Tariffs with the USTR & Prediction Markets with the CFTC 6/2/26

Summary

Squawk Pod Episode Summary

Title: Tariffs with the USTR & Prediction Markets with the CFTC
Date: June 2, 2026
Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Featured Guests:

• Jamison Greer (U.S. Trade Representative)
• Michael Selig (CFTC Chairman)
• Dan Murphy (CNBC Correspondent, reporting from Abu Dhabi)

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Episode Overview

In this episode broadcast live from the CNBC CEO Council Summit in Washington, D.C., the "Squawk Box" team delves into international trade policy, the regulatory landscape of prediction markets, and other current market-moving news. Notable discussions include a deep dive on the new U.S. tariff strategy with USTR Jamison Greer, a candid interview with CFTC Chairman Michael Selig about prediction markets and crypto oversight, and analysis of high-profile tech IPOs, short-selling controversies, and a new AI ownership proposal from Bernie Sanders.

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Key Topics & Insights

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1. Tech Market Developments and AI IPOs

(Starts ~02:46)

• Anthropic's IPO:
  Anthropic, an AI giant, has filed confidential paperwork for an IPO, possibly going public by fall. Rival OpenAI may follow suit soon. Sam Altman, OpenAI CEO, downplayed the significance of IPO timing, emphasizing improvement in technology over going public.

  "I think there is a race to deliver the best technology and build the best business. But, you know, going public is a financing event and I don't think that's one that we're focused on the timing of. We'll do it when we think it makes sense."
  — OpenAI CEO Sam Altman (as referenced by Andrew Ross Sorkin, 03:00)

• Google's Major Stock Sale:
  Alphabet is selling $80B in stock to fund AI, including a $10B private placement from Berkshire Hathaway, growing Berkshire’s Alphabet stake to over $31B. Google’s CapEx is now projected at $180–$190B for the year.

  "If this is a flex move, if you can go ahead and secure that capital, good way to do it right now. Under these terms..."
  — Becky Quick (03:25)

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2. Short Selling, Free Speech & The Andrew Left Case

(05:32–10:29)

• Andrew Left Guilty:
  Prominent short seller Andrew Left was convicted of securities fraud for allegedly manipulating stocks through public statements timed with favored trades.

  "The complicated part about this case is from afar, it looks like a case about can you talk about your investments either going long or... short. ...When does it turn into a manipulation?"
  — Andrew Ross Sorkin (05:38)

• Free Speech vs. Manipulation:
  The hosts debate the line between permitted market commentary and illegal manipulation, the importance of transparency regarding disclosures, and the chilling effect this conviction might have.

  "It's chilling that the government can regulate a private citizen's trading and speech. Even if no false statement statements made or manipulative trading, the crime was the intent to profit."
  — Andrew Left in email to Andrew Ross Sorkin (09:20)

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3. Bernie Sanders’ AI Ownership Plan

(10:44–12:57)

• Proposal:
  Sanders advocates for a “sovereign wealth fund” providing Americans direct ownership in top AI companies, funded by a one-time 50% tax on stock (not profits).

  "If we as a country can invest in companies like Intel, why not have a stake in the upside for something that could be possible?"
  — Becky Quick (11:15)

• Panel Reaction:
  Some skepticism about the specifics and methods, but openness to the core idea of broader public benefit if AI leads to job disruptions. Tone is skeptical-humorous regarding economic policy proposals from Sanders.

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4. International Headlines: Iran Negotiations & Trade Tariffs

(15:51–19:47)

• Iran War Talks:
  Dan Murphy details tense U.S.-Iran negotiations, conflicting U.S. and Israeli accounts, and the potential market impact of Middle Eastern instability.

  "Quiet diplomacy overnight appears to have pulled the US and Iran back from the edge... The market is wrestling with several questions, like how long will Israel actually hold off?"
  — Dan Murphy (16:09)

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5. U.S. Tariffs—A New Strategy Explained by USTR Jamison Greer

(21:24–27:56)

• Tariffs as Industrial Policy:
  Greer argues that the U.S. must use tariffs as a flexible industrial policy tool to counter unfair trading practices and promote domestic manufacturing.

  "All of the underlying assumptions of economists during the past 30 years that efficiency was going to win out in economics and global trade, none of that really came to pass because we live in the real world... So our view is these markets can sometimes be broken."
  — Jamison Greer (21:24)

• Nuanced Application:
  The USTR describes current tariffs as targeted, sector-specific (e.g., steel, autos), and asserts they are nuanced "surgically" rather than blanket measures. Recent proposals include new tariffs against Brazil following a section 301 investigation.

  "We have a set of tariffs that are sector specific... they're applied to different countries... depending on the level of problem we have. ...There's been more nuance to it than people realize."
  — Jamison Greer (23:20)

• Banana Shortage Misconceptions:
  Greer disputes reports of banana shortages blamed on tariffs, noting prompt negotiation with key suppliers allowed removal of some tariffs.

  "I never heard they couldn't buy bananas. There was never a banana shortage in the US... Those served as leverage."
  — Jamison Greer (24:39)

• Outlook:
  Ongoing investigations may trigger additional targeted tariffs to address unfair trading practices, forced labor, or structural overcapacity in over 70 countries.

  "If we find unfair trading practices, structural excess capacity, forced labor... we'll put out proposals... and everyone will comment."
  — Jamison Greer (25:31)

• Tariffs & Inflation:
  Greer refutes claims that tariffs caused significant inflation, attributing price rises mainly to monetary policy.

  "Inflation is rarely one to one. So, so we don't see that as an issue."
  — Jamison Greer (27:37)

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6. CFTC and the Regulation of Prediction Markets

(29:57–41:23)

• CFTC Leadership Reset:
  Chairman Michael Selig asserts that his administration is focused on non-political, market-neutral regulation, turning away from enforcement actions perceived as politically motivated under the previous administration.

  "We're done with the lawfare. We're done with pursuing certain industries or certain types of politically, you know, involved people."
  — Michael Selig (30:55)

• Prediction Markets & Statutory Authority:
  Selig clarifies that current law grants the CFTC authority over commodity and event contracts, including those tied to sports or politics. The agency retains discretion to prohibit trading in certain categories.

  "The statute is very clear that event contracts, whether the events on sports, politics or anything else, is within our remit."
  — Michael Selig (33:06)

• Debate over Sports Betting:
  The panel discusses whether prediction markets are functionally equivalent to gambling and how regulatory distinctions are drawn. Selig responds that structure matters but CFTC has exclusive jurisdiction over such markets—not state gambling authorities.

  "You cannot offer a market in sports derivatives. You cannot offer a market in political derivatives. Those products are regulated... by the CFTC."
  — Michael Selig (34:30)

• Intent of Congress:
  Selig maintains Congress intended for the CFTC to have broad regulatory powers, including discretion over sports-related event contracts.

  "I do believe that the intent of Congress was for the CFTC to exclusively regulate these products and to have discretion over certain areas."
  — Michael Selig (35:20)

• Market Manipulation in Prediction Markets:
  The conversation draws parallels between the Andrew Left stock manipulation case and potential manipulation in event and sports contracts.

  "If somebody is engaging in behavior to drive up the price artificially, of course we're going to consider a manipulation action."
  — Michael Selig (36:41)

• Retail Participation and Enforcement Challenges:
  Selig acknowledges the growing scale of retail involvement in prediction markets and the challenge of monitoring and enforcing against manipulation, indicating efforts to bolster resources using technology and new hires.

  "We're using tools like AI to make sure that we're able to leverage staff more effectively."
  — Michael Selig (39:48)

• Crypto Enforcement & The Winklevoss/Gemini Case:
  Selig distinguishes between enforcement and weaponization, saying his CFTC won’t target individuals or companies for political reasons.

  "The agency should not be used to engage in lawfare... That's not going to happen again. It can't happen again under my administration or a future administration."
  — Michael Selig (41:05)

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Notable Quotes (With Timestamps & Attribution)

• On the blurred lines of speech and manipulation in markets:

  "When does it turn into a manipulation?... The real question of the case was was it a manipulation case?"
  — Andrew Ross Sorkin (05:38)

• On the nuance in trade policy:

  "There's been more nuance to it than people realize. ...We're trying to go very carefully to change the terms of trade between the United States and the rest of the world and also be careful."
  — Jamison Greer (23:20)

• On inflation and tariffs:

  "Inflation tends to happen when you inject more money into the money supply. That's usually the primary source. ... Inflation is rarely one to one. So, so we don't see that as an issue."
  — Jamison Greer (27:37)

• On the intent and current scope of CFTC regulation:

  "We have express authority in the statute to prohibit the trading in certain event contracts involving sports, involving political things like war, terrorism and assassination."
  — Michael Selig (33:06)

• On enforcement in sports prediction markets:

  "If somebody is engaging in behavior to drive up the price artificially, of course we're going to consider a manipulation action."
  — Michael Selig (36:41)

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Key Timestamps

• 02:46: Anthropic and OpenAI IPO discussion
• 03:25: Google’s $80B stock sale for AI CapEx
• 05:32: Andrew Left short selling conviction
• 10:44: Discussion of Bernie Sanders’ AI ownership proposal
• 15:51: Iran negotiation update (Dan Murphy from Abu Dhabi)
• 21:24: USTR Jamison Greer on tariffs (in-depth interview starts)
• 23:20: Tariff strategy nuances explained by Greer
• 27:37: Tariffs, inflation, and economic impacts
• 29:57: Interview with CFTC Chairman Michael Selig begins
• 33:06: Selig on statutory authority for event contracts
• 35:20: Congressional intent on prediction markets
• 36:41: Market manipulation in prediction markets
• 39:48: CFTC resource and enforcement challenges
• 41:05: Selig on non-political enforcement and Gemini case

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Memorable Moments

• The lighthearted skepticism about Bernie Sanders, including Becky Quick’s repeated “never, never, never” when asked if she’d turn to him for economic proposals (12:48), but recognition of the seriousness of AI’s societal impact.
• Jamison Greer’s deadpan response to banana shortage claims, unequivocally denying any such shortage resulting from tariffs (24:42).
• Selig’s shots at Gary Gensler (“I think he has a little bit of trouble reading statutes.”, 33:06) and firm stance that the CFTC is getting “back to baseline” after alleged politicization.

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Tone

The episode combines CNBC’s trademark brisk, analytical, and occasionally sardonic style. While probing and sometimes critical, the hosts balance skepticism with an openness to substantive debate, particularly when discussing the evolving regulatory and policy landscape around technology, AI, and markets.

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For Listeners: Why This Episode Matters

This episode is must-listen for anyone following macroeconomic policy, the intersection of finance and technology, and the debate over how to regulate rapidly innovating, often controversial markets. You’ll hear candid talk, direct from the policymakers, about tariffs, market manipulation, prediction markets, and the regulatory tensions underlying America’s position in a shifting global order.

Transcript

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[Andrew Ross Sorkin]

Bring in show music, please.

[Joe Kernan]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode on the ground in Washington, the team catches up with D.C. leaders like U.S. trade Representative Jamison Greer.

[Jamison Greer]

There's been more nuance to it than people realize.

[Joe Kernan]

The tariff strategy so far and the changes still to come, like in Brazil

[Jamison Greer]

for investigating specific unfair trading practices by different countries.

[Joe Kernan]

Chairman of the CFTC joins us too, Michael Selig on how he views his own role in the market of prediction markets.

[Michael Selig]

I do believe that the intent of Congress was for the CFTC to exclusively regulate these products and to have discretion over certain areas. Sports, gaming, all of that we have authority to prohibit potentially if we choose to use that authority.

[Joe Kernan]

Plus, Anthropic is officially going public. Google is selling $80 billion worth of stock to fund its AI build out. Short seller Andrew left, was found guilty of securities fraud. And Bernie Sanders has a proposal to democratize AI ownership.

[Becky Quick]

If we as a country can invest in companies like intel, why not have a stake in the upside of Bernie

[Andrew Ross Sorkin (alternate or guest commentator)]

Sanders for any type of economic proposals and public policy?

[Joe Kernan]

Never.

[Becky Quick]

Never, Never, never.

[Joe Kernan]

It is Tuesday, June 2nd and Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand back. You buy in three, two, one.

[Becky Quick]

Good morning, everybody. Welcome to Squawk Box. We are live from the CNBC CEO Council Summit in Washington D.C. this morning. Big show for us. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin.

[Andrew Ross Sorkin]

AI giant Anthropic has filed confidentially for an initial public offering that could put it on track now to go public this fall. Multiple reports saying that rival OpenAI also preparing to submit its own IPO filing imminently yesterday, OpenAI CEO Sam Altman telling David Faber he didn't think there was a race to go public and his company would do it when it makes sense. I think there is a race to deliver the best technology and build the best business. But you know, going public is a financing event and I don't think that's one that we're focused on the timing of. We'll do it when we think it makes sense.

[Advertisement Voice]

But you will do it as well.

[Andrew Ross Sorkin]

I would say we'll do it someday.

[Becky Quick]

And shares of Google's parent Alphabet are lower. This morning. It looks like they are off by about 2 1/2 percent. $366.8. This comes after the company says that it's selling $80 billion in stock to fund investments in artificial intelligence. That includes $10 billion from Berkshire Hathaway through a private placement. That position for Berkshire Hathaway adds to a position in Google class A and C shares that Berkshire has been building over the last. In fact, as of the most recent filings, it looks like they had $21.76 billion in shares of Alphabet. This again adds another $10 billion to that. So just over $31 billion. Alphabet says that it plans to spend somewhere between $180 and $190 billion on CapEx this year. They upgraded those numbers in April. Before that they had been saying 175 to $185 billion. And at the time when they upgraded that CapEx spending number, Sundar Pichai was asked what keeps him up at this is the race to try and make sure they have enough money for compute power. Google already had $126 billion in cash on hand, according to the most recent filing. So it is a company that has plenty of access to cash. It kicks off a lot of cash. But look, if this is a flex move, if you can go ahead and secure that capital, good way to do it right now. Under these terms, A federal jury has convicted prominent short seller Andrew Left of securities fraud. Prosecutors accused him of using his reputation and media appearances to manipul shares in a way that would reward his trades. They said he made bold public calls on stocks and then exited a trade minutes or hours later after inciting small price moves that would yield quick profit. Left testified in his own defense, arguing his statements were authentic and attributing his conduct to being an active traitor. Sentencing is set for August 31st. The main securities fraud charge carries a maximum 25 year prison term. Left said the jury got it wrong. He also said he plans to appeal. But Andrew, you brought him on squawk box?

[Andrew Ross Sorkin]

Yeah, I think he came on. Was that about a year ago, before the case began?

[Becky Quick]

It was before.

[Andrew Ross Sorkin]

When did we have him, guys?

[Becky Quick]

Maybe a year and a half.

[Andrew Ross Sorkin]

About a year ago. Look, the complicated part about this case is from afar, I think it looks like a case about can you talk about your investments either going long or in this case going short or a combination of both. And to some degree, I think Andrew left positioned the case as a free speech case. The real question of the case was was it a manipulation case? And I think in certain instances there were elements of free speech, meaning you want people to be able to talk you, especially short sellers, you want them to be able to do investigations and come out publicly and say what they found. The question is, when does it turn into a manipulation? If in fact within minutes or hours

[Andrew Ross Sorkin (alternate or guest commentator)]

on the day that recommends stocks?

[Andrew Ross Sorkin]

Well, we will. And the question is, are they coming on the air?

[Andrew Ross Sorkin (alternate or guest commentator)]

They shouldn't sell right after they get

[Andrew Ross Sorkin]

two or three hours or five minutes later or I believe in potential. In some cases there was suggestions that, that there were misstatements completely. Meaning could you say that you owned something and you didn't. Now, could have you forgotten that you owned it, by the way, going on

[Becky Quick]

to talk about it or tell.

[Andrew Ross Sorkin]

Hopefully you. Hopefully you don't, but, you know, could have a trader traded something the day before and you didn't know.

[Becky Quick]

Disclosures, we ask our guests for disclosures.

[Andrew Ross Sorkin]

These are a lot of those issues.

[Becky Quick]

If they're going to be talking about things, we ask if they are long or short those.

[Andrew Ross Sorkin]

And so the question is, are they manipulated?

[Andrew Ross Sorkin (alternate or guest commentator)]

This wasn't from the short. Like people have this weird, you know, notion that if it's on the short side, oh my God, he's talking out, you know, and he sold, you know. Well, it's mostly CEOs, but it's fine to come on.

[Jamison Greer]

I don't have a problem with talking.

[Andrew Ross Sorkin]

Well, in this case it was about long. Long engine. Long engine, that's what I mean.

[Andrew Ross Sorkin (alternate or guest commentator)]

So that's not it either.

[Andrew Ross Sorkin]

But we have people come on and talk about SpaceX ahead of an IPO there, by the way, increasingly, I think the more complicated place is actually all of the talk about private companies and then what's happening as it relates to secondary investments and everything else. And when we get into a universe of tokenization and prediction markets and everything else. But that's where this gets very complicated.

[Becky Quick]

We don't want a line where people can't talk long or short, but probably

[Andrew Ross Sorkin]

specifically no, you want Everybody, Exactly.

[Becky Quick]

Enron was uncovered in many other major frauds within companies.

[Andrew Ross Sorkin]

But there's a secondary question which is do you believe for example that there should be a rule which says if you publicly put out a letter saying that something is happening or that you're investing in this and you believe in this that therefore you have to own it for 24 hours, for 72 hours, what's the line? And that becomes part of the whole

[Andrew Ross Sorkin (alternate or guest commentator)]

debate if you dig even deeper. You know my problem with suicide. These people we have on that are self that they, they're giving advice to the, you know, the, the financial advisors that are in their firm. They don't remember what they said the month before that they were on and sell side analysts that don't have any skin in the game compared to a buy side. Someone that's got, knows where he bought it or he or she bought it, knows where he sold, know how, knows how long he's been in, he's got receipts for what he's done. You know they have to have accountability. I would take a buy side anytime over a sell side. And this is what we're talking about here. Someone that actually is recommending a stock that they have a vested interest in, those are the people that you want. I would think it's like when a CEO.

[Andrew Ross Sorkin]

Well but so I have a very mixed view when a CEO buys, sometimes you want to, sometimes you want somebody who's an impartial person. I mean it depends. A lot of, a lot of analysts, sell side analysts are supposed to be completely independent and are not supposed to be talking their book if you will.

[Becky Quick]

Are you talking your book or are you putting your money where your mouth is?

[Andrew Ross Sorkin (alternate or guest commentator)]

Good old days. You could have a sell side analyst that was also doing some banking for them.

[Andrew Ross Sorkin]

That's not all that was really a

[Andrew Ross Sorkin (alternate or guest commentator)]

good deal that ended.

[Andrew Ross Sorkin]

I just wanted to let you know I got an email from Andrew Left overnight right after he was convicted and I wanted to read it to you because it made me speechless to get an email like this right after you get convicted. He wrote effectively to me the following. He said I'm a bit speechless. He said what does this do for the future of free speech is chilling. Can individual investors not talk? SpaceX. Wow. Still shocked, he then went on in a separate email to say it's chilling that the government can regulate a private citizen's trading and speech. Even if no false statement, statements made or manipulative trading, the crime was the intent to profit.

[Becky Quick]

He said, you know what the idea is? What's the definition of market manipulation here. I mean, we had this conversation earlier. How soon after you go out and you say something is terrible, can you then get rid of your shorts on it? Or how soon after you say something is wonderful, fabulous, can you go sell and sell it?

[Andrew Ross Sorkin]

And clearly there's, I mean, look, there was evidence, there were things he was saying and then relatively quickly there were things that he was then either selling or buying as a result on the other end.

[Andrew Ross Sorkin (alternate or guest commentator)]

Yeah, this was illegal in ancient Greece too. I mean, this is pump and dump. This is the oldest thing. Right. And what we're talking about here is just a classic. Pump and dump is what he's being accused of. And I'm not convinced, to be honest, that it was.

[Jamison Greer]

That there's merit.

[Becky Quick]

Yeah, yeah. Senator Bernie Sanders says that he will introduce a bill to give the American public a direct ownership stake in the largest AI company through a sovereign wealth fund.

[Andrew Ross Sorkin (alternate or guest commentator)]

This legislation would give the public a direct ownership stake in the largest AI companies in America through a one time 50% tax, not on profits, but on stock.

[Becky Quick]

Then he said that the billions, if not trillions of dollars generated by the fund would provide direct payments to the American people. I don't know if it's as crazy as you might ordinarily think if there is going to be, or if there are going to be massive job layoffs because of AI. This might be a way to go back at it. I don't know about how you fund the sovereign wealth fund or how much you end up putting in it, but if we as a country can invest in companies like intel, why not have a stake in the upside for something that could be possible?

[Andrew Ross Sorkin]

I interviewed Dean Ball yesterday.

[Becky Quick]

Oh yeah, on stage.

[Andrew Ross Sorkin]

On stage right here at this conference. Dean was an advisor to President Trump, wrote the AI task force plan effectively in terms of what that plan action plan was supposed to look like. And he made, I think, a very smart argument, which is I don't think we're there yet in terms of UBI and knowing where this is going to go and whether it's going to take employment or whether it's not. I think we all have lots of different views. There's also, by the way, another view which is that we, the taxpayers already own ostensibly some major percent of these companies. Insofar as if they are successful, they should hopefully be paying taxes, they should be creating jobs. I mean, there's a whole plethora of things that can happen. On the flip side, yes, maybe if they start taking the jobs. But then the question is, I don't

[Becky Quick]

know about how Bernie Sanders just proposed to fund it. That sounded a little crazy to me. But the idea of having some skin in the game and some upside down potential on it doesn't seem.

[Andrew Ross Sorkin (alternate or guest commentator)]

Are you ready to go to Bernie Sanders for any type of economic proposals?

[Becky Quick]

Never, never, never, never.

[Andrew Ross Sorkin (alternate or guest commentator)]

Let's start with I would never agree

[Becky Quick]

with him, but this doesn't sound like the idea of having an upside. The AI doesn't sound as crazy as I would anticipate.

[Andrew Ross Sorkin (alternate or guest commentator)]

I should actually listen and give it a chance. I just tune out.

[Andrew Ross Sorkin]

Tease will be next.

[Joe Kernan]

Coming up on Squawk Pod, we'll take you behind the headlines for for the latest in the Iran war talks and then details on the proposed 25% tariff on Brazil and the tariff strategy overall. With US Trade Rep Jamison Greer, grocery

[Becky Quick]

store owners and others saying we can't buy bananas anymore because we don't grow them here. And every country that does, we've got these huge tariffs.

[Jamison Greer]

I never heard they couldn't buy bananas. There was never a banana shortage in the US.

[Becky Quick]

That's what Target CEO told us on air.

[Jamison Greer]

I never heard anyone having a band.

[Joe Kernan]

We're talking trade right after this break.

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[Joe Kernan]

Welcome back to Squawk pod. We're turning to international headlines now with Joe Kernan, Becky Quick and Andrew Ross Orkin.

[Andrew Ross Sorkin]

President Trump now saying yesterday that indirect talks with Tehran were continuing at what he called a rapid pace. This coming after he shrugged off the potential collapse of negotiations, telling CNBC he didn't care if they were over. CNBC's Dan Murphy joins us from Abu Dhabi this morning with the latest. Dan?

[Dan Murphy]

Andrew, good morning. Well, let me tell you what's happening behind the headlines here because the last 24 hours have really been a white knuckle ride for anyone watching this conflict. It seems as if quiet diplomacy overnight appears to have pulled the US And Iran back from the edge of the and we're seeing that reflected in the oil markets today. The picture from the region this morning is a little more status quo, but of course, don't mistake that for stable. We saw Iran threatening to walk on Monday, officials telling the semi official Tasnim news agency that no talks with Washington resume until Israel stands down in Lebanon, which Tehran calls a direct violation of the U. S. Iran cease fire. And they threw in a threat for good measure as well. The Iranians threatening retaliation in the Strait of Hormuz. Now that sent oil prices up. It also sent the president straight to the phone, first with CNBC's Eamon Chavez and then to Israel's Prime Minister Benjamin Netanyahu later in the day. There's new reporting from Axios this morning that says Trump put the prime minister on blast with an expletive heavy exchange pressing Israel to stand down. Now, we have not independently verified what was said on that call, but publicly the president had a completely different tone on truth social. Trump called it a very productive call saying no Israeli troops would go to Beirut, any en route had been turned back and that even Hezbollah had agreed that all shooting would stop. Netanyahu then put out his own statement, the prime minister saying the IDF would keep striking southern Lebanon as planned. And Al Jazeera reports today that Some strikes have occurred. So you've got two leaders, one call, two entirely different readouts. The view here in the region today is that Washington did successfully push Israel back from a major escalation in Lebanon, the kind that could have potentially blown up the Iran negotiation entirely. So a win, at least for now. But you also really get the sense here the market is wrestling with several questions, like how long will Israel actually hold off? How quickly can the US And Iran get a deal across the line? And of course, what happens if they don't? And then ultimately, what will any agreement mean for the day after here in the region as well, the market trying to price all of these potential scenarios simultaneously, it would seem. Back over to you.

[Andrew Ross Sorkin]

Hey, Dan. So I was texting with a hedge fund manager last night and we were discussing if we had a sliding scale with a chart on it, where we were today relative to where we were, where we are versus the last three, four, five, six, seven weeks. Where do you think we are? What do you think the sense is in these negotiations in the office in terms of time, in terms of does this end? There's been a lot to be good.

[Dan Murphy]

Yeah. I mean, it's hard to put a, put a point on it, right? It depends what type of graph you're, you're looking at. I mean, for the region, it's, it's looking maybe two thirds of the way through. But then again, the timeline is anyone's guess here. The day after is the real question. You can put the cease fire on a piece of paper, have a signature at the bottom. That opens up this negotiation window for what happens with Hormuz and the nuclear program. But this is a region that's been completely reset as a result of the last four months of conflict. And exactly what it is going to look like, how these regional leaders are going to respond, I think we haven't even started to scratch the surface.

[Andrew Ross Sorkin]

Dan, want to thank you. Appreciate it.

[Andrew Ross Sorkin (alternate or guest commentator)]

The office of the United States Trade representative is proposing 93 or 25% tariffs on Brazilian goods. The agency accusing Brazil of engaging in practices that are unreasonable and burden or restrict U.S. commerce. U.S. trade Rep. Jamieson Greer said the investigation was conducted under section 301 at the direction of President Trump. Greer said negotiators from the US And Brazil continue to have substantial differences in resolving the issues identified in the investigation. The U.S. trade Representative's office is going to hold a hearing about the 25% tariff in the proposal on July 6th. And joining us now ahead of this appearance on stage at the CNBC CEO Council Summit. U.S. trade Representative Jameson Greer. I'm sorry you didn't get to. I wish you would had an earpiece and we've been talking about you, maybe your ears were burning. But I read with great interest the op ed that you wrote about tariffs. It's not just a defense of tariffs, it's almost, I mean almost a zealous endorsement of tariffs and sort of correcting a lot of misconceptions that are pervasive currently. Can you, can you just summarize what you said? Because we've used them in the past, suddenly it just became almost a factual statement that they're bad, they're taxes, they hurt the consumer and if you tax something you get less of it. Why do you think that's more nuanced?

[Jamison Greer]

Well, the article you're talking about, I really address two economists because I think fundamentally for many years, particularly following the end of the Cold War and this idea that history has ended and now there's this inexorable march to everybody becoming a market based democracy, which of course is false. We look now, we see where we are. We know we see some of the larger, largest economies in the world. China, not a democracy, not, not market based. India, certainly a democracy, but quite statist in its approach. So all of the underlying assumptions of economists during the past 30 years that that efficiency was going to win out in economics and global trade, none of that really came to pass because we live in the real world and in the real world countries are operating with, with power, their, their pursuing economic policies for reasons other than economic efficiency. And so they get ahead of us and we end up becoming, we have to just accept whatever policies they make. So our view is these markets can sometimes be broken. If you have China that goes in and they undermine everybody, they have a lot of subsidies or state direction, it eliminates the possibility of free trade. Therefore we have to use whatever tools are available to us. Tariffs, as you mentioned, are a tool that have been used for, for over a century in the U.S. you know, we didn't use as much in the post war period and certainly not in the post cold war period. But it's a tool of industrial policy. It's to be used, you know, carefully. But we have seen over the past year very good results. We're exporting more than we've ever exported. We're seeing green shoots in manufacturing and we're seeing expansion in maintenance manufacturing. So all of these things that are happening, it's not just theory, the data are backing up what we're doing.

[Andrew Ross Sorkin (alternate or guest commentator)]

Is used efficiently and almost surgically. Would you say that's what's been done? Because critics would say it has not been surgical.

[Jamison Greer]

Well, it's interesting that you say this because it is simple for people to say, well, they've just been applying tariffs wildly. And that's simply not the case. We have a set of tariffs that are sector specific. Automobiles, steel, aluminum, copper, sensitive supply chains. And if you look at those, you know, they're applied to different countries differently depending on the level of problem we have at those countries. And then we have other types of tariffs. Last year we had what we call reciprocal tariffs that were designed to get at a lack of reciprocity in trade. But even in that situation, we didn't have tariffs on oil and gas, we have tariffs on fertilizer, we didn't have tariff on food that we can't even grow here, tropical fruits and that kind of thing. So there's been more nuance to it than people realize. You know, just last night we released a proposal on tariffs on Brazil for a number of unfair trading practices they had. And again, that was something that was quite nuanced. So we're trying to go very carefully to change the terms of trade between the United States and the rest of the world and also be careful.

[Becky Quick]

But Jameson, to be fair, I think that's a more recent approach to it. When, when we had Liberation Day last April, those were exactly the complaints we were hearing from grocery store owners and others saying we can't buy bananas anymore because we don't grow them here. And every country that does, we've got these huge tariffs on it. Is it fair to say that it's become more precise as you've gone along?

[Jamison Greer]

Well, I never heard they couldn't buy bananas. There was never a banana shortage in

[Becky Quick]

the US that's what Target CEO told us on air.

[Jamison Greer]

I never heard anyone having a banana shortage. We never saw any news of that. We did have tariffs on other products for those first six months or so. These served as leverage. And when we were able to finally get deals with a lot of these countries that produce those types of product, you know, the Ecuadors of the world, you know, Indonesia, Vietnam and others, those who make coffee. Once we had those deals in place, we were able to jettison those tariffs again. We're trying to have tariffs applied to reshore to protect American production. And where we don't need to have a tariff, you don't need to have it. But our sense is we have a giant trade deficit. We have a lot of offshoring so we do need substantial tariffs apply these.

[Andrew Ross Sorkin]

What's that going to look like over the next couple of months? I imagine there's going to be a lot more announcements. So to replace effectively the tariffs that were taken off as a result of the Supreme Court.

[Jamison Greer]

Well, so what I, what we're doing now is, is we have investigations ongoing in my office of the US Trade Representative, and we're investigating the specific unfair trading practices by different countries. And we're covering a lot of countries over over 70 countries. And so you will see over the next few weeks, we'll be releasing reports on our findings. And if we find unfair trading practices, structural excess capacity, forced labor, things like this, we'll put out proposals on how we think we should fix it. And that may be proposed tariffs or other things. And everyone will comment, they'll have an opportunity to, to say their piece. I can't prejudge the outcomes of these, but we do know that there have been persistent unfair trade practices globally.

[Andrew Ross Sorkin]

Had you done that initially a year ago instead of Liberation Day, could do you think you could have raised any kind, anything near the same kind of money and created the same kind of incentives or disincentives that that program was aimed at?

[Jamison Greer]

So I would say, I mean, you talk about money and money obviously is incidental to tariffs. My sense is anytime you increase tariffs to a certain amount, you're going to have more money. So that's a factor, but I don't think that's a defining factor of difference. Other things that could have been accomplished. I would say that when the president used his emergency authorities, he was able to move very quickly to get at this issue, get a lot of leverage, impose tariffs, tell everyone the direction of travel. And we were do that right off the bat. I mean, the investigations I'm doing right now, they take time and they take a lot of process appropriately. But they're not the kind of thing where you come in on January 1, 2025 and you're trying to fix a problem that's been in place for decades. We had to move really quickly. It was an emergency situation for us. It was appropriate.

[Andrew Ross Sorkin (alternate or guest commentator)]

War came along, obviously, or conflict, whatever we want to call it.

[Jamison Greer]

An excursion is what they're called excursion. We don't have a lot of time

[Andrew Ross Sorkin (alternate or guest commentator)]

left, but I made the case that the inflation that we were going to see from tariffs did not come to pass. I mean, we are seeing it now. Would you say that's a fair statement, that the worst case scenario for the tariff inflation never really happened?

[Jamison Greer]

No, it didn't happen. I mean, we know that inflation tends to happen when you inject more money into the money supply. That's usually the primary source. When you do a tariff, it may rearrange supply chains. You people, you see people changing their product choice, but inflation is rarely one to one. So, so we don't see that as an issue.

[Andrew Ross Sorkin (alternate or guest commentator)]

Thank you for joining.

[Jamison Greer]

Thank you very much.

[Andrew Ross Sorkin (alternate or guest commentator)]

Come and see us in New York

[Joe Kernan]

next on Squawk Pod, the complicated job of regulating prediction markets.

[Andrew Ross Sorkin]

This is a fundamental question about how this whole system works in the context

[Michael Selig]

of a sports derivative. We look at it the same way as in an oil derivative or any other type of commodity derivative. If somebody is engaging in behavior to drive up the price artificially, of course we're going to consider a manipulation action.

[Joe Kernan]

CFTC Chairman Michael Selig is coming up.

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[Andrew Ross Sorkin]

Squawk box Friday 8:30am Eastern and streaming on CNBC plus.

[Joe Kernan]

Welcome back to Squawk POD from cnbc. Joe Kernan, Becky Quick and Andrew Ross Sorkin are in Washington, D.C. today. Here's Andrew.

[Andrew Ross Sorkin]

Welcome back to Squawk Box. Our next guest is going to weigh in on crypto regulation, prediction markets and so much more. Want to bring in the CFTC Chairman. Michael, Good morning to you. It's nice to see you. We're all trying to figure out a bunch of things are happening here. We've got the prediction markets which I think are completely roiling or raising all sorts of questions about sports betting, about how they're used. All of those issues. There's the crypto piece, what's happening with Gemini, for example, Just everything that you're doing. I want to start with sort of a broader sort of question, which is there was a big piece in the New York Times just about a week ago that talked about the politics of the agency and who was in the agency, who was forced out of the agency. And sort of how you think that has or hasn't changed the fundamental sort of philosophy of what the agency does?

[Michael Selig]

Well, a lot of what was recounted in that New York Times article was before my tenure. Of course, I've only been in the seat for about over 100 days now, and a lot of this was the previous leadership. But I will say that a lot of what happened under the Biden administration was this regulation by enforcement, was this politicization of the agency. And we're trying to get back to a baseline. We're trying to make sure that the agency does its job of regulating the markets and nothing else, nothing political. We're done with the lawfare. We're done with pursuing certain industries or certain types of politically, you know, involve people. And so, yes, there were some people at the agency that are no longer with the agency, but we're moving forward under my leadership, and that's what I'm here to do.

[Andrew Ross Sorkin]

Is the view, though, that they were too political, those people? Meaning, because this goes back to the which side is has the agency now become politicized? If you thought it was politicized before, has it now been politicized in some other way?

[Michael Selig]

Well, we're focused on at the agency is the future. We're focused on making sure that we have dedicated career civil servants and we do have hunters, hundreds of dedicated career civil servants that are not political. They're focused on doing their job. There are certain people like me that are there for political reasons. I'm a political appointee. But those that aren't really should not be engaging in lawfare, should not be targeting people for political reasons. And we're getting back to baseline, making sure that's not the case.

[Andrew Ross Sorkin]

Part of the piece, though, talked about sort of this revolving door connection between industry and the agency itself. And for example, the prediction markets obviously have now opened up in a remarkable way, in a way that I think we didn't even see two or three years ago. I'm curious, sort of what kind of influence you think that has had. But more importantly, I don't know if you saw, Gary Gensler was in Barron's recently and was talking about how when the original rules came about for prediction markets, that there was never a conversation ever, ever, ever a conversation about sports betting being part of prediction markets. And had sports betting, for example, been part of prediction markets, been part of that conversation, that senators, especially from the states where they had laws already in place against sports betting, would have never gone for it. What do you make of that?

[Michael Selig]

Gary Gensler, also the man who said every crypto asset is a security, and that's very obvious. I think he has a little bit of trouble reading statutes. But I will say that the statute's very clear. The CFTC regulates all derivative contracts to the extent they are commodity derivative, to the extent they involve a security that goes to the sec. And the statute is also very clear that event contracts, whether the events on sports, politics or anything else, is within our remit. We have express authority in the statute to prohibit the trading in certain event contracts involving sports involving political things like war, terrorism and assassination. And so that's all in the statute. I'm not reading outside the statute, I'm reading in the black letter.

[Becky Quick]

But do you then use it to prevent those sports predictions from being made?

[Michael Selig]

We do have discretion to set rules for that. We're considering rules in the space. I don't want to get ahead of that. We've put out an advanced notice, proposed rulemaking received over, I think, 1500 comments on that issue, and we'll consider various rules. We have one with OIRA right now.

[Becky Quick]

I would just. Separating yourself from being the commissioner at this point, how do you feel about that? Is this sports prediction? Can you make it a sports prediction? If you're betting, let's say, what happens to the outside to even what happens to the game score. Is that sound to you like gambling or does that sound like an actual contract?

[Michael Selig]

It all depends on how the product structured in the casinos and the sports books. You cannot offer a market in sports derivatives. You cannot offer a market in political derivatives. Those products are regulated except exclusively by the cftc. And they're different than going to a bookie and placing cash here.

[Andrew Ross Sorkin]

That's the question I'd ask you, which is, I've read the statute, you've read the statute. I think we could agree that the statute seems to, on its face, just by dint of the text, allow for a market to be made in the context of what you just described around sports. I actually think that's not even up for grabs. I think the bigger question is whether you believe the intent of that law, when it was signed by Congress, was in fact to allow for what has turned into a market for something that looks very much like gambling.

[Michael Selig]

I do believe that the intent of Congress was for the CFTC to exclusively regulate these products and to have discretion over certain areas. Sports, gaming, all of that we have authority to prohibit potentially if we choose to use that authority. But I do believe that Congress was very clear that the CFTC is the exclusive regulator.

[Andrew Ross Sorkin]

Different question. It goes to the question about insider trading, manipulation, all sorts of things. We just talked about this fascinating case. Andrew Left, who's a short seller, I don't know if you saw yesterday, was convicted by a jury of effectively manipulating stocks because he would go on social media, he would talk something up and then hours later the argument was that he sold that and that was a form of manipulation. Does that constitute a form of manipulation? If I go on Twitter and tell people that I think the Knicks are going to win and then I bet against the Knicks. So I'm going to, I'm going to, I'm going to bet on the spurs, but I'm going to tell everybody trying

[Becky Quick]

to drive the derivative.

[Andrew Ross Sorkin]

Right, but I'm going to bet on the other. I'm going to, I'm going to bet on the spurs, but I'm going to tell everybody that I think the Knicks are going to win and you too should go bet on the Knicks. What is the.

[Andrew Ross Sorkin (alternate or guest commentator)]

What?

[Andrew Ross Sorkin]

No, but this is, this is a fundamental question about how this whole system works.

[Michael Selig]

It could. So in the context of a sports derivative, we'd look at it the same way as an oil derivative or any other type of commodity derivative. If somebody is engaging in behavior to drive up the price artificially, of course we're going to consider a manipulation action.

[Andrew Ross Sorkin]

Well, but how it does that work in the context of sports, it's just a total, It's a different. Do you see what I'm saying? That's why, that's why I think all this raises all sorts of new questions in whether either Congress or somebody else, maybe you think the CFTC is supposed to be the one that ultimately determines what the guardrails are on all this.

[Michael Selig]

It's really not so different. Right. These are sports teams and organizations and players. If you're manipulating the outcome related to a sports team, a player, etc. It's no different then manipulating the outcome of what the price of a stock is going to be. Or how many cars will Tesla produce.

[Andrew Ross Sorkin (alternate or guest commentator)]

You go out and say you're going to bet on the Knicks, I'm betting on the Spurs.

[Andrew Ross Sorkin]

But no, I just, by the way, I don't disagree. If a player throws a game or a manager or somebody does something that may be sort of the equivalent of management that I agree with is different. I'm saying, let's say there's, I don't know, somebody who you think has a large following online and a reputation and therefore tells people, this is what I think is going to happen and whether that has any impact on these things. Do you think that that would be considered some kind of manipulation and how would you treat that?

[Michael Selig]

We're going to consider it. As I've said since the outset of my tenure, we are going to be tough on manipulation, fraud, insider trading and abuse. We've brought a handful of actions already. We have more in the pipeline. We're sending out subpoenas. We are not going to tolerate any sort of manipulation.

[Andrew Ross Sorkin (alternate or guest commentator)]

These markets, I mean, it's out there already. Do you have any idea how we're going to eventually what the resolutions? I feel like we're like. We're almost like this. We're almost blindfolded as we're going forward trying to figure out what to do with these. It's like the wild, wild west right now. Do you have a structure in your mind that we're going to eventually arrive at? I don't envy you.

[Michael Selig]

We do. These products are trading on regulated exchanges that are registered with us. They administer the same types of controls and requirements that we have with other types of derivatives exchanges. But there are some nuances to these markets and that's why we've put out a proposed rule that's now with oira. We've also accepted a number of comments, as I mentioned in a request for comments. And we'll continue to iterate and put rules in place, but we're going to bring enforcement actions against those that break the rules.

[Becky Quick]

Chairman, that. That strikes me as maybe the biggest issue. If you're trying to enforce things things. There's a limited number of people who are playing in derivatives markets when it comes to commodities or any of the traditional ways of kind of placing these bets. What this prediction markets have done has opened the floodgates to so many more people being involved in these things. Do you need a ton more resources to be able to monitor all of this and bring actions on these levels? It just seems like the volume that you must be dealing with at this point, I can't even imagine how it's grown. Do you have any numbers on that volume and do you need more resources for this?

[Michael Selig]

We are seeing an increased retail participation in our markets, and this started before the prediction markets, we saw it with things like S and P, mini contracts and contracts really designed for retail. We've seen it now with interest in crypto and now prediction markets. And so of course, we're using our resources efficiently and we will continue to do so. We're using tools like AI to make sure that we're able to leverage staff more effectively. But we also have a number of job postings on USA Jobs. We're recruiting, we're bringing on new staff, and we'll continue to do so.

[Andrew Ross Sorkin]

I ask you a question in the context of enforcement. So on one side you're saying you're going to enforce things. On the other side, in the crypto space right now you're saying that the Winklevoss twins from Gemini were victims effectively of the CFTC when the CFTC found and then accused them of misleading or lying to the agency. So how do you, how do you think about enforcement in those contexts?

[Michael Selig]

The Biden administration weaponized the federal agencies against the crypto industry and many other industries. They politically targeted people like the Winklevoss twins and that's not acceptable. We're righting those wrongs. We're going to start fresh. The agency should not be used to engage in lawfare and we're going to make sure that.

[Andrew Ross Sorkin]

Do you think the Winklevoss twins misled the agency?

[Michael Selig]

Look, I'm not going to get into the facts because this is an active investigation or in litigation rather. But what is important here is that to the extent the agency was used to politically target folks, we're reversing that and we're starting fresh. That's not going to happen again. It can't happen again under my administration or a future administration.

[Andrew Ross Sorkin]

This is all fascinating and we so are thrilled to have you here. Appreciate it very, very much. Thank you. It's a fascinating conversation, Chairman. We should also make a quick and important disclosure. CNBC and Calshi have a commercial relationship that includes customer acquisition and a minority investment.

[Joe Kernan]

That's Squawk Pod for today. Thank you you for tuning in. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Orkin. You can catch them live on CNBC for three hours starting at 6am Eastern every weekday morning to get the best bits of that TV show right into your ears. Follow Squawk Pod wherever you're listening now. We'll meet you right back here tomorrow. Have a great day.

[Andrew Ross Sorkin]

We are clear. Thanks, guys.

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