Peter Navarro on Trump's trade talks at the G7 summit

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Peter Navarro on Trump's trade talks at the G7 summit

White House trade adviser weighs in on 'Fox News Sunday.'

This is a rush transcript from "Fox News Sunday," June 10, 2018. This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace. We're live in Singapore where President Trump has just arrived for his historic summit with North Korea's Kim Jong-un.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's a one-time shot and I think it's going to work out very well.

WALLACE: This hour, we'll preview the high-risk, high reward summit with special reports from here and the Korean peninsula. We'll discuss what's at stake as President Trump presses Kim to give up nuclear weapons and long-range missiles that pose a growing threat to the U.S., asking veteran diplomats about the challenge of negotiating with the North Koreans.

Then, the president's other summit this week, confronting close allies angry after he slapped stiff new tariffs on their exports.

TRUMP: We're like the piggy bank that everybody is robbing and that ends.

WALLACE: We'll ask White House trade advisor Peter Navarro what are the chances to head off a trade war and about the president's surprising call to bring Moscow back into the G7.

TRUMP: I think it would be an asset to have Russia back in. I think it would be good for the world.

WALLACE: All, right now, on "Fox News Sunday".

(END VIDEOTAPE)

WALLACE: And hello again from Fox News today in Singapore.

You are looking at the night sky line of this vibrant island nation of five and a half million people that is one of the financial capitals of the world. Air Force One just landed, bringing President Trump to a summit that was unthinkable just over three months ago. The man he came to meet, North Korean leader Kim Jong-un, got here a little earlier today.

Let's get you situated about exactly where we are. Singapore is 10,000 miles from Washington in Southeast Asia. It's much closer, only 3,000 miles from Pyongyang, but that's the longest trip Kim has taken since he became North Korea's leader in 2011.

The two leaders are set to meet Tuesday at 9:00 a.m. on Sentosa Island, just across from the city center. Sentosa has an amusement park and beaches and the luxury Capella Hotel where the summit will take place.

This hour, we'll discuss what to expect out of the summit, how both leaders are likely to approach it and what would qualify as success.

But we begin with chief White House correspondent John Roberts reporting from a military airbase here in Singapore where President Trump just landed -- John.

JOHN ROBERTS, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Chris, good evening to you.

President Trump disembarking Air Force One into the steamy Singapore night and taking a step closer to history with that meeting Tuesday morning here in Singapore with Kim Jong-un. The president telling the host TV in the assembled proposal under the wing of Air Force One that he is feeling good about that meeting.

The president going back to his hotel tonight for some rest. Tomorrow, he will meet with Lee Hsien Loong. He is the prime minister of Singapore. Lee Hsien Loong, last year, when he visited the White House, extended an invitation to the president to come to Singapore, so the president really killing two birds with one stone.

You mentioned Kim Jong-un arriving earlier this afternoon here in Singapore. He landed at Changi, which is the civilian airport aboard an Air China plane. It's the national flag carrier of China, but the type of plane that he arrived on, like the president, was an American-made 747. He will meet with Prime Minister Lee tomorrow.

Before leaving, La Malbaie, Quebec, in the G7 summit, President Trump saying this is a one-shot opportunity, that this is the only opportunity Kim Jong-un is going to get to try to turn around the future of his nation because if these talks do not bear fruit and North Korea goes back to its nuclear program, that is not going to work out well for Kim.

And denuclearization is the only thing that President Trump says that he will accept. But if things go well, Chris, we could see Kim Jong-un come to the White House. We could see a normalization of relations between the U.S. and North Korea, which would mean the U.S. putting an embassy in Pyongyang -- Chris.

WALLACE: John Roberts, reporting from Singapore's military airbase -- John, thank you.

Now we want to get the view from inside North Korea about this historic meeting. Eric Talmadge is the Associated Press bureau chief in Pyongyang, the only American reporter with a regular posting in North Korea.

Eric, what are you hearing from officials there? What does Kim want out of this summit and what is he prepared to give up?

ERIC TALMADGE, AP PYONGYANG BUREAU CHIEF: Well, I think the main thing that the North Korean side wants is as they said, and end to the American hostile policy towards their country, which is something that they said they wanted an end to for many years now.

And it's kind of hard to determine exactly what they are looking for, but one of the things that normally would be on the table with that kind of thing would be a removal of strategic nuclear assets -- for instance, aircraft that can be used to attack this country, or other things that can be used to threaten the security of the regime. That's the main thing that they are after.

And I think in return it's very hard to say exactly what they are willing to discuss. I think there should be some surprises and there should be some room for progress at this summit. But right now, it's really very hard to say exactly what's on the table.

WALLACE: Well, let's press down on that because President Trump says the ultimate U.S. demand is that North Korea give up all of its nuclear weapons and all of its missiles.

From what you hear there, is that a realistic possibility?

TALMADGE: I think in the short term, that's not a realistic possibility. I haven't heard any comments from any officials here that that's something that they're looking at right away. I think when the North Korean side talks about denuclearization, what they have said so far is indicated that when the whole world is ready to denuclearize, then the North Korean side will do the same.

Now, whether that's actually the negotiating position that they're taking as they go into the talks, we'll have to wait and see. But I think if there is going to be denuclearization, it's going to be a very long and difficult process and we haven't really gotten any indication from Pyongyang that anything serious is going to happen along those lines in the immediate future.

WALLACE: President Trump says that if North Korea were to disarm, that the U.S. and the West would invest heavily and boost the North Korean economy. But you say that Kim and his regime view that more as a threat than a promise.

TALMADGE: Well, I think, definitely, there's an element of caution on this side to that kind of a promise or an offer. The North Korean side I think is looking for better relations with its neighbors, first and foremost, particularly with the South Korean side and also with China.

The problem with investment is that investment, if it's heavy and it comes to fast, then that can cause changes, it could be too rapid, it could be seen as threatening for this country. So although I think the North Korean government would like to see investment, and they are definitely interested in improving their economy, they are at the same time very cautious about exactly what kind of relationship they want with the United States in the future.

WALLACE: Eric Talmadge at his post in Pyongyang -- Eric, thanks for your time.

TALMADGE: Thank you very much.

WALLACE: So what should we expect from the Singapore summit?

We decided to bring in American diplomats with years of experience dealing with the North Koreans.

Ambassador Robert Gallucci started negotiating with Pyongyang during another nuclear crisis in 1994. Former Governor Bill Richardson has led more than a half-dozen missions to North Korea, negotiating for the release of Americans detained there. And Gordon Chang is an expert on North Korea and China.

Ambassador Gallucci, what should President Trump's game plan be going into this summit? What should he hope to accomplish in the one or two days he meets with Kim here in Singapore?

AMBASSADOR ROBERT GALLUCCI, CHIEF U.S. NEGOTIATOR, '94 NOKO MISSILLE CRISIS: I think the -- Chris, I think the easy part is the meet-and-greet that he referred to on the White House lawn. I think that they can have good vibes. They can have a nice appearance and optics.

It's the meet and greet plus, it's the plus part. I think everybody is going to be looking to President Trump to get something and that doesn't mean a full deal. That means real clarity on the question of whether the North will in fact in a reasonable amount of time give up in a verified way its nuclear weapons capability.

Everybody is looking for that. If he does not get that, it's very hard to call it a success. And if he does get that, almost no matter what else happens, it will be a success.

WALLACE: Let me bring in Governor Richardson.

And I want to play a clip for you from President Trump earlier this week that surprised a lot of people.

Governor, here's where -- here it is.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think I'm very well-prepared. I don't think I have to prepare very much. It's about attitude. It's about willingness to get things done.

(END VIDEO CLIP)

WALLACE: Governor, is that what this summit is really about? The two men getting together face-to-face and sizing each other up, deciding whether or not they can do business. And we now hear talk that President Trump may right at the start of the summit on Tuesday pull -- gently pull Kim aside for a one-on-one before they meet with their full delegations. Would that be a good idea or not?

BILL RICHARDSON, FORMER U.S. AMBASSADOR TO THE U.N.: That would be a good idea because the North Koreans never make deals with counterparts across a negotiating table. They are very focused, relentless. They are very well-prepared, but you make deals with them on the side.

You know, I think that facility in Singapore is good for that. You take him for a walk or over a meal. I think the one-on-one is very important.

The only caution I would give the president is not be photographed too much with a smiling Kim Jong-un because they use that in North Korea for dramatic propaganda purposes. The North Koreans have already gotten one major concession, a meeting with the president. They are going to want a piece treaty, a security guarantee.

I would wait on those until the North Koreans deliver some kind of verification, inspections, timelines. I think that's going to be very important.

WALLACE: Mr. Chang, you say, and I'm really following up on what Governor Richardson says, that North Korea has already gotten a lot of successions, like the very fact that the summit is being held.

What do you think Kim wants out of this day or so in Singapore?

GORDON CHANG, COLUMNIST: Because certainly Kim wants the photographs of him shaking hands with President Trump because that's legitimization. And even more important, that means he solidifies his rule at home, because we are going to see those pictures of Trump and Kim for decades in North Korea.

So, you know, President Trump gives up a lot of leverage as soon as he shakes hands with Kim and that means if he doesn't get firm commitments to dismantle the weapons programs, then we're going to be working uphill. We can do that because we've got a lot of leverage but it nonetheless puts Kim in the driver's seat, at least for a little while.

WALLACE: Governor Richardson, you have been to North Korea eight times on various diplomatic missions. Back in 2005, you met with Kim's father, Kim Jong Il.

What stands out about sitting across the table and negotiating with the North Koreans?

RICHARDSON: Well, first, they are very prepared. They know what they want. They never say no. You can brag on negotiations. They never tell you no.

At the same time, they want that personal trust. They want to feel that you can deliver and you can negotiate with them.

Kim Jong-un I understand is not like his father. His father was like a rug merchant. You know, you get a political prisoner in exchange you get the visit of a former president.

Kim Jong-un is not that way. I think he's more strategic. I think he wants private-sector assistance for North Korea rather than what his father wanted which was handouts and foreign aid.

So, I think we're dealing with a man that we probably have underestimated and he's going to be very well-prepared on some of these nuclear missile issues. And I hope the president -- and I worry sometimes that the president will not be as prepared.

WALLACE: Let's -- gentlemen, let's talk about some of the key issues that we think are going to come up in this summit. I want to begin with an acronym we're going to hear a lot about over the next few days, CVID, complete verifiable irreversible denuclearization.

Here's how the president's national security advisor John Bolton defined that back in April.

(BEGIN VIDEO CLIP)

WALLACE: North Korea has to give up basically its whole program before the U.S. begins to relieve economic sanctions.

JOHN BOLTON, WHITE HOUSE NATIONAL SECURITY ADVISER: Yes, relieving that pressure isn't going to make negotiation easier. It could make it harder.

(END VIDEO CLIP)

WALLACE: Mr. Chang, do you think that Kim will ever give up his entire nuclear and missile programs? What's the most that we can hope for in that area?

CHANG: Yes, I think we can actually get CVID.

This is not a Kim question though. You know, Kim certainly doesn't want to give up his missiles, his nukes. He doesn't want to do any of that, of course, but this is an issue of what President Trump will do. Whether President Trump will use the elements of American power to force Kim to do what he doesn't want to do.

So, for instance, we can tighten the sanctions on North Korea because although the junctions are strict, they're not strict enough, and we need to put sanctions on North Korea's major power backers, the Chinese and the Russians who have been violating sanctions lately for the last three months.

So, clearly, there's a lot that we can do. Now, we can do those things. It's a Trump question though, Chris. It's not a Kim question.

WALLACE: Let me -- I've got about a minute or so left and I want to get to a couple of quick answers on other issues.

Ambassador Gallucci, President Trump is also talking about an agreement between North and South Korea, in effect a peace treaty and the conflict, the armistice rather that began in the 1950s and there's even talk that the president might offer normalization of relations and a U.S. embassy in Pyongyang. Are those good ideas? Are those good places to start? And if you begin there, isn't it going to be almost impossible to maintain the sanctions regime, the maximum pressure against North Korea?

GALLUCCI: Chris, this meeting is a cart before the horse as everybody has noticed with the president out front. You can also make the whole negotiation a cart before the horse. The normalization process, and the president referred to a process, should really be following the gains that we are looking to make at this summit and then in the following meetings.

So, yes, ultimately having normalization of relations, exchange of liaison offices, exchange of embassies, all that is a good idea. But it should be done clearly in the course of a step-by-step phase movement in which we get what we need to get and it means performance on the nuclear weapons, nuclear program, productions, capability, fissile material, and their ballistic missile program.

Taking the political part of that part is to give the concession, the major succession that the North Koreans seek, something we should be willing to do it eventually.

WALLACE: Governor, I've got about 30 seconds. Quick question. If President Trump brings up human rights and the repression inside North Korea, how will that be received by Kim?

RICHARDSON: Well, he'll be nervous about it, but the president should bring those issues out. The gulag issues in North Korea. The remains of our soldiers from the Korean War should be returned to their families. There's about 5,000 of those.

Help the Japanese on the abduction issue. I think that's important.

But I think Kim is going to want modernization of his economy, a good trade-off is going to be a strong commitment of his improving the human rights situation in North Korea, which is pretty bad. The president should not leave human rights aside in this negotiation.

WALLACE: Right.

Gentlemen, thank you. Thank you all so much for participating this morning and we'll see how the world turns this week.

Up next, we will talk with two American reporters who covered the White House and State Department and have made the long trip here. What do their sources say we should expect from the Singapore summit?

When we come back with much more from "Fox News Sunday" live in Singapore.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: How long will it take to figure out whether or not they are serious? I said maybe in the first minute.

(END VIDEO CLIP)

WALLACE: President Trump trusting in gut instinct on whether he'll be able to make a deal with Kim Jong-un at their historic summit that is now just hours away.

We want to bring in two of the literally thousands of reporters who have come to Singapore to cover this historic event.

David Nakamura, who reports from the White House for The Washington Post, and Fox News correspondent Rich Edson, who covers the State Department.

Welcome, gentlemen. This is a kind of cool place to be, isn't it? Well, I shouldn't say cool because the humidity and heat are off the charts, but it's a fascinating place.

David, I want to start with you, and what strikes me as we approach the summit is how dramatically President Trump has lowered the expectations and his goals for the summit. Originally there was talk about the complete denuclearization of North Korea. Now, there's talk about a getting-to-know-you process.

Pretty substantial.

DAVID NAKAMURA, WHITE HOUSE REPORTER, WASHINGTON POST: Very substantial. I think some of that, Chris, is due to what we saw leading up to the summit, which was that the president declared in March he was going to do this on a very fast time frame. He wanted to meet as soon as possible. He instructed his team to get set to work and then we saw some hiccups along the way, including the president, of course, backing out about two weeks ago of the summit.

I think that show that the negotiations were hitting a bit of a roadblock, and that's not unexpected. People who negotiate with North Koreans in the past have said they are very difficult to nail down ahead of these summits. And you have a very condense time frame.

So, the president is readjusting some of that to what he was hearing from his negotiating team on the ground in Korea. I think they had at least five different sessions trying to nail down what is going to take place at the summit and the White House has still not said what that is. We do know the president has talked about this meet and greet tomorrow, and he really stressed the historic nature of that.

WALLACE: Tuesday.

NAKAMURA: Tuesday. Really stressed the historic nature of that, I think to say, look, just the meeting is a big deal. But as we -- as some of your guests have talked about, that's not nearly big deal enough.

WALLACE: Nothing it seems to me, Rich, defines the split inside the administration more than two people. First, national security advisor John Bolton, who originally said when this meeting was first announced, here's what the meeting should be. President Trump should meet with Kim and say when are you going to deliver all of your nukes and all of your missiles in the next week?

I mean, he was like you deliver and then we'll talk about what we may give. And then you've got the new Secretary of State Mike Pompeo who seems to have taken a much longer view of this whole process. I guess the question is how dramatic a split is there inside the president's foreign policy team?

RICH EDSON, FOX NEWS CORRESPONDENT: It's significant but it's the type of split that you have a national security advisor who went through some of this during the Bush administration and there was from 1994 to 2002 an agreement in place between the United States and North Korea where there were inspectors living inside North Korea. They did destroy nuclear infrastructure and that didn't hold.

And now, you have a secretary of state who comes in and the 21st century and the Trump administration who is the most senior person in the last 18 years to have met with Kim Jong un or to meet with North Korean leadership, to meet with the dictator of North Korea. He's been there twice.

We asked the secretary of state directly what his impression of Kim was and he was, I wouldn't want to say, complementary, but he certainly wouldn't say anything very bad about the conversation that he had with him when he went to North Korea.

WALLACE: I'll say two things he told me off camera, I guess I can say it, one is he said he is very well-prepared, very well-versed. And I said, do you think he understands English? Because the conversation was all being translated and he said, I had the distinct impression as I was making my point he understood the point I was making and took the time for the translation to figure out his response.

EDSON: Yes, the question if he really understands what he's saying, is really waiting for the translations, sometimes they put that show on in front of translators, but the key thing that the secretary of state has said going into this is that it would be a true tragedy if Kim Jong-un didn't take advantage. He was essentially saying that it's the North Koreans who have to move here, but unlike the national security advisor, it seems as though he wants to give them that opportunity that we want.

NAKAMURA: What's interesting is you do see that John Bolton has made this trip and he's going to be part of it. We saw him sidelined a bit a week or so ago when the North Korean official visited the White House, John Bolton was not in those meetings because the North Koreans have a very --

(CROSSTALK)

WALLACE: Do you think he will be -- he will sit down in a meeting?

NAKAMURA: We think that he's involved as parts of the meeting at least.

WALLACE: Because, I mean, I think it's fair to say the North Koreans just plain don't like them, right?

NAKAMURA: He has foul language about John Bolton. They stayed away from doing that with Donald Trump, but certainly, there's a lot of hard feelings from the Bush days when John Bolton advocated for --

WALLACE: I suspect John Bolton would consider that a badge of honor.

David, you know, the president has said from the start and said again this weekend in Canada, look, if this meeting is a waste of time, I am going to walk out. Do you think that there were any circumstances under which he would walk out or given that probably at the very least there is going to be the optics of the two men meeting and talking that he will declare the Singapore summit a success regardless?

NAKAMURA: I think some of these things tend to be baked in ahead of time. There is a lot of ground work that led up to this. It was, you know, a rough process but I think the goal -- the president really wanted to be a success. He sees a political victory here.

He's done something his predecessors have not done, start this process, start a meeting. As you said he's lowered expectations. But I see very unlikely the president gets up and walks out, you know, even if we don't see sort of a grand bargain at the end of this, which no one expects to happen.

I think it's the start of a process. The president himself now had said it could take more meetings between the two leaders. And certainly, the staff to get nail down some of the details.

WALLACE: Yes. Your man Mike Pompeo at the State Department has obviously been the leader in terms of negotiating with the North Koreas, Kim, and then also his vice chairman.

What's the sense that you're getting from your sources about how this process plays out after Singapore? Is it a long process? Are we talking about months, are we talking about years? Are we talking about multiple summits?

What your sense of the process here?

EDSON: Multiple summits and continued conversations. And remember, the United States and North Korea under the Trump administration have already had conversations going back to when Otto Warmbier was returned to the United States. There had been a channel in New York at the United Nations. So, a lot of those conversations had taken place even before secretary of state Mike Pompeo took over at the State Department and remember as CIA director, he has been to North Korea and as secretary of state, he has been there.

But I think now, you are even hearing the president publicly acknowledged because I think of the results that you are hearing from the conversations with the State Department officials that this is going to take more than one meeting, a high level meeting, also with the continued conversations at the staff level to try to get this done. There are major issues that they have to work through here to have a successful agreement.

WALLACE: All right. Having said all of that, David, how invested is President Trump in this negotiation with Kim? You know, in the early, heady days right after the announcement of the summit, the president was thoroughly enjoying the crowds chanting Nobel Peace prize. Clearly, things have calmed down a little bit from that point.

But how badly does he want a deal and is there a danger that he could fall exactly into the trap that Barack Obama -- he says fell into with Iran, that he pushes for a deal even if it's not the right deal?

NAKAMURA: Right. That is a danger and it could be very similar to what we saw with Obama. Extended period of time and one that North Korea could get some economic benefits down the road.

I think how invested he is, he's extremely invested. If you look around the world with his foreign policy, he's alienated allies, as we know. We saw what happened at the G7. He's sort of tangling now with Iran again, raising stakes there.

This is a place where he's trying to use diplomatic means to achieve something. I think it's a real important moment for him.

WALLACE: David, Rich, thank you both. Thank you for joining us. Let's hope for lots of news this week.

Before President Trump flew here to meet with a long time enemy, as David said, he first confronted U.S. allies over tariffs at the G7 economic summit in Canada. We'll discuss where things stand now on that issue with White House trade advisor Peter Navarro as "Fox News Sunday" continues to live from Singapore.

(COMMERCIAL BREAK)

WALLACE: Coming up, President Trump warmed up for his summit in Singapore by taking on U.S. allies at the G7.

(BEGIN VIDEO CLIP)

TRUMP: They do so much more business with us than we do with them, that we can't lose that.

(END VIDEO CLIP)

WALLACE: We'll ask our Sunday panel about the split over tariffs, coming up on "Fox News Sunday".

(COMMERCIAL BREAK)

WALLACE: A look at the striking Marina Bay Sands Hotel here in Singapore with its iconic sky park at the top there ahead of Tuesday's landmark summit.

Before President Trump traveled to Asia, he faced other world leaders at the Group of Seven Economic Summit in Canada. Allies that are upset over new tariffs he's imposed on steel and aluminum imports.

Joining us now, one of the architects of that controversial plan, White House trade adviser Peter Navarro.

Mr. Navarro, the summit ended with a nasty dustup between President Trump and Canadian Prime Minister Trudeau. He held a news conference after the summit in which he said Canada will retaliate for tariffs that the U.S. has imposed on Canadian aluminum and steel.

Here he Trudeau.

(BEGIN VIDEO CLIP)

JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: We move forward with retaliatory measures on July 1st, applying equivalent tariffs to the ones that the Americans have unjustly applied to us. Canadians, we're polite, we're reasonable, but we also will not be pushed around.

(END VIDEO CLIP)

WALLACE: Well, President Trump responded with this tweet while flying here on Air Force One to Singapore. Trudeau of Canada acted as meek -- so meek and mild during our G-7 meetings only to give a news conference after I left. Very dishonest and weak.

Question, Mr. Navarro, is that really how we want to deal with our second biggest trading partner?

PETER NAVARRO, WHITE HOUSE TRADE ADVISER: Chris, there's a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door. And that's what bad faith Justin Trudeau did with that stunt press conference. That's what week, dishonest Justin Trudeau did. And that comes right from Air Force One.

And I'll tell you this, to my friends in Canada, that was one of the worst political miscalculations of a Canadian leader in modern Canadian history. All Justin Trudeau had to do was take the win. President Trump did the courtesy to Justin Trudeau to travel up to Quebec for that summit. He had other things, bigger things on his plate in Singapore, where you are now, Chris. He did him a favor and he was even willing to sign that socialist communique. And what did Trudeau did -- do as soon as -- as soon as the plane took off from Canadian airspace, Trudeau stuck our president in the back. That will not stand.

And as far as this retaliation goes, the American press needs to do a much better job of what the Canadians are getting ready to do because it's nothing short of an attack on our political system and it's nothing short of Canada trying to raise its high protectionist barriers even higher on things like maple syrup and other goods.

WALLACE: Mr. Navarro, I've got a lot to talk to you about, but I do have to press this. You used some very strong words, stab in the back, a special place in hell. You said that that came from Air Force One. Are those the views, are those the words of the president towards Trudeau?

NAVARRO: Those are my words, but they're the sentiment that was on Air Force One after that.

Look, Chris, this was -- this was just wrong what -- what Trudeau is doing. The Canadians are totally bungling our trade relationships and it's due to their leadership. Take NAFTA for example. We'd have a deal, we'd have a great deal with NAFTA, by now, if the Canadians would spend more time at the bargaining table and less time lobbying Capitol Hill and our press and state governments here, they --

WALLACE: All right.

NAVARRO: They are just simply not playing fair. Dishonest. Weak.

WALLACE: Well, I -- I -- I want to pick up on this, though, Mr. Navarro, because it isn't just Canada. Germany's chancellor, Angela Merkel, released a photo of the summit. And there was no comment on it, but it certainly looked like it was President Trump against the other members of the G-6, America's closest allies.

And I want to pick up on this point because the last time you were on with me on "Fox News Sunday," you said that no country would retaliate for the tariffs that we were going to impose.

But let's take a look at, in fact, what has happened since we last talked.

Canada has announced tariffs on $13 billion in U.S. goods. The European Union will impose tariffs on $3 billion in American products.

I understand, sir, that the objective of the president's trade policy with your advice, some would call it a trade war, is to get the other countries to lower their tariffs on us, but hasn't the practical effect been to get them to raise their tariffs on our products?

NAVARRO: So one of my favorite quotes of this president happened just yesterday when he said, we've been the piggy bank for the world and that's got to stop. If you look at Angela Merkel's Europe, you see a continent where we run $151 billion trade deficit in goods every year. Germany has tariffs on autos four times higher than our tariffs on the equivalent German imports here and they sell us three times as many cars as we sell them.

So, on the issues alone, we have allies strategically. But when it comes to these trade disputes, these allies basically are robbing us blind. The president is not going to put up with that. And in terms of these retaliation, I want to get back to the Canadian miscalculation here. The Canadians --

WALLACE: I -- I -- I -- I --

NAVARRO: We -- because this is (INAUDIBLE) retaliation.

WALLACE: I -- I -- I -- I don't mean to interrupt, but I do -- I do want to move on --

NAVARRO: Sure.

WALLACE: Because we've got limited time and I've got some other questions, because the president also shocked the allies just before he came to Canada by suggesting, pushing the idea that Russia should be invited back into the G7 to make it the G-8, the meeting, the group of economic world leaders.

Here's the president on that.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It may not be politically correct, but we have a world to run. And in the G7, which used to be the G8, they threw Russia out, they should let Russia come back in.

(END VIDEO CLIP)

WALLACE: But, Mr. Navarro, Russia was kicked out of the G-8 after it invaded Ukraine and seized Crimea. Why does the president think they should ineffective be rewarded when they haven't done anything to clean up their action, they're still in Crimea, but welcoming them back into the G-8?

NAVARRO: Chris, let me say a couple of things here. First of all, that -- that one's above my pay grade. Ambassador Bolton, Mike Pompeo, the president himself deal with issues like that. But just observationally, I mean, looks what's happening now in Singapore. The president is willing to talk to Kim Jong-un in the hope that we can deal with denuclearization on the Korean peninsula. He's willing to talk with any world leader. And I think the philosophy here is that when we have discussions with world leaders, we should get everybody together so that we can basically hammer some of these problems out.

So I think that the bigger problem here, from my point of view, I'm the trade guy, is that we have a bunch of countries out there, whether it's strategic competitors like China, or allies like Europe and Canada, basically using us as a piggy bank, using unfair trade practices. And my job at the White House is to help the president get jobs, good jobs, manufacturing jobs to the working men and women of America, and we can't do that unless we upset this existing world order, which basically is tremendously biased. We'd lose half a trillion dollars a year of our wealth every single year because of these unfair trade practices, and that's what the president is aiming for.

WALLACE: Let's go back -- Mr. Navarro, let's go back to a trade issue then.

You are a notorious hard-liner on China --

NAVARRO: (INAUDIBLE) --

WALLACE: And the unfair trade practices there.

Well, you wrote a book a few years ago called "Death by China."

So, here's my question. How do you explain --

NAVARRO: My code name at the CIA is notorious, by the way.

Go ahead.

WALLACE: Oh, OK. That's interesting.

NAVARRO: No, I was just joking, Chris.

WALLACE: How do you -- how do you explain the decision by President Trump to lift the sanctions against the Chinese telecom company ZTE after it had violated our sanctions, our ban on doing business with North Korea and Iran and was considered to be a serious national security risk? Why on earth would we do that?

NAVARRO: I -- I -- I think you should have Secretary of Commerce Wilbur Ross on to explain the -- the details of what is a very hard negotiation that -- that was done. But I can tell you this, it's going to be three strikes you're out on ZTE. If they do one more additional thing, they will be shut down.

What -- we have a bad actor in ZTE. The president did this as a personal favor to the president of China as a way of showing some goodwill for bigger efforts, such as the one here in Singapore. But it will be three strikes you're out for ZTE. And everybody understands that within this administration.

So they're on notice.

WALLACE: Yes.

NAVARRO: We're going to have monitors inside that company. They're changing their board of directors. They're changing their management. The they're paying us a billion and a half dollars in order to continue in business.

WALLACE: I -- I want you --

NAVARRO: Yes, sir.

WALLACE: I want you to give me a one sentence answer on my final question.

NAVARRO: OK, I'll try.

WALLACE: Did the ZTE decision -- did the ZTE decision give you some heartburn?

NAVARRO: I don't get heartburn.

Justin Trudeau tried to give me heartburn. I didn't get heartburn.

WALLACE: All right, I'll have to think -- I'll have to think of another physical -- I'll have to get -- think of another physical diagnosis.

NAVARRO: Yes.

WALLACE: Mr. Navarro, thank you. Thank you for joining us today. Always good to talk with you, sir.

NAVARRO: My pleasure. Good luck in Singapore, Chris.

WALLACE: Thank you.

Up next, President Trump's surprising call to bring Russia back into the economic group of world leaders. We'll discuss that and more with our Sunday group back in D.C. as "Fox News Sunday" reports ahead of the U.S.-North Korea summit live in Singapore.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: When I'm telling them, they're smiling at me. You know, it's like the -- the gig is up. It's like, the gig is up. They're not trying to -- there's nothing they can say. They can't believe they got away with it.

(END VIDEO CLIP)

WALLACE: President Trump at the G-7 summit in Canada describing the reaction of U.S. allies to his tough new trade policy.

And it's time now for our Sunday group back in Washington.

Former Republican Congressman Jason Chaffetz, Adrienne Elrod, former advisor to Hillary Clinton's campaign, and Jonah Goldberg of the National Review.

Jonah, let me start with you.

Your thoughts about the optics and the substance of the G-7 summit in Canada and especially those explosive words we just heard from Peter Navarro that clearly was on like a -- a direct message from President Trump on Air Force One.

JONAH GOLDBERG, NATIONAL REVIEW: Yes, so I'm not an expert on all things theological, but I'm pretty sure your admittance to hell is not entirely contingent upon your attitude towards Donald Trump or whether or not you agree with his trade policies. So I'm not sure there's a special place in hell for Trudeau. And I thought that was more than a little over the top.

As I did, I thought Donald Trump's entire performance in Canada. I understand that he likes this optics. It works for him domestically with his base to sort of be seen as standing up to the globalist world order and whatnot. But these are our closest allies. He's saying that -- you know, he's legally justifying these tariffs and -- and on the ground that it's a national security issue. But when he's pressed on a little bit, all of a sudden he says, no, it's really because of dairy subsidies in Canada. And I think that's going to create real policy problems for him going forward.

WALLACE: Adrienne, Democrats generally like the idea of protections to help U.S. workers in U.S. industries. So from the Democratic point of view, with this new tough trade policy and talk of tariffs, is President Trump on the right track?

ADRIENNE ELROD, DEMOCRATIC STRATEGIST: No, absolutely not, Chris. I mean, look, Democrats are all for protecting U.S. workers, but at the same time we recognize that getting into a trade war with some of our biggest allies, notably Canada and Germany in this situation, is not the right course of action for our workers. This is what the president has done from the very beginning. We know that he did not consult with his full team of economic advisors before he imposed tariffs on China -- on Chinese steel and aluminum and we're -- now we're seeing him display this erratic, chaotic type of behavior with some of our closest allies. That is not a way to help American workers.

WALLACE: Congressman Chaffetz, do you want to respond to that?

JASON CHAFFETZ, FORMER U.S. CONGRESSMAN, R-UTAH: No, look, the president was elected to do something other than the status quo. And his disruption was certainly very successful in that summit. That's what he was elected to do. That's what he's doing. And I think in his -- from his approach, that puts the United States in a position to now go back and push some negotiations so that we can get to something that is fair and balanced and equal. I think that's what the president is after and I think that's where we'll eventually get to.

WALLACE: But, Congressman Chaffetz, President Trump keep saying, and Peter Navarro says, that, look, the point of all this -- and that eventually our allies and countries like China will cave and lower their trade barriers. But the results, at least so far, and I understand it's early, is that instead of lowering their trade barriers in response to our threats, they're raising their tariffs. I mean are -- can't you make the argument that instead of solving the problem, we're creating a trade war?

CHAFFETZ: I think the president is after the long term goal of making sure that there's an equalization that happens across our borders. We love Canada. We love Germany. These are our allies. But it is not fair. And the people within those industries, who want to export to those countries, know how imbalanced it is and that's why Donald Trump enjoy so much support from those people in those industries. And I think this will accelerate the need to, now that there's a problem, to go back -- and it's been highlighted by the president -- to go back and solve that. And I think he will.

WALLACE: Jonah, as a traditional conservative free trader, do you buy that?

GOLDBERG: No. Not at all. Sorry, with all due respect, I think it's -- I think that all of this is premised on a lot of economic fallacies. It -- which can be illustrated just starting with the fact that President Trump loves to talk about how terrible trade deficits are while he's bragging about how much foreign investment that we are getting.

Foreign investment is the inverse of trade deficits because all of those dollars have to come back to America somehow. The more -- the bigger your trade deficits, the more foreign investment you get. This is all premised on an accounting fiction that somehow trade deficits are terrible. Meanwhile, the things that we're putting tariffs on are much more important to industries in America that use them. We use a lot of steel. When we make steel more expensive, we hurt more workers and cost more jobs than we save. This is a blinkered 1930s approach to economic policy and it makes no sense whatsoever.

WALLACE: I would -- I've got a couple of minutes left and I want to get to one other subject.

Adrienne, what do you make of President Trump's surprising call to bring Russia back into the economic summit, to make the G-7 the G-8?

ELROD: You know, Chris, the fact that he is, again, alienating some of our top closest longtime allies, but he seems to continue to embrace Russia and frankly North Korea. I don't understand. I don't know what Vladimir Putin has on him, but it's absolutely ridiculous to even insinuate given all of the international rules that Russia has violated, most notably going into Crimea, that he would even invite them back into the -- to make it the G8 again. It's ludicrous. It makes you, again, wonder what really does Vladimir Putin have on Donald Trump to make him do this.

WALLACE: Congressman Chaffetz, I know you're not going to like that association, but it is one that people are certainly going to raise. And it is -- I think you'd agree, at least from a political standpoint, it is an odd suggestion to make to invite Russia back in right in the middle of the Russia investigation in the United States.

CHAFFETZ: I see nothing in Russia's behavior that would justify bringing them back into make them part -- and make it back into the G8. I just don't see that. The invasion of Crimea, the attack of our financial systems, the meddling in an election, the stealing of our intellectual property, I mean there's nothing on that checklist that would say, hey, this is a good idea, Russia is now behaving better, let's bring them back in as a partner in these discussions and make it the G8. I -- I don't -- I don't get it.

WALLACE: So -- well, so let me ask you, as one of our political analyst, why do you think he's doing it?

CHAFFETZ: I don't know. I don't know. I -- it was -- we -- the president had a mission to disrupt the current status quo with the G7 and get after some of these trade imbalances, but I think that was a distraction to suddenly suggest that Russia should be part of those -- those discussions. I -- I -- it just came from out of the blue. I don't understand it.

WALLACE: Thirty seconds, Jonah, what do you think is going on here?

GOLDBERG: Yes, I'm not sure I buy the, this is all because Putin has something on Trump explanation. I think it may be -- in fact be because President Trump tends to like to pick on people he thinks he can get away with picking on and he sees the G7 and people like Trudeau as -- as pushovers. And, meanwhile, he sends -- tends to respect countries and strong leaders that don't like democracy and -- and behave in a sort of an authoritarian way. And I think he kind of likes Xi of China, Kim and Putin because they exert kind of manfulness (ph).

WALLACE: All right. All right. Anyway, it's something to talk about.

Thank you panel. See you next Sunday back in D.C.

Up next, what we can learn about the Trump-Kim summit from summits of the past. Showmanship and substance and sometimes agreements that changed the course of history.

(COMMERCIAL BREAK)

WALLACE: The excitement over the Trump-Kim summit hearkens back to an earlier time 30 or 40 years ago when the leaders of the two great superpowers would get together with the world's fate hanging in the balance. For sheer drama and long-term significance, nothing rivals the talks between Ronald Reagan and Mikhail Gorbachev. And I was fortunate to have a front row seat.

(BEGIN VIDEOTAPE)

WALLACE (voice over): When Reagan and Gorbachev met in Geneva in November of 1985, it was the first summit between leaders of the U.S. and Soviet Union in six years. And this first encounter of a lifelong cold warrior and a vigorous business like Russian drew the world's attention. A young White House reporter was there.

WALLACE (on camera): And certainly no major breakthrough. And we certainly don't expect anything like that at all. But, of course, we don't know what's going to happen in these two days of talks. That's going to be the telling sign and that's what we're told by U.S. officials that one of the keys to this whole summit will be how these two men get on during the 12 hours they'll be spending together.

WALLACE (voice over): There were no breakthroughs, but the two leaders decided they could do business. Eleven months later, they held a snap summit in Reykjavik, Iceland. Gorbachev offered massive arms cuts but only if Reagan gave up his star wars missile defense plan. Reagan refused and walked out.

U.S.-Russian relations went into the deep freeze, but the deadlock in Iceland led to deals a year later. They signed an historic agreement to eliminate all medium-range missiles in Europe, although star wars still blocked a deal on long-range weapons.

RONALD REAGAN, FORMER U.S. PRESIDENT: The general secretary and I expressed different points of view. We did so bluntly. And for that reason alone, our talks have been useful in this area.

WALLACE (on camera): It seems clear then that Gorbachev is ready to deal with the U.S., but only on his own terms and at his own pace. For a president with just a year left in office, that may mean steady progress, but not the big finish he had hoped for.

WALLACE (voice over): But there was a big finish in Moscow in May of 1988. Walking through Red Square with Gorbachev, Reagan was asked whether he still thought Russia was an evil empire.

REAGAN: I was talking about another time, another era.

WALLACE: Again, there was no deal on the ICBMs the two superpowers aimed at each other. But Reagan spent time pushing for human rights in Russia, setting the stage for future change.

WALLACE (on camera): As U.S. officials become increasingly certain there will be no big agreements here, they are playing up the president's contact with the Soviet people, saying it will be great theater and could mark something of a turning point in superpower relations.

(END VIDEOTAPE)

WALLACE: That turning point came in November of 1989, when the Berlin Wall came down and Eastern Europe was set free. Two years later, the Soviet Union was officially dissolved.

We can only hope the diplomacy of Donald Trump and Kim Jong-un brings change that's as long-lasting.

For full coverage of the Trump-Kim summit, please stay tuned to this station and Fox News Channel.

And that's it for today. Have a great week. And we'll see you back in Washington next "Fox News Sunday."

END

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