This is a rush transcript from "Sunday Morning Futures," July 6, 2019. This copy may not be in its final form and may be updated.

CHARLES PAYNE, ANCHOR: Good Sunday morning, everyone. I'm Charles Payne, in for Maria Bartiromo.

Joining us straight ahead on "Sunday Morning Futures," Senator Marsha Blackburn responds exclusively to new escalations from Iran, leaders there defying U.S. pressure, saying they will keep enriching uranium. How should Washington respond?

Plus, Arizona Congressman Andy Biggs on the growing crisis at our southern border and President Trump's threat to resume mass deportations, what he thinks or he plans to ask special counsel Robert Mueller when he testifies later this month.

Plus, Anthony Scaramucci is with us. He's going to weigh in on the record stock market highs here, strong job growth, as well as the U.S. economy bucking signs of recession. Will the Federal Reserve now reconsider cutting interest rates?

All that and more as we look ahead on "Sunday Morning Futures."

Iran showing no signs of caving to U.S. pressure, saying today it is prepared to enrich uranium at any level. Senior officials in Tehran will keep reducing its commitment to Obama era nuclear deal every 60 days unless other nations signed onto the pact can salvage the deal.

President Trump pulled the U.S. from that deal a little over a year ago. Republican lawmakers in Congress say Iran's threat amounts to blackmail, and they are urging the president to impose more sanctions.

Joining me now, Tennessee Senator Marsha Blackburn, a member of the Senate Armed Services Committee.

Senator, thanks for joining us.

SEN. MARSHA BLACKBURN, R-TENN.: Good to be with you.

PAYNE: All right, so the provocations have escalated. The saber-rattling has escalated. It is clear Iran is trying to turn Europe against us here.

And it feels President Trump has been pretty cool so far with all of this, but what's going to happen from here, because it feels like Iran is desperate?

BLACKBURN: They are desperate.

Bear in mind, their economy is shrinking 6 to 10 percent this year. Inflation is at 40 percent. And President Trump is doing exactly what he ought to be doing with keeping the pressure on, on those sanctions, and making certain that the regime realizes we know what they are up to.

They want to go back to enriching uranium. They want to be working to a nuclear weapon. And they want to go back to spreading terror. They are the largest state sponsor of terrorism.

Charles, I think we're doing exactly what we need to do, keeping the pressure on, saying, we're going to stay right on top of this, we're not going to give you an inch.

PAYNE: Right.

So it's interesting, because I'm hearing reports within Iran, because the leaders there have spent so much money, billions of dollars to sponsor terrorism, as all these economic woes, as you pointed out, have escalated...

BLACKBURN: That's right. Yes.

PAYNE: ... that there's enough resentment on the ground that, if we can just keep our cool and somehow show support for that, that may turn into something.

BLACKBURN: I think it may.

And bear in mind Iran is not a six-month or six-year problem. This is something that goes back to the '70s, with the shah being overthrown and the ayatollahs coming in.

And when I talk to friends who are Iranian immigrants and people who are a part of the Baha'i faith, what they tell me is, they are working desperately to support some of the Iranian people who really have a lot of problems with what this regime is doing, because they are suffering.

They are standing in line trying to buy things. The pressure is having an effect. Iran knows that. They know their people are suffering. They know the country is suffering. And for us to keep the pressure on, this maximum pressure campaign, that is exactly what we should do.

PAYNE: What's going to happen with our European allies, though? They have been really quiet, I would say ominously quiet. There had been talk about them trying to subvert the economic system in place right now so they can continue to do business with Iran.

Where are they? Because in every escalation that we have seen since -- during the Trump administration, all the critics say, get our European allies on board before we forge ahead.

I never see them get on board.

BLACKBURN: I -- I think that they wait for us to lead from the front. That is one of the lessons we learned through the Obama years, that leading from behind doesn't work.

And our allies want to know that we are with them, so that they feel free to be with us. Our enemies need to know that they need to fear us.

Now, as we look at what is happening in Iran, I think you have to look at who is working in conjunction with them. Look at what China is doing. Look at what Russia is doing. Look at what's happening in North Korea.

And then you have to ask, is this the new axis of evil? Of course, I think you put those four countries together, and it probably is.

They do not wish us well.

PAYNE: Right.

BLACKBURN: We have to keep the focus on, who are the bad guys here? And we know who they are.

PAYNE: I'm glad you brought up China. And I want to switch to that.

But I do want to also point out, I have read that you still are holding out hopes, though, for ultimately a diplomatic solution to Iran.

BLACKBURN: Yes, absolutely, I'm holding out hopes for a diplomatic solution.

And, you know, the thing is, is, we know that Iran realizes they're not going to have the markets for their oil product. That puts more pressure on their economy, which is already shrinking.

PAYNE: Right.

BLACKBURN: That is their big export. We know that this enriching uranium, they think that they can taunt us, if you will, with that.

They have been enriching uranium. Donald Trump has been very consistent in saying, stop the spread of terrorism and make certain that Iran doesn't have a nuclear weapon. And that is the goal, and we're going to continue to support that.

PAYNE: On China, we have had a reset, if you will, with the trade negotiations...


PAYNE: ... but China using tougher language this time around. But at least we know it's not a complete restart. We're not -- it's not a game of Monopoly, where we go back to go and not collect $200.

There was a 150-page agreement. It was seven volumes, seven chapters. So, there's a blueprint of sorts. Does that give us any hope that maybe this can be resolved, and certainly resolved in a timely fashion?

BLACKBURN: It does give me hope that there is a way forward here.

And, of course, Gordon Chang is the one who is going to weigh in some with China. He's such an expert on that.

Here's the thing I think that's important, restarting the sales of the ag products, working through that. And President Trump is to be commended for that.

Here is where we need to be watchful. In my opinion, it's Huawei. We do not need to let Huawei get into building out these 5G networks, not for us, not for any of our allies because of the dangers there.

China is -- they're building a spy network. They want to win the cyber- war.

PAYNE: Sure.

BLACKBURN: And what we have to do is continue to say to them, you cannot empower Huawei, which is state-run, regardless of what they say. We know it is state-run. And it is their mechanism for spying.

So is there a way forward? Yes, there is. China knows that they are in better shape if they are at the table than if they are not at the table.

PAYNE: On Huawei, though, for a lot of Americans, they had never even heard of Huawei until this whole thing came up.


PAYNE: And then the threat of Huawei has only become apparent to people just in the last few months. And now it's a critical piece in this whole - - in this...

BLACKBURN: Yes, but, Charles, here's the thing.

When I was in the House, some of us had amendments to appropriations bills that would block Huawei from selling to the U.S. military and the U.S. government, because we knew they were embedding that spyware.

PAYNE: Right.

BLACKBURN: That was a known fact.

So these American companies that are selling to Huawei need to stop that. And we do not need to do anything that is going to encourage their cell phone sales. We don't know...


PAYNE: So, you don't like American ship companies, for instance, selling to Huawei...


PAYNE: ... even if we're going to block them from being part of our 5G network?

BLACKBURN: Not at all. Why would we do something that would encourage their innovation?

Because Huawei is building out a network that's embedded with spyware, and it doesn't matter if it is financial data, if it is artificial intelligence or A.V. networks, autonomous vehicle networks. Why would you give them the ability to shut down those networks?

So, no, let's eliminate them from our network.

PAYNE: I know that, in the tech world, they are telling the administration they are working on technology, so that there won't be checkpoints where they could usurp networks and take them over.

BLACKBURN: That's right.

PAYNE: We will see.

But it feels like this is going to be really probably ultimately what it comes down to.

Senator, please stay with us.


PAYNE: Coming up, folks, new details on the DOJ's general inspector's probe into the alleged government's surveillance of President Trump's campaign.

Key witnesses now coming forward in the late stage of this investigation -- that and more straight ahead.

Also, be sure to join the discussion on Twitter and Instagram @SundayFutures, also @CVPayne. I'm pretty active on Twitter. And we're pretty active there.

So, stay with us, as we look ahead on "Sunday Morning Futures."


PAYNE: Welcome back.

An update on a story that we have been following closely on this show for almost two years now, alleged government surveillance of Donald Trump's 2016 campaign.

FOX News now learning that key witnesses have come forward at the 11th hour of this investigation by the Justice Department's inspector general.

We're back with Senator Marsha Blackburn, who sits on the Senate Judiciary Committee.

You know, it's -- Senator, it's going to be really interesting how this all plays out. After two years of building up Mueller's reputation, the Mueller report, I think it was a dry hole, to be quite frank with you.

We're not hearing a lot about the I.G. report, but I think it could be blistering.

BLACKBURN: It is going to come out. It is about time for it to come out.

And, look, what people want to know, when I'm talking to Tennesseans, they want to know, how in the world did they use a fake dossier to get a FISA warrant, and then we have been in this charade of a two-year investigation?

And people want answers to that. They want to see, what chain of communication took place that actually triggered this? How was it that a FISA judge ended up doing this, when it wasn't a credible document?

And people want to know the answer to that. I think having some of these key witnesses finally break and say that they are going to come toward and tell what they know is going to be very helpful to this.

We know that the Democrats have been very nervous about this, and probably they ought to be pretty nervous about this.

PAYNE: They should be nervous about it, but I think the American public should be optimistic about it...


PAYNE: ... because maybe we can figure this out.

If you have potentially rogue agents, you know, first a faulty document, a lie by the -- for the most part, that can trigger something to this level, but people still want to know just what degree of interference or favoritism the FBI's animosity towards President Trump and then candidate Trump played.


PAYNE: What role did any folks in the Obama administration play? How far up the food chain did this go? Who knew about this?

These are really important questions. Do you think we can get answers to them?

BLACKBURN: I think we will get answers from them, because people are demanding them.

And, as I said, if you were on the road with me in Tennessee, this would be one of the main things that you would hear. People talk a lot about the economy. The economy is doing great. And they are happy there.

They want to be certain that we're watching Iran and our enemies and rebuilding our military, that we're securing the southern border. And then they will say, and you better find out how they ended up using the FBI to spy on an American family and on an American campaign.

They cannot believe that this happened. They feel like they're reading some kind of novel, and that this couldn't possibly have happened. But now that it's been confirmed that, yes, indeed, it did, it is, how did it happen, and where is the corruption within the Department of Justice and the FBI?

PAYNE: And maybe some accountability.


PAYNE: We went to break teasing our Twitter handles. We talked about you and I both being on Twitter.


PAYNE: Conservative censorship in social media and technology...


PAYNE: ... is something that you are very passionate about. Where are we going there? Because it feels like it's actually gotten worse, not better.

BLACKBURN: It does continue to escalate.

And what we are looking at -- we just recently did a hearing on these algorithms, looking at that, not only for social media, but also for artificial intelligence. And how do engineers actually nuance or how do they inform building those algorithms, so they tilt against those that are on the conservative side?

PAYNE: Right.

BLACKBURN: And we're going to do some more work on this in Judiciary Committee, as we look at putting in place privacy and data security rules, looking at antitrust, looking at censorship, because, Charles, now you have the virtual space underpinning literally every industry, and so much of Americans' transactional life.

They want to make certain that, as I say, their virtual you is protected and private unto them...

PAYNE: Right.

BLACKBURN: ... and that they give the permission to transfer or for a third party to look at their personally identifying information. So they want to opt-in ability on that.

PAYNE: Well, I think that's something that should be apolitical.


PAYNE: I think that's something all Americans care about.

But something became political this week that in a million years I wouldn't have believed, the Nike-Betsy Ross flag controversy.

BLACKBURN: Oh, my goodness gracious, yes.


PAYNE: You wrote an op-ed. I just want to share some of what you wrote in your op-ed on Nike.

You said to Nike: "There are millions of us who would really like to wear a Betsy Ross running shoe and celebrate what women have done for freedom and freedom's cause. There's such a thing as founding mothers. Why don't you choose to honor them?"

I mean, I just got goose bumps reading that. How -- how -- I don't know how this became a controversy and why Nike blinked on this.

BLACKBURN: It is phenomenal that they would have blinked on this.

Betsy Ross was an abolitionist. She is one of our founding mothers.

PAYNE: She was an anti-slavery Quaker.

BLACKBURN: That's correct. That's correct. And she was a pro-suffrage for women.

And then you look at this with the flag that she made or designed or -- it was such a symbol of our revolution, of seeking freedom and fighting for freedom's cause. It is amazing to me that, as we approach the 100-year anniversary of women suffrage, and you have that flag that was created by one of these founding mothers...

PAYNE: Right.

BLACKBURN: ... and then they say, we're not going to push this to market because someone has an objection?

I think it's time for some history lessons, and we need to celebrate these women who have been fighting for freedom and freedom's cause.

PAYNE: Yes, celebrate these women. You can't change history. And the bottom line is, I think we should be proud of how we have evolved as a nation, not look back and think and with this type of scorn that's being heaped on these things. But you are right.

BLACKBURN: You know, whether it's Abigail Adams or Betsy Ross or Susan B. Anthony or Carrie Chapman Catt, there are women who have so solidly stood for the cause of freedom, and I'm ready to celebrate their good work and recognize those works.

PAYNE: I celebrate that you are in studio. I always appreciate you coming on.


PAYNE: And you are absolutely one of my favorite politicians.

BLACKBURN: Oh, I appreciate that. It's always good to...

PAYNE: It is a short list, but you are one of my favorites.


BLACKBURN: I appreciate that. Good to be with you.

PAYNE: Senator Blackburn, thank you so much. Appreciate it.

BLACKBURN: Good to be with you. Thank you.

PAYNE: And coming up: Democrats and Border Patrol trading blame, as the situation of our southern border grows more dire every single day.

Arizona Congressman Andy Biggs joins me next, as we look ahead on "Sunday Morning Futures."


PAYNE: Welcome back.

Outrage is building on Capitol Hill over the crisis at our southern border. Democrats are slamming Customs and Border Patrol after a recent inspector general's report revealed squalid conditions at migrant detention centers.

But the Border Patrol is equally outraged, and they're pushing back. They are saying that the report outlines what they have been telling lawmakers for months, that only Congress has the power, if they really are upset, to solve this dire situation.

Joining me now, Congressman Andy Biggs from the border state of Arizona. He also sits on the House Judiciary Committee.

Congressman, thanks for joining us.

REP. ANDY BIGGS (R-AZ): Thanks for having me, Charles.

PAYNE: All right, so, six months ago, the media laughed at President Trump. They said it was all make-believe.

And, all of a sudden, we have got these record-breaking numbers of families, unoccupied children. Everyone agrees it is a crisis.

Can we somehow maybe in Washington, D.C., get beyond the typical finger- pointing and get something resolved?

BIGGS: Well, you would think that we would, Charles.

And, you know, a lot of the folks that are claiming there's a -- basically atrocities going down on the border, they are the same folks that said there was no crisis.

But when I have been down there, and I have been to these holding facilities -- by the way, CBP doesn't have really detention facilities. They have holding facilities. And ICE has detention facilities. They are both overmatched. They're overpowered, 25,000-bed shortfall.

Think of that, Charles. And that's why you're getting so many people caught and released. And we should be able to get something done on this, but it's a constant fight. You need to get control of your border.

But you also have to make sure that the supplies are there, and we have seen that the supplies are there. It is overcrowded. It's tough circumstances. It's not -- it's not horrific.

PAYNE: Right.

BIGGS: It is not an atrocity.

But it's a tough circumstance, there's no doubt.

PAYNE: Well, what -- there have been reports of deaths, reports of the conditions? And what rises to the level of an atrocity for you?

BIGGS: Well, an atrocity would be if you're -- if we're deliberately trying to put people in harm's way.

And that's not what's happening here. This is happening because you have incentivized -- not you, but we as a nation have incentivized hundreds of thousands of illegal aliens to come to this country.

And they come up, and they know that the facilities are going to be there for -- and they are only going to be there for a short time. And then they're going to be released. They have food. They have got water. They have got shelter.

They have got air conditioning. They have got the sanitary supplies that they need. It's just not pristine as we would like it to be, as we would expect it to be if we were staying at a Holiday Inn.

They are in a detention facility, Charles.

PAYNE: Right.

BIGGS: And it is not perfect. But it is better in some respects than being out in the desert sun when it's 120 degrees coming across.

And maybe you have got a parent who has put the child in the hands of cartel, for Pete's sakes. These are the atrocities, the human trafficking, the sex traffickers that are going on.

So I think it is a mischaracterization of the context, the entire context, of what's going on.

PAYNE: Right.

I do want to ask you, along these lines, that President Trump now saying that the ICE deportations will be on. They will begin after the holiday, so presumably next week.

Let's take a listen to the president himself.


DONALD TRUMP, PRESIDENT: I say they came in illegally, and we're bringing them out legally. These are people where we have the papers. We have gone through the court system. They'll be starting fairly soon.


PAYNE: President Obama was known as deporter in chief. And he didn't get a lot of pushback.

Obviously, though, President Trump will get a lot of pushback. The GOP will be called the heartless party, breaking up families here at home.

How do you -- how do you -- how would you or are you going to reply to those?

BIGGS: Well, the first point to realize is that President Trump has deported less than -- or fewer than half of the numbers that President Obama deported, number one.

Number two, we have given due process to people that President Trump is talking about. We're talking literally a couple million people. These are people that have actually been in this country. We have given them due process, more due process than you get in any other country in the world.

I have lived overseas. And I will tell you that we -- these people have been able to go to court. They have had a judge rule that you are not legally in this country and you must be removed.

And that's all that -- those are the people that will be removed. And if you have a court order, this is a nation of laws, and guess what? If we're not going to enforce our court orders, then you basically have no borders, you have no boundaries, and you have no rule of law anymore.

PAYNE: Right.

BIGGS: And you just provide additional incentive for people to come in.

PAYNE: Congressman, speaking of courts, the Supreme Court sent back the administration's request to have the citizenship question answered -- placed on the census report.

The administration is still trying to figure out whether or not they want to pursue this, and the clock obviously ticking. The report has to complied -- compiled and then, of course, printed out.

Where do you come down on this? And what essentially in your mind perhaps did the Supreme Court miss?

BIGGS: Well, I think the Supreme Court missed at least two things.

Number one is the purpose of the census is an enumeration for creating congressional districts. I mean, that's article 1, Section 2. That's just as basic as it gets.

And then the second thing I think they missed is the historical context of this as well. Every administration has included some kind of nationality or country of origin question, except for the Obama administration in 2010.

But even President Obama's administration for the annual census estimates surveys that they were doing, they asked that question.

PAYNE: Right.

BIGGS: And so to say that this is somehow discriminatory or a problem is wrong, because the reason you need to know is because you cannot dilute some congressional districts in favor of others.

In other words, if you have 612,000 legal residents in one, and you only have 400,000 in another, then the 612,000 are going to get effectively less representation than you would...

PAYNE: Right, less representation and also, of course, less money. We're talking $600 billion at stake.

BIGGS: Exactly.

PAYNE: We have got a minute to go, but I have to ask you.

The Mueller testimony coming up very shortly. What do you anticipate?

BIGGS: Well, I think the Democrats have already said they are going to have him read a lot, because he's not going to answer anything new.

And I think the Republicans and what I want them to get to is the origins, which the inspector general is looking at, but we should get some of that out of Robert Mueller as well, the origins of the Russia investigation.

And the second thing -- and I think is really critical -- is when did they know that President Trump was no longer the focus of some kind of Russian conspiracy investigation? And why did they wait so very long, in fact, waited until after the midterm elections, to get to it?

And then I would say the third thing that I think is really interesting and critical is, how much money? They looked into President Trump and all of his campaign, but I would like to know how much money that Hillary Clinton and the DNC received from foreign nationals and foreign governments in that campaign.

PAYNE: I got a feeling you are not the only one who would like to know those things. Maybe we will get some answers.

BIGGS: Hope to.

PAYNE: Congressman Biggs, thank you very much.

BIGGS: Thanks, Charles.

PAYNE: Well, the U.S. economy posting its best month in jobs growth since January, but there are still some signs of economic anxiety.

Anthony Scaramucci is going to join me next, as we look ahead on "Sunday Morning Futures."


PAYNE: Welcome back.

A new jobs report showing signs of a growing economy. Employers adding 224,000 jobs last month. That was much higher than anticipated. The unemployment rate ticked up to -- from its 50-year low to 3.7 percent.

But get this. That's because the strong economy lured more people, 335,000, to be exact. So, after this, the Dow, Nasdaq, and S&P 500 still closing at record highs just on July 3.

Meantime, the Federal Reserve, they are prepared to make a key decision on interest rates later this month. Fed Chair Jerome Powell is due also to testify on Capitol Hill later this week.

Joining me now, former White House Communications Director Anthony Scaramucci.

Anthony, let's start with the jobs reports. People were bracing for something really ugly; 224,000 was magnificent, 335,000 people back in the labor force. It's really -- I mean, this is the ultimate economic data point. What do you make of it?


I think, just to dovetail it into your last conversation, the reduction of illegal immigration at the border, Charles, has actually increased wages for lower- and middle-income families. So you have just got the labor -- there's more people that are looking -- there's more jobs available than there are people looking for jobs.

So, for me -- I have been studying the economy for 30 years -- you're going to see trending growth through the 2020 election. And that's going to be very good for President Trump. And it's also good for his trade strategy.

So, for us right now, I don't think the Fed can cut rates here, given how strong the economy is. I know the president wants them to do that, and I know that there are signs of weakness and deflation around the world, but we are literally witnessing an economic miracle, mostly born by the president's policies.

PAYNE: You know, Anthony, for all the focus on President Trump's pressure, if you will, on the Federal Reserve, no one bullies the Fed more than Wall Street.

So, if there's not a rate cut, it won't be the president that will be outraged. It will be the stock market down 500 points. You're OK with that?

SCARAMUCCI: Well, listen, again, I feel the pressure on Jerome Powell is immense, but he has to -- the number one thing that he is looking for is some stability to the currency.

And so you definitely have the growth element and you have low inflation right now. I think one of the things the president is saying to people, look at those inflation numbers. It is 1.6 percent, when you have 3.2 percent growth.

But if you have been studying this thing for 50 or, in Warren Buffett's case, 75 years, that sort of pattern is typically not sustainable. So, for me, I can't see, from an economist's point of view, how he puts in a rate cut in July.

Having said that, you know, obviously, I have got a lot of money in the stock market, $12 billion under management at SkyBridge.

PAYNE: Right. Well...

SCARAMUCCI: If he cuts rates, it is going to be very, very good for the stock market, but I'm just worried that it may be too early to start that process, given the strength of the economy.

Remember, he only has got 250 basis points. And you need about 400 basis points of stimulus, Charles, to smooth out the sharp edges of a recession. And so he doesn't have a lot of bullets in the tank.

PAYNE: Well, without getting too wonky for our Sunday audience, Anthony, I will also say, though, that...


PAYNE: ... the Fed has a real bad habit of being behind the curve. Jerome Powell is not an economist. And he understands Main Street, I think, a little bit more. And maybe he hiked rates too much last year.

We will see. Everyone -- all eyes are going to be on that.

But, in the meantime, I do want to ask you about the -- you brought up China a moment ago. What are your thoughts on this restarting of the negotiations. Where do we go from here?

SCARAMUCCI: Well, listen, I think the president, again, has all the cards.

I think what you are seeing is that the Chinese economy, despite Western media, is probably not as broad and as deep as the media was celebrating, very, very similar to what was going on when they were celebrating the Japanese economy 30 years ago.

And so the president has the cards. He's been patient on this thing. I do think he will get the deal that he wants, but it is just not going to come as quickly as Wall Street wants.

So -- but, if I had to predict it, I would say, by the end of the summer, into mid-September, I do think Steven Mnuchin and Lighthizer get a deal done with the Chinese. Both sides want the deal. I think the Chinese need it more than we do. And I bet -- I'm betting that they are going to curve closer towards what the president wants here over the next 10 weeks.

PAYNE: All right, we have got Gordon Chang, who is going to help us also flesh this out later in the show.

I have got to ask you. It is all about the money. Follow the money. The figures are starting to come in. President Trump's second-quarter fund- raising, it was $54 million. The GOP had another $50 million. You see on the screen there Buttigieg at 24, almost -- let's call it $25 million, Biden $22 million, and Sanders $18 million.

What do these numbers suggest to you, not just the total numbers, Anthony, but the amount of donors, with respect to how much passion perhaps is -- are behind these campaigns?

SCARAMUCCI: Well, listen, the passion is there.

But the Democrats have diffused that passion with 20 candidates. So, if you add up all those numbers on their side, you are like, whoa, that is really impressive.

The president has the incumbency, the presidency, and he's the one candidate on the Republican side. He will have over a billion dollars to spend by the time this is over. And these guys are going to be fighting it out until July of next year.

So, it's going to be very, very hard for them to amass, in my opinion, the same amount of money. And, plus, the president has a story now. He is an experienced president in a rising economy. And so he's the odds-on favorite to win reelection, Charles.

But I'm impressed that those Democrats were able to raise those amounts of money, but they're diffusing themselves by having that much volume in the race against the president.

PAYNE: Are they also diffusing themselves with their economic message? I think America's not ready for socialism. And even though candidates who say they are not socialists don't push back strongly against those that are admitted socialists.

SCARAMUCCI: Well, that's the big problem.

That is one of the reasons why Howard Schultz was trying to get in there and try to pull the party closer to the center. But if they lurch very far to the left, it plays right into the president's sweet spot.

At the end of the day, when you look at the president's policies, shut off the Twitter account, just look at the policies, they have been staggeringly good for the American people and for the American economy and actually for the global economy.

So, at the end of the day, you're going to run a socialist model, 150 years of failed socialism. Everybody in the world knows you can't systematize an equal outcome. We should be more focused, Charles, on creating more equal opportunity for people, younger people in the education system, as opposed to trying to force it down or confiscate wealth from other people that have worked their whole lives to build it up.

So, for me, America is not ready for that. And it's surprising to me that the Democrats are moving in that direction. That's a sign that they have allowed extremists to control their party.

PAYNE: Anthony Scaramucci, as usual, thank you very much. Always a pleasure.

SCARAMUCCI: Hey, great to be here. Thank you.

PAYNE: Hey, criticism from both sides of the aisle after President Trump rolls back restrictions on China's tech giant Huawei. There are some serious security concerns.

We have got Asia analyst extraordinaire Gordon Chang on the far-reaching impact of this next on "Sunday Morning Futures."


PAYNE: President Trump now allowing U.S. companies to do limited business with China telecom giant Huawei.

The reversal sparking pushback from Democrats and Republicans, who say that the company is still a national security risk, and they have major concerns over Huawei's ties to the Chinese government.

Joining me now, Gordon Chang, Asia analyst and author of "The Coming Collapse of China."

Gordon, this is something that you have been adamant -- adamantly against as well.


You just can't separate Huawei into those parts of the companies that pose a national security threat and those that don't. The administration is making the argument that smartphones aren't a problem. The problem is that Huawei can use smartphones to spy on the U.S.

But there's a more fundamental issue, and that is, money is fungible. So profits from smartphone sales are going to help Huawei on their servers and router business. And that clearly is a national security threat.

We should just ring-fence off this company and say, no business at all.

PAYNE: About a month ago, Huawei announced that they would lose $30 billion from restrictions in the sanctions against them by America in just two years.

Is it our goal to put Chinese companies out of business? Is that we entered into this trade war for? Isn't that a dangerous thing to do?

CHANG: Well, the goal of the trade war -- and you look at the Section 301 tariffs.

Those are meant to be a remedy against the theft of U.S. intellectual property. People can argue about how much China's stealing. But it's somewhere between $150 billion and maybe $600 billion. That's a grievous wound to the United States, which has an innovation-based economy.

That's our goal. Our goal is to get the Chinese to stop stealing our intellectual property. And, also, it would be a nice thing if they actually honor their trade agreements with us. That's what the goal of all of this is.

PAYNE: But another goal was to open up the Chinese market, so we'd have less of a trade imbalance, right, that they could buy $150 billion, $200 billion worth of stuff more from us, including the chips that the American companies want to sell to Huawei.

Isn't that a key part of what the president entered this for? Do we still -- do we forget about that part and focus mostly on the security aspect?

CHANG: Well, the president has talked about the trade deficit. And, clearly, this trade deficit is a reflection of the Chinese stealing our I.P., and also the trade violations.

So I think that if you don't focus on the trade deficit as a goal, but you look at what we should be doing, we're going to be in a much better place.

PAYNE: We have got a restart on this thing. But the restart came with tougher language from China, tougher demands from China, OK, we have hit the restart button, but we want this, this and this.

Are they in a position to really be making these sort of demands?

CHANG: Well, not really, Charles, because, right now, you look at the numbers that have come out of the Chinese economy from May, which -- down - - imports down 8.5 percent year on year, that's a real indication of softening demand.

Their consumer numbers are not very good. The first indications from June on the manufacturing sector show a contracting economy. So they're not in a good position. But they think that they can bluff President Trump.

And by getting him to back down -- and by getting Trump to back down on Huawei, at least part of the way, I think that they're saying, yes, we can intimidate the United States.

PAYNE: But we have -- President Trump still has the -- he still has the strongest position?

CHANG: Oh, clearly, when you look at what's happening inside of Beijing right now and Xi Jinping's political problems.

PAYNE: Right.

CHANG: And those demands on the United States that China's making, they are no position to enforce them if Trump uses American leverage.

PAYNE: OK, the art of the deal and the art of war, they merge in this, in my mind, and it feels like one of the keys in the art of war is that, when you have a defeated enemy or an enemy that you can certainly squash at some point, you give them an exit, you make sure they can leave.

There's been a lot about China saving face in this. How does an elegant deal look, so that they can get something that they can take to their people and we can take to ours, and resume some -- a real, fair, honest-to- goodness free trade negotiation -- relationship?

CHANG: That would be nice to think that the Chinese think that way, Charles, but I don't think that Xi Jinping, the Chinese ruler, actually views the world in those terms.

He views this as China being the only sovereign state, we can do whatever we want, kick the Americans to the curb, they're in terminal decline. And, basically, what they're doing, challenging our military, challenging us across the board, this is a problem that we have got to understand the depth of the concern, the depth of China's challenge.

PAYNE: All right, stay right there, Gordon.

Remember way, I mean, way back, when President Trump made history walking into North Korea with Kim Jong-un?


PAYNE: It was actually only a week ago.

Well, now North Korea is accusing the U.S. of being -- quote -- "hell-bent on hostility."

Gordon Chang is going to come back. We're going to talk about North Korea.

Also, protests are rearing their ugly head, or positive head, depending on how you look at it, in Hong Kong.

We will take you there as well when "Sunday Morning Futures" returns.


PAYNE: Well, that didn't take long.

We're talking about these new relationships between the United States and North Korea. It's gone south again, just one week after that really sunny impromptu summit between President Trump and Kim Jong-un at the DMZ.

North Korea accusing Washington of being -- quote -- "hell-bent" on hostile acts against the regime.

I'm back with Asia analyst Gordon Chang.

Gordon, you are also an expert on North Korea. Is this -- this kind of stuff, does this surprise you? It felt like these guys made history last week, and all of a sudden we're back to the saber-rattling.

CHANG: Yes. It is simple, Charles.

North Korea has not made that strategic decision to give up its most destructive weapons. And until it does, we're going to hear stuff like we just heard in the last 24 hours.

PAYNE: I want to take the audience to -- right to Hong Kong, because they're -- right here, these are live images you are seeing, another massive protest in Hong Kong.

And you're saying, Gordon -- you were telling me in the break that protesters are really smart. They're really even -- they're altering and changing their tactics.


First of all, they have expanded their goals. But now they are in a part of Hong Kong where you haven't seen these large protests since 2014. Also, they are going after mainland tourists. Tourists from the main part of China are coming into Hong Kong. The protesters are going to places where these tourists go, and they're talking to them about what they want in Hong Kong.

This is really bad for China because, although those tourists are probably not going to sympathize with the Hong Kong protesters, those Hong Kong tourists are going to be inspired by the protesters, in the sense of, oh, look, these guys are protesting. We should go back to our homes and protest too.

PAYNE: The idea that they don't trust China enough to want extradition speaks volumes of China as a place where -- justice or lack of justice.


And it is not just these tourists. It is the business community that's led the charge against the extradition bill, because they are worried about, you know, mainland partners going after them.

So you have the big business organizations. They are now working on this. And it means that a lot of these businesses could leave Hong Kong if the extradition bill were put in place.

PAYNE: Well, we know the clock is ticking to full takeover at some point.

But the idea was always that maybe success, the success of Hong Kong, the freedoms of Hong Kong could influence China, rather than vice versa. You know, who is winning this sort of idea battle?

CHANG: Well, the idea battle is being won by Hong Kong, because we saw these large protests in Wuhan, which is in the mainland of China.

And I think that they were inspired by what is occurring in Hong Kong, which is a very small place, 7.5 million people vs. 1.4 billion people. But ideas are contagious, and freedom is one of the most contagious ideas.

PAYNE: You see them continuing these protests?

CHANG: This is going to go on for a very long time, because these people in the streets and the business community, they're fighting for their home.

PAYNE: They are fighting for their home, again, though, scheduled to be handed over. So, what can they accomplish, I mean, realistically?

CHANG: Well, realistically, what they can do is, they can preserve their autonomy in the short-term.

PAYNE: Right.

CHANG: And maybe they can outlast the People's Republic, Charles.

PAYNE: Well, I got to tell you, it is inspiring for people watching all around the world.

So, and you're inspiring. Gordon Chang, thank you very much.

Folks, that does it for "Sunday Morning Futures." I'm Charles Payne. It's been a pleasure filling in for Maria Bartiromo.

And, of course, you can catch Maria on "Mornings With Maria" 6:00 to 9:00 Eastern. That's on the FOX Business Channel.

You can also catch me. Every day, I'm trying to make folks money on weekdays 2:00 p.m., FOX Business Network.

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