Lt. Col. Bob Maginnis on Turkey's deal with Russia: Erdogan is 'pushing the envelope'

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Lt. Col. Bob Maginnis on Turkey's deal with Russia: Erdogan is 'pushing the envelope'

Turkey and Russia to conduct joint patrols in northern Syria; reaction and analysis from retired U.S. Army Lt. Col. Bob Maginnis.

This is a rush transcript from "Your World," October 22, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Thank you, Trace.

Well, a five day cease-fire in Syria is officially over, and now Turkey and Russia are officially teaming up. And no one knows what they're up to.

Welcome, everybody. I'm Neil Cavuto.

Turkish President Erdogan now striking a deal with Vladimir Putin. This will apparently move Kurdish fighters from the Syrian border within about six days, and this as the president meets with his secretary of state, Mike Pompeo, at the White House.

Now, what does all this mean for American troops already feeling the heat in the region?

We're all over it with Steve Harrigan in Irbil, Iraq, on where things stand right now, and Jennifer Griffin at the Pentagon what the options we have are right now.

We begin with Steve.

Steve, what's up?

STEVE HARRIGAN, CORRESPONDENT: Neil, there were real concerns just one hour ago when that U.S.-brokered cease-fire was scheduled to end that there could be more fighting.

This military offensive by Turkey has created more than 170,000 displaced people. These are just families, mainly Kurdish, on the move trying to run from the fighting. And there were even towns that became ghost towns in the last several hours, people trying to get away from what they thought could be a renewed Turkish offensive.

That is not happening right now. It might not happen at all, in part due to this agreement between Russia and Turkey. Here's the Turkish president.

(BEGIN VIDEO CLIP)

RECEP TAYYIP ERDOGAN, TURKISH PRESIDENT (through translator): Both countries will adopt precautions against a leakage of terrorists, and a joint mechanism will be established for the observation of the memorandum and its coordination.

(END VIDEO CLIP)

HARRIGAN: What we are going to see in about six days' time are joint patrols with the Russian government forces and Syria government forces under Assad working together, patrolling a safety zone, a buffer zone, about 18 miles deep into Syria to make sure no Kurdish fighters are in there.

We have seen a real swing in momentum, in prestige and influence here between the U.S. and Russia, U.S. troops withdrawing Monday, and now Russian troops filling that void. They negotiated the cease-fire agreement and they will enforce it with their own military on the ground -- Trace back -- Neil, back to you.

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

Now to Jennifer Griffin at the Pentagon, how they're responding to all of this -- Jennifer.

JENNIFER GRIFFIN, NATIONAL SECURITY CORRESPONDENT: Neil, as soon as the convoy of roughly 100 American military vehicles with U.S. troops retreating from Syria crossed the border into Iraq, the Iraqi military said they were not welcome.

The U.S. had hoped to reposition in Iraq in order to monitor ISIS. Defense Secretary Mark Esper was asked by reporters if U.S. troops would only be deployed to countries who pay the cost of them being there, like Saudi Arabia.

(BEGIN VIDEO CLIP)

MARK ESPER, DEFENSE SECRETARY: We're not a mercenary force. Mercenary forces do things for the pay.

(END VIDEO CLIP)

GRIFFIN: The aim of those troops is -- the aim is to pull the soldiers out and eventually get them back home, that according to Secretary Esper.

Esper added that some U.S. troops might stay at two bases in Syria to watch the oil fields and prevent Iran from filling the vacuum left by the U.S. withdrawal.

(BEGIN VIDEO CLIP)

ESPER: We're going to be -- we will reposition as they come out of Northeast Syria into Iraq. Eventually, their destination is home. But what we have got to do is pull them out deliberately out of Northeast Syria, and make our preparations to go home from there.

And I will have that discussion tomorrow with the Iraqi defense minister.

(END VIDEO CLIP)

GRIFFIN: The 120-hour cease-fire gave U.S. forces cover while they withdrew across the border to Iraq, so that they weren't pulling out under fire.

President Erdogan of Turkey and Russian President Vladimir Putin met for six hours in Sochi today and then another announced, as Steve mentioned, that Turkish soldiers and Russian soldiers will now be conducting those joint patrols along the Syrian border, the same border where U.S. troops were patrolling with the Turks just two weeks ago, before Turkey reneged on that agreement.

Turkey is a member of NATO, which was formed, of course, to counter Russia after World War II. Now Turkey is patrolling with Russian troops after having forced U.S. troops to retreat from Syria -- Neil.

CAVUTO: All right, thank you, Jennifer Griffin, very, very much.

So what do you think of that, the possibility here of Russian and Turkish forces patrolling areas in Syria once dominated and controlled by U.S. forces?

Let's get the read on all this from Lieutenant Colonel Bob Maginnis.

Bob, what do you think of this?

LT. COL. BOB MAGINNIS (RET.), U.S. ARMY: I'm not surprised, Neil.

The Russians have been in Syria and, of course, have helped Assad basically win the civil war in the west, along with the Iranian help. The Russians lost that region years ago after the Soviet Union fell.

And Vladimir Putin just lavishes the idea of going in and splitting up the NATO alliance, which he considers his primary enemy. And, of course, Turkey is the southern flank of NATO. And we saw, of course, Erdogan here recently buying S-400 air defense systems.

And, of course, we retaliated by saying no longer are you going to get the F-35 fighter, because it compromises our technology. So what's going on is something that we have seen in the past. Unfortunately, this is the type of back and forth, geopolitically, that we have seen and will continue to see, I think, into the future.

CAVUTO: I'm just curious, though, Colonel. If this is what an active member and supporter of NATO does, what the heck does an enemy do? That sounds like someone who shouldn't be in the club.

MAGINNIS: Well, I think that Erdogan is pushing the envelope.

Obviously, we're being quiet about it because we have Incirlik, which is on the southwest corner.

CAVUTO: Right.

MAGINNIS: And we use that as a strategic location. And we, of course, probably store a variety of crown jewels here.

But the reality is that we need that southern flank. It is a stabilizing force. At least it has been until here recently. And we're -- of course, they denied us access in 2003, when we tried to get into Northern Iraq.

But somebody has to keep the lid on the Iranian aggression. Someone now, of course, has to keep a lid on what the Russians are doing. And, of course, I think Erdogan is incredibly geopolitically ambitious, as we have seen some of his actions over the last couple of years.

I had a very high-placed person in a nearby government inform me that Erdogan has ambitions to become a new caliph of the Muslim caliphate in that part of the world.

(CROSSTALK)

CAVUTO: And what would we do in response, then, Colonel? I mean, if he goes, and, let's say, within these next five or six days does something farmer sweeping, and maybe with the Russians' help, all bets are off. And we're sort of out of the game to militarily challenge him.

MAGINNIS: Well, we're not out of the game just because we withdrew a handful of troops.

CAVUTO: How do you think we would respond to that? How would you respond?

MAGINNIS: I think Pompeo was talking to the president today. We have a lot of firepower in that region.

We're talking about an ally here. We're, of course, sworn to defend them. And the reality is that, if we don't sever that relationship, should Turkey do something that is unconscionable to us, then our alternatives are few. But we have a lot of capability there.

And I think the president is looking at that. And I think Mr. Esper, who is, of course, in Iraq today, is looking at our calculations, our alternatives.

CAVUTO: Yes.

MAGINNIS: If the American people want to go back in, in a major way, we're not going to send 1,000. We would have to send tens of thousands of people.

And I just don't think we have the stomach for that, quite frankly, given the threats that we see around the world with the Chinese and, of course, the Russians and Ukraine, and then the western part of -- Poland and so forth.

CAVUTO: Well, the president knows that. Right? To your point, the president knows that.

MAGINNIS: Yes.

CAVUTO: And maybe that was why the 1,000 troops that were pulled from that area, but the strategy was, look, we're -- we can always find a reason to be in endless wars. He pulled the plug now.

Do you think, in retrospect, the timing of that was a mistake?

MAGINNIS: Well, the timing was questionable.

But, Neil, keep in mind, you can say we have about 55 different wars around the world. We're engaged in a lot of them.

CAVUTO: Very true.

MAGINNIS: I think it's important that we recognize what our national interests -- I have heard all the political debate and all the reasons for trying to stay there longer. And I'd like someone to begin to tell me what our national interest are there.

Maybe it's keeping the Russians from gaining a foothold there. That's already been done. Perhaps it's pushing back against the Iranians. And we clearly have an interest there.

But are there larger geopolitical reasons for risking our blood and treasure in that part of the world? It's an endless series of wars and conflicts and religious differences. Why in the world do the American people really want to keep us there?

If that's important, then you need to elect somebody that's going to do that. I don't think this president, who is avoiding a malign impact on the United States and believes America first, is willing to spend any more of our blood and treasure in that area.

CAVUTO: Indeed. He's made that quite clear.

Colonel, thank you very much good. Catching up with you.

MAGINNIS: Thank you.

CAVUTO: Meanwhile, some more domestic pressure here.

Forget about the threat of impeachment over a call to Ukraine. Is a bigger worry over the president and his tax returns possibly going to the Supreme Court?

(COMMERCIAL BREAK)

CAVUTO: All right, this is getting to be taxing.

Anyway, the legal tussle over the president's tax returns could be heading all the way to the Supreme Court maybe sooner than you think. The president legal team agreeing to a fast track and appeal to the high court if that team loses tomorrow's decision from a circuit court.

All this is so far over my head, my hair hurts.

So, that's why we called in Mercedes Colwin to help us out with this.

Mercedes, good to see you.

MERCEDES COLWIN, LEGAL ANALYST: I just love you, Neil. I do.

CAVUTO: I'll tell you.

So you're a great attorney.

COLWIN: Thank you.

CAVUTO: These attorneys are telling the president, all right, we're going to try our luck here at this court.

COLWIN: Sure.

CAVUTO: It doesn't work, we're going all the way to the Supreme Court.

Would the Supreme Court take a case like this?

COLWIN: So, it's so interesting, because all this is about the subpoena for the tax records.

And the tax records, the underlying investigation is to determine whether there had been some violation of the campaign finance laws surrounding the payment to those two women who allegedly had an affair with the press.

CAVUTO: Right.

COLWIN: So, that whole -- that is what it's all basing on.

(CROSSTALK)

CAVUTO: But it's really to get these tax records for other purposes.

(CROSSTALK)

COLWIN: They want the tax records. Right. They want the tax records.

CAVUTO: Absolutely.

COLWIN: They want to see if there had been some criminal activity, because how you're going to list those payments to those alleged -- to these women will be reflected presumably on those tax records.

CAVUTO: Don't you think that is a really elaborate ruse, though, to just get their hands on those records and have a field day?

COLWIN: Well, eventually.

But I'm not in the mind of Cy Vance, who's the DA wants those records. But that's what -- that's what's being reported. We want those records. Did you commit a crime? But there's an investigation

CAVUTO: But then why ask for up to a decade of them, these payments?

(CROSSTALK)

CAVUTO: Go ahead.

COLWIN: Well, and that's a great point.

So how much do you have to look at these records to determine whether criminal activity took place, when you know that there was a finite time where those payments were made?

So you're going to look at these records. It's just the investigation. It's not the prosecution yet.

CAVUTO: I understand.

COLWIN: When it gets up to the U.S. Supreme Court, yes, there is precedent that says that you can't criminally charged a president. But we're not talking about a criminal charge.

We're talking about a criminal investigation. We're not discussing whether there are going to be charges levied yet. So if I were to guess what the Supreme Court will rule, they will probably say, right now, it's an investigation. It's not a criminal prosecution. You're not above that.

And there's already history where presidents...

CAVUTO: So, the president would have to hand them in?

COLWIN: The president may be...

(CROSSTALK)

CAVUTO: We do know the Supreme Court did unanimously tell Richard Nixon, you got to hand over those tapes.

COLWIN: Exactly.

CAVUTO: Was it the same rationale?

COLWIN: Well, then it was also criminal activity, not criminal prosecution.

So we have that. We also have -- with President Clinton, there was also subpoenas that had been at least litigated. And, at some point, President Clinton said, fine, I will give over -- there were some records that needed to be discussed.

Oh, it wasn't records. Testimony.

So we already have some history of sitting presidents being subjected to subpoena power, whether a subpoena for testimony, subpoena for records.

If I were a betting person, the records will some day, during the time of this presidency, be disclosed.

CAVUTO: In other words, if they went to Cyrus Vance Jr.'s Southern District court in New York, someone would leak that out?

And isn't that really what -- I don't want to be a political cynic about it. Isn't that what this is all about?

COLWIN: You raise a great point. We know that grand juries are confidential.

CAVUTO: Absolutely.

COLWIN: They're not -- the information, the testimony is not to be disseminated publicly.

Could it be released and leaked? Has it been done in the past? There have been reports of that.

CAVUTO: Well, I think of things like the Pentagon Papers and other things, Daniel Ellsberg's files and all that.

COLWIN: Right. So...

CAVUTO: I guess I'd like to know where this goes, because that -- I remember hearing from a lot of people long before the Mueller report came out that what was going on in the Southern District would be far more of a headache for the president.

Do you agree with that?

COLWIN: That's where I practice. I mean, I love those judges in the Southern District. I think they're phenomenal judges. They have lifetime appointments. They are above the politics.

Frankly, I think that he would get a fair shake in federal court, I would say so much in state court, but that's only been my experience. Maybe other judges would -- other...

(CROSSTALK)

COLWIN: Those practitioners...

(CROSSTALK)

CAVUTO: So, the court rules, hand them over, Mr. President, what happens if he says, no, I'm not going to hand them over?

COLWIN: He could be held -- I mean, now you're -- now, that's an interesting question, because now would it be contempt of court?

Now, contempt is a criminal...

CAVUTO: That's a high crime and misdemeanor right there.

COLWIN: It could be. It could be.

So, at some point, we're going to know what those records say. That's -- if I were a betting person, at the end of the day, I think the U.S. Supreme Court will rule and look at this the way that we're now analyzing it today.

It's a criminal investigation, not a criminal prosecution.

CAVUTO: Wow. Amazing.

All right, always good seeing you, Mercedes. Thank you very, very much, Mercedes Colwin, attorney extraordinaire.

COLWIN: Great to see you.

CAVUTO: All right, LeBron James, basketball player extraordinaire, he might want to win an NBA championship, but tonight, tonight, he might want to win over protesters not too pleased with his views on China.

(COMMERCIAL BREAK)

CAVUTO: All right.

If you think it got bad for LeBron James and the NBA in China, it could get worse, because right here in the U.S. of A, the NBA starts its season tonight, including the aforementioned LeBron James.

Jonathan Hunt in Los Angeles on all that.

Hey, Jonathan.

JONATHAN HUNT, CORRESPONDENT: Hey, Neil. Good to see you.

The NBA would prefer tonight was focused on passing and points, rather than politics and protest, but it seems they may not get their wish. The tweet that was heard around the world, Houston Rockets general manager Daryl Morey expressing support for pro-democracy activists in Hong Kong, now threatens to become the story at several season openers, including here in L.A., where the Lakers open against the Clippers at Staples Center, with LeBron James having been drawn into the controversy after appearing to criticize Morey for speaking out.

(BEGIN VIDEO CLIP)

LEBRON JAMES, LOS ANGELES LAKERS: I believe he wasn't educated on the situation at hand. And he spoke. And so many people could have been harmed.

(END VIDEO CLIP)

HUNT: Now, Morey's tweet, of course, came as the Lakers were set to play the Brooklyn Nets in two preseason games in China.

And the Chinese government reacted furiously, shutting down TV coverage of the games and ordering billboards to be pulled down, while almost every Chinese company that partners with the NBA there pulled out of those partnerships.

And the NBA commissioner, Adam Silver, was left trying to thread the needle of standing by the league's free speech tradition, while at the same time apologizing to the Chinese government, which effectively controls billions of dollars in potential income for the NBA.

And a protest movement began gathering pace at preseason games here. First, fans wearing pro Hong Kong shorts were thrown out of a Sixers game. Then around 150 protesters turned up at a Brooklyn Nets game last Friday.

The movement centering on slogans on T-shirts, on the basis that the NBA won't allow fans to hold signs, but can't police what they were.

So, tonight, Neil, there is particular nervousness among NBA officials over well-organized protests in Toronto and here in L.A. The question, will dunking or democracy be the story of the night, Neil?

CAVUTO: Oh, I see what you did there.

Thank you, my friend, Jonathan Hunt, great reporting, as usual.

HUNT: Sure.

CAVUTO: So, is this China problem going to be an NBA problem, and maybe for a long time, maybe the entire season?

We got Kennedy here. We got Mike Gunzelman here.

Gunz, what do you think?

KENNEDY, FOX BUSINESS NETWORK CORRESPONDENT: Hi.

MIKE GUNZELMAN, INTERNET RADIO HOST: I think, initially, it's going to be something, especially against LeBron James.

I mean, the bottom line is, a lot of people, especially Americans, are mad and upset about this, that the Chinese are telling a company or corporation or sports entity that, listen, if you criticize us, we are going to go after you.

And I think that Americans feel that that's wrong, that that shouldn't be allowed. But are they going to protest every single game? I don't see it happening as much as it did with the NFL when they started taking a knee, et cetera.

That was more so with the flag, patriotism, against the police, against the military, against our brave soldiers. This, I don't think has as much of a direct effect as the flag did or at least protests or riots or your own local police force did when you went against the flag.

CAVUTO: Right.

Kennedy, what do you think?

KENNEDY: I actually disagree with you. I think it has much more direct effect.

And if there's one thing that resonates with Americans, it is freedom. And they understand what people are fighting in the streets for in Hong Kong. It is to preserve their rights, and not to give them over to the communist Chinese, who are trying to squash free speech in this country and abroad.

And, unfortunately, they have found helpful tools in people like LeBron James. Quentin Tarantino talked about this on my show last night on the FOX Business Network. It's Monday through Thursday at 9:00 p.m.

CAVUTO: Yes, if you don't get it, you should demand. Sure. Sure.

KENNEDY: You should demand it, absolutely.

CAVUTO: It's a very good show.

KENNEDY: Quentin Tarantino has stood up to Chinese censors, saying, you're not going to change a frame of my film to fit your authoritarian whims.

I wish the NBA had been so bold and brave.

CAVUTO: What were they angered at, the portrayal of Bruce Lee in the movie? Was that it?

KENNEDY: Yes.

It was Bruce Lee's daughter appealed to the communist government.

CAVUTO: OK. And he said, to hell with you?

KENNEDY: He has final cut rights. He can do whatever he wants with his film here or there or anywhere.

CAVUTO: OK.

KENNEDY: The point is, we love freedom.

And when you're on the rational side of politics, you don't go to the fun debates because you think people there are kind of idiotic. But this is actually a fun one, because you are fighting for something. And you are thumbing your nose at a bunch of oppressive overreactors who are trying to steal our stuff and squash our freedom.

CAVUTO: But look at how the fans react. They didn't have any problem when these guys were skipping out on trips to meet the president, right, or dissing the White House. Now they're making a big issue of this.

I know a little different here, but they seem to have different standards here.

GUNZELMAN: Well, and I agree with you.

Listen, I was here the other week saying...

CAVUTO: I think you're afraid of what she said because she disagreed with you.

KENNEDY: No, no, no, I agree with the fact that, listen...

CAVUTO: But she came right out the gate and said, I disagree entirely.

(LAUGHTER)

(CROSSTALK)

GUNZELMAN: But LeBron James, I mean, should be criticized.

CAVUTO: Right.

GUNZELMAN: I mean, listen, he sold out. He sold out. He's got a $1 billion contract, lifetime guaranteed, with Nike.

CAVUTO: But they were fine with him when he was dissing the president and the White House, right?

GUNZELMAN: Which is he -- which is why it's only convenient when it matters to him. And I think that's why nobody really has faith.

He is self-centered, et cetera, which is why I think he should be protested. But the NBA is supposed to be this woke league. Should the average American be upset about this? Absolutely. You have -- we're giving into the Chinese, all right?

The same LeBron James...

CAVUTO: Well, they wouldn't be the first enterprise that has, right?

KENNEDY: OK. No, absolutely not.

And the NBA...

CAVUTO: And you're free to be a weenie, right? You're free to cave go pressure.

KENNEDY: I hope so, Neil. That is that is what I base my career on. And thank you very much for pointing that out.

(LAUGHTER)

KENNEDY: What they're doing, though, is they're passing out in Toronto and in Los Angeles, where the Clippers are meeting the Lakers, they're passing out "Free Hong Kong" T-shirts, because the league and the teams can confiscate political signs.

It is -- they're within their right to do that, but they cannot take your clothes. So they are passing out thousands and thousands of "Free Hong Kong" T-shirts.

CAVUTO: Is that right?

What if China sees that and says, that's it, you're out of here?

KENNEDY: Good. I hope they do. I hope they see it. And I hope everyone in China sees it.

I hope it is one message that they cannot snuff in that country, because even companies like Google, with their Dragonfly program, they crafted a way for China to shut down speech in their country.

CAVUTO: I wonder how the NBA would react in that? Because China is going to act up if this happens.

GUNZELMAN: Oh, absolutely.

Well, there was a report that they were pressuring Adam Silver to fire Daryl Morey, who's the one that initially sent that tweet.

CAVUTO: Right. Right. Right.

GUNZELMAN: So that's the thing.

And that's when the American people I think will stand up even more, being like, no, we're not having China going into here and allowing people to lose their jobs or not be able to express ourselves.

CAVUTO: What if we call their bluff in China and said, all right, go with the European league, go with your own league?

GUNZELMAN: That's what I said initially.

I said, listen, all right, China doesn't want the NBA?

CAVUTO: Oh, that wasn't just my idea? Others thought of it.

GUNZELMAN: I probably got it from you.

KENNEDY: Neil, it was a great idea.

GUNZELMAN: Bottom line is, 300 million people play basketball in China.

CAVUTO: Is that right?

KENNEDY: The NBA and China just made a half-a-billion-dollar agreement two years ago to enhance basketball. Money, sales, that's what it's all about.

But, hey, let's protest. I'm all about the protest. Will it last all season? Probably not.

KENNEDY: If you're in L.A., take Metro Rail. Go to Staples. Wear one of those shirts. Get on TV. I will love you for life.

CAVUTO: Wow.

Quick question. This is basketball?

(LAUGHTER)

CAVUTO: Got it.

All right, we have got a lot more coming up, including the fallout. Talk about bouncing fortunes here. What's going on with trade? Are we going to see trade or not?

After this.

(COMMERCIAL BREAK)

CAVUTO: I want you to look at this.

Biogen shares up north of 26 percent today, because it might -- just might -- have a potential cure or treatment for Alzheimer's. And that has got a lot of people excited, including investors.

More after this.

(COMMERCIAL BREAK)

CAVUTO: You know, a lot of companies are blaming what's going on in the trade uncertainty in the world for what could be disappointing earnings.

UBS the latest to say -- this is the big investment bank -- hinting that that was a big reason for that. Sometimes, I could see those who have operations directly in China, ship stuff there, don't ship stuff there, get factories and that.

I don't know. I just think this sometimes can be overkill.

Erin Gibbs is with us, investor extraordinaire.

That's where I have a problem, like, delineating how a UBS could be exposed vs. other names that actually have operations and significant exposure.

ERIN GIBBS, GIBBS WEALTH MANAGEMENT: Yes, and it's tough.

And UBS, their excuse that it was from trade wars is just ridiculous. I mean...

CAVUTO: Said that it affected trading volume because of this.

GIBBS: Yes.

And when, in fact, trading volume wasn't even the area where they really had the big hit. It was really consumer and corporate banking, as well as investment banking.

And so you might say, oh, investors were afraid and they didn't want to do as much M&A activity. But when you look at UBS, it's a Swiss bank; 25 percent of their revenues come from Switzerland, another 20 percent...

(CROSSTALK)

CAVUTO: Where they have negative interest rates.

GIBBS: Where they have negative interest rates, and they're continually declining.

So it's really about net income going down. And it's really about their backyard. It's about Europe and Switzerland and the lack of M&A activity in Europe, not because of fears of a trade war. It's about bad economy.

(CROSSTALK)

CAVUTO: Right, that I think a lot of companies -- and the president touched on this a few weeks ago -- might use the trade situation as an excuse.

I had certain reason to believe that a good many, it affects their capital spending plans, their hiring, if it's uncertain and you're a global -- I get that.

GIBBS: Yes.

CAVUTO: But I feel this is like when I used to cover in my reporter days retailers who would blame a weak quarter on the weather, but never credit a good quarter on, oh, yes, a lot of sunshine, you know?

GIBBS: Yes.

And, unfortunately, it really takes a lot of delving into the details. And it's clear from reading UBS' report that it had nothing to do with consumer sentiment that...

CAVUTO: Then what about all these others who worry or are scaling back their plans because we don't know how this is all going to work out? Hasbro comes to mind.

GIBBS: Hasbro really just went through -- you read the transcript and you just feel exhausted reading about it.

They went through -- you forgot there were four times that there were threats of tariffs going into effect, and then three of those four were postponed. So Hasbro was going through these fire drills of getting expedited shipping, warehousing extra stock.

And that, you can really understand. And we all know expedited shipping costs extra money, even if you're clicking on your Amazon.

CAVUTO: Absolutely. Right.

GIBBS: So you can see very clearly that they had massive increases in costs. They were running one fire drill after another in third quarter.

And they have a very specific plan in 2020 to really move their supply chain out of China.

CAVUTO: But there were a lot of guys who were still caught flat-footed there and exposed to it.

Does that change with this phase one deal? Because most of it is a commitment on the part of the Chinese to buy agricultural products. But what else am I missing?

GIBBS: I think it's the fact that third quarter, specifically, we had a lot of proposed tariffs that went in effect that eventually got delayed.

But, of course, at the time, you don't know they're going to be delayed. And so, as you're scrambling to basically get the shipments into the U.S. earlier before that, like, proposed date comes in, that enhanced a lot of just extra work and inefficiencies, extra costs.

CAVUTO: So, let me ask you. As someone who watches the investor and the investment community and average people and their competence, do you think this will affect individual American shopping plans, that they -- oh, I don't know how this trade thing is working out?

I don't think they think that way.

GIBBS: No.

I think it's really not going to be until you see a big increase in prices. And that could certainly be a shift, where consumers say, OK, I'm just not going to buy it. I will wait until next year, or maybe I will buy one, instead of two.

CAVUTO: But do you see that even happening?

GIBBS: Well, we haven't seeing a big increase in the end consumer prices yet. We haven't seen that...

(CROSSTALK)

CAVUTO: A lot of American distributors, retailers suck that up to avoid passing it on, right?

GIBBS: And some of it has been delayed until December 15.

CAVUTO: Right.

GIBBS: So the holiday season is what -- at least from an investment standpoint, is what we're watching, is, are those sales going to be hit? Are people still didn't go out and do that Christmas holiday shopping?

Or are they going to pare back?

CAVUTO: What do you think?

GIBBS: Right now, things look -- still look very healthy. We're seeing good wage growth. And we haven't seen a big jump in prices so far.

CAVUTO: All right, we will watch closely.

Erin Gibbs, thank you, Gibbs Wealth Management, much, much more, good read of the markets, very prescient read, too.

We got this big closed-door testimony on Capitol Hill. A lot of Democrats are disturbed by what they're hearing out of our acting ambassador to Ukraine.

But a lot of Republicans are saying, we would be too, if you would let us in on this -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, they were waiting for this one, the acting ambassador to Ukraine testifying today in the impeachment inquiry.

Democrats are already calling his testimony disturbing.

Hillary Vaughn on Capitol Hill with the latest.

Hey, Hillary.

HILLARY VAUGHN, CORRESPONDENT: Hey, Neil.

Well, President Trump's acting Ukraine Ambassador Bill Taylor is still meeting with lawmakers behind closed doors. The Washington Post is reporting that Taylor told lawmakers that the E.U. ambassador, Gordon Sondland, told him that President Trump wanted Ukraine to publicly announce an investigation into the Ukrainian energy company Burisma and also Ukrainian interference in the 2016 election before handing off military aid to the country.

But sources tell FOX News that Taylor admitted he had no firsthand knowledge or evidence that Ukraine officials knew that military aid had been suspended at the time of the July 25 phone call between President Trump and Zelensky.

That information would favor the White House defense that there was no quid pro quo, if Ukraine didn't know about the delay -- Neil.

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

Well, Republicans aren't keen on this whole process, complaining they're being shut out by Democrats over getting ahold of transcripts from the impeachment inquiry, even participating in questioning like the one today of Bill Taylor.

So what's really going on?

Let's get a read from FOX News Capitol Hill producer Chad Pergram.

Chad, they feel that they're odd man out in this, that they can't really participate in this. Is that true?

CHAD PERGRAM, SENIOR CAPITOL HILL PRODUCER: Not completely.

Republicans are in the room for every interview. The problem they have is they can't report out what is said, unless they leak the transcripts.

We're going to get those transcripts publicized at some point, maybe weeks or even months away. But, right now, because this is in private, Republicans are crowing about the process.

I noticed a pivot the other day, Neil, from Republicans, where they started to call where the Intelligence Committee is located -- and you got to remember this is down in the sub-basement of the Capitol Visitor Center. It's down there because it's a secure area, what we call a SCIF here on Capitol Hill, a secure intelligence facility. That's the abbreviation.

And they have been calling it a bunker. That's part of the pivot, part of the spin on behalf of Republicans, to say, wait a minute, Democrats are abusing the process.

Now, where Republicans do have a point here is that Republican -- Democrats are trying to say, all right, we're going through this investigation our own, and we're not actually conducting hearings. We're not actually going through and releasing the transcripts.

The Democrats are saying that they're acting as kind of an independent counsel or special prosecutor, like what you had with Archibald Cox in Watergate, much like what you had with Ken Starr in 1998 and 1999 with President Clinton.

So Democrats are saying they're doing that research. That's the dispute now between Democrats and Republicans about process.

And there was a very interesting moment today on Capitol Hill when I asked the Senate majority leader, Mitch McConnell. I said, is it hard for Republicans to defend the president and are they reluctant to do so or afraid to do so or come out and criticize the president, for fear they get their head taken off?

And he immediately pivoted to process. And I said, wait a minute, that's the problem here.

Some Republicans on Capitol Hill are having a problem defending the president, but they don't want to do it in public.

CAVUTO: Oh, I thought you were throwing to a bite there. I apologize.

PERGRAM: No.

CAVUTO: So let me ask you something here.

When Republicans are in on this, and they're in on the whole thing, so they're allowed to question in this case Mr. Taylor as well, right?

PERGRAM: Right.

Now, sometimes, it's limited to counsel from the committee or members from that committee. And mostly what we have been seeing here is the Intelligence Committee that's running the show on this. Members from the House Oversight Committee, and also from the Foreign Affairs Committee are in the room.

But what we have seen in some of these previous interviews is that it's restricted to the Intelligence Committee. And that's why you have had some Republicans say, well, wait a minute, we can't have any member go down there. There were some instances last week and the week before were members who were not part of those committees, Matt Gaetz from the Judiciary Committee, tried to sit in on the meeting, and he wasn't allowed because he's not a member of one of the three committees of jurisdiction.

That's where Republicans are complaining about the process and say the Democrats should take a floor vote to codify this, so everybody knows what the rules are. And until you do that, nobody knows exactly what the rules are, Neil.

CAVUTO: All right.

So if Taylor is reportedly saying that the president was withholding military aid to Ukraine in order to force this investigation of Joe Biden, he goes on to say that it was crazy to withhold security assistance for help with a political campaign and conveyed that to others.

PERGRAM: Right.

CAVUTO: What I'm asking you, I mean, these are political affairs, impeachment, as you remind me, but is that a high crime and a misdemeanor? Does it -- does it rise to the level at which the Democrats say, yes, it is?

PERGRAM: Well, Democrats will start with the idea of obstruction of Congress, the idea that they have not been able to get some of the witness testimony and some of the documents. So they could go back and say, this is one of those articles of impeachment.

And if you go to article three, the three of the five which were considered by the House Judiciary Committee in 1974 regarding Richard Nixon, article three dealt with obstruction of Congress.

So Democrats feel like they are on the strongest impeachment turf with that. The other thing is this question of a quid pro quo. And this is where, with Taylor, how much validity was in that text message he was having with Gordon Sondland, the U.S. ambassador to the European Union? Did he believe it, and did he have firsthand knowledge of what the president actually thought?

That is the biggest question right now. And what we have been led to believe, is that he didn't have direct custody of this. One of the most interesting comments I have heard today about this testimony came from Mike Quigley. He's a Democrat from Illinois. He's a member of the Intelligence Committee.

He quoted Alfred Hitchcock. And he said, what did Alfred Hitchcock say? Movies are like life without the boring parts. This is testimony without the boring parts -- Neil.

CAVUTO: And then a bunch of birds just flew out. We have got nowhere idea what that meant.

(LAUGHTER)

PERGRAM: A horror movie.

CAVUTO: Yes, exactly.

All right, Chad, thank you very much.

PERGRAM: Thank you.

CAVUTO: You're the best, Chad Pergram on Capitol Hill here.

In the meantime, there's a new poll on impeachment that could some spell some bad news for Democrats trying to seize this on the campaign trail. Proceed slowly.

(COMMERCIAL BREAK)

CAVUTO: So many polls. This one is very interesting, though, a new poll that looks at just the key battleground states that could show a bump for the president heading into 2020.

It's a little over half the voters in key states like Pennsylvania, Michigan, Florida, North Carolina, Wisconsin, Arizona, who oppose impeaching the president and removing in from office. Those are big electoral states, and many of them the very states that the president won to tip it back into the Republican column.

The Federalist's Emily Jashinsky on all this.

Emily, what do you make of it?

EMILY JASHINSKY, THE FEDERALIST: Yes, it's interesting.

I mean, of course, we expect these battleground states to be divided. They have been divided since 2016. But I do think it's interesting, especially to note that Democrats are kind of working with something -- they're pulling at threads, and they will continue to pull at threads about something that is already known, right?

So we have that phone call. It's been known in public.

CAVUTO: Right.

JASHINSKY: And if this is where the numbers are right now, how much can Democrats continue to move the needle? And will support for the inquiry vs. impeachment -- because that is a very key distinction that we have seen show up in polling for the past few weeks, where you have people in these battleground states they may support the inquiry, but that doesn't mean they support impeachment.

Will support for the inquiry itself wane as they continue to pull at those threads that lead back to what's already been out in the open?

CAVUTO: As you have reminded me in the past, this isn't a national election, as much as a series of states toward gathering the electoral vote.

And so, sometimes, when we focus on these general polls that look nationally at American sentiment toward impeachment and show about half open to that, we forget the fact that it's a state-by-state contest. And in these battleground states, that is not the prevailing view.

JASHINSKY: Yes.

And it's interesting, because I think Republicans, especially I think some Republicans in the Beltway, need to be careful to look at these polls and say, wow, in some states like Pennsylvania, like Wisconsin, where the president had pulled out surprise victories in 2016, support for impeachment itself is still around 40 percent, 43 percent, according to this poll.

CAVUTO: Right.

JASHINSKY: That is a huge chunk of voters.

And so while it may not be enough to help Democrats carry those states, that's still -- I mean, the division in those states is really deep. I mean, this is a question of impeachment. This isn't a question of whether you like the guy or you don't. This is impeachment.

(CROSSTALK)

CAVUTO: No.

And it's interesting too. It cuts -- obviously, overwhelming number of Democrats are for it, the overwhelming number of Republicans are against it. The independents that were apparently proportionately polled in these battleground states were -- cut the difference, and a little over half didn't want to pursue it.

But I'm wondering too, Emily, about the course of this. For example, let's say the House goes ahead. We hear Steny Hoyer and others say, wrap it up for the impeachment process, at least in the House, presumably for a vote, by the end of the year.

That then would mean it goes to the Senate for trial, again, if they impeach the president, which is a leap at this point. Then you have so many of these candidates running for president going into the Iowa caucuses, certainly New Hampshire, and after that South Carolina and all the Super Tuesday states.

They're senators. They would have to be participating in that. So all of a sudden it boomerangs back on them. What do you think?

JASHINSKY: Well, yes.

And you have to imagine whether that's playing into Democrats' calculations here, because that's a really big deal. It may seem like a small thing, because people can jump on planes and get back and forth quickly nowadays, but it actually -- I mean, the need to be in Washington, D.C., to be present for those things is huge.

And on top of that, Republicans control the Senate. So these Democrats would be participating in hearings that are controlled by Republicans, as opposed to what we're seeing in the House now, which can make a really big difference in terms of who's testifying, how that -- how those hearings are being run.

And so this may not actually be -- even when you look at the Democratic base during a primary -- as helpful to them as they may have initially thought.

And Nancy Pelosi is very smart. She has all of these things in mind. This is all factoring into their decision. But there is an open question as to whether they got ahead of their skis a bit.

CAVUTO: Yes.

I do wonder too about the timing of it all, to your point as well, that it will ultimately come to an impeachment vote by the end of the year. Do you think, at least in the House, it will, the Senate stuff notwithstanding?

JASHINSKY: I mean, I go back and forth on this, because I think we have seen Nancy Pelosi be so careful.

CAVUTO: Yes.

JASHINSKY: I tend to actually think there won't be a vote in the House by the end of the year.

CAVUTO: Wow.

JASHINSKY: This timeline is so tight. And I do think the...

CAVUTO: It depends on what they get out of all this testimony too. We don't know.

JASHINSKY: Exactly. Exactly.

CAVUTO: Because they're not sharing it with anyone.

JASHINSKY: Exactly.

CAVUTO: Emily, thank you very, very much, Emily Jashinsky following all of this with The Federalist in Washington, D.C., where it will all be going down one or the way.

JASHINSKY: Thanks, Neil.

CAVUTO: Meanwhile, Lori Loughlin is facing some new charges and reports she might be looking to strike a deal in that college admissions scandal.

Some others have been added to that fingering by the feds -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, she's not alone.

Lori Loughlin now facing additional charges on the college admissions scandal. And, as I said, there are others who have been roped in as well.

Molly Line has the latest right now from Boston.

Hey, Molly.

MOLLY LINE, CORRESPONDENT: Hey, Neil.

About a dozen parents are actually facing these new additional charges, embroiled in the college admissions scandal. As you mentioned, Lori Loughlin, her fashion designer husband, Mossimo Giannulli, among those in the group.

Specifically, they're facing a new bribery-related count. Loughlin and Giannulli, along with nine of the other parents in the case, that have not made this deal with prosecutors, they're alleged to have tried to have bribed employees of the University of Southern California to facilitate their children's admission.

They now face this additional charge of conspiracy to commit federal programs bribery count. That provides for a sentence of up to five years in prison. The announcement of new charges coming just a day after USC officials confirmed that the daughters of Loughlin and Giannulli no longer attend the school, writing in a statement that Olivia Jade Giannulli and Isabella Rose Giannulli are not currently enrolled.

Officials providing no additional information about that, citing student privacy laws.

Now, defendant John Wilson of Lynnfield, Massachusetts, he's the founder and CEO of a private equity real estate development firm, also got hit with bribery charges related to his efforts to get his kids into Harvard and Stanford University. He and three others also facing some additional accounts related to wire fraud.

These new charges tack on to other conspiracy counts that these parents are facing related to fraud and money laundering. Thus far, 10 parents have been sentenced in total, but these are the parents that confessed early. They showed remorse. They made deals with the government.

All but one were given prison time ranging from two weeks to five months. Tomorrow, the final parent that is essentially part of that first group that made the early deal with prosecutors will go before the judge for her sentencing.

And there is much to watch as this case goes forward and as people, some others, are inching closer to trial -- Neil.

CAVUTO: So in the case of Lori Loughlin, right, I mean, you hear reports, oh, it could be years, decades that she's in jail for that.

What are they basing that on, Molly?

LINE: Well, they're basing it on the maximum sentence for the potential charges.

So that conspiracy to commit money laundering charge, the conspiracy to commit mail fraud or services mail fraud, those are 20 years each max. That is not what we have seen those that have been sentenced so far getting.

Now, though, you're seeing prosecutors hit some of these defendants that have yet to make a deal that are inching closer to trial with these various other charges. And they have their own time potentially tacked on as well

Specifically, that count that the nine parents related to USC are facing, that has an additional potential up to five years.

So, when you add it all up, it could potentially mean a lot of prison time. Thus far, the judge in the case, Judge Talwani, has not sentenced anyone to many, many years in prison.

But it is worth noting that these other defendants that are moving forward are going before a different judge.

CAVUTO: Wow.

LINE: And judges have a lot of power in the system. So we will see what happens.

CAVUTO: All right, Molly Line, great reporting, as usual -- Molly Line on all of this out of Boston.

And all to get their kids into those elite schools.

Here comes "The Five."

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