Exactly how are you trying to do that?
What computer operating system for your Premiere Elements 12?
Please explain what you are doing?
It sounds to me like you are trying to create a picture in picture effect.
Also important, what workspace are you working in - Expert workspace or Quick workspace. The details for Picture in Picture for both workspaces is described in the link above.
You need to confirm yes or no on that idea. If no, then please detail what you are doing and the effect that you are trying to achieve, including what is the description of the two files involved.
Please consider. If any questions or need clarification on the above, please do not hesitate to ask.