm sure -- my prediction is that it will be.

CAVUTO: Yes.

It used to be, in the early days of the Trump administration, there was sort of a hands-off relationship with the president. A lot of folks are seeing, all right, let's see how this works out. The economy started churning, and then the markets and everything else.

So, now there's a clear pattern here that anyone who is hooks up to Trump or shows loyalty to Trump, or Trump to that candidate, it works out, right?

JASHINSKY: Yes. And that's what's interesting, because if you look at someone like Mitt Romney, or if you even look at someone like Mark Sanford, who just lost his primary down in South Carolina, Mark Sanford actually won 46.5 percent of the vote among South Carolina Republican primary voters.

And he's fairly -- some would consider him never-Trump, but even he and even that Romney have had to tread a pretty fine line. They are able to come and say, listen, I can be reasonable about Trump. I will support him when I like what he does. I won't when I don't.

So, even you see these people...

CAVUTO: But, in other words, you want to embrace him, right?

You want to be loyal to the president. And I'm wondering, should they actively, do you think they will actively, as we get closer to November, use him on the stump?

JASHINSKY: I don't know.

I would imagine that in some of the states -- I think Wisconsin would be an interesting place to watch that, right? This is a state he won by like 1 percentage point.

CAVUTO: Right.

JASHINSKY: And in the primary, both candidates are still trying to run on Trump.

They're trying to be as Trumpy as possible. But in the general election, his approval rating is underwater. His favorability is underwater there. So I don't he would come to a state like that.

But I think you could see him go to Utah. You will certainly see him go to South Carolina if they ask him to. So it just will depend on the state, which is -- makes this midterm cycle very interesting.

CAVUTO: And the passion on the left, because they don't like him, is there still as much passion there to swap the House? Because that's what they hope for.

JASHINSKY: Yes, I think we have actually seen signs of that dissipating.

CAVUTO: Yes.

JASHINSKY: We see the enthusiasm gap narrowing, which is pretty impressive. And we see his approval ratings sort of steadily climbing.

So, if those indicators stay the same going into November, they aren't going to have the blue wave that they thought they might have like a year ago.

CAVUTO: Very good read. Quick read of things.

Emily, thank you very, very much. Good seeing you.

JASHINSKY: Thanks, man.

CAVUTO: I know you are going to have a late night following all of this. So, those seven big battles all tonight, multiple battles as the week and months ensue before we get to November, where I'm told there's going to a big midterm election, and you're invited.

"The Five" is next.

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