Mixed messages on US-China trade talks amid tariff dispute

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Mixed messages on US-China talks amid tariff dispute

President Trump's negotiating style raises business uncertainty; reaction and analysis from the 'Special Report' All-Stars.

This is a rush transcript from "Special Report," August 27, 2019. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT: I see an alert, or as you would call it, breaking news. The vice chairman of China came out that he wants to see a deal made.

UNIDENTIFIED MALE: It appears that that call might never have happened.

STEVEN MNUCHIN, TREASURY SECRETARY: There were discussions that went back and forth. Let's just leave it at that.

TRUMP: Last night, and before last night. Numerous. They want to get something done.

UNIDENTIFIED FEMALE: Did they call, did we not call, did we talk on the phone?

TRUMP: We've had many calls, not just one. This isn't one. And these are high-level calls. They want to make a deal.

UNIDENTIFIED MALE: If we can't even agree on whether a phone call took place, how are we possibly going to get a trade negotiation or a trade agreement together?

(END VIDEO CLIP)

BRET BAIER, HOST: The who, what, when about phone calls between the U.S. and China, it is unsettling, obviously, for the market. Today, the market, the Dow started out down. We measure these things day to day. There's a lot of different variables, obviously, with the markets. But over all changes since the president took office, it's important to step back and look 30,000 feet, real GDP growth is down. And a lot of people blame specifically this China trade back and forth for really the slowdown that they are seeing here. Unemployment rate also down, consumer confidence is up significantly, and average hourly earnings are up despite some criticism that they wouldn't be. They are.

Let's bring in our panel, Matthew Continetti, editor in chief of the "Washington Free Beacon," Charles Lane, opinion writer for "The Washington Post," and FOX News contributor Steve Hayes.

Matthew, we are now in the second day of digesting post G7 and really the fallout from this China trade war back and forth.

MATTHEW CONTINETTI, EDITOR IN CHIEF, "WASHINGTON FREE BEACON": I don't think anyone should be optimistic, Bret, that the trade war will end any time soon, President Trump is asking the Chinese to pay a price they just can't pay, and that is liberalizing their economy, ending the state owned enterprises, ending the forced technology transfer, ending the nontariff trade barriers that China has. And if China were to do that, then they were to threaten the CCCP's grip on power. So in the midst of protests in Hong Kong, upcoming anniversary of the Communist Party takeover of China, and then the Taiwan elections in January, we are in for a long road ahead.

BAIER: On FOX business today on Maria's show, John Hilsenrath with the "Wall Street Journal" had this to say about what businesses are looking at.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What I think what really matters is, how is it playing out in boardrooms and executive suites, because the way this rebounds back on the president negatively, if it does, is if companies starts saying I can't invest more in this environment, or I don't want to increase my hiring when there's so much uncertainty, then it starts to affect the economy and potentially hurts the president.

(END VIDEO CLIP)

BAIER: Looking at the economy and how it relates to the president, the Real Clear Politics average of polls on the president's approval on the economy, and there you see approve 51.4 percent. Chuck, he doesn't like some polls. This one he probably likes. And the question is whether there is that negative rebound the longer this goes.

CHARLES LANE, OPINION WRITER, "WASHINGTON POST": I agree with Matt, and I also would add that I'm not sure President Trump really wants a deal. And Peter Navarro, his top adviser on China, seemed more and more to actually see a break with China as the strategic goal, a decoupling of the U.S. and the Chinese economies.

And the irony here is there's actually -- I don't know about for a decoupling, but for a much, much tougher posture on China, there's quite a bit of support in the United States, including in our business community. What has got people troubled and uncertain and disinclined to invest is the conduct of the policy, is the erratic nature of the president's pronouncements that just what you were showing, he doesn't seem to even know if there was a phone call or who made it. He refers to the vice chairman on China, whoever that is. And it raises big questions about his competence with which he is pursuing this.

And so it's not so much that there is a trade war per see or a confrontation with China. Some people thought --

BAIER: There is.

LANE: Yes, but some people thought that was overdue. It's whether it is being conducted with any strategic coherence that is really what's creating uncertainty that people are reacting to.

BAIER: Steve?

STEVE HAYES, CONTRIBUTOR: Yes, and this is an area where the presidents volatility has obvious real term economic effects. You're seeing people, you've seen people over the years, whether you're talking about steel producers, whether you're talking about manufacturers, whether you're talking about farmers, who are seeing this in their pocket book. This is not a theoretical war, these aren't theoretical problems. It's affecting real people, and in many cases people that the president has promised to help.

I think the broader question of volatility, volatility and President Trump, that's not anything new. You just look at the rest of the stuff that happened this past weekend, whether it's picking fights with Denmark, whether it's retweeting conspiracy theorists, whether it's not having a straight story. That part I think people have come to expect from the president even if this past weekend was a little crazier than it usually is.

But I think the real problem on the trade war is that the president and his team are now making arguments that contradict arguments they have made for years. American consumers won't really will be affected, this isn't a big deal. And then when the president decides to hold off on new tariffs, they celebrate this as a gift to the American consumer. Those two things are in pretty obvious tension. You don't have to know a whole lot about how trade wars are conducted to know that those things don't agree with one another.

BAIER: On the flipside, arguing the other way, the president said this is how he negotiates. Yes, it's chaotic. But the Chinese don't know what he's going with next, and there hasn't been a president who has pushed back on China like this one has.

CONTINETTI: I think on two big issues, the rise of China and also the concentration of power in Silicon Valley, President Trump has forced the conversation, forced Washington to take attention and to pay attention.

I would say this, though. When talking about a global economy which is the only closed economy is the global economy, there are a lot of different pressures on this global economy. It's not just the trade war with China. We also have a slowdown in Germany. We also have the possibility of a hard Brexit coming up at the end of October. And we also have political and economic disruption in Italy. So there are a lot of different factors that could tip the global economy into a downturn, and that could hurt President Trump in the long run.

BAIER: Meanwhile, Secretary of State Pompeo gave a speech today, largely ignored. But it was the American Legion speech about Americanism.

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: Americanism, it means telling the truth about the challenges we face. Look, this administration didn't pretend that the Islamic Republic of Iran was a responsible actor in the Middle East. We called out China's bad behavior on trade and on national security. We recognized, we recognized that North Korea's rogue behavior could not be ignored.

(END VIDEO CLIP)

BAIER: On all those fronts, he's right, they did call it out. But on all those fronts there is still a question mark about what comes next, on China, on Iran, that Iran says it's not going to sit down with President Trump now, and on North Korea as they launch missiles and the prospect of a third summit still hangs in the ether.

LANE: And on all three of them there is this strange kind of dual quality to the way the president talks about these hostile powers, China, Iran, North Korea. Every other day, they are the enemy, and then he says Kim Jong-un is a guy I love, and we get a terrific letter from him, and he builds up the legitimacy of someone like that. On one day he's saying Iran is a rogue state and we've got to crack down. But hey, I'd be happy to sit down with the president of Iran, something Barack Obama never dared to propose. And so people are never quite sure exactly whether he understands the role of the United States in conferring legitimacy on the same regimes that he's attacking.

BAIER: But on Iran and on China, I mentioned this last night, both of those places are feeling hurt based on what the U.S. is doing. And whether that hurt leads to something else, we don't know yet.

HAYES: I think the president deserves credit for calling Iran on its behavior. We had eight years under Barack Obama were they pretended that Iran was a friend and waiting. It wasn't. Iran is an enemy. They are a determined enemy. They're a foe.

I would say one thing that wasn't in that clip from Mike Pompeo was the administration's words, rhetoric, and I think policy coming on Afghanistan, where they are downplaying the threat from the Taliban and not speaking the truth about the threats emanating from jihadists in Afghanistan and the Taliban specifically.

BAIER: Because the president wants to leave.

HAYES: He does.

BAIER: Panel, thanks.

Next up, a major ruling about opioids, what that means for drug makers, consumers. Is it the tip of the iceberg?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JUDGE THAD BALKMAN, CLEVELAND COUNTY, OKLAHOMA DISTRICT COURT: Janssen and Johnson & Johnson's misleading marketing and promotion of opioids created a nuisance.

SABRINA STRONG, JOHNSON &JOHNSON ATTORNEY: Johnson & Johnson did not cause the opiate abuse crisis here in Oklahoma or anywhere in this country. We have many strong grounds for appeal, and we intend to pursue those vigorously.

MIKE HUNTER, R-OK, ATTORNEY GENERAL: I'm asking the CEO of that company to get his checkbook out and write this check so that we can start again addressing the problems they have created in our state.

(END VIDEO CLIP)

BAIER: A $572 million check, Oklahoma's attorney general there. There are 48 states that now have sued opioid manufacturers and distributors. But take a look at these stats really quickly. The crisis from 99 to 2017, more than 400,000 people have died from an overdose involving some type of opioid. On average, 130 people die every day from an opioid overdose, 2.1 million people in the U.S. suffer from an opioid use disorder. The stats are staggering, and if you look at five states with the highest rates of opioid overdose deaths, this is back in 2017, you can see West Virginia, Ohio, Washington D.C., New Hampshire, and Maryland.

Back with the panel. Steve, this seriously is a crisis, and the question is whether the Oklahoma case is the tip of the iceberg of these kinds of suits.

HAYES: Yes, the answer is yes. It almost certainly is. I think you have a legal issue here, a moral issue here, and a P.R. issue here. And ironically, I think the latter might drive resolutions to many of these cases because you are looking at these companies who are looking at lengthy lawsuits, lengthy trials, and almost certain culpability in the end given the outcome here.

The real question is how much did the companies know, how much did the families know, the owners know as this crisis was growing? And there are documents that were released in discovery in a trial in Massachusetts related to the the Sackler Family who owns Purdue Pharma, their knowledge of the addictive qualities and the heightened risks with high doses of Oxycontin. Those are the kinds of things I think we can expect to see emerging from these trials. And I think you're going to see the companies and potentially the owners racing to settle them.

BAIER: Chuck?

LANE: I listened to the judge and the lawyer from the pharmaceutical company there, and I found myself thinking in a way they are both right, because it's true that Johnson & Johnson and other companies like it are a big part of this problem, but they're not the only part of this problem. This was a comprehensive failure. The companies got greedy and pushed these drugs. Doctors who should have known better or could have known better overprescribed them. Pharmaceutical distributors are in the mix. The FDA approved these things, probably unwisely.

The big picture here is what we are seeing is very imperfect substitute in retrospect for a lot of things that went wrong when they shouldn't have in the past. And the bottom line is the American people were very, very poorly served by a whole bunch of institutions who should have had their safety front and center.

BAIER: Whenever we do these stories and these panels, Matthew, I get emails and tweets and posts from people who desperately need these drugs as far as handling their pain. So they don't want them to be inaccessible. But this is a major problem that hopefully science is going to advance to be able to help in the prescription of them. But this is probably going to last for a long, long time.

CONTINETTI: When we look at the scale of the crisis, in 2017 along more Americans died of drug overdoses than Americans killed in action in the entirety of the Vietnam War. This is a huge event. And the issue is, as Chuck eloquently put it, where to assess blame? And it's only natural, I think, that you are going to start looking at the people who produced these painkillers. And we're headed toward tobacco two. We're headed toward another master settlement agreement between the states and the drug industry, big Pharma. And my concern is that the monies actually go to prevention and addiction counseling. What we saw with the tobacco settlement, out of the $250 billion that had been paid out between 1998 and 2023, only 22 percent is going to the treatment and prevention. Instead the money goes to state's general funds and its use to help to fix these constrained state budgets. So if we do something similar here, we have to pay a attention to addiction treatment and prevention.

BAIER: Purdue Pharma is considering, or talking about $10 billion to $12 billion of settlements, and we'll see where that goes. Last word.

LANE: I was just going to say, if you have a problem that is so big and you can't pin it on anyone, it's ironic that so many people could have died and no one is accountable, that can't be right. And I think that's the impulse behind these lawsuits.

BAIER: Panel, thank you. When we come back, kids these days.

(COMMERCIAL BREAK)

BAIER: Finally tonight, a lesson in kindness for back to school.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: One act of kindness can change someone's life.

UNIDENTIFIED FEMALE: It can change the world. That's all it takes.

(END VIDEO CLIP)

BAIER: It can. Courtney Moore's son Christian was at his first day of school in Wichita, Kansas, when he noticed another eight-year-old boy, Connor, who was crying. Connor, who is autistic, was overwhelmed with everything going on around them. Christian then took his hand, calmed him down, and walked him inside. Now the boys have an inseparable bond, and that picture and the story went viral, as well it showed. Nice job, Christian.

Thanks for inviting us into your home tonight. That's it for the “Special Report.” Fair, balanced and unafraid. "The Story", hosted by Martha MacCallum, starts right now.

Hey, Martha.

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