Brandon Judd: The moment those tariffs kick in the Mexican government will have to do something

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Brandon Judd: The moment those tariffs kick in the Mexican government will have to do something

National Border Patrol Council president weighs in on President Trump's new Mexican tariffs.

This is a rush transcript from "Your World," May 31, 2019. This copy may not be in its final form and may be updated.

CHARLES PAYNE, ANCHOR: Forget the wall. Now President Donald Trump is trying to slam Mexico in the wallet, but who's really going to pay?

Hello, everyone. I'm Charles Payne, in for Neil Cavuto. And this is "Your World."

And the message from the White House to Mexico: Tighten up the southern border, or your economy could get tight, with a dose of tariffs on all Mexican goods.

That had that stocks here feeling very tight today, the Dow closing below 25000 for the first time since January 31. So what's the fallout from all of this? We're all over it.

We have got Kevin Corke on what the president is planning, Jackie DeAngelis on why investors and consumers should be worried, and Border Patrol Union chief Brandon Judd on why his members are applauding.

First to Kevin at the White House with the very latest -- Kevin.

KEVIN CORKE, WHITE HOUSE CORRESPONDENT: C.P., good to be with you, my friend.

And, listen, there's great frustration here at the White House. Make no mistake about it. The president is fed up. And he is now willing to go from tough talk on illegal immigration to very serious talks about tariffs.

Let me take you inside the numbers, but first a tweet from the president today, again, assailing the Mexican government for what he called passive cooperation with this mass migration, what he called an incursion into our country along the southern border.

To the tweet first. He says: "Mexico has taken advantage of the U.S. for decades. Because of the Dems, our immigration laws are bad. Mexico makes a fortune from the U.S., have for decades. They can easily fix this problem. Time for them to finally do what must be done."

All right, so what's he talking about here, Charles? He's talking about tariffs, 5 percent on all goods coming in from Mexico beginning on June 10. That goes all the way up to 25 percent on October 1, if he were to follow through with the threat if Mexico's government doesn't do something.

In one single instance this week, more than 1,000 people, Charles, were apprehended along the southern border. That's on top of the hundreds of thousands who came here last year and the year before and so on and so forth. So the message is clear. Mexico has to help the U.S. or they will pay a very heavy price.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: We're asking Mexico to enforce their own laws to help stop the people coming in from Central America. We have seen a massive influx of people coming from that region. And they have certainly the ability and the legal authority in which to deal with it and we're simply asking them to do that.

(END VIDEO CLIP)

CORKE: As for Mexico's president, he has a strong take on this as well. He almost appears, Charles, to be questioning the validity of national sovereignty.

He says: "President Trump, listen, social problems are not resolved with taxes or coercive measures." He adds this: "The Statue of Liberty is not an empty symbol. With all respect, even though you have the sovereign right to say it, the slogan America first is a fallacy, because even until the end of time, justice and a universal fraternity will prevail above national borders."

Wow.

On Capitol Hill, a bit of pushback from Republicans. Joni Ernst, the senator from the great state of Iowa, saying this: "Listen, it's clear that we need to address the unprecedented flow of illegal immigrants coming across our border day in and day out. And it's imperative that Mexico step up and do its part to stop the stream of these migrants. That being said, the livelihoods of Iowa farmers and producers are at stake."

No word yet, Charles, on just when we might hear from the U.S. -- make that the Mexico trade reps who are set to be on the way to Washington. Kellyanne Conway actually just down the driveway was talking about this a moment ago. If I get some good nuggets, I will pass them along, but, for now, back to you, and happy weekend.

PAYNE: K.C., thank you very much. Appreciate it.

CORKE: You bet.

PAYNE: Meantime, all that had investors selling big time today and saying mayday for the entire month.

We're now looking at the first losing month of 2019.

To FOX Business Network's Jackie DeAngelis on what has investors running for the exits right now -- Jackie.

JACKIE DEANGELIS, FOX BUSINESS CORRESPONDENT: Good afternoon to you, Charles.

Well, investors, as you can see, not responding well to this new threat from President Trump of imposing tariffs on Mexican imports to stop migrants from crossing the border.

It was a surprise to the markets because they were actually hoping for some relief with the passage or coming passage potentially of USMCA to get some relief. But the additional issue with Mexico, it can impact millions of goods, products like cars, machinery, fruits, vegetables, really the whole gamut there.

The fear and the uncertainty, it was already in the markets because of the China threat, so now heightened. The yield on the 10-year note, 2.14 percent. We saw that dropping over the last few days. That's because investors are flying for shelter. They want safety and you get it in the 10-year note.

Now, today, the Dow was down 354 points. It closed at session lows. It also closed under 25000 for the first time since January 31. Remember, that is a very key psychological mark for investors. And pretty much every stock, almost every stock on the Dow was in the red today.

Oil prices are also in lockstep telling the story too, closing today at $53.50. It wasn't long ago that we saw oil trading well over $60. But when you have fears about economic growth, oil prices drop because investors worry about demand and the future.

So some of the sectors that we saw today that were hit the hardest, well, the autos were certainly one of them, companies like GM, like Ford, like Toyota, like Fiat Chrysler. You can see right across the board there. GM got hit the hardest, more than 4 percent in losses today.

And this is because these companies import steel and aluminum from Mexico. The car part makers, they also got hit, so companies like Gentherm, Stoneridge, Dana, Incorporated, all seeing red as well.

For the month, the Dow suffering about a 6.5 percent loss there, 6.7 percent, the Nasdaq getting hit hard, almost 8 percent, the S&P 6.5 percent. This was the worst May that the market has seen in nine years, Charles, so since 2010. It was pretty staggering for the losses.

PAYNE: Yes, this time, sell in May and go away was pretty good advice. It doesn't always work that way. But it did this time.

Jackie, thank you very much.

DEANGELIS: Sure.

PAYNE: Meantime, not everyone at the White House is on board with this new immigration plan. We're now getting reports that President Trump's top trade adviser, Robert Lighthizer, and Treasury Secretary Steve Mnuchin were both opposed to these potential tariffs on Mexico.

So is this the right plan at the right time?

Let's ask GOP strategist Evan Siegfried, Democratic strategist Max Burns, and FOX News contributor Kat Timpf.

Evan, what do you think?

EVAN SIEGFRIED, REPUBLICAN STRATEGIST: Well, I think the president missed a golden opportunity here.

He has gone out, and he's met with people like Kim Jong-un on and developed these personal relationships and tried to get positive results as -- out of them. And he could have done that with AMLO, Mexico's president.

But instead he's gone out and he's decided to implement what's essentially a tax on the American people. If you are a Texan, what this 5 percent tax does is it raises taxes on Texans by $5.35 billion. And if it goes to 25 percent, it'll go up to 28 percent in terms of the tax.

And it's very, very punitive to us as Americans, as opposed to Mexico.

PAYNE: Although the Mexico peso got hammered. I mean, I think it's got a big -- I think it's going to, I think, ultimately, personally, will hurt Mexico more than us, because we don't have to buy all these things that come across.

And there's a lot of people that...

(CROSSTALK)

KATHERINE TIMPF, CONTRIBUTOR: Speak for yourself. I love guacamole.

(LAUGHTER)

PAYNE: But here's the thing I do want to ask, though, because we know President Trump's style, usually, it's a carrot and stick sort of approach. So the stick came first. Perhaps the carrot comes now.

We're getting word -- Kevin Corke just mentioned Kellyanne Conway. There was a question about meeting with Mexico. She did indeed say they are on their way. She was also asked, will this jeopardize USMCA? She said it shouldn't end and that this will go on, on parallel tracks. Congress can approach this and also Mexico can work on this at the same time as improving their immigration policy, Kat.

TIMPF: right.

I really hope that this is just Trump doing that thing where he comes out with something really bold and big and kind of scary sounding, and it just amounts to rhetoric, because tariffs, as you mentioned, are a tax on the American consumer.

And I know that he wants Mexico to feel the pain, but American consumers are going to feel the pain.

PAYNE: I want to push back on that, because there's not a single person watching this show that -- let's say Chinese tariffs went 25 percent, would pay 25 percent extra.

This is the way it really works and people should understand. First, the currencies adjust. Today, the U.S. dollar was up 3 percent against the peso. That almost wipes out the 5 percent. Then the exporters, they take a lower price.

So, if Mexico or China is going to sell something at 10 bucks, we don't have customers for it. They will sell it at nine bucks. That's why China's economy is getting crushed. And, by the way, importers take a bite. Vendors take a bit. The stores take a bite.

I watch the markets. If any store could raise prices 25 percent, Woolworths would still be in business. Macy's -- Sears would still be in business.

(CROSSTALK)

PAYNE: But let me go beyond that, because I think that's a fallacy that somehow any business can take any price and raise it 25 percent. That's a fallacy. If a business could raise prices 3 percent, normally, their stock goes higher.

But I do want to bring this up, because Nancy Pelosi is out with a statement.

Max, I got to ask you about that. She's saying that, listen, of course, she mentions USMCA, but she's saying that she now hopes that President Trump will join in bipartisan comprehensive immigration reform.

I think that's what everybody wants. What is stopping that?

TIMPF: Yes.

MAX BURNS, DEMOCRATIC STRATEGIST: Yes, it would be nice to get that.

And the president has agreed and then backed out on his own statements five or six times. The challenge with this and with these tariffs is that even though it may be a carrot and stick, the U.S. consumer is getting the stick now.

I mean, J.P. Morgan just came out with a statement calling this the make abysmal growth attainable plan. I mean, they're looking at going into...

(CROSSTALK)

PAYNE: You do know that we grew 3.2 percent in the first quarter, after a year's worth of tariffs on China, a year's worth of tariffs on China.

But this tariff thing just came out yesterday on Mexico. It hasn't even gone into effect.

BURNS: Correct. And we're already starting to see the market effect.

PAYNE: Now, we're talking about an immigration crisis.

Let's just remind the audience of what we're talking about here. In April, 109,000 illegal immigrants apprehended, in March, 100,000 apprehended, in February, 76,000 apprehended. Every one of those numbers are up 100 percent or more year over year.

This isn't a crisis that happened with Trump's tweet last night. This has been in effect for a long time. Why -- let's be honest, Max. Isn't this just a better political ploy for Democrats that they have made a calculation that, as long as this is an issue, it's better for them with voters?

BURNS: This isn't just an issue for Democrats or politicians.

This is the fact we spent $16 billion paying farmers for the hurt we have already caused them.

(CROSSTALK)

PAYNE: We're talking about immigration policy. Let's not conflate these things.

I'm talking about immigration policy that, by the way, unaccompanied children, almost 9,000 in April. The numbers are staggering.

BURNS: Yes.

PAYNE: They're staggering.

BURNS: Six of whom have died in federal custody.

PAYNE: Why aren't the Democrats doing anything about this?

BURNS: You need the president and the Senate to come along.

We have had agreements on comprehensive immigration reform.

(CROSSTALK)

SIEGFRIED: We have had agreements of eight people in the entire Congress.

This predates Donald Trump in terms of updating our election laws or -- no, pardon me -- our immigration laws, because, I mean, we have been waiting longer for immigration law updates than George R.R. Martin's next "Game of Thrones" book.

(LAUGHTER)

SIEGFRIED: But here's the real problem with what Trump's doing.

There is an immigration crisis, and it's only getting worse. But if Trump, in doing this, yes, American consumers might go and buy products from other where, and it will hurt Mexico. That hurts Mexican jobs and actually has more Mexicans trying to come into the United States.

(CROSSTALK)

PAYNE: Ultimately, we all agree that, ultimately, this will -- you will create an economic issue in Mexico that makes the problem worse.

But we know Mexico is on their way. And, hopefully, they will mitigate all this.

(CROSSTALK)

TIMPF: I don't think it'll work, because Mexico has said they're not going to respond to economic threats.

PAYNE: Well, they will.

TIMPF: So, on top of that, I don't think it's going to happen.

(CROSSTALK)

BURNS: If they launch retaliatory tariffs, that could hurt American providers as well.

(CROSSTALK)

PAYNE: It could. It could.

But I tell you what. We have got a pretty strong economy right now. All we're asking Mexico to do is just enforce maybe some, some immigration rules that you have on the books.

I wish we had more time. I love all you guys. We will talk to you again real soon.

Meanwhile, Democrat and House Intel Chair Adam Schiff just calling Republicans a bunch of cowards for failing to stand up to President Trump.

What does Republican and former House Oversight Chair Trey Gowdy think of that? Well, get ready. Gowdy is here.

(COMMERCIAL BREAK)

PAYNE: Investigating the investigators.

Attorney General Bill Barr has critics all fired up after launching a probe into how this whole Trump-Russia investigation started.

Something tells me, though, he could care less what his critics have to say.

(BEGIN VIDEO CLIP)

WILLIAM BARR, ATTORNEY GENERAL: Any attorney general in this period is going to end up losing a lot of political capital. And I realized that. And that's one of the reasons that I ultimately was persuaded that maybe I should take it on, because I think, at my stage in life, it really doesn't make any difference.

QUESTION: You're at the end of your career or...

BARR: I'm at the end of my career. I have...

QUESTION: It's a reputation that you have worked your whole life on, though.

BARR: Yes, but everyone dies.

(END VIDEO CLIP)

PAYNE: Former Republican Congressman and Fox News contributor Trey Gowdy.

Trey, what do you make of this? Because I really -- I got to tell you, personally, I think Bill Barr has been refreshing. And I feel very confident now as to getting some true closure on all of this.

TREY GOWDY, CONTRIBUTOR: Yes, he is a serious legal mind trying to do a legal job in an impossible political environment.

And I appreciate his willingness to accept this role. There was another friend of mine named John Ratcliffe I think was up for it. I think most people will take a long, hard look at whether or not they want to subject themselves to, number one, the confirmation process, and, secondarily, the unmitigated duplicity and hypocrisy that exists in our current political environment.

So I'm glad he did it. He's a really, really good lawyer, but everything that comes out of his mouth is subject to a political analysis. And no lawyer can function in that environment.

PAYNE: But you hit the nail on the head, right, because this polarizing political environment we're in is not going to go away anytime soon.

And while Bill Barr talks about being at the end of his career, he's at a point right now where he can get something done. And, otherwise, it's just going to be left out there. And it's going to be up to interpretation. And even after perhaps the I.G.'s report, his report, everything else, both sides will probably take what they want from this, but I think the American people desperately are seeking closure.

GOWDY: Well, I think they are.

And I think the American people also desperately want a Department of Justice that they have confidence in, even if they may episodically disagree with certain decisions made. He's an institutionalist. He's a DOJ guy from way back. He cares very much about repairing the reputation of that department and the bureau, because he's the boss of the bureau in a sense as well.

So I'm glad he's there. I think if given the time and the objectivity and an open-minded jury, he can get to the bottom of some of these fact patterns.

But, Charles, half the country at least, and certainly half the Congress, doesn't have any interest in getting to the factual predicate of Russia or whether or not the FISA application process was abused. It's an outcome- determinative world.

If you don't like Trump, nothing's going to change that. And if you like Trump, nothing's going to change that.

PAYNE: So if we find that the origins of this Russia probe were nefarious to begin with, and some of the complaints that have been voiced from day one turned out to be legitimate, then what does that -- you're saying that shouldn't have any impact on the way things are?

I would suspect it could.

GOWDY: I'm saying it won't.

PAYNE: Really? That's a...

GOWDY: I don't think so.

PAYNE: Yes.

GOWDY: I mean, you have got -- you got Peter Strzok with a historical level of bias, who was leading the Russia investigation, and said his real concern was that there was no there there, and if it wouldn't result in impeachment, he wasn't interested.

This was the lead FBI agent. And I -- finally, I found a cop that Democrats can defend and support. Unfortunately, it was Peter Strzok.

PAYNE: Yes.

GOWDY: I could not believe, in that hearing, they're defending someone with a historic level of animus and bias.

PAYNE: I want to get your reaction to something House Intelligence Chairman Adam Schiff, calling Republicans a bunch of cowards. Listen here.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF, D-CALIF.: Over time, I have had even senior Republicans will say in hushed tones, keep doing what you're doing.

But I'm, frankly, exhausted by the private misgivings. People need to speak out. And I...

(APPLAUSE)

SCHIFF: I think there's been an epidemic of cowardice in the GOP.

This president doesn't stand for anything the Republican Party said it stood for.

(END VIDEO CLIP)

PAYNE: An epidemic of cowardice in the GOP.

Trey, your thoughts?

GOWDY: Well, let's just get the top line out of the way. I don't know a single Republican that gives a damn what Adam Schiff thinks about him or her or the Republican Party.

There are three kinds of Republicans Adam really likes, those that vote with Democrats, those that lose, and those that die. And for most of us, that's too steep a price to pay to curry favor with Adam Schiff.

This is the same Adam Schiff that did everything his power to keep you from finding out that Hillary Clinton had her own server and classified information traversed that server. He did everything he could to make sure you never found that out, Charles.

The dossier, you wouldn't know about if it was up to Adam Schiff. The FISA application what was used in it, you wouldn't know about if it was up to Adam Schiff. He went to court to make sure you didn't know that the DNC Christopher Steele's work. And you wouldn't know about the Strzok-Page texts if it were up to Adam Schiff.

So the king of transparency is one of the most overtly partisan charlatans that I had the pleasure of serving with.

PAYNE: Right.

GOWDY: And that's why -- there are playing of Democrats I do care what they think. Adam Schiff just ain't one of them.

PAYNE: Trey Gowdy, thank you very much. Really appreciate it.

GOWDY: Yes, sir.

PAYNE: All right, folks, it's a libertarian throw-down, with Kentucky Senator Rand Paul clashing with Congressman Justin Amash over calls to impeach the president.

We're going to bring in our very own libertarian to referee. Kennedy is here.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. RAND PAUL, R-KY: I don't understand a libertarian who would take this investigation and say, oh, we should pursue it and impeach the president. It goes against everything libertarians are for.

(END VIDEO CLIP)

PAYNE: Kentucky Republican Senator and libertarian Rand Paul at opposite ends of the impeachment debate with fellow libertarian Republican Congressman Justin Amash.

So, which is libertarian is right?

Let's bring in FOX Business Network's Kennedy. And she joins me now.

KENNEDY, FOX BUSINESS NETWORK CORRESPONDENT: Charles, great to see you. Happy Friday.

PAYNE: So, you're the libertarian.

KENNEDY: Yes.

PAYNE: You get to decide. Who...

KENNEDY: Sometimes, it's very uncomfortable straddling both sides of the chasm.

PAYNE: But there is a chasm, then?

KENNEDY: There is. And there always is, and there should be when you're talking about political philosophies, and not everyone has to be in lockstep.

And libertarianism is really about individual rights and personal responsibility. And so I think Congressman Amash and Senator Paul are coming at it from two different places. And, actually, you could make an argument that they're both right, because Congressman Amash is looking at the report, saying, if you follow the Constitution, there could be impeachable conduct.

He hasn't been a fan of the president. There's talk that he's going to run as a libertarian.

PAYNE: That's an understatement.

KENNEDY: Yes, that's true. And he has been -- he's been one of the Republicans in Congress who has been combative, not only with the president, but with House leadership of his own party, not to mention Speaker Pelosi.

But Rand Paul is right. And if you talk about the beginning of this investigation, there are still so many outstanding questions. And what civil libertarians have been saying for a long time is, there is a far too great concentration of power that is so attractive for abuse.

And if you have people who have been used to wielding that power, and feeling like they're the good guy, protecting us from the bad guys, and then all of a sudden they see this candidate as the ultimate bad guy, it's too easy for them to use and abuse that power.

And Rand Paul and Justin Amash have both been saying for a long time that we have to take a rational approach to this and scale back some of those tools.

PAYNE: So, with that in mind, I would think that Representative Amash would wait then for the I.G. report. Bill Barr's still doing a lot of investigative work, because you talked again about the origins of this.

Some people argue, hey, if there was no obstruction, which, by the way, was the main purpose of this two-year foray, then, yes, the president was on Twitter. He didn't -- he didn't make secret his disdain for the process. It wasn't something that he did behind closed doors. Then how could that be obstruction of something that never occurred?

KENNEDY: Well, even if you didn't rob a bank, you can still break the law speeding driving away really quick because you got scared.

And I think you can make the argument that obstruction can happen even without a crime. And I would argue that what the president did doesn't amount to a crime. And I think the special counsel is right not to charge him.

I think that Robert Mueller, with all of his years of experience, and with all the money and resources that he had, he could have done a much better job outlining what he thought the president did wrong and said, well, we can't charge him with the crime.

If you can't charge him with the crime, then what's the point of the second part of the investigation in the first place?

PAYNE: Right.

KENNEDY: Because you have essentially nullified your own premise.

PAYNE: On that note, I thought it was interesting, since there was a second part and they did look into obstruction, that no one was charged with obstruction, not just the president, but there was no one else.

KENNEDY: OK.

PAYNE: You know, OK, legally, you can't charge the president. But if there was -- if it was pretty obvious, and you put this many millions of dollars and these many hours and these many interviews, you couldn't find someone potentially?

Again, to your point, Mueller punted on this, when he should have been standing tall and making firm decisions.

KENNEDY: And people want to draw parallels between the Clinton impeachment and the Nixon investigation and Watergate.

And with Watergate, you saw seven people within the administration go to prison. And that's how obstruction works. If you're really obstructing something, if you're really committing conspiracy...

PAYNE: Right. That's my point.

KENNEDY: ... and perjury, as John Mitchell was found guilty of all three of those things, those are all incredibly serious crimes.

And it's not a solo sport. And is the president completely unorthodox and does he give into whims and does he shout things? Yes, absolutely. And I think that's why a lot of people voted for him. Does that get him into trouble? Yes, clearly, it can be problematic for him.

And that's up to him to decide how he comports himself moving forward.

PAYNE: Yes.

Now, President Trump's not going to change the way he does things at all.

KENNEDY: And I think he knows his base wants him to stay the same.

PAYNE: Right.

And that's -- listen, it's a double-edged sword, to your point, but it propelled him into the White House against all odds.

But, that being said, on the libertarian side, it was a few years ago when it felt like that libertarianism was gaining a greater foothold within the GOP.

KENNEDY: Yes.

PAYNE: Has that faded now?

KENNEDY: I think it has, because any president is the leader of their own party. And President Trump is a completely different kind of Republican. He's certainly not a traditional Republican.

He's not a traditional conservative Republican. He's got some limited government instincts, but they're not consistent across the board, as you would find with a typical philosophical libertarian.

And Rand Paul was for, quite a while, seen as the front-runner of the GOP pack.

PAYNE: Right.

KENNEDY: And that was the post-Snowden era, when we were having conversations about limiting warrantless government spying. He was really leading the charge. And he also led the charge against people like John Brennan, rightly so.

PAYNE: Yes.

KENNEDY: Is it a different party? Is it a different time? Absolutely. Does that mean that libertarianism is not the greatest thing on Earth? No, it is the greatest thing on Earth.

PAYNE: Final word, Kennedy.

(LAUGHTER)

KENNEDY: Thank you, Charles.

PAYNE: Always great seeing you.

(LAUGHTER)

PAYNE: Hey, maybe this is why President Trump wants to slam Mexico with tariffs. Take a look at that, more than 1,000 illegal immigrants crossing the southern border in just one day.

And, folks, that is a record. But will these tariffs get Mexico to stop the flow?

Border Patrol union chief Brandon Judd is next.

(COMMERCIAL BREAK)

PAYNE: Rough day on the stock market, Dow off 350 points, all because President Trump may slam Mexico with tariffs to push back against what everyone considers a massive crisis at our southern border.

We're back in 60 seconds.

(COMMERCIAL BREAK)

PAYNE: The scene in El Paso, Texas, on Wednesday, where Border Patrol agents arrested more than 1,000 illegal immigrants trying to cross the southern border. That set a single day record.

National Border Patrol Council President Brandon Judd says this is why we need the president's tariffs on Mexico.

Brandon joins us now.

Thanks for joining us, Brandon.

BRANDON JUDD, PRESIDENT, NATIONAL BORDER PATROL COUNCIL: Thank you.

PAYNE: Well, the stock market certainly recoiled from the potential tariffs against Mexico. A lot of firms on Wall Street saying it's a mistake, even members of the Republican Party saying it's a mistake.

But you say we're at a drastic -- we're at a drastic place that needs perhaps drastic measures?

JUDD: Oh, absolutely.

Look, I'm going to use the phrase, but I like to put my money where my mouth is. The president is doing exactly that. He understands that the stock market is going to go down for one day. This is deja vu. We saw it with China. The stock market went down, but then it popped right back up.

And the tariffs on China didn't, in fact, hurt us, like everybody said it was going to. Mexico cannot withstand the tariffs. The United States can. And the stock market will go back up. But if we do, in fact, put this pressure on Mexico, illegal immigration will go down.

That 1,000 people that you saw cross the border, that pulled so many of our resources out of the field. And it allowed the cartels to have access to our border with very little resistance from the Border Patrol. This is what's taking place.

And this is why this issue is so important. We can't get continue to allow drugs to flow freely into this country, kill United States citizens. We can't continue to allow illegal aliens to freely flow into the country and be released.

PAYNE: Right.

JUDD: We have to do something. And Congress isn't doing it. So the president is doing it for them.

PAYNE: What does the president need to see? What do you think he needs to see, so that perhaps even the first round, the 5 percent, aren't kicked, aren't triggered on June 10? What can Mexico do immediately to show that they have the -- that they want to do the right thing?

JUDD: It's very simple. All Mexico has to do is expand the migrant protection program.

Allow us to send these individuals that are coming into the United States and asking for asylum, allow us to send them back to Mexico and wait their turn in Mexico, until their asylum hearing comes across.

If Mexico were to do that, that would drive illegal immigration down exponentially. But the fact remains, Mexico doesn't want to do that because they want illegal immigration.

The amount of money that criminal cartels make on it illegal alien smuggling and drug narcotics is a multibillion-dollar industry. That money stays mostly in Mexico. And that helps the Mexican economy, which is why they have been so reticent in helping the United States in controlling this illegal immigration crisis.

PAYNE: So, Brandon, let me jump in, because you're accusing the Mexican government of being in bed with drug dealers.

JUDD: Yes, we have seen that.

I mean, look at the -- look at the El Chapo hearing. They came out and said that the former president of Mexico was on the take. We know that we're dealing with a corrupt government. That's why Mexico is in the position that it is.

The United States is such a great country because we believe in laws, and we try to enforce those laws. Mexico doesn't, which is why their economy is where it is, and which is why that country functions the way it does.

PAYNE: It was suggested on this show earlier, and President Trump has spent a lot of political capital meeting with Kim Jong-un, and he's met with others, and that perhaps the better method to this would have been perhaps to meet with presidents -- Mexico's new president, develop some sort of rapport and outreach.

Do you think that was it? Or is there -- is there something with the sense of urgency that precludes that from being an option?

JUDD: No, he's been trying to work with the Mexican government for months now to get them to try to help us control the situation. They have done little to nothing.

He's been put up against a situation where he has to take drastic measures. If Congress isn't going to act, if the government of Mexico isn't going to act, then the president is going to have to unilaterally come up with programs and decisions to try to control this problem.

We are at a crisis. We are at a national emergency, and we have to do something -- 1,000 people in one group crossed. Charles, that's nearly tripled the size of our previous largest group. And we continue to set records month after month, and nobody is doing anything about it.

And the president is left on his own to -- at his own druthers to do what he needs to do. Frankly, that's unacceptable. Congress has to do their job. Mexico has to do its job. And then the president can do his job -- his job.

With all three doing it together, we can control this situation.

PAYNE: Are you concerned, though, that, if this lingers, much like the China trade deal negotiations have lingered, and the tariffs go from 5 to 10 to 15, 25 percent, they're going to have a major deleterious impact on Mexico's economy, and the sort of irony there is that they would actually create more illegal immigration, this time not from Central American countries, but also from Mexicans?

JUDD: It's not going to linger.

The moment those tariffs kick in, the Mexican government is going to have to do something. That's going to force their hand. They're going to have to do something.

I seriously doubt that it would linger. Mexico would easily be able to control their southern border. They would easily be able to accept people under the migrant protection program, pending their asylum cases.

They would have to do something. That is what I would bet. And, frankly, we will wait and see.

PAYNE: Brandon, I have got to jump in here. We have got some major breaking news.

Thank you very much.

I want to go to Catherine Herridge.

JUDD: Thank you.

Apparently, the transcripts have been released. Some Michael Flynn documents have been released. Catherine Herridge is on the phone.

And, apparently, this is a voice-mail conversation?

You know what? Catherine, we don't her on the phone yet.

Are we going to take a break?

We are going to take a break. We will be right back.

(COMMERCIAL BREAK)

PAYNE: We have got breaking news on some new Michael Flynn documents just released.

Catherine Herridge is on the phone with the latest -- Catherine.

CATHERINE HERRIDGE, CHIEF INTELLIGENCE CORRESPONDENT: Well, Charles, thank you.

I have just been speaking with John Dowd. John Dowd is a former lawyer for President Trump. And he's confirmed to me that he is the John that's referred to in the voice-mail exchange with Rob. Rob is Rob Kelner. He is the lawyer for the former National Security Adviser Mike Flynn.

What we see in what's been released by the court is pretty close to what is in the special counsel report in the obstruction chapter.

In the voice-mail, according to Dowd, he says that it was not meant to intimidate. It was a longstanding relationship with Kelner. And he said what people need to understand is that they had what's called a joint defense agreement between Flynn and the president's legal team.

So there was a broad sharing of information. Some of that information would have been sensitive or privileged. And he told me the motivation for the phone call was to say to Flynn's lawyer, if you're going to do a deal, we want to have a heads-up, because some of this material is sensitive and is privileged because of the communications with the president.

The other thing I want to say, Charles, is that it's worth looking closely at the order from the judge, because my read is that he asked for two sets of documents, not only the transcript of this voice-mail, which was part of the obstruction volume in the special counsel report, but, more significantly, I think, these transcripts of phone calls between Michael Flynn and the Russian ambassador, Sergey Kislyak.

And it was those phone calls that really were the catalyst to the series of events and the lies by Flynn that led to his termination shortly after the inauguration in 2017.

And it was the substance of those conversations that were leaked to the media that set the chain of events into motion. And based on my reading of the records right now, it doesn't appear that we're going to get the Kislyak transcripts, at least today. And I'm not sure how the court will proceed, given that -- given that action by the government.

PAYNE: Catherine, thank you very, very much.

HERRIDGE: You're welcome.

PAYNE: We will have more right after this break.

In the meantime, National Security Adviser John Bolton is saying that Iran was indeed behind those tanker attacks. Now he says he could present that evidence next week to the United Nations. What happens next, though, if he does that?

(COMMERCIAL BREAK)

PAYNE: National Security Adviser John Bolton says he has seen evidence that Iran was behind the oil tanker and pipeline attacks in the Gulf. And he plans to present it before the U.N. Security Council next week.

So, where's this going?

Let's ask Fox News senior strategic analyst General Jack Keane.

General, thanks for joining us.

JACK KEANE, SENIOR STRATEGIC ANALYST: Sure.

PAYNE: So we have heard for a while that there wasn't clear communication, at least from our European allies, on what exactly, why we needed to send the fleet out there, have the show of force, why the extra manpower to the Middle East.

Now it appears that John Bolton will present that. If indeed it is what we think, where do we go from here?

KEANE: Well, first of all, these acts were done after the United States had made the announcement that we were going to put some forces back into the region that we had taken out of it, based on some credible intelligence.

Obviously, this is a statement that they're making, based on evidence, that, one, they did have credible intelligence, and, number two, we need to expose the Iranians for the malign behavior that they're up to, and they lied through their teeth. They denied all of this, obviously.

They're going after the UAE's tankers and the Saudi -- the Saudis' pipeline. I mean, that's an act of war, what they're doing here. And they have to be called out for it. And an international arena, like the U.N., is the proper place to do it.

What are the Iranians really up to here? Well, first of all, it does fill a pattern of aggressiveness -- aggressiveness that they have had in the region. I mean, they dominate Lebanon. They are running the war in Syria. They're encroaching on Israel from Syria, and also with all the rockets and missiles they provide to Hamas in Gaza.

They toppled the regime in Yemen which was friendly to the United States and our allies lies. They're -- and they're certainly heavily involved in that civil war as well. And they undermine all the other countries in the region as well.

So, what the Iranians are trying to make a statement -- with all the pushback on them that this administration has imposed on them. And, by the way, Charles, no administration has ever pushed Iran to the degree that this administration is doing, despite the fact that Iran has been doing this for 39 years.

They're trying to make a statement, particularly to the allies in the region, less to the United States, that: Lookit, we are still the major power in this region. And despite what the United States is trying to do to us, we are not going to be deterred. You are still going to have to deal with this major power, Iran.

PAYNE: Right.

KEANE: That's what they're about.

PAYNE: General, you started, though, and you pointed out that these are indeed acts of war.

And yet there's no chance of us actually getting involved in a military conflict in Iran. In the meantime, there's more and more evidence that these economic sanctions are biting, to the point you have to wonder about the internal turmoil within that country.

KEANE: Yes, absolutely.

The economy has contracted 6 percent. Inflation is up at around 37 percent. The rial is their currency, has taken a steep dive. And unemployment is on the rise. Food shortage is routine now, power outages out once a week, rising unrest in the country, around the whole country.

The elites and the upper class not touched at all by any of it -- they're well-protected. But the middle class and others are beginning to feel the bite.

The other thing that's happening, which is very good news, is their proxies in the region, the Hezbollah, the Hamas, the Houthis, they're not getting the resources that they have been used to getting in the past, because Iran flat does not have it.

So we have got to continue on the path we're on, Charles. The administration, I think, has called this right. Keep the pressure on these guys. Remember, job one here is to change their behavior in the region, Charles, and stop this aggressive malign behavior.

Number two is, we don't want them to have nuclear weapons. And, three, the president truly wants them to come back to the negotiation table, so we can put these issues back on the agenda.

PAYNE: On the other end of this, though, some are saying, beware of the Saudis, and let's not get sucked into fighting their battles, particularly when it comes to the Houthis in Yemen, and their longtime rival -- rivalry with Iran.

Are you concerned about where they are? Are they on the same page as us?

KEANE: This is about U.S. national interest, Charles, not about Saudi Arabia.

The Iranians began killing us in the '80s. They blew up the Lebanon embassy, the Lebanon annex. They blew up the Marine barracks, over 240 killed. They blew up the Kuwait embassy. They blew up the Air Force barracks in Saudi Arabia. They targeted U.S. soldiers for four years in Iraq with a specially designed IED that would penetrate anything, got 600 killed.

PAYNE: Right.

KEANE: Listen, they have been after us for a long time.

And we are finally pushing back on them. No Democratic or Republican administration has ever, ever called on the Iranians for the -- what they have done to us. We are finally getting to it.

PAYNE: General Jack Keane, always appreciate it. Thank you very much.

KEANE: Good talking to you, Charles.

PAYNE: Hundreds of roads underwater, as historic flooding continues to breach celebrities and threaten communities in the Midwest.

An update from Arkansas after this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The last two days, I filled up sandbags. These are my neighbors. These are people that I depend on. And they need me. They depend on me.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PAYNE: Historic flooding causing a levee breach along the Arkansas River this morning, prompting evacuations and a flash flood warning.

Casey Stegall is in Conway, Arkansas, the latest there -- Casey.

CASEY STEGALL, CORRESPONDENT: Hey, Charles.

Yes, President Trump by the way signed a disaster declaration for 16 counties across the state of Arkansas that have been impacted by this historic flooding that's really inundated the whole region.

Meantime, the governor says about 500 homes statewide have taken on water. And emergency management officials fear the number will only go up, as these historic floodwaters continue rising, which is happening quickly in multiple communities lining the swollen Arkansas River, especially those furthest to the south.

As all of that water makes its way downstream from Oklahoma and beyond, farmers have taken a major hit. Thousands of acres of fields of crops have taken on water, even more so after that levee breach that you spoke of, which happened overnight in Dardanelle, Arkansas.

That's about 40 miles northwest of where we are. It is cause for concern, say local officials, since record water levels are putting pressure on the entire flood control system like never before.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is difficult to comprehend. When you see it from the air, the breadth of the flooding, you realize the historic area that we are in, in terms of the Arkansas River. We have never seen this before. We have never had to deal with this before. So there are a lot of unknowns.

(END VIDEO CLIP)

STEGALL: Virtually every resident, every local that we have talked to since we have been on the ground here tell us that it's very much a wait- and-see kind of mode.

The water is coming up fast in some places, slowly in others, like this, about four feet in roughly four days, but it's getting closer and closer to homes right behind our camera.

So, again, it's this wait-and-see mode, Charles, as they hope to dry out and recover from these historic rains and floods -- back to you.

PAYNE: And, Casey, thank you, and our prayers with all the people in that region.

Folks, thank you very much for joining us.

And, of course, don't forget, don't miss "Cavuto Live" tomorrow at 10:00 a.m. Senate Judiciary Committee Republican John Kennedy will be joining, also complete coverage of this showdown with Mexico.

The best way to start your weekend is always with Cavuto.

Have a great night.

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