How can the US assess North Korea's nuclear arsenal?

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How can the US assess North Korea's nuclear arsenal?

Secretary of State Pompeo insists sanctions relief will not come to the regime until it completely denuclearizes. Former weapons inspector, David Albright, provides insight on 'Journal Editorial Report.'

This is a rush transcript from "Journal Editorial Report," June 16, 2018. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

The long-awaited report from the Justice Department's watchdog was released Thursday and concludes that former FBI Director James Comey deviated from bureau and Justice Department procedures in his handling of the Hillary Clinton e-mail investigation. The inspector general, Michael Horowitz, going so far as to call Comey insubordinate for concealing from his superiors his plans to make a public statement in July 2016 when he ultimately exonerated Clinton. Horowitz found, however, that Comey was not motivated by political bias. The report also found that Comey made a serious error of judgment in sending a letter to Congress in October of 2016 announcing he was reopening the investigation.

Let's bring in "Wall Street Journal" columnist and deputy editor, Dan Henninger, and columnists, Kim Strassel and Bill McGurn.

So, Kim, what's the single biggest take away we should have out of this IG report?

KIM STRASSEL, WASHINGTON COLUMNIST: The single biggest take away is that the leadership under Jim Comey was disgraced by this report. He said that Jim Comey was insubordinate, as we noted, not only did he decide to cut out the Department of Justice, go around the chain of command, he concealed that from the people that were his bosses. And against better advice, went out and did this press conference exonerating Hillary Clinton, but then also chastised her for things that she was not charged for, which is something that the Department of Justice does not do. A lot of this was put in Rod Rosenstein's memo for why Donald Trump fired him, and we now know that he was correct to have done that firing.

GIGOT: OK, let's dig into the substance of Comey. So pretty really rough criticism, but Comey, of course, defended himself, in his memoir in particular. Why would he do this if it was so against Justice Department rules?

BILL MCGURN, COLUMNIST: Well, I think he thought he was -- I wouldn't say above the law but he was the law. If you look at the report, to me, the most damming thing was ad-hoc decision making based on personal views.

GIGOT: It's not political bias but it's about him?

MCGURN: About his own reputation. I think the bureau's reputation suffered because he put his own personal reputation first and sent awfully bad signals. The reason the Justice Department and the FBI have procedures is to guaranty fairness, and not just fairness but also the appearance of fairness, so that people can have confidence in institution. The irony is by putting ego first. And people that have written about James Comey for 20 years, have never really accused him of being political. They've accused --

(CROSSTALK)

GIGOT: Political in the sense of being partisan.

MCGURN: A partisan. They've always accused him of putting his own grand- standing above everyone else. And the bureau suffered terribly for it. And the deceit is a big part. The way he dealt with Loretta Lynch and the people at the Justice Department and these announcements, kind of, you know, informing them after he's informed the press that he is going to have press conference, it's outrageous. And there's no defense. The FBI's letter, at the end of the report, they defend Mr. Comey on this.

GIGOT: Dan, the tragic irony here is that Comey claims to have done this to protect the reputation of the FBI, but by breaking the rules, in the end, he undermined the FBI, probably to a greater degree than we can recall since J. Edgar Hoover.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Yes, that's right, Paul. I think he has done significant damage to the reputation of the FBI. Clearly he was, at the least, incompetent to be the director of the FBI. What he thought he was doing was manifesting the title of the book he wrote, "To a Higher Authority," and that's what he always thought he was doing. But there were higher authorities than James Comey at the Department of Justice. And we should say, what were they thinking. Loretta Lynch, presumably, felt that she had to -- she did not recuse herself, but take herself back with meeting with Bill Clinton on that tarmac, but there was no reason why Loretta -- and this has made clear in the IG's report, they wondered, why did not Attorney General Lynch or Deputy Attorney General Sally Yates step in and try to take more control over what Comey was doing. He was left to run on his own with no accountability to anyone.

GIGOT: Kim, what about this question of political bias? I don't want to get into some of the emails by other members of the FBI right now, but I want to ask you about Comey himself and the decisions that were made about the Clinton investigation. The IG said they weren't -- he didn't deceit political bias but he did really raise a lot of questions about breaking normal practices.

STRASSEL: Well, actually, what he said -- and I think this is a very important distinction -- is he said they did not find any demonstrable factual evidence that bias made an impact on specific decisions having to do with the investigation. So that's essentially saying, we didn't catch anyone to write a letter saying, we should start this or let Clinton off the hook so that she can be president.

GIGOT: Right.

STRASSEL: They didn't find any evidence of that. But he did say that, in fact, there was a great deal of bias which he found and that that cast a cloud over the entire credibility of the investigation. And I think if you look at some of the decisions that were made in terms of immunity deals, in terms of their agreeing to Clinton lawyer demands on what they could search for in laptops, the kid-glove treatment over all, what he was essentially saying is, I think you cannot stop yourself from asking whether or not bias did influence the way that they -- they dealt with this investigation.

GIGOT: A lot of questionable decisions, waiting a month before investigating Anthony Weiner's laptop --

(CROSSTALK)

MCGURN: Mr. Comey's explanation for that is he didn't know that Huma Abedin and Anthony Weiner were married. It's an extraordinary kind of -- imagine if General Flynn gave that kind of defense if asked about something.

(CROSSTALK)

MCGURN: It's incredible.

Further to Kim's point, as Ed Whelan, former Justice Department guy, said, no evidence of bias affecting decisions does not mean that there was evidence of no bias. In fact, the IG pointed out that Peter Strzok's decision to prioritize the Russia investigation over following up on the emails, they didn't have confidence that it was free of bias.

GIGOT: We will get a lot more on Peter Strzok after we come back, much more on the IG report as well, including new scrutiny of texts exchanged between two FBI employees, and whether political bias did play a role in Clinton and Russia probes.

(COMMERCIAL BREAK)

GIGOT: The inspector general's report shining a new light on texts between FBI Agent Peter Strzok and his girlfriend, FBI Lawyer Lisa Page. An exchange included in the report, Page asks Strzok, quote, "Trump is not ever going to become president, right, right?" Strzok responds, "No, no, he won't, we will stop it."

While the inspector general said he did not find documentary evidence that political bias affected any decision-making, he concluded that because of his views, Strzok may have improperly prioritize Russia investigation over the Clinton probe during final weeks of the campaign.

We are back with Dan Henninger, Kim Strassel and Bill McGurn.

So, Dan, it's an extraordinary e-mail. What was going through Peter Strzok's mind? He's a law enforcement officer who is supposed to be disinterested.

HENNINGER: Right. He was not disinterested, and that's the problem. Not only Peter Strzok and Lisa Page, but they identified at least two other FBI agents, FBI Agent One and Five, and FBI Attorney Number Two, who were exchanging similar sorts of highly-political emails or texts. And what happened here is that these agents, these people at the FBI went into a simple panic, a political panic at the idea that both Donald Trump could become president -- they were doing this before the election -- and then, indeed, after the election. They completely lost professional discipline. And there seemed to be no one around to impose discipline at all. And the question is whether that informed some of their decisions. I think the Inspector General Horowitz gave them a break by saying it did not inform their decisions. It really challenges credibility that they can be exchanging texts like that and not have that affect your professional decision-making.

GIGOT: Bill, one other extraordinary fact, maybe you can shed some light, the second part of that Strzok exchange with page, Congress had asked for that and that was left out on what was provided to Congress.

MCGURN: Yes. The Lisa Page part they got --

(CROSSTALK)

MCGURN: -- from Ron Johnson.

GIGOT: But --

(CROSSTALK)

MCGURN: The question is whether it was a glitch or whether it was deliberately excluded. And the problem is --

GIGOT: Do we know?

MCGURN: We don't know. I don't think that the FBI and the Department of Justice have earned the benefit of the doubt, given redactions of all of these documents.

Further to Dan's point, the one thing the inspector general could not find in 568 pages is any pro Trump texts by anybody there. Look, FBI agents have right to their opinions but this was on FBI devices. These were people at the top running the investigation into basically the campaign of the person, of the two leading candidates. They have to look fair in addition to being fair. And maybe one of the comparisons is not just, was this decision reasonable in Hillary investigation but compare the Hillary investigation -- let's cooperate with the witnesses, let's let Cheryl Mills act as counsel and sit in -- with the way the FBI investigated Donald Trump, which was FISA warrants and, we will plant informant there. Trey Gowdy suggests that's a big problem.

GIGOT: Kim, let's take the response. Peter Strzok said, look -- they said there was no - his lawyer said there was no political bias so really no problem, these were just private views, and it didn't affect the investigation. So what's your response to that?

STRASSEL: Well, my response is the texts that you just named, "We will stop it." And the inspector general went out of his way to say, look, why this particular text is very problematic is because it goes beyond having a political view and suggests that you will take action using the powers that you have under your control at the FBI --

(CROSSTALK)

GIGOT: But, Kim, if there were no --

STRASSEL: -- to change a political outcome.

GIGOT: But if there were no action taken, then what's the problem?

STRASSEL: How do we know that? How do we know -- the problem is that once you have said that, once you have said, "We will stop it," now you have to look at every single action that Peter Strzok took. And do not forget -- I mean, this is very important -- he was the lead investigator on the Russia probe. He was the guy who flew to London to debrief this Australian diplomat who first supposedly tipped them off about the Russia collusion, if there was any. He was the guy calling the shots. When you have a guy on record saying, "We are going to stop this," I think the implication is that every single action he might have took was taken to stop Donald Trump from being president, rather than because he believed that there was an honest issue or problem.

GIGOT: Dan, what do you think this all does to the Mueller probe? Obviously, Mueller was named after this -- after the campaign, but at the very least, it would seem to complicate how he's going to proceed going forward or the reception of what he produces will get?

HENNINGER: That's right. Let's recall that Mueller was appointed after Donald Trump fired James Comey. The idea was that perhaps Trump was doing it to obstruct the investigation into the so-called Russian collusion story. This IG report makes it clear, as did Rosenstein's memo, that Trump was absolutely justified, unquestionably justified in firing Jim Comey. So that predicate for the Mueller investigation is now very weak. And the question is, what is he left with, other than the peripheral investigations that he's been going with, some of the people at the edge of the Trump campaign. So I think the Mueller investigation is really on pretty weak ground right now, Paul.

GIGOT: OK. Thank you, Dan, Kim, Bill.

When we come back, breaking down the Trump-Kim summit. Was this week's historic meeting merely a photo-op or the beginning of something more?

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: We signed an incredible agreement. It's great. And it's going to be great for them, too.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: Chairman Kim and I just signed a joint statement in which he reaffirmed his unwavering commitment to complete denuclearization of the Korean peninsula. We also agreed to vigorous negotiations to implement the agreement as soon as possible. And he wants to do that. This isn't the past. This isn't another administration that never got it started and, therefore, never got it done.

(END VIDEO CLIP)

GIGOT: That was President Trump in Singapore Tuesday following his summit with North Korean leader, Kim Jong-Un. The historic one-day meeting capped off with the signing of a statement called comprehensive, but critics call vague. So was the summit a photo-op or something more?

We are back with Dan Henninger, Bill McGurn, and Wall Street Journal editorial board member, Mary Kissel.

So, Bill, summit, big P.R. success for sure. The president dominated the world stage. What about substance? How successful?

MCGURN: Well, we don't know. We know that President Kim in theory has agreed to complete denuclearization. Look, this is where I depart from Ronald Reagan. I was never a "trust and verify" guy. I'm a "distrust and verify" guy.

(LAUGHTER)

There should be a lot of skepticism. That said, for all the criticism, everything that Donald Trump does comes with a lot of noise. It's like the circus coming into town. And I think we have to -- to me, the test is, whether any of these things are worth it, is whether we get what the agreement says, complete and verifiable denuclearization, and we won't know that for a while.

GIGOT: In that sense, Mary, we are betting on Donald Trump being right as he assesses the intentions of Kim Jong-Un.

MARY KISSEL, EDITORIAL BOARD MEMBER: Yes, that's right. And just a correction here to Bill. It didn't say "complete verifiable, irreversible denuclearization."

(CROSSTALK)

GIGOT: The communique.

KISSEL: The communique. It just said "complete." And Mike Pompeo said, yes, yes, all those other things are in there, trust us. I think it's positive that the president is keeping maximum-pressure sanctions on. The thing that worried me, Paul, was the president's remark that he wants to stop war gaming with South Korea. He called the exercises very provocative. They're really anything but. They serve to deter North Korea, they keep our troops ready, and it's really a unilateral concession on the president's part to suspend those games. I think there's a lot of concern amongst our allies.

GIGOT: Mike Pence told the Senate Republicans that they were only suspending two exercises, the big one in the spring and another one in August, which they now have suspended. He had to walk that back a bit afterwards. It's not clear yet, is there -- or can you clarify for us whether or not more extensive, even routine investigations and training will be suspending?

KISSEL: Routine training is going to continue. But the Pentagon isn't returning phone calls asking about the big exercises.

Look, Paul, these aren't one-off exercises that you can just cancel. They are meant to keep our troop readiness up and coincide with the North Korean exercises. You have troops coming in from the United States, you have allies coming in. They are meant to familiarize this joint coalition with the terrain of the Korean peninsula. You know, you can't say, let's just cancel them, we can always restart them. There are real costs to doing that.

GIGOT: Dan, here is the argument you hear from the people in the administration, look, nothing else has worked, give the president a chance, the sanctions are still on, give him some running room. They can always be -- the military exercises can be restarted. The sanctions can be toughened up. Let's just see if this can happen.

HENNINGER: Yes, let us, indeed, do that, Paul. But let us not delude ourselves that this is materially different from what previous presidents have done, all right? What he has done is meet personally with the leader of North Korea. Any other president could have done that with Kim's father. But where we are is the same point they were, in the foothills of negotiations with no commitment, as there was not in previous negotiations, from the North Koreans to do anything concrete or material to wind down their nuclear capability. And so, yes, we are hopeful. And at the moment, they are not testing missiles, they are not testing more bombs. That will hold for a while, presumably. But make no mistake, Kim Jong-Un's scientists will be working in their labs to try to prefect the weaponization of a ballistic missile while the negotiations go on. And what we are looking for is some material commitment from the North Korean side, such as inspectors inside that country soon, but we have not seen that yet.

KISSEL: Well, here is a thought. If the president cares about provocations, what about having the North Koreans pull their troops back 50 kilometers from the Demilitarized Zone. That is a show of good will. What about a statement acknowledging South Korea as a separate country? What about an accounting of the WMD program? What about lists of countries that they supply goods to and trade with? I mean, any number of things where they could demonstrate some good will.

MCGURN: Yes. I would push back on that. One thing, look, there are a million caveats you can have. You can't expect the leader of a country to come to a meeting to be publicly humiliated before the world. Probably, he came because if he worries that if he doesn't cooperate there's a Plan B, military force. The effort, up to this meeting, was the president got our hostages out, he put in very tough sanctions that other people haven't. Again, you can have a lot of questions about the details. And if President Trump fails, it'll be, number one, very harmful to American security and a massive humiliation for him. He staked his credibility on this.

GIGOT: But how different is it really, other than the photo-op?

MCGURN: Well, we won't know.

GIGOT: But, wait a minute. Bush and --

(CROSSTALK)

MCGURN: First of all, I think it was a lot tougher going into it, right?

KISSEL: Was it?

MCGURN: Bill Clinton stood and said --

(CROSSTALK)

KISSEL: I don't know about that.

(CROSSTALK)

MCGURN: Did anybody get American hostages out of North Korea --

(CROSSTALK)

KISSEL: Not many hostages. We had Banco Delta Asia (ph) under the George W. Bush administration.

MCGURN: Not as tough as -- I think that the policy proceeding this was a lot tougher than we've had before. Again, the test for me is, will it be worth it? It'll be worth it if we do get it denuked. It won't be worth it and it will be a humiliation if we don't. It seems to be very simple.

GIGOT: Last word, Mary?

KISSEL: The proof is in the pudding. I think Mike Pompeo has a big road ahead. I don't think it's helpful to make unilateral concessions talking about war gaming.

GIGOT: OK, thank you all.

Still ahead, the Trump administration insisting that sanctions will remain in place on North Korea until denuclearization is complete. So what do we know about Pyongyang's nuclear arsenal and how will we know when that's achieved? We will ask a former weapon's inspector, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: We believe that Chairman Kim Jong-Un, understands the urgency of the timing of completing this denuclearization, that he understands that we must do this quickly and that sanction relief - - we should recall these are U.N. sanctions -- that sanction's relief cannot take place until such time as we have demonstrated that North Korea has been completely denuclearized.

(END VIDEO CLIP)

GIGOT: That was Mike Pompeo in Seoul this week insisting sanctions relief will not come to North Korea until it completely denuclearizes. A process the secretary of state says could take as long as two and a half years. Pyongyang staged the destruction of one of its test sites last month but dismantling its entire nuclear program is another matter.

So how can the U.S. verify what North Korea actually has in its arsenal?

Let's ask David Albright. He's the founder and president of the Institute for Science and International Security and a former weapon's inspector.

Mr. Albright, thanks for being here.

DAVID ALBRIGHT, FOUNDER & PRESIDENT, INSTITUTE FOR SCIENCE AND INTERNATIONAL SECURITY & FORMER WEAPONS INSPECTOR: Good to be here.

GIGOT: So let's start out by -- how many nuclear weapons do we think North Korea really has?

ALBRIGHT: Well, it's a very difficult estimate to make because we know -- not that much. I mean, estimates I've made, it's anywhere from 15 to 35 nuclear weapons. The number could be higher if they have more capability than -- than we are estimating. So it's very tough. But they have, you know, a couple of dozen nuclear weapons, maybe. There's a chance it's fewer. But, again, it's uncertain. The problem is it's very hard to know where countries make nuclear weapons and where they store them. So what we fall back to typically is trying to look at their capabilities to make plutonium and weapon-grade uranium, and those facilities tend to be easier to understand and to inspect.

GIGOT: All right, how many of those facilities do we have, because, for a while, we knew they had a plutonium site but we didn't know about their enriched-uranium site?

ALBRIGHT: That's right. The plutonium program is much better understood. It was the focus of the six-party talks in the 2000's, and so --

GIGOT: Right.

ALBRIGHT: And earlier, so a lot is known about that. We don't think they have a secret reactor. But they do have a secret enrichment plant, we are pretty sure, and we don't know -- well, Western intelligence has a good idea of where the plant is. They also have another one at Yongbeyong (ph), which they built in secret and revealed in 2010. So I think the working assumption is they have two substantial uranium-enrichment plants, one North Korea admits to, and one it doesn't. And those plants are going to have to be thoroughly inspected. But before that, I mean, what you want in verification is for the country to reveal in an honest way what its nuclear capabilities are and, in this case, including its nuclear weapon's production capabilities and the size of nuclear arsenal.

GIGOT: Right. That means that at a first step what you want from North Korea is essentially a declaration, a list. Here is what we have in terms of our weapons, in terms of our sites for building those weapons, in terms of sites for enriching uranium and plutonium and so on and so on.

ALBRIGHT: And you would like -- the initial list could be almost just like a list, but you would like them for them to allow visits to those sites so inspectors can, in a sense, get the lay of land. And these inspectors probably should not be International Atomic Energy Agency. It should be effort organized by the United States and its allies in that region, including China. Well, not call them ally, but at least a friend on this issue.

GIGOT: Right.

ALBRIGHT: And then North Korea needs to create a narrative of its nuclear weapon's program, and that would become a full-blown declaration which could then be verified by then inspectors.

GIGOT: When you talk about inspectors, you said it should be an international group, not the U.N., and the U.S. should be part of that, but does it have to be inspections that are essentially on demand, that means anywhere we want to look, we can go and you'll help us look and see what you've got?

ALBRIGHT: They don't have to be that intrusive. I mean, but North Korea has to be willing to allow -- well, to tell an honest story.

GIGOT: Right.

ALBRIGHT: I mean, in the sense, you know when you see it. Then there's going to be some places -- I mean, we have list of sites that are suspect nuclear sites, and they are going to have to allow some level of visits to places where we just want to check it out. You know, where were wrong, were we right, is it falling off the list because it's closed down? But so there's going to have to be fairly broad access. But it doesn't have to be like in the case of Iraq where the inspectors had the absolute right to go anywhere. It can be less than that.

GIGOT: But why --

ALBRIGHT: And it can work quite well.

GIGOT: But why less than that? If we know, from the past, that North Korea has not told the truth, why shouldn't it be just as intrusive because Saddam lied for years as well, and that's why it was intrusive?

ALBRIGHT: What I'm saying it would be great if could be that intrusive. North Korea hasn't allowed inspectors to go outside Yongbeyong (ph) to this day, except maybe one or two cases where the U.S. had a special mission to do, and paid quite a price to get there. So I think what you want to do is design a system where it's good enough, but you don't want to demand perfect.

GIGOT: OK. Do we have to insist that they stop enriching uranium and we basically be able to haul out all of the stockpiles of enriched uranium and plutonium and haul it out of the country?

ALBRIGHT: They certainly have to stop. I mean, that's going to be an issue. North Korea will say, yes, but we have needs, civil reactors, we want fuel. I think the United States has to be very firm, no enrichment at all. It's just a bad idea given the history of the whole effort with North Korea. They should be shutting down and dismantling their uranium- enrichment program, along with their plutonium program and their nuclear weapon's program. And that's absolutely necessary. It's not about freezing. It's really about getting rid of in a verifiable manner and so it's critical to do that.

GIGOT: I would assume that would include plutonium as well?

ALBRIGHT: For sure. They may keep a reactor operational that if, somehow, they're making electricity. They may even import reactors. But they wouldn't be enriching uranium for those reactors. Those reactors would be structured or designed in a way that they're what we call very proliferation resistant. But that part of the peaceful nuclear energy program in North Korea has to be negotiated carefully, and really I don't think we are even at that stage yet.

GIGOT: Right. That's fascinating.

Thanks for the insight, Mr. Albright. Appreciate it.

ALBRIGHT: Thank you.

GIGOT: Still ahead, the Trump administration is slamming steep tariffs on imports from China> What does the move mean for the world's two largest economies and Beijing's cooperation with North Korea?

(COMMERCIAL BREAK)

GIGOT: The Trump administration announced Friday that it will impose a 25 percent tariff on up to $50 billion of Chinese goods, a decision that brought swift retaliation from Beijing and dramatically escalated trade tensions between the world's two largest economies. The penalties aimed at punishing China for stealing American technology and trade secrets. The tariffs will apply to over 1,000 imported products and will target the Chinese aerospace, robotics, manufacturing and auto industries.

We are back with Dan Henninger, Mary Kissel, and Wall Street Journal editorial board member, Allysia Finley.

Mary, tariffs, 25 percent, good idea?

KISSEL: Identified the right problem, but the wrong solution, Paul. By taking unilateral action under U.S. trade law, the United States foregoes in concert with allies suing China at the WTO, which has multiple provisions that we could have used here to punish their intellectual property violations, to punish them for state subsidies, for exports and all manner of things. I think by doing this, Trump risks, first of all, a trade war that would hurt U.S. consumers, but he also isolates the United States. Look, European allies, Asian allies, they think they have the same problem with China as well. So let's get them on board with us and let's act together against China, let's not go it alone.

GIGOT: Allysia, you have been looking at the list of products that are targeted by the Trump administration, and now China targeting American products. Who is going to be hurt here?

ALLYSIA FINLEY, EDITORIAL BOARD MEMBER: I think manufacturers, including some aluminum and steel makers.

GIGOT: American manufacturing?

FINLEY: Right. Most of their components, they're used in machines, boring machines, drilling machines, some in construction will be hurt. It's will increase the cost for a lot of infrastructure projects. One of the goals of the corporate tax reform is to increase investment in capital expenditures, and that's really going to take a hit.

GIGOT: So this is from the tariffs that we are imposing on China.

FINLEY: China.

GIGOT: What about the tariffs that China is imposing on American goods? Who are they targeting there?

FINLEY: I think mainly the Farm Belt. You see soy, pork. And to an extent, airplanes. But these are --

(CROSSTALK)

GIGOT: Could be Boeing?

FINLEY: Possibly Boeing, yes.

GIGOT: So they are going to -- that's Trump country. You think they are deliberately targeting Trump states?

FINLEY: Well, of course, because these are -- they are trying to maximize political pressure and so you're going to have Iowa farmers. And this could ripple -- if this escalate into a trade war, this could ripple into a recession in the Farm Belt.

GIGOT: Because the Farm Belt is actually --

(CROSSTALK)

GIGOT: -- one of the weaker parts --

(CROSSTALK)

FINLEY: Right. Income has been declining for the past couple of years.

GIGOT: Dan, I don't know if you saw, but Gary Cohn, president former economic adviser, said that this could begin to undermine, if this gets out of control, this trade tit for tat. And the president is fighting with Europe on steel and aluminum, Mexico, Canada and Japan and now China. This could escalate in a way that puts a big dent in the economy, do you agree with that?

HENNINGER: I agree to the extent that, yes, it could. We are not there yet. But we need some results if we are going to avoid that result. And we just have not seen them yet. But it's very complicated. The Trump administration is kind of playing three-dimensional chess here. We've slapped $50 billion of tariffs on China, who we want to help us negotiate denuclearization with North Korea, all right? And as Mary suggested, we should have our allies along if we are going to rightfully target China's trade practices. However, we have also targeted all those allies, Britain, Europe, Japan, South Korea, with tariffs of their own. So this is a very complicated process. And I presume the White House has a plan, but if it doesn't pan out, Gary Cohn is right, we will start seeing negative impact on the American economy eventually.

GIGOT: That plan I don't see, frankly. I don't see. I think this looks to me to be ad hoc.

But here is another thing that I don't quite understand, is the sanctions that Trump lifted against ZTE. That's a Chinese telecom company that buys products from America's Qualcomm. And had death sentence because twice, not once, but twice violated U.S. sanctions against exports of technology to Iran and North Korea. Yet, he gave them a reprieve, even now as he turns around and slaps tariffs on China for other goods. What's the common thread or plan, if I may, here?

KISSEL: Yes. Dan said three-dimensional chess. I'm not seeing three- dimensional chess, Paul. This looks like a game of checkers in a playground.

Look, he's -- there's no plan here. I think the president is an emotional person and I think he acted because President Xi Jinping asked him to save ZTE. And now he has Congress against him, and rightfully so, because, by helping ZTE that was rightfully sanctioning, you are undermining the sanction's regime. And you're saying to other violators, well, you know what, if your head of state calls the president and says nice thing, maybe you will get a reprieve, too.

GIGOT: Briefly, Allysia, you've been reporting on Capitol Hill. Are they going overrule the president on ZTE?

(CROSSTALK)

FINLEY: And the White House is going to have to try to work out this amendment in the defense reauthorization to try to get it out of the House.

(CROSSTALK)

GIGOT: -- the House version.

FINLEY: Right. There's widespread opposition to letting ZTE off the hook.

GIGOT: OK. He may have to veto if he wants it out.

When we come back, a federal judge greenlights AT&T's acquisition of Time Warner in a deal that could transform the American media landscape.

(COMMERCIAL BREAK)

GIGOT: In a big defeat for the Trump Justice Department, AT&T announced Thursday that it had completed its acquisition of Time Warner after a federal judge earlier this week ruled that the deal could go through without any condition. The Justice Department sued to block the $85 billion merger last November, arguing that it would hinder competition and raise prices for consumers.

We are back with Dan Henninger, Kim Strassel and Allysia Finley.

Allysia, you have been covering this for us. Good decision by the judge?

FINLEY: Right, it was right on all the merits. And really sent a message to the Justice Department. The last time a vertical merger was challenged by the Justice Department was 1977, and it lost. Here it was even more dubious because, in the media and broadband markets, they are becoming more competition and more convergence. Google and Facebook now have more advertising revenues than all TV combined.

GIGOT: So when you talk about a vertical merger, you mean companies that don't directly compete with one another?

FINLEY: Right. Like distributors and content producers.

GIGOT: That's what this combines?

FINLEY: Right.

GIGOT: The government argued that this would raise prices because AT&T would deny Time Warner content to other people. The judge said, no, there's no evidence.

FINLEY: There's no evidence, right. They relied on this one University of California, Berkeley, professor, but all the other economists that were brought in as witnesses really disputed his assertions and assumptions. And even the judge really picked apart in his 172-page ruling of these arguments.

GIGOT: So, Kim, help me out on the politics here. If the -- the law and the marketplace was so clear to the judge, why would the Justice Department lead with its chin in such a high-profile case?

STRASSEL: Well, it might have something to do with the fact that the guy at the top, Donald Trump, opposed this merger, not necessarily on any strong legal grounds, but because he didn't like CNN much, which happens to be one of the entities at question here.

So we have Makan Delrahim, who is his antitrust chief, they decided to go out and try to this. Didn't work on the merits, and it shouldn't have. And, you know, we will see what they decide to do next. They said they are considering next steps. But this is one where they ought to let it go because it's right on policy and right on the merits.

GIGOT: Dan, you and I have covered antitrust for many years, and there's always antitrust lawyers in the Justice Department who look for any case to try to stop just because they can flex their muscles and show they are still relevant even if they end up losing. Is this going to now, with this defeat, unleash a lot of mergers in the media business? You know, there's a bidding war for the assets of FOX now, which -- which, of course, owns this network, and some of those assets between Disney and Comcast. Are we going to see all kinds of mergers?

HENNINGER: Unquestionably, we will see mergers. The amount of economic activity that is going to take place in the media business is going to be extraordinary. In many ways, Paul, at the end of the day, it's, what does this all mean for consumers, customers of this video content. And we're, in a way, like where we were at the dawn of Hollywood or the golden age of television, all of which were predicated on the fact that there are massive numbers of people who want to absorb entertainment through a screen. That means a lot of money. And these people are now, with the result of this economic activity, going to be afforded all sorts of ways to get that material, and probably at a pretty good price. I don't think most consumers could care less whether the platform is AT&T or Netflix or Amazon Prime. They just want good product. And I think that's what's going to result from this process.

GIGOT: One of the interesting things, Allysia, you will see Amazon, you will see Google, YouTube already in the entertainment media business, you will see Facebook investing in content, you are going to see all kinds of companies -- Comcast is bidding for more. What does this suggest, though, to you about the future of antitrust against the big-tech giants? Are we going to see maybe the Justice Department and the FTC, Federal Trade Commission, turn to them and say, you control so much market share and search and social, now we are going to target you?

FINLEY: Right, when you have Facebook and Google controlling 70 percent of all digital ad revenues that raises -- and they use their cloud to kind of block competitors, whether it'd be Yelp, whether it be "Wall Street Journal" editorials. And I think you are going to see a bigger push, especially from Capitol Hill, to put pressure on these companies. And you're already seeing some calling for them to break up.

GIGOT: It will be fascinating to watch.

We will take one more break. When we come back, "Hits & Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time now for "Hits & Misses" of the week -- Bill?

MCGURN: Paul, a miss to Drew Faust, the president of Harvard University. She sent out a letter to the wider Harvard community, including alums, like Mary --

(LAUGHTER)

-- explaining Harvard's position in this lawsuit by students for fair admissions, which is arguing that Asian-Americans are discriminated against by Harvard's affirmative action program. This case is probably headed to the Supreme Court. I think the trial's going to start later this year. And what it shows is that Harvard's going to fight for diversity with all its might, even if that means taking away spots from Asian-Americans.

GIGOT: Kim?

STRASSEL: Paul, a hit to the United States, Canada and Mexico for winning the right to host the 2026 World Cup, beating out Morocco. What I love about this is it's a reminder that the United States is strongest when it works with its closest allies, not against them. The U.S. lost out on a bid, a recent bid to host the cup. And the people who voted this time made it clear that Canada and Mexico clinched the deal. Maybe we can remember that on issues like trade and immigration too.

GIGOT: Mary?

KISSEL: I'll give a half hit to the Trump administration for reinstating funding for Syria's White Helmets. This is the incredibly courageous aid group that rushes to the scene and treats bombing victims and gives them medical care. It's a great gesture. But, unfortunately, Paul, it is treating the symptom and not the disease, and that's the Assad regime.

GIGOT: All right.

Dan?

HENNINGER: Well, Paul, notwithstanding Kim's hit to the United States for working with our Canadian allies on soccer, the Department of Homeland Security this week says it's going to strengthen our northern border strategy. And it's talking about not letting things in from Canada. This comes in the wake of Donald Trump's famous set-to with Justin Trudeau, the prime minister up there, over Canadian products as a threat to our national security. DHS is talking about drugs and immigrants, but I think I hear a wall going up on the Canadian border.

GIGOT: A wall to prevent anybody from coming from Saskatchewan.

And remember, if you have your own hit or miss, be sure to tweet it to us, @JERonFNC.

That's it for this week's show. Thanks to my panel. Thanks to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.

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