Tim Seymour (3:08)

All right, Megan, thank you. Megan casella in Washington, D.C. and what we've learned this week is what we've known all along and that is the markets sway according to tariff Talk. We saw that rally based on that report saying that his stance will be softer. Here we are, auto tariffs are looming at any moment and we saw the markets go lower. So what do we do?

Steve Rosso (3:25)

Thinking I have to sort of we've talked about you're going to have to be prepared for these types of, you know, ebbs and flows in terms of the market, in terms of the rhetoric and we're on the other side it now I think in terms of the broader market, you know, 58 and a quarter in the S and P was a level I think collectively we thought we could trade to. We got close. That was a 50% retracement of the all time high in this recent low. It all makes sense and I think this sell off is just a continuation of what's been in place since early January.

Melissa Lee (3:49)

Yeah.

Tim Seymour (3:50)

What do you think?

Dan Nathan (3:50)

Well, I think we failed at the 200 day in the NASDAQ and in the S and P. And the question is, is the, is the Trump put really at a 5,500 strike? Because that's what we got. It's a day. We also got comments from the Fed just kind of implying that maybe tariff impact isn't just temporary And I think that would be more reference to the inflationary side. But, but we've heard auto executives, you know, for, for weeks now and certainly in the last week and there was apparently a zoom that went on or a video conference of some kind. And the point was that we don't necessarily need this. The White House is, is saying that this is aimed at inspiring and spurring domestic growth. And yet when you're talking about the numbers we're getting through on what this means in terms of the kick higher in auto prices and there's numbers out and we don't really know where they are because we don't really know what the tariffs are yet. But, but the reality is that it's something that the industry isn't necessarily rooting for. Even though imports which are finished good cars, not auto parts, etc. Are something that conceivably they could be targeting.

Guy Adami (4:49)

Well, it's coming at a bad time, right, for the auto industry if you just think about it, right, and you know, gm, Ford and you know, rest of Detroit and then you go, go over to Tesla. You probably thought that I was going to avoid that. I mean, this is actually really bad for Tesla. When you think about the kind of price war that is going on right here. If you start having some disruption in the supply chain of the parts that are coming in here, you think about how do you make that up? They're already doing like 0% financing and the like. Then you get the reciprocal tariffs and you're going to China and you're saying to yourself, I'm competing right now with byd. I'm competing with show me. This new car that they've introduced is outselling Tesla Model 3 right now. So, you know, I think there's a lot of adverse effects that you could see on the auto industry. And I think it's actually probably worse off for Tesla.

Chris Harvey (5:30)

I think you have to trade through all of this. You almost have to not listen to it because there's a lot of stuff, stuff that is, I would say algorithmic trading or tape reading trading. So if you think about it, didn't they have to deal with mandates? EV mandates, emissions. How much was that? 3,000, 8,000 per car that they had to add. So this is probably the equivalent of 3,000 to 5,000 in tariffs. I would say avoid them because of recessive recession, not avoid them because of tariffs. If the market's going to slow down, you have to avoid buying all these luxury items because the interest rates are.

Dan Nathan (6:08)

Recession though a function of tariffs or you Think, I think, I think it.

Chris Harvey (6:12)

Could, it could facilitate one, it could push us into one. Recessions are cyclical. They're natural, normal. I think we're overdue for one. I don't think this one will push us into one. There's none in place. So if you think about it, let's see what they are first before we react to them. So the guy's point where he kicked it off, it's got to be like a nascar. You go, you drive to the accident, you don't try to avoid the accident, right. Because it's not there when you get there. So if we're investing, trying to avoid a tariff and it never comes to play, then you've actually chased your own tail on this market that was seen.

Steve Rosso (6:49)

In days of Thunder when cold trickle right at the accident. And remember Robert Duvall said, you're going to make it through drive through.

Tim Seymour (6:57)

You remember, as if I watched that.

Steve Rosso (7:00)

Well, it's funny because Tom came out. Tom Cruise is a big fan of the show.

Guy Adami (7:04)

This is more of a rubbing his racing situation. Right. Because we don't really know to your point where this is going to end. And I just think, I actually think you have to take this at its face value right now. You know, my view going into this stuff is that they were going to pull him. They just weren't going to do it. They were going to use it as a negotiating tactic, which, you know, they did the first time around. So right now, if you do this, I mean, it's just really coming at a time where a lot of the data we're seeing from a consumer standpoint is not particularly great. And I think that, you know, to your point, this is a lot of discretionary sort of thought process around buying a car.

Chris Harvey (7:32)

What Tim said, The 200 day moving average is 5756. We, we were below it for 11 days. We were below it for nine days back in 2023. We popped above it, we failed. We didn't do that back in 2023. We stayed above it and we ramped right from there pretty much into year end. So if you have to look at the technicals, 5756 in the S and P cash is what we need to reclaim in order for the rally to be back on.

Tim Seymour (7:59)

I mean, I think that there are a lot of things that we need to know about the auto tariffs that could be answered at this press conference, which could happen again at any moment. First of all, are they stacks or are they on auto parts plus finished goods? So you're paying a percentage on it on a sum, and then a percentage again on the finished good. Are they against companies or are they against countries? And so all of this will help us answer. Is the stance softening when it comes to tariffs or is it getting worse? Because when Trump pulls forward the idea of copper tariffs, for instance, by 25% when copper tariffs, they had 270 days to do the study. Commerce Department, then you question, well, what is the tariff agenda? And that's where this volatility is, you know.

Steve Rosso (8:38)

But I think he's going to be careful in the language because I think he's very focused on not hurting GM and Ford, which he views as iconic American companies. I think we all do as well. So I'll say this is not meant to be derogatory in any way. I don't think they really know what they want to do in terms of tariffs. They just know that they want to sort of throw that out there and see how the dust settles.

Dan Nathan (8:57)

Well, that's what's always interesting about how the tariffs are being communicated. Maybe, maybe it's the media, maybe it's, there's, there's dynamics around. People just shouldn't be getting kind of detail that they probably need until they're announced. But what you always hear is talks are very fluid, things are kind of moving. And in the sense is we're not even sure what they are because again, if we're back to a place where this is really now targeted and, you know, know, we gave you a month, now we're going back to Mexico and Canada. Okay, and what's this all about? Is that really bad auto parts? Is that really about not finished goods, finished vehicles that are coming into this country? So it's, it's confusing. More importantly for the market, the confusion is what we are dealing with. And so some of those technical failures, you also have, like, everything we heard from the strategists that were either out there, some that have even been on this show in the last week and a half is oversold. Conditions led to a bounce, but everyone was a trader, not an investor. That's what they said. And whether it's, you know, two steps forward, three steps back, three steps forward, two steps back. If this is a trading range, and again, you failed at an important trading range, and uncertainty has only been augmented here, I think that's part of what's going on. And we're also just getting some measures and there's some, some notes that I saw on Bloomberg that S and P liquidity in the futures markets is a two year lows and dynamics around. If you start to lose market liquidity, that's a different element altogether. It doesn't necessarily mean fundamentals have broken down, but it does mean there become other factors for the market.

Tim Seymour (10:17)

Let's get more on the potential industry impact of this latest round of tariffs. Bring in our own Phil LeBeau. Phil.

Melissa Lee (10:24)

Melissa, as we wait to hear from President Trump, the thing to keep in mind here is just how many vehicles are brought into this country that are manufactured in Mexico, Canada, Korea, Japan, Europe, 53 to 54% of the vehicles. It might even be 56% somewhere in that range. There you go. It's 53.7% of the vehicles are manufactured here in the United States. By the way, that doesn't mean the content is all from here in the US Most of the parts, a good chunk of the parts are coming from plants in Canada and Mexico. And there you see how many are brought in from Mexico and these are finished vehicles. Then you have South Korea, Japan and Canada. Melissa I just talked with a couple of people in the industry and I said, look, the speculation is that it might just be 25% on the finished vehicle and there won't be any impact on the components. What would that do to the pricing of a vehicle? The consensus is anywhere between $3,500 and $4,500 in terms of a cost impact per vehicle. Now, how much of that the automakers would be able to pass along to consumers? How much would they be able to say, okay, we'll bring down the incentives that'll help us, and how much of it will they have to eat and cut into their margins in North America? Melissa, we've done a number of reports over the years on your show. When we talk about the earnings reports for the automakers, North America is the profit margin driver. Whatever profits there are within the auto industry, the vast majority are coming from North America. So as we await the President, those are some things to keep in mind.

Tim Seymour (12:00)

So let's say there's roughly 45% of vehicles that are not made in the United States. Where are they coming from primarily?

Melissa Lee (12:10)

Well, first and foremost is Mexico. If we put that graphic back up, 16% from Mexico, then South Korea at about 8.6%, Japan at 8.2% and Canada at 7.1%. It's about 6% for Europe. I get this question a lot from people. About 6% from Europe most of the way. By the way, most of the European autos sold in the US Are manufactured in the US Whether it's BMW, which is up in South Carolina, or go over to Alabama. Right now, I'm down in Savannah at the Hyundai plant that just opened up here. That's where the foreign manufacturing is based in the south part of the southeast part of the United States. So the Europeans have a lot of manufacturing presence here in the US So do the Asian automakers. But we still see a number of these vehicles coming in from, from around the world.

Tim Seymour (12:58)

Phil. Thank you. Phil LeBeau.

Melissa Lee (13:01)

You bet.

Tim Seymour (13:02)

By the way, that Hyundai plant where Phil is, the plans were in place from the first Trump administration when they were trying to bring auto manufacturing back $3,500 to $4,500 per vehicle. In terms of impact, can the consumer bear that at this time?

Dan Nathan (13:15)

Look, this is an average auto price in the US that's gone from 40,000 in 21, late 20 into 21 to 48,000 and change. Now, do you think the auto companies really want this going on? Do you think that's really going to inspire demand? I don't. It's not.

Tim Seymour (13:30)

Yeah.

Dan Nathan (13:30)

It's the opposite.

Guy Adami (13:31)

Buying down rates, I mean, it's not good for margins. Right. And so we've seen margins come down. You know, we had this period obviously during the pandemic and the post pandemic and you know, you screw up these supply chains, you kind of mess with demand a little bit. You know, it's probably going to hard to get back, you know, some of these sales that were kind of meant to happen here. So again, I think the knock on effects are like, what does it mean for other parts of the US Economy? Because they're not going to stop here if they really do put these in place. I'm just really surprised to mention, you know, the, the Trump put. Right. So maybe it came in at 5,500. You know, as the silver lining guy here on the desk, I'd say that the S and P is only down 3% on the year.

Sandy Weil (14:05)

Right.

Guy Adami (14:06)

And so I just look more comical.

Tim Seymour (14:08)

The more you have to say that it's more, it becomes more and more comical.

Guy Adami (14:11)

Like funny or.

Tim Seymour (14:12)

No, no, you have to call yourself that. You're not. That is you.

Sandy Weil (14:17)

Where's the point?

Guy Adami (14:18)

She's getting annoyed. I'm getting laughs over, you know, I'm.

Dan Nathan (14:20)

Just saying the funniest I've ever seen my laughing inside.

Guy Adami (14:23)

My point is, is like what happens when the S and p is down 15% on the year? You know what I mean? Not down. You know, so again, and if they start cutting rates, I don't think that's going to be particularly good for the.

Chris Harvey (14:32)

Well, I think, I think that kicks.

Tim Seymour (14:33)

In the, there's a Powell put and a Trump put. So you're, you're going in there below the market.

Dan Nathan (14:40)

Well, that means the markets have to go down here.

Chris Harvey (14:41)

Yes, they do. So, so if there when, when President Trump came in, he was headbutting with Powell and now he's talking down the 10 year. He doesn't talk about Powell anymore. If you notice that it's only about the 10 year. So if the market drops, if we hit a recession, that puts Powell into play without Trump having to say, cut rates. So I do think there is a put. Yes, of course, the put is below the market. We could have to fall another 10%.

Guy Adami (15:09)

The market's going to drop precipitously before we know we're in a recession. Like that's just like always.

Chris Harvey (15:13)

Hindsight.

Guy Adami (15:14)

Yeah.

Tim Seymour (15:15)

All right. Meantime, St. Louis fed President Alberto Musalam warning the tariffs could mean persistent inflation. But when Wall Street Bull isn't budging from his optimistic forecast, Chris Harvey is ahead of equity strategy for Wells Fargo Securities. Chris, great to see you.

Alberto Musalam (15:29)

Good to see you too.

Tim Seymour (15:31)

Are you brace? I mean, how do you view the markets at this point?

Alberto Musalam (15:35)

The way I view the market. You guys said best, right? What you're trying to do is you're trying to handicap something you really don't know. You don't magnitude of tariffs, you don't know the timing of the tariffs. And so what we're doing, what we're counseling clients, you want to stay in the game, it's not time to go to cash and canned goods, but it's also not time to be a hero. So a certain portion of your portfolio should be in low volume, something defensive. We like staples, but low volatility, etf, however you want to play it. The other part of your portfolio should be in your best risk rewards. We think the communications, we think banks and financials are the way to play it. And you want, what you want to do in the first half of the year is it's three yards and a cloud of dust. That approach has been the right approach so far. And by the second half of the year we can start talking about upside because at that point in time, I do think there is a power put. I do think that we'll have more clarity on tariffs, valuations will become better and we'll start talking about taxes, not so much tariffs all the time. And so the first half is just stay in the game. Don't be a Hero, grind it out in the second half, it will become much clearer what you need to do and where you can put risk on.

Tim Seymour (16:40)

So presumably you had this view sort of going into this year. You're a strategist. You put out your forecast at the very beginning or at the end of last year. Has anything changed in terms of how things have played out when it comes to when the market drawdown was, when it comes to the timeline? I mean, what is the date today? Today is. Today is March 26th right now. Incredible. April 2nd is, quote, unquote, Liberation Day. Actually, you know what? Let's put a pin in this for now. President Trump is speaking in the Oval Office now on the auto tariffs. Let's listen in.

Sandy Weil (17:13)

Thank you very much. It's an honor to be with you. Today we just celebrated Women's Day at the White House. It was fantastic, attended by a lot of great women. A lot of great women. All women are great. So this is the beginning of Liberation Day in America. We're going to take back just some of the money that has been taken from us by people sitting behind this desk or another desk that's not quite as nice, but they have their choice of seven, as you know. And we're going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they've been taking over the years. They've taken so much out of our country, friend and foe. And frankly, friend has been oftentimes much worse than foe. And this is very modest. And what we're going to be doing is a 25% tariff on all cars that are not made in the United States. If they're made in the United States, there's absolutely no tariff. We started off with a 2.5% base, which is what we were at, and we go to 25%. And basically, as you know, and as you've been seeing, not reporting as accurately as it should be reported, because it's a massive story. Business is coming back to the United States so that they don't have to pay tariffs. And I think also because of November 5, the election, they're very happy. AI is coming back to levels that nobody has ever seen before. It's a new sort of a new business, I guess, when you think about it. But it's plants are going up all over the United States, and many of them have already been started. We're getting early electricity taken care of. We're getting permits very quickly for them, and we're going to make their life Very happy. They're coming in with tens of billions of dollars. Individual plants will cost 10, 15, even $20 billion. We're going to let them build electricity generating plants along with their plant. And they can't even believe it. And we're going to get a very quick permits, as I've done always. I did that in Louisiana with two LNG plants. I got one permit in one day after waiting 14 years and the other one in one week after waiting for 12 years. But this is very exciting to me. This is the automobile industry and this will continue to spur growth like you haven't seen before. I was elected, we were losing all of our plants that were being built in Mexico and Canada and other places. Now those plants largely have stopped and they're moving them to our country in Indiana, the great state of Indiana. I love Indiana. Honda is building one of the biggest plants anywhere and they've just started. They wouldn't have done it without this. In all cases, they wouldn't have done it without what we're doing. So we'll effectively be charging a 25% tariff. But if you build your car in the United States, there is no tariff. And what that means is a lot of foreign car companies, a lot of companies are going to be in great shape because they've already built their plant. But their plants are underutilized. So they'll be able to expand them inexpensively and quickly. But others will come into our country and build and they're already looking for sites. They're looking for mostly sites. They don't want to take the old buildings that are empty and falling down. They want to build new. And there's tremendous action. There is likewise for other companies and countries like the chip making process. Your chip bill was a disaster done by Biden. All he does is give tremendous amounts of billions of dollars to chip companies that will do nothing with the money. They're not going to use the money here. They're going to just keep it. They have plenty of money. The one thing they have is they have a lot of money. In our case, all we're doing is saying you can't come in unless you build here. And the largest chip company by far is manufacturer from Taiwan is building here and it'll give us almost 40% of the chip market. Just with that, they're spending almost $200 billion in the United States to build a plant. And they've almost started. They'll be doing much of the work in Arizona. So we have a lot of exciting things. But to me, this is one of the most exciting now outside of one specific day. And that's Liberation Day. That's the real liberation day of America. And that's going to be in April 2nd. And I look forward to it. We'll have a little news conference, we'll talk about it. But this is very exciting. So we're signing a executive order today that's going to lead to tremendous growth in the automobile industry. As you know, the electric mandate that we did allows you to buy a car. Now, electric or gasoline powered or hybrid, you can buy any car you want. We had it so that within a short period of time you had to buy all electric. And the country could never get, they could never provide the money necessary to build all of those power plants that you would need all over the country. As you know, in the Middle west, they built eight power stations that's like the size of this desk or smaller. And they ended up spending $9 billion on eight. And of the eight, four of them didn't work. And we're not doing that. So you can buy electric or you can buy gasoline, or you can buy hybrid or you can buy whatever you want to buy. And that's the way it should be. The market is going to determine that and you're going to see prices going down, but it's going to go down specifically because they're going to buy what we're doing incentivizing companies to and even countries, but companies to come into America and build. And we're already setting records for new plants. I think the new plant number, the tally is just within a period of a few weeks. It's, it's very large. I want to be accurate. It's very large. And I'd like to ask Will just to come and give some of the basics and then I'll sign it and it's off to the races. I think our automobile business will flourish like it's never flourished before. Yes, please, Will. Thank you, sir.

Dan Nathan (23:30)

As you stated, we've prepared for your.

Melissa Lee (23:32)

Attention a proclamation imposing a 25% tariff on foreign made cars and light trucks. This is in addition to tariffs that.

Dan Nathan (23:40)

Are already in place on those goods. In addition to, as you said, spurring.

Melissa Lee (23:46)

Increased domestic manufacture of cars and trucks.

Dan Nathan (23:49)

We expect that these tariffs will result.

Melissa Lee (23:52)

In over $100 billion of new annual.

Sandy Weil (23:56)

Revenue to the United States of America in tariff revenue. I think ultimately we could probably anywhere from $600 billion to a trillion dollars will be take it in over the relatively short term period, meaning a year from now, but starting right away. Starting right away, I think we'll go from 600 to a trillion within two years. And I think we'll be very. I mean, right from the beginning, we're going to be at a very high number right from the beginning. And right from the beginning, you're going to have a lot of construction jobs, but you're also going to have a lot of automobile jobs. So this is very exciting. But it's also exciting because of what's happening with other aspects. We're going to be doing tariffs on pharmaceuticals in order to bring our pharmaceutical industry back. We don't make anything here for. In terms of drugs, medical drugs, different types of drugs that you need, medicines. It's in other countries, largely made in China, a lot of it made in Ireland. Ireland was very smart. We love Ireland. But we're going to have that. We're going to have lumber. We're going to free up some of our land. And you'll be able to meet a lot of other standards, like fire cuts. If Los Angeles had fire cuts, which they didn't have, that's a gap of half a football field between areas. You wouldn't have had the fires. They would have been contained. But you have fire cuts. And by the way, you sell that wood for a lot of money, a lot of. A lot of profit. It's made from that. But we're going to be doing lumber. We're freeing up our land so that people can. So that we don't have to use outside sources of lumber. Energy. We're doing fantastically well at. You know, the energy prices have been coming down rapidly as we increase supply. And we've already done that. We have. Chris and Doug are doing a fantastic job on that. That's Department of Energy and Department of Interior and they're working together hand in hand because Interior has the land and energy has the ability to do the drilling and do what they have to do. Our coal areas are going to be opened up for clean, beautiful coal. Germany is opening up many coal plants now. You know, they tried the wind and it didn't work. They almost went out of business. They almost went bankrupt. They tried wind, which is a disaster because it's too expensive and it doesn't look good. Kills all the birds. A lot of problems. But Germany is now building a lot of coal plants. China is building one. One a week. Think of that. And they're using coal, which is very powerful. Coal is a very powerful energy. And we're opening up our coal mines again and we're going to do. I Call it beautiful clean coal. The technology is so good now that coal can give you tremendous power. At the same time, it can be very clean. But we're also obviously doing oil and gas and various other things. You can do pretty much whatever you want. We don't like the wind because we think it ruins the landscapes, the plains ruins them. And it's got a lot of problems. It's also the most, by far the most expensive energy. It looks horrible in the oceans. It's dangerous in the oceans in terms of navigation. And if you look at what's happening with whales, you know, in one area they lost two whales, like in 20 years washed ashore. And this year they had 17 wash ashore. So there's something happened out there, there's something driving the wells a little bit loco. But they lost two in 20 years and now they lost 17 in a short period of time. So it's something wrong out there. So this is very exciting. This is going to lead to the construction of a lot of. A lot of plants and a lot, in this case, auto plants. And you're going to have. You're going to see numbers like you haven't seen both in terms of employment takes a little while. You're going to have great construction numbers initially. And then you're going to have. Ultimately you're going to have a lot of people making a lot of cars. And one other thing we are trying. We have the speaker of the House with us who's doing a fantastic job and where is Mike? And we're trying to get approved. Mike, thank you very much for being here. We're trying to get approved if we can. If you borrow money to buy a car, you're allowed to deduct interest payments for purposes of income tax, but only if the car is made in America. So if the car is made in America, you get a loan, you can deduct the interest. That's a big saving. A lot of people in that part of the world in terms of buying cars, a lot of them don't think in terms of deductions. People that think in terms of deductions are very wealthy people. But people are going to start understanding what a good deduction is all about. So when you get a loan to buy a car, and I think it's going to pay for itself, I don't think there's any cost. I think that's going to. You're going to have so many cars built, but you're only going to get that deduction of interest if the car is made in The United States of America. So I'm going to sign this, and Mike, I hope you can get that, because I think it's going to be amazing in terms of the number of cars that are going to be made because of it. And I want to thank Howard Lutnick, our fabulous commerce chairman. That's what he is. He's a chairman. He's a very successful guy, a great guy. And we have a big day, Howard, coming up next week. It's going to be. That's Liberation Day. That's going to be on the second, and that's going to be reciprocal. And I think people will be impressed. We're going to be. We're going to be very fair. We're going to be very nice, actually. We have not been treated nicely by other countries, but we're going to be nice. So I think people will be pleasantly surprised. But it's going to make our country very rich because we're the piggy bank that everybody steals from, and they've been doing it for many years, for decades. So we're not going to let it happen. So. But we're going to treat people very nicely. We're going to treat other countries very, very nicely. And I think. I think it's going to have a very positive effect on everybody, including those other countries. So I'll sign this, and we will see you again on April 2nd. In terms of this, it's going to be another round, and it's about making America great again, making it strong and prosperous again. Thank you very much, sir. Can I ask you about tariffs, Mr. President, on the car tariffs? How do you assure that a car coming into the country is fully built? Could an automaker in Germany, say, leave the tires off a car? Yeah, we're going to have very strong policing, and it's pretty easy to do. If parts are made in America and a car isn't, those parts are not going to be taxed or tariffed, and we'll have very strong policing as far as that's concerned. For the most part, I think it's going to lead cars to be made in one location. You know, right now, a car would be made here, sent to Canada, sent to Mexico, sent all over the place. It's ridiculous. So this is a very simple system. And the Beauty of the 25, it's one number. It's not up or down, depending on the cost of the car. It's one number. And that number is going to be used to reduce debt greatly in the United States and to build things, reduce taxes I mean, basically I view it as reducing taxes and also reducing debt. And within a fairly short period of time, I think we're going to have a balance sheet that's going to be outstanding. Yes. How do you assure Americans then that this will not cause a long term increase in prices? Well, look, I think we're going to have a market the likes of which nobody has ever seen before, not in this country. You know, we had the best market ever in my first term. It was the strongest market ever, the best economy ever. And I think you're going to, I think this blows it away. But this is something that people have wanted to do. Presidents have wanted to do for a long time. A lot of them didn't understand it, it wasn't a priority for them. But foreign countries understood it very well and they've really ripped us off at levels that nobody has seen before. But that's not going to happen.

Melissa Lee (31:59)

Mr. President, get this for today or on April 2nd.

Sandy Weil (32:01)

The auto terrorists say it go into.

Melissa Lee (32:04)

Effect today or on April 2nd.

Sandy Weil (32:06)

They go to effect on April 2nd. We're signing today. It's, it goes into effect April 2nd. We start collecting on April 3rd.

Tim Seymour (32:19)

Coming.

Sandy Weil (32:19)

In on April 2nd. What does that mean? Tariffs on any other sectors on April 2, for example, ships or pharmacists? Not then, but we will be putting a tariff on lumber. We, as you know, have a tariff already on steel and on aluminum of 25%. And we're taking in tremendous amounts of dollars. More importantly, our steel factories and aluminum factories are roaring. They're starting to roar. They're building new ones. I just heard from Nucor, which is a big, a big company, a very big steel company, and they're building a massive, a massive plant for steel that they wouldn't build without this. So you're going to see, you're going to see things that are going to be actually amazing. And I think you already have. You know, we've had some news conferences where I can't, I can't have enough. They want to do news conferences where they announce they're going to spend 20, 30, $40 billion. But Apple as an example is spending $500 billion. Okay, any other.

Tim Seymour (33:19)

On the signal chat, Senator Roger was.

Sandy Weil (33:22)

Hold on one second.

Tim Seymour (33:24)

Reciprocal tariffs next week. Will those be immediately effective April 2nd on all countries or will you focus on the worst offenders?

Sandy Weil (33:31)

No, we're going to make it all countries and we're going to make it very lenient. I think people are going to be very surprised. It'll be in many cases less than the tariff that they've been charging us for decades. So I think people are going to be very, very surprised.

Tim Seymour (33:47)

Why is that a tariff?

Sandy Weil (33:48)

I think they'll be pleasantly surprised. I don't know. I think we're trying to keep it somewhat conservative.

Tim Seymour (33:53)

And on these auto tariffs, we saw, Obviously, the NASDAQ 100 go down 2% at close S&P 500, down 1%. What are you concerned about reaction, yes or no?

Sandy Weil (34:03)

I didn't say that. I want to see the jobs I want to see that will all take care of itself. That could take care of itself in one day, two days, or one week. Are there any conditions under which you'd remove these auto tariffs, sir, or is this permanent for the rest of your term in office? Oh, this is permanent, yeah. 100%. Yeah.

Tim Seymour (34:19)

Are you holding on there, sir? Does Elon Musk advise you at all on the. On these auto tariffs?

Sandy Weil (34:24)

No, because he may have a conflict. So we don't talk. I've never talked to him. Elon's amazing. He's never asked me for a favor in business whatsoever. I'm actually a little surprised by it. I might do it, I might not do it. I do what's right and he'd want me to do what's right. No, he's a patriot. He has never, you know, these are big deals we're talking about. This is probably nothing like this. And I've never had Elon come and say, would you do me a favor with the mandate or the electric mandate or anything. He's never asked me for anything.

Tim Seymour (34:54)

What's the response to Republican lawmakers who have said today that your administration should take more accountability and not downplay what's happened with the signal that we've seen in these messages today?

Sandy Weil (35:04)

Well, I don't know about downplaying. The press upplays it. I think it's all a witch hunt. That's all. I think it's a witch hunt. I wasn't involved with it. I don't. I wasn't there. But I can tell you the result is unbelievable because the Houthis are looking to do something. They want to know, how do we stop? How do we stop? How do we have peace? The Houthis want peace because they're getting the hell knocked out of them. It's been very, very strong. The Houthis are dying for peace. They don't want this, and they're bad. Look, they were knocking ships out of the ocean. You know, we had in the Suez Canal. They only have about 20% of the ships going through, they have to go through a different way, which takes weeks of travel and that really affects commerce. But the Houthis have been hit hard and they want to negotiate peace. But I don't think they're quite classified.

Melissa Lee (35:56)

That was shared.

Sandy Weil (35:57)

Say it.

Alberto Musalam (35:57)

Do you still believe nothing classified?

Sandy Weil (36:00)

Well, that's what I've heard. I don't know. I'm not sure. You have to ask the various people involved. I really don't know. I can only tell you this, you know, you don't want to talk about it. The Houthis have been horrible to the world. What they've done killed a lot of people and knocked down a lot of ships and planes and anything else. You know, it's not just the ships. And they have been hit. They have been hit harder than they've ever been hit. And they want us to stop so badly. And they've got to stop. They've got to say no mas. But I can only say that the attacks, you know, it's attacks every day, every night. It's not just the one you're talking about. One, the attacks have been very successful, even beyond our wildest expectations. We've, we've hit it very hard, very successfully, and we're going to do it for a long time. We're going to keep it going for a long time.

Tim Seymour (36:55)

Senate Republicans have asked, said that they have formally asked the administration for an inspector general report on the signal issue. Will you agree to that?

Sandy Weil (37:04)

It doesn't bother me. I don't know. You know, I want to find if there's any mistake or if signal doesn't work. It could be that signal is not very good. You know, it's a company, maybe it's not very good. I think we'd rather know about it now. There was no harm done because the attack was unbelievably successful that night and it has been unbelievably successful every single night for the last four or five nights. So, and that's the thing that you should be talking about. This is something that should have been done by sleepy Joe Biden, but he was asleep at the wheel other than when it came to stealing money, of course, Joe Biden should have done this attack on Yemen, which is basically a certain group within Yemen, the Houthis, and this should have been done by Joe Biden, and it wasn't. And that's caused this, this world a lot of damage and a lot of problems responsible. But he's also overseeing the investigation to find out what went wrong, maybe who's responsible. Mike Waltz says that he's responsible? Well, yeah, Mike Waltz, I guess he said he claimed responsibility, I would imagine had nothing to do with anyone else. It was Mike, I guess. I don't know. I was told it was Mike. But again, the attacks were unbelievably successful. And that's ultimately what you should be talking about. I think Mike did. He took responsibility for it. Say it. Should Secretary Hegseth consider his position over the signal? Hegseth is doing a great job. He had nothing to do with this hexa. How do you bring Hank Seth into it? He had nothing to do. Look, look, it's all a witch hunt. Here we are talking about some of the greatest business deals ever made. The greatest companies in the world are moving into the United States and you want to ask about whether or not signal works. I don't know that signal works. I think signal could be defective, to be honest with you. And I think that's what we have to. Because you use signal and we use signal and everybody uses Signal. But it could be a defective platform and we're going to have to find that. That. Have you been briefed about the soldiers.

Alberto Musalam (39:09)

In Lithuania who are missing?

Sandy Weil (39:12)

No, I haven't spoken, sir, with the.

Tim Seymour (39:16)

Big three automakers about these tariffs.

Sandy Weil (39:19)

What was their reaction? I have. It depends on whether or not they have factories here. I can tell you if. If they have factories here, they're thrilled. If you don't have factories here, they're going to have to get going and build them because otherwise they have to to pay tariffs. Very simple. And most of those have pretty big factories here, like General Motors has big factories here. They're going to move their parts divisions back to the United States because some of them were made in Canada and some of them were made in Mexico and other places. They'll be moving their parts division back to the United States in factories where they may be at 60% capacity. So they don't even really have to build too much of a factory. But you know, generally speaking, if they have factories here, plants here where they make their cars and equipment, but they make their cars here, they are thrilled. Same thing with the steel industry. Steel industry is now paying a 25% tariff, as you know, I put it on last week. And the business is roaring in the United States. And we can't because of military. We can't lose the steel industry. If I didn't put the initial tariffs on steel in my first term, you wouldn't be able to have a military tariff because we wouldn't have every steel company. Every steel company would be bankrupt in the United States and every plant would be closed. But now they're booming and putting this tariff on, this additional tariff for steel and aluminum, it's, it's making them thrive and it's already happened.

Tim Seymour (40:43)

Coming up on the deadline for the TikTok sale, will you extend that deadline? If you don't have a deal, do you support or.

Sandy Weil (40:49)

Well, we will have a form of a deal. Tick Tock is very popular, very successful, very good. We're going to have a form of a deal. But if it's not finished, it's not a big deal, we'll just extend it. I have the right to have the deal and to extend it if I want. So we'll see whether or not we have a deal. We have a lot of interest in TikTok.

Tim Seymour (41:09)

Is there a way for a US company to operate it and ByteDance to still have a share of the algorithm?

Sandy Weil (41:13)

Well, it'll be. There are numerous ways you can buy TikTok and, and we will find the one that's best for the country, for our country. I'm worried about our country more than anything else with respect to TikTok. And China is going to have to play a role in that, possibly in the form of an approval maybe, and I think they'll do that. Maybe I'll give them a little reduction in tariffs or something to get it done, you know, because every point in tariff is worth more money than TikTok. If you think every point. Tariff is a much bigger world and TikTok is big, but every point in tariffs is worth more than TikTok. So in order to get China to do maybe I'd give them a reduction in tariffs as an example. Sounds like. Sounds like something I do you suppose tariffs are going to be good for Tesla, sir? Good for who?

Steve Rosso (42:04)

Tesla, which makes it.

Sandy Weil (42:06)

Well, he makes. He is a fantastic Tesla. Will tariffs be good? I think they may. It could be a net neutral or they may be good. He has a big plant in Texas, he has a big plant in California and anybody that has plants in the United States, it's going to be good for in my opinion, Mr. President, you.

Tim Seymour (42:25)

Want to return education control to the states. How would you handle it if a state like California were to put in place education?

Sandy Weil (42:31)

You know, I haven't seen a mask in so long. You're wearing a mask. So nice of you. I haven't seen anybody wearing a mask in a long time. It's good. You feel more comfortable. Right? Good. That's Good. So go ahead.

Tim Seymour (42:44)

You said you want to return education control to the states. How would you handle it if a state like California were to put in place education policies you disagree with?

Sandy Weil (42:53)

Well, I think that California is going to be tougher because they are they're doing badly on everything they do. You know, everything they do touch turns bad. So a place like California would be tougher for education. But what I would see with California is you'd have a Los Angeles department and you'd have Riverside, you'd have, you know, you'd go to various places, and I think you'd have some great areas in California and you'd have some like everything else, it doesn't work so well, but ultimately, I think it would be very successful. I think in New York, as an example, you'd go to Long Island, Westchester, you may have Nassau County, Queens county, you'd have you break it up in certain ways. So they'd have maybe five departments. You know, because of the size, they'd have five departments instead of one. A state like Iowa, you'd have one. And I mean, they're just chopping at the bit to get going. So many states are chopping at the bit to get education, and it's going to happen fast to get the education.

Tim Seymour (43:55)

Ms. We've been listening to President Trump from the Oval Office fielding a wide range of questions there. The video froze, obviously, so as soon as we get it back, we'll go back to him. But it is official he did announce 25% tariffs on finished autos coming into the United States, also talking about bringing manufacturing back to the United States. Let's get to Phil LeBeau to sort of unpack what was said about the auto tariffs. Phil?

Melissa Lee (44:20)

Melissa, 7.38 million vehicles were imported and sold in the United States last year. Now, I want you to imagine that if you had that same demand, you're going to put a 25% tariff on 7.38 million vehicles. Clearly, that is not going to happen. What's going to happen once these tariffs go into effect is the automakers will respond in a couple of ways. One, they're going to slow down production in foreign plants for vehicles that are imported here to the United States. They're going to also probably have to raise prices and cut incentives. That'll probably happen fairly quickly. And the final decision they'll have to make is how much capacity do they have to bring production back into the United States. The president says, well, there's some places that only have 60% capacity. It's not as simple as just flipping a switch. There's tooling, there's also making sure that the plant and the supply chain can adjust and bring production from a particular plant overseas back here. But there's no doubt this is going to be a huge hit for the auto industry. One executive in the industry texted me earlier and he said this is going to drive the auto industry, not the overall economy, strictly the auto industry, into a recession. Shit, Melissa.

Tim Seymour (45:38)

So that's what we're seeing the automakers across the board. Ford fall, phil. I mean, GM is down 5% at this hour. Ford is down something like 3. So Stellantis, even though it seemed like 25% on finish coming in, would have been actually viewed as, as not as bad as expected.

Melissa Lee (45:57)

Sure, to an extent it's not as bad as expected. It also leaves leverage for the president if he's not happy with negotiations with countries that he could ultimately hit the parts suppliers as well. One quick note, Melissa. I get this question from a ton of people. They're like, well, how quickly could General Motors or Ford, Ford, by the way, is building a plant in Tennessee. That's the only new plant that is currently under construction. But how quickly could an automaker, any automaker, build a new plant like this one here in Savannah, Georgia, even if you had the site picked out and you said do it right now, two and a half years to three and a half years. And that's lightning speed. Melissa. A few people I talked with when I brought this up, they laughed and they said, I've never seen an auto plant built in two and a half to three and a half years. But I guess if you expressed everything, maybe you could get that to happen. So for the people who say, well, they're going to bring all the production back here to the United States, you just don't flip switch and make it happen.

Tim Seymour (46:56)

Right. President Trump also spoke about potentially exploring the idea of making the interest paid on auto loans tax deductible if you buy an American made autofill. I mean, could that offset some of this pain?

Melissa Lee (47:11)

It could. I listened to that. When I heard that, I sat there and I thought that will be appealing to a number of people. On the flip side, if you have to raise the price and we don't know how much the automakers will have to raise prices. If you have to raise the price, $4,000, you know, now you're getting into an average transaction price over 50. Right now it's close to 49,000. Now you're going up into 52, $53,000. It is an attractive thing to make that interest tax deductible. But you're also going to be looking at higher costs.

Tim Seymour (47:46)

Right, Phil? Thank you. Phil LeBeau. Driving the auto industry into a recession. GM shares are down 5%. We were sitting around the desk looking at the declines in the automakers as President Trump is speaking.

Dan Nathan (48:00)

Well, it's been a difficult run already for the automakers and we have heard about sensitivity on higher prices. And again, if you're talking about 4,000 on a crossover and they're saying three or three times that in terms of EVs, this is something that at least is going to feed through. And now ultimately, we'll see what finally comes out. I understand that we've been given a lot of detail here, but I do think you've got a dynamic. What's also just fascinating to me is that we also heard in the same few breaths that we're talking about tariffs on lumber, tariffs on pharma, tariffs on things that, you know, let's see how they're reacting as well. But there's nothing about this that I think is market friendly.

Tim Seymour (48:35)

All right. And we'll go to Washington once again, get the lowdown on everything that President Trump spoke about because he did talk about reciprocal tariffs and the timeline there and also the other areas that could be tariffed. We're going to take a quick break and we'll be right back.

Phil LeBeau (48:49)

Our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@mycare.org a SquawkBox exclusive.

Sandy Weil (49:22)

Banker financier philanthropist Sandy Weil on the health of the economy and the consumer, plus his thoughts on the state of Wall street and Washington's impact on the market. Squawkbox tomorrow, 6:00am Eastern, CNBC.

Tim Seymour (49:38)

Welcome back to Fast Money. We got a lot out of Washington, specifically from President Trump from the Oval Office. Let's get to Megan Casella with the download on that. Megan?

Megan Casella (49:45)

Hey, Melissa. Absolutely. So in listening to the president roll out those auto tariffs, you're right, you mentioned this just before the break, that it was a little bit less than it could have been. It appears from what the president said that auto parts were excluded. That's just the 25% tariff on finished cars. But there were also a couple points that I want to highlight that, show just how far he is going. He did emphasize that these tariffs will stack on top of any existing tariffs. So that means if there's already something like a 10 or a 20% tariff on the EU, for example, something that we might see next week with the April 2nd reciprocal tariffs, this 25% tariff would be on top of that. He also said he's not really interested in any negotiations to try to remove these at any point during his term. He was emphasizing it's not a negotiating tactic, but an end game, something that he believes could ultimately lower taxes, lower the debt. But he says this is permanent, 100%. When he was asked about it, he also talked about the reciprocal tariffs. And something I would flag there is that he said tariffs on all countries will be rolled out on April 2nd. That is a little bit of an escalation from what we've been hearing from White House officials in the past few weeks, who had said some of the worst offenders in their eyes might get tariffs on April 2, but we could see additional tariffs over weeks or months after that. So escalating it a little bit there. But then, one final point, he also again emphasized, as we heard him say last night in the Newsmax interview, that he is going to be looking for some leniency in the reciprocal tariffs. And he also said, quote, we're trying to keep it somewhat conservative, so a lot more to come on that front, but getting a little bit more clarity on the reciprocal tariffs at the same time we're learning about these auto tariffs.

Tim Seymour (51:14)

Melissa, Megan, thank you. Megan Casella, let's get more on the impact from Wells Fargo's Chris Harvey, who managed to stick with us. Thank you, Chris, for sticking around. I mean, when you hear things like the auto tariffs will be made permanent, does that change your view of how things play out?

Alberto Musalam (51:29)

It doesn't change our view.

Sandy Weil (51:30)

Right.

Alberto Musalam (51:31)

So again, you still have to have some defensiveness, some lower volatility. But one thing we've been talking about in the office is a lot of credit card data has still been very good. Consumer has been strong. And what we've been saying is we're not sure it's going to be as predictive as it has been in the past, because people walk into the showroom and say, whoa, how'd that happen? And you can say a lot about the US Consumer. When the US Consumer sees value, they will buy. When they don't see value, they will step away. And I think that's about to happen.

Steve Rosso (51:59)

We've seen a pretty decent move back higher in yields. What, if anything, does what you just heard over the last 20 minutes mean for interest rates?

Alberto Musalam (52:07)

Not too much. I think interest rates actually do grind down. I'm not, not an inflation. I think, think inflation will continue to grind down. I think one of the things that the administration does have, right. If they can get oil lower, then inflation will go lower. And oil has been going lower for the most part. Right. So we're not too worried about inflation at this point in time. We don't think rates are going to trend up much higher. We think they're more in a downward spiral, but a pretty tight range in.

Tim Seymour (52:33)

Terms of earnings season, which we are going to be in shortly. What do you expect? I mean, it's basically a free pass for CEOs to sandbag or to say there's a lot of uncertainty, etc. So are you saying the second half of the year there will be upside to all those forecasts?

Alberto Musalam (52:46)

Yep. Second half of the year, I think is up a fair amount of upside. But you're right, earnings season this time around, the thing that we've been seeing for earnings season reports, the, the reaction, not good. And I think that's going to continue. And you're right, there's no reason to go out on a limb at this point in time. And so you, you may actually just want to sandbag things a little bit and that could cause a negative reaction during earnings, which is something we haven't seen in a while.

Tim Seymour (53:10)

Is that a buying opportunity in your view? Eventually, but you're not willing to say that yet. You don't want to go out on a limb.

Dan Nathan (53:17)

Chris, what are you seeing and what are you thinking? Just about rotation out of the obvious ones, the mag sevens. In a world where there's been underperformance. You're talking about a barbell approach. I didn't really hear a high growth part of your barbell.

Alberto Musalam (53:27)

Well, the high growth part of the barbell is communication. But talking about rotation, one of the things, Mel, before we got cut off, what you said is, hey, what surprised us, we were looking for regime change. Regime change was predicated on some sort of resolution between Russia and Ukraine that while we haven't had that just yet, there's a lot of optimism around there and that has sparked that regime change. It's the rest of the world versus us. It's value over growth, it's low volume over momentum. And so you're seeing people say we have other opportunities than the Max 7. The other thing that they're saying is, hey, the growth opportunities. The trends meet. The absolute numbers may not be strong, but the trends are much better over in Europe. They're better in value, they're better in the rest of the world and that's where they're putting their money.

Dan Nathan (54:08)

Mega.

Tim Seymour (54:09)

Sounds like it's what does that stand.

Dan Nathan (54:10)

For that's making international.

Tim Seymour (54:13)

It hasn't caught on.

Sandy Weil (54:14)

Good point, Miga.

Tim Seymour (54:16)

Chris, thank you. Great to see. Chris Harvey, Wells Fargo. Up next, final trades.

Phil LeBeau (54:25)

For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together we're building a healthier future. Learn more@mycare.org school's in session. And today's lesson, how you can join a fast growing 71 billion dollar child care industry with a premium brand that parents trust. As a Goddard School franchisee, you'll benefit from a proven financial model backed by 37 years of industry experience and over 640 preschools nationwide. Plus we'll support you with financing assistance, real estate, construction, marketing and operations. Now's the time to grow with us. Visit onagoddardschool.com to learn more. This is not an offer to sell a franchise. Franchises are offered only through a franchise disclosure document and in compliance with applicable laws.

Tim Seymour (55:15)

Time for the final trade. Let's go around the horn.

Dan Nathan (55:17)

Tim Seymour, Tyson Foods. There is some cyclicality in chicken and beef right now. Actually chicken prices looking interesting.

Chris Harvey (55:24)

Steve, all this tariff talk has me.

Tim Seymour (55:26)

Thinking steel letter X. Dan Nathan.

Dan Nathan (55:29)

Yeah.

Guy Adami (55:30)

Carter Braxton Worth. He was waiting in the wings.

Tim Seymour (55:32)

Did you see him really patiently chart slb?

Guy Adami (55:34)

He was I think by the slide. I think it's a good looking break.

Tim Seymour (55:37)

Were you here?

Dan Nathan (55:38)

You had no time right now I'll take some slb.

Tim Seymour (55:41)

Oh, you like SLB too?

Dan Nathan (55:42)

I like slb.

Tim Seymour (55:43)

That's like a little mini sld. Segments could be the advance, you know, blends or blands because Lyft is going to get shoved in there.

Steve Rosso (55:52)

Guy got to jam it in there.

Dan Nathan (55:54)

Yeah.

Steve Rosso (55:56)

McDonald's has been performing very nicely on what's been an interesting tape over the last few weeks. So Cafe Mac works for me and McDonald's. And on the way home, four cheeseburgers, large fry, medium Coke every night. Discussion just tonight and then talk to me in about an hour and a.

Melissa Lee (56:12)

Half after that and no thank you.

Tim Seymour (56:15)

Thank you for watching Fast. Have a great night. Mad Money with June Kramer starts now.

Phil LeBeau (56:21)

All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Schools in session and Today's Lesson how you can join a fast growing $71 billion child care industry with a premium brand that parents trust. As a Goddard School franchisee, you'll benefit from a proven financial model backed by 37 years of early childhood education experience and over 640 preschools nationwide. Plus, you'll be in business for yourself, not by yourself, because we'll support you every step of the way. From financing real estate and construction to marketing and operations, the Goddard School is more than a business. It's an opportunity to shape the future of your community by helping children develop the skills and confidence they need to succeed. Ready to make a difference? Join the Goddard School and be part of a proven early education model with growing demand, prime locations and strong support. Visit ownachoddardschool.com to learn more. This is not an offer to sell a franchise. Franchises are offered only through our Franchise Disclosure Document and in compliance with applicable laws.