Economic impact of Trump's trade agenda

This is a rush transcript from "Special Report with Bret Baier," June 19, 2018. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

PRESIDENT DONALD TRUMP: You see what is happening with China. We have no choice. This should've been done many years ago. We have no choice.

SECRETARY OF STATE MIKE POMPEO: They're the most predatory economic government that operates against the rest of the world today.

HEATHER NAUERT, STATE DEPARTMENT SPOKESWOMAN: We want to have a constructive relationship with the government of China. In order to do that, we need to repair, make some progress on some issues related to trade.

GENG SHUANG, CHINESE FOREIGN MINISTER: We advise the U.S. to remain rational and stop such wars to harm itself and others. This is the only viable way out.

(END VIDEO CLIPS)

BRET BAIER, ANCHOR: The threat of $200 billion of additional tariffs against China sent the markets reeling not only here but around the world, especially in Asia. You see the Dow there dropping 400 points in inter day trading, down 270 at the end. But it did make things rocky and there were a lot of people here on Capitol Hill weighing in on all sides.

We're back with the panel. Jonah, what about this strategy, and can the president and the administration forced China to buckle on this?

JONAH GOLDBERG, NATIONAL REVIEW: I'm pretty skeptical. China has a long history of -- China has a much bigger nationalism problem than almost anything else, and the idea of investing their national pride in being seen as losing face to the west or to the Americans I think is a real problem politically.

But also, it's worth pointing out that the Dow is down, it's now negative for the year. The Dow used to be the administration's favorite talking point about the indicator of how well things are going. They now point to better ones like unemployment and whatnot. But these things -- trade wars are not easy to win and they are very hard to end. And right now still prices in the United States are already up 40 percent. We have a lot more people who are employed by firms that use steel than make them, and this could go south very quickly and it makes me very nervous.

BAIER: Trade representative Lighthizer is running point on this, but Peter Navarro, senior adviser to the president on this. Take a listen.

(BEGIN VIDEO CLIPS)

PETER NAVARRO, NATIONAL TRADE COUNCIL DIRECTOR: What we need for the American people is the enforceable, accountable, systematic change, structural in nature, so that we can have free, fair, and balanced trade not just with China but with the rest of the world. And we are looking forward to that day, but that is not this day.

SEN. ORRIN HATCH, R-UTAH: I've never been a big fan of Peter Navarro. The president himself kind of goes along with it. And I think that president has got to wake up and realize that's not the way to go.

(END VIDEO CLIPS)

BAIER: There's a lot people, Steve, who say this is just shaky ground here. They don't know, as Jonah said, how it's going. There's others who say that this needs to be shaken up in the world order of things.

STEVE HILTON, FOX NEWS: I am one of them. I think Orrin Hatch is the one who needs to wake up. He and the other members of the consensus that's been building around China ever since the late '90s, that we need to engage and be open all the rest of it and that will improve their behavior, they've been proved to be completely wrong. Ever since we've been engaging economically with China, their behavior has gotten more and more authoritarian. They have set out clearly a plan for world domination. That's the language they use, economically and militarily.

They have a plan to beat us. We need a plan to beat them. I think it's great that we're finally standing up to them, but frankly I don't think these measures go far enough. I would say we need a complete economic boycott of China. That is the only way to face down this threat, because if the world is run according to the values of the authoritarian communist dictatorship led by president for life Xi Jinping, that is not a world we want

BAIER: Steve, what happens to all of the companies they do business with China, all the workers would feel in on the back end?

HILTON: I've heard this argument, I made this argument when I was working at 10 Downing Street. I'm very familiar with it. There's a whole world of opportunity beyond China. There is Africa, South America, India, the greatest democracy. That's where we should be putting our priority. The suck-up to China that has been going on for so long has been a complete disaster and we need to reverse it.

BAIER: All right, A.B., how does this play politically? Obviously it is strange bedfellows here. You have some Democrats applauding all of these moves, including Senator Schumer.

A.B. STODDARD, REAL CLEAR POLITICS: Right. You have Democrats also like Sherrod Brown in Ohio who is up with a 14-point lead owning the tariffs, saying he has been in the Bernie Sanders wing on the far left in unison with Trump on this for a long time.

But you have other Republicans in states with farmers. I read yesterday that the hit to soybean farmers in Iowa alone will exceed $600 million. All the planning has to happen now. So whether or not we can determine or the market can determine or the poor Republican congressman running for reelection can determine what Trump is really going to finally do, all of the planning that's taking place now. Disruption is already underway domestically and internationally, flows through ports, people planning for their inventory, prices, supplies, all of that is rippling out.

And the poor members of Congress who think that they are going to get an answer from President Trump and whether it's just a tactic or it's definitely a trade war that's going to be easy to win are going to be sitting around waiting to see the market response and the voter response. And it's really scaring them. They won't bring it up with him. But as you know because you're up there today, Bret, it's all the talk.

BAIER: He brought it up first. That's what he started with in this meeting, apparently. Very quickly, Jonah, tangentially you have China working on the North Korea issue whether they are helping or not, and that factors in as well.

GOLDBERG: It does, and that's one of the questions that we just don't know. It is in China's interest and North Korea's interest to run out the clock as long as possible on these negotiations, which I think is what China wants to do. I think that North Korea is still essentially an unruly vassal state of China, and how you negotiate this trade war stuff while at the same time figuring out how you keep North Korea on the path to this alleged denuclearization seems to me it's very tricky. I can't quite parse it.

BAIER: Panel, thank you very much for rolling with the punches tonight.

Content and Programming Copyright 2018 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2018 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.