Will scandal in Seoul hurt efforts to deal with Pyongyang?

Reaction from the 'Special Report' All-Star panel

This is a rush transcript from "Special Report with Bret Baier," March 10, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

KWON SEONG-DONG, SOUTH KOREA JUDICIAL COMMITTEE (via translator): The owner of the nation is our people and everyone, including the president, is equal before the law.

UNIDENTIFIED FEMALE (via translator): I hope she regrets her fault. Personally I want her to go to jail.

KYO-AHN (via translator): It is possible that North Korea will abuse the situation to kindle divided public opinion or carry out military provocation to aggravate the confusion in our country.

SPICER: There is an acting president we have strong relationships with. It's a domestic issue in which the United States takes no position in the outcome of that election. It's up to the Korean people and their Democratic institutions to determine the future of their country.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Well, the South Korean president was impeached over a corruption scandal. On their way out that administration is, as Secretary of State Rex Tillerson is on his way over there to deal with an aggressive North Korea, missile testing, nuclear program. There are a lot of questions about how this all will play out.

Let's bring in our panel: Jason Riley, Manhattan Institute senior fellow, Charles Hurt, opinion editor for The Washington Times; Anne Gearan, political correspondent for The Washington Post, and syndicated columnist Charles Krauthammer. OK, Jason, thoughts?

JASON RILEY, SENIOR FELLOW, MANHATTAN INSTITUTE: Well, many South Koreans feel that they have ousted a deeply corrupt president. And they may be right. The court decision was unanimous to impeach. But it probability couldn't come at a worse time in terms of South Korea-U.S. relations. We've been trying to isolate North Korea. South Korea had been an ally in doing that. But polls show that the opposition that replaced Park wants closer ties to North Korea and closer ties to China, which of course is North Korea's protectorate both economically and diplomatically at the U.N. So here you had a strong partner, the U.S. had in the South Korea, and we don't know where that relationship is going to be going forward.

BAIER: We're deploying this THAAD system, an anti-missile battery. And one of the Congressmen up on the Hill concerned about this is Sensenbrenner, a Republican who says to "The Washington Examiner" "I think that there's going to be an urgency by our military, which I support, to put the THAAD in South Korea before the South Korean election." Jim Sensenbrenner from Wisconsin on the House Foreign Affairs Committee. Charlie, I think that there is this concern that this is just going to upset the applecart here.

CHARLES HURT, THE WASHINGTON TIMES: Absolutely. This is no doubt a very -- the largest challenge that President Trump and his team, Rex Tillerson, General Mattis, have had to face. And of course as Jason pointed out, the reason that they want to get the THAAD missile defense system in there now is because, you know, the next administration will likely be a lot less hospitable to the U.S.

North Korea is the most unstable nuclear power in the world. The only country they care about is China. And one of the things the Trump administration has to deal with is the fact that over the past eight years the former president, Obama, didn't do anything to strengthen America's hand against China. And we'll see how well he is able to deal with that.

BAIER: And as you look at a map of that region you see all of the countries that are directly involved in one way or another, right there. You have South Korea, you have Japan. China obviously is concerned about North Korea possibly falling apart and all of these people flowing across the border into China.

ANNE GEARAN, THE WASHINGTON POST: Right. I the mean, China's interest in protecting North Korea is not necessarily all friendly and benevolent. They are worried about a desperately poor and deeply unstable country on their border. They want to make sure that they don't have a giant refugee humanitarian crisis on their hands. They don't want thousands of starving people coming over the border.

And they also want to prop up a fellow nominally communist, nuclear arms regime because the consequences of not doing so are far worse in their view.

BAIER: Covering State, have you seen what is being portrayed as a weakness at State or somehow the White House is looking at State as somehow not empowered? Despite the fact you have the secretary of state who used to be the head of a company that was the size of a country?

GEARAN Yes, we don't know yet. The signs certainly are not good for an empowered State Department acting as a forward deployed American diplomacy and a secretary of state to match. People thought that Rex Tillerson certainly would fill that bill as Trump is certainly known to like having camera ready cabinet officials and people with business experience. And he clearly had all that, knows the world. Didn't do as great in his confirmation hearings as people thought he would, but still acquitted himself well. But once in office has not really asserted himself until any way. So, you know, we don't know. And the budget certainly, numbers, leaked budget numbers are a very bad sign from the State Department's perspective.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: The worrisome thing here is the outside partner. This is not just a three-sided game, North Korea, South Korea, and the U.S. It's the Chinese reaction. And the Chinese are watching after eight years of withdrawal, accommodation, and essentially no response to Chinese expansion, are seeing the United States now asserting itself.

The USS Carl Vinson, an aircraft, carrier, is now in the South China Sea. Trump has just sent B-52's into South Korea as a way to threaten the North Koreans, and everyone knows what they carry. They carry nuclear weapons.

But the worst thing from the Chinese point of view is the THAAD. This is the antimissile system. The Chinese reacted to that the way the Russians did to the anti-missile system we wanted to put in eastern Europe. They get very upset because it can be applied against them. Yes, our reason for doing it is to defend the South Koreans against the North. But the overall effect is to put up a missile shield that could degrade and weaken the Chinese arsenal. They know that. They are very worried about that. And they are getting semi-hysterical.

"Global Times" which is a government friendly publication, just this week said that the government of China will no longer rule out a first nuclear strike. That's a big deal. That's not an official statement. But it tells you how much the Chinese are upset, which is why we are now rushing to install the THAAD by the end of April before the election. So at least it's a fait accompli. But it's a tinder box.

BAIER: He's right. The Chinese foreign minister put out all kinds of statements, Jason, about this THAAD going to South Korea. And yet we are supposed to be interacting with China to prevent North Korea from being the crazy one.

I want to read, real quickly, a New York Times article, really detailed, but "Trump's aides say everything is on the table. Chinese recently cut off coal imports from the North. But the United States is also looking at ways to freeze the Kim family's assets, some of which are believed to be held in Chinese held banks. The White House is also looking at preemptive military strike options, a senior Trump administration official said. Though the challenge is huge given the country's mountainous terrain and deep tunnels and bunkers. Putting American tactical nuclear weapons back in South Korean -- they were withdrawn a quarter century ago --- is also under consideration even if that step could accelerate an arms race in the North."

I've been told, Jason, that China, when they say they cut off the coal imports, they had already gotten their quota of coal, so by saying that they were doing that really didn't mean anything big. But there are no good options here.

RILEY: No. And up until yesterday, the one thing we did have was a strong ally in the region. And that's what's so scary now. We really are flying blind. We don't know how the political situation will play out there. North Korea continues -- we had Kim's, the assassination of his brother in Malaysia recently. You have North Korea firing missiles into the Sea of Japan. This is an incredibly unstable situation, and we've lost our strongest ally there, and that's what's most worrisome. I think the administration is flying blind somewhat right now and they will have to make it up as they go along.

BAIER: And they also have not all the positions filled, Charlie. Under the top ones there is a lot of hollowness.

HURT: Yes, and all across the entire administration. But it does underscore the importance when you have a place as unstable as this the importance of sort of doing little things every step of the way so that they don't become big things. And now we have a big thing on our hands and it's, as you say, no good options.

BAIER: As same in Syria.

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