SPECIAL REPORT

Trump's talk with the president of Taiwan raises concerns

This is a rush transcript from "Special Report with Bret Baier," December 2, 2016. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT DONALD TRUMP: I put on some of the greatest business people in the world. One of the networks said, why, he put on a billionaire at Commerce. That's because this guy knows how to make money, folks. I'd like to put on a guy that failed all his life, but we don't want that, do we?

We are going to appoint "Mad Dog" Mattis as our secretary of defense.

(APPLAUSE)

TRUMP: But we're not announcing it until Monday, so don't tell anybody. They say he is the closest thing to General George Patton that we have and it's about time.

(APPLAUSE)

(END VIDEO CLIP)

BRET BAIER, ANCHOR: It was a rowdy event last night in Ohio, some teleprompter, some ad lib as you can see there in the announcement of his nominee for Pentagon, retired general James Mattis.

At the Trump Tower today, Senator David Perdue from Georgia, retired Admiral Jay Cohen, former Defense Secretary Bob Gates, former attorney general Pam Bondi, John Bolton, former U.S. ambassador to the U.N. who is up for secretary of state, Senator Heidi Heitkamp, Democrat from North Dakota, and David Malpass, president of Encima Global, economic adviser to Donald Trump.

But perhaps the thing that caught most attention today was a phone call that was read out in the list of phone calls late this afternoon, and that was a phone call between the president-elect and the president of Taiwan. During the discussion they noted the close economic, political, and security ties exist between Taiwan and the United States. President-elect Trump also congratulated President Tsai on becoming president of Taiwan earlier this year.

Well, there's a big dust up there because U.S. leaders don't usually talk to the Taiwanese leaders because of sensitivity with China and what that means for the Asian geopolitical situation.

Let's bring in our panel: Jonathan Swan, national political reporter for The Hill; Leslie Marshall, syndicated talk radio host, and syndicated columnist Charles Krauthammer.

There's a sensitivity here, obviously, Charles, in a non-political correct, say what you say, most people would look at this and say you are making too much of it. But in the State Department world, their hair was on fire probably.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: And in the Chinese world. The Chinese are extremely sensitive about these nuances in diplomacy. They have been at it for 4,000 years. And the rules were laid down by Kissinger and Nixon when they made the opening, and it was that we would be allies of Taiwan but we would have to observe certain rules so that we would not be contradicting the notion that we and the Chinese agreed on at the time that Taiwan is part of China. And once you have communications between the president of the U.S. directly the president of Taiwan, then you are impinging on that.

And it wouldn't really matter. This is politically correct, except for the fact that the Chinese when they get upset can do things, like take over an island here or there or tear up an agreement, or start threatening or do other things that could cause a crisis. So I don't think this is going to cause one. But when he ascends to office, Trump is going to have to be briefed on stuff like this, particularly in the Middle East where there's a code language, where if you say the wrong word, which is ordinary language, like "even-handed," it has a meaning which is not the normal meaning in normal discourse and it could cause a real diplomatic rupture.

BAIER: We saw a readout of a call with the Pakistani prime minister, Leslie, that was really surreal. It kind of went into all the things the president-elect told the Pakistanis in detail. So this part of it, as he is waiting to choose secretary of state, is an important part for this president-elect.

LESLIE MARSHALL, RADIO TALK SHOW HOST: Definitely. And some of you know and some of you don't, I've lived in Pakistan. I know a lot about Pakistan. I know certainly a lot about this prime minister, who is not numero uno for that country. And a lot of people that I know in Pakistan said, what a minute, I thought he is banning us and anybody from our country, yet he's praising us the people of our country and our prime minister.

I think to Charles' point, and this goes with Pakistan, with Taiwan, there are certain rules in place in our government for any president regardless of their party. And many of them are not written rules necessarily. And president-elect Trump doesn't play by rules. And he is going to have to change that to a degree, because it could end up being very dangerous when you are talking about countries like Pakistan and, like Charles said, I would agree 100 percent, when you're talking about Middle Eastern nations.

BAIER: Here is what he said about Mitt Romney, former GOP nominee, who is under consideration for the secretary of state and his meeting with President Obama.

(BEGIN VIDEO CLIP)

TRUMP: He has been very gracious. I hit Mitt pretty hard also before the fact, and so I understand how it all works. But he has been very, very nice. We had dinner the other night. It was great. There was actually good chemistry. It was a really good chemistry with him and also with President Obama. We were supposed to sit down for 10 minutes and we ended up sitting down for an hour and a half keeping everybody waiting. But we had a great talk.

And so I don't know. We will see what happens. We're going to pick our secretary of state. We have some other announcements coming up literally very soon.

(END VIDEO CLIP)

BAIER: One of them, of course, made at the rally that night, last night. Here is the possible secretary of states as we see them right now. It could expand, obviously, Jonathan, beyond this. Some word about looking beyond this. But Mitt Romney, Rudy Giuliani, Senator Bob Corker, David Petraeus and John Bolton, who was at Trump Tower today.

JONATHAN SWAN, THE HILL: I don't think there was any secret why Reince Priebus was at the dinner. He is one of the few to my knowledge, unless there's others who aren't outing themselves who actually supports putting Mitt Romney in there. And this is why it's a fascinating decision because, really, if you look from Steve Bannon to Kellyanne Conway, work your way around Trump's inner circle, none of them are supportive of Mitt Romney. And it's really pence in a very hedged way and Reince in a slightly more way full-throated way supporting him. So if Donald Trump does this, he really would be making an incredibly sort of unilateral, out there decision.

BAIER: Meantime, as you look back at the campaign, there was this event where campaign managers came together. And it got a little heated between the Trump campaign, Kellyanne Conway, and the Hillary Clinton campaign, Jennifer Palmieri. Take a listen.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, TRUMP CAMPAIGN MANAGER: Do you think I ran a campaign where white supremacists had a platform, are you going to look me in the fact and tell me that?

JENNIFER PALMIERI, CLINTON CAMPAIGN: You did. Kellyanne, you did.

CONWAY: Do you think he could have just had a decent message for the white working class voters? Do you think this woman who has nothing in common --

PALMIERI: I'm not saying that's why he won --

CONWAY: The 200 counties that President Obama won and Donald Trump just won, you think that's because of what you just said or because people aren't ready for a woman president, really? How about, it's Hillary Clinton, she doesn't connect with people? How about they have nothing in common with her? How about you had no economic message?

(END VIDEO CLIP)

BAIER: It was like that for a long time, Charles. And there did seem to be a bit of a disconnect with what the Clinton folks thought the problem was.

KRAUTHAMMER: Well, look, every time liberals lose, they accuse the other side of all kinds of isms. That's been going on for 50 years. And at a certain point they run out of steam. You can argue that, yes, there were times when Trump might have allowed sort of going beyond the bounds of what was -- what is tolerable in political speech. But to attribute the loss to racism or an appeal to white supremacy I think is ridiculous.

She didn't even show up in Wisconsin. She lost Wisconsin. There were layer and layers of mistakes that she made. And in the end, the reason she lost is she had nothing to say. She was running because it was her turn. There was no way -- remember from one of the internal messages that were leaked on WikiLeaks, someone said, "What is our message?" This is from inside the campaign.

So she would like to blame it on the basket of deplorables. I don't think that's going to hold up. Yes, you can launch a criticism of some of the things that were happening on the edges of the campaign, but it does not account for the outcome.

BAIER: Leslie, this dustup comes as the party is trying to find itself, the Democratic Party. You have Keith Ellison, who looks like he is having some troubles here as far as the head of the DNC. Howard Dean drops out. A lot of shakeup happening.

MARSHALL: Definitely. I mean, I'm a Democrat and I will gladly say we're a hot mess right now and we need to get ourselves together. And I hope it doesn't take us six years like it did last time around.

The problem is looking at the reality and the facts, and you can't discount what the numbers say. And the numbers say certain people didn't vote -- African-Americans, the youth, the Bernie or bust people. Certain people, our candidate cannot visit Wisconsin and didn't listen to Bill Clinton when he said don't forget about the disenfranchised, white working class voters.

Going forward, and I have to say that I'm not very popular in my group with this. I thought maybe it was time for a change for our party. And I say that because I'm from California. Nancy Pelosi is from California. When you have been a leader and your party has lost the White House, you didn't get the gain in the Senate that you thought you would have in the majority, and you lost seats within the minority in the house, maybe it's time to take another look. Why not have somebody from a rustbelt state? So we're divided. We're divided on where we need to go and how we need to get there, how left of left we want to be.

BAIER: And how much the party wants to cooperate with President Trump.

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