China Trade Pressure & TSA Workers Miss First Paycheck 3/13/26

Summary

Squawk Pod – March 13, 2026 – “China Trade Pressure & TSA Workers Miss First Paycheck”

Hosts: Becky Quick, Andrew Ross Sorkin
Featured Guests: U.S. Trade Representative Jameson Greer, Former DHS Secretary Jeh Johnson, CNBC’s Robert Frank, CNBC’s Dan Murphy

---

Episode Overview

This episode dives deeply into the intersection of geopolitics, economic security, and American domestic policy. From tensions in the Middle East impacting oil markets and global trade relations, to legal wrangling over tariffs, to how Congressional gridlock is leaving TSA workers unpaid, the Squawk Box team hosts expert guests for in-depth discussions and firsthand insights.

Key focuses:

• The latest on the Iran conflict’s impact on oil and global trade
• U.S.-China trade relations and new Section 301 investigations
• The struggle and stress of unpaid TSA officers amid a partial DHS shutdown
• Populist tax proposals targeting the ultra-wealthy—and their chances in Congress

---

Key Discussion Points & Insights

---

1. Middle East Tensions and Oil Market Volatility

[02:33–07:54]

Iran War’s Ripple Effects

• News: A U.S. KC-135 aircraft crashed in western Iraq (non-hostile cause pending investigation), against the backdrop of continued U.S. operations in the region.
• Crude Prices: WTI above $95, Brent over $100/barrel—the highest since 2022.
• Drone Attack in Dubai:
  • A drone/missile incident struck the facade of the Dubai Innovation One building, near Nasdaq Dubai and CNBC facilities.
  • “There were reports of a loud explosion and smoke in the skyline... debris from a missile interception... no injuries reported.” – Dan Murphy [03:20]
• Financial Industry Impact:
  • Most banks and financial firms working remotely amid repeated threats; Dubai is “firmly in the crosshairs.” – Dan Murphy [06:58]
• Naval Escorts: U.S. military considering ship escorts through the Strait of Hormuz, though “traders [wonder] if that’s even going to be possible given how things seem to be escalating.” – Becky Quick [05:10]
• Iran Laying Mines: IRGC using swarms of small boats for mine-laying, as U.S. attempts to keep the strait clear.
  • “Iran is aiming to lay these mines faster than the US Navy can clear them... After their vessels were destroyed, they pivoted to these small, fast boats.” – Dan Murphy [05:34]

Geo-economic Responses

• The U.S. Treasury is authorizing purchases of Russian oil currently stranded at sea as a temporary market relief, despite ongoing sanctions. Waivers also granted to top importers like India.
• Chinese economy seen as vulnerable due to its dependence on Iranian oil and petrochemical feedstocks.

---

2. U.S.-China Trade Talks and New Tariff Investigations

[08:01–11:13; 13:06–21:43]

Setting the Stage

• U.S. officials, including Trade Rep. Jameson Greer, are heading to Paris for trade talks with Chinese counterparts ahead of anticipated meetings between Presidents Trump and Xi.
• The U.S. launches new “Section 301B” probes into 60+ countries over forced labor, as well as excess capacity investigations—the timing notably close to Supreme Court rulings invalidating certain tariffs.

In-Depth Interview: Ambassador Jameson Greer

[13:37–21:43]

• Main Objectives of Paris Trade Talks

  • “We want to ensure continued stability in the U.S.-China relationship. It's one of the most important economic relationships in the world.” – Jameson Greer [13:37]
  • Focus: stability, balanced trade, access to rare earths and manufacturing inputs

• Progress with China

  • “Our trade deficit with China in goods has gone down by 30% over the past year… Our imports from China in January were the lowest they’ve been since 2004.” – Greer [14:16]
  • A more “balanced relationship” is emerging, with U.S. efforts to shift trade to non-sensitive goods.

• Iran War’s Trade Impact

  • The conflict influences both the oil market and downstream Chinese industries:
    • “What you want to look is what are the feedstocks doing in China?... We have a lot of domestic feedstocks... [but] we’ll be watching how that might affect the Chinese economy.” – Greer [14:59]

• On Timeline and Resilience

  • “We're talking in terms of weeks... Our expectation is that any effects we see will be short-lived.” – Greer [15:55]
  • “The military is looking at a matter of weeks... missile launches and drones have gone down by 80–90% [from Iran].” – Greer [17:01]

• On Tariff Refunds, Supreme Court Ruling

  • Customs is building a portal to refund $165B in tariffs plus interest after the Supreme Court ruling.
  • Greer positions this as a result of Democratic attorneys general lobbying for money to go back to companies importing foreign goods:
    • "Their wish was to take money from the US Treasury... and give it back to companies who import foreign goods made by foreign workers." [18:36]
    • “Interest payments... are par for the course.” [18:36]
    • Suggests that any windfall should “go as bonuses to their workers.” [20:02]

• Upcoming Section 301 Investigations:

  • “They’re very process-driven, transparent. There’s an opportunity for hearing, for public comment... We’re trying to move in a matter of months.” [20:50]

---

3. Populist Tax Proposals Targeting High Earners

[24:03–30:09]

• “Working Americans Tax Cut Act” Analysis – Robert Frank:
  • Exempts income up to $46,000 (single) and $92,000 (couples) from federal taxes; raises top rates to 59% for $5M+ earners.
    • “For someone in New York City making over $5 million a year, the top combined state, city, and federal rate would be over 73%.” – Robert Frank [24:18]
  • Washington State poised to pass its first-ever income tax—prompting high-profile departures (e.g. Howard Schultz).
  • Quote: “What’s notable is... they’re saying: we’re going to raise taxes on the wealthy and give tax cuts for everyone else.” – Robert Frank [26:34]
  • Political calculation is to force opponents into a “vote against a tax cut for 60% of Americans.”
  • Frank notes: “0 likelihood of passing” in the current Congress, but it sets the narrative for the next election cycle.

---

4. TSA Workers & Homeland Security: Unpaid and Overstressed

[30:14–40:46]

Jeh Johnson, Former DHS Secretary, on the Human and Security Cost

• TSA Officers Missing First Full Paycheck due to a partial funding shutdown over political gridlock.

  • “Your average TSO... they live paycheck to paycheck when they’re getting paid. Morale traditionally in TSA is low and now we’re forcing them to go to work without being paid at all.” – Jeh Johnson [31:08]
  • Communities organizing food and essentials drives for unpaid TSA staff.

• Security Implications

  • “It puts the agency and its workers under a tremendous amount of stress at a time when there is no doubt a heightened security environment because we've gone to war against a nation that is a state sponsor of terrorism.” – Johnson [31:08]
  • “I won't say that passengers... are at risk. Any heightened risk. I think generally here in the homeland there is a heightened security threat environment because of the fact that Iran is a state sponsor of terrorism.” [32:18]
  • DHS is defunded and “basically shut down for almost a month now.” [32:09]

• Political Football

  • “... whoever’s in the minority... [says] this is their only tool. Eleven years ago I heard that from Republicans. So this is my message to both Democrats and Republicans: ... Don’t link it to funding the government.” [35:07]
  • “The workers are the political footballs, and so often the workers have no voice in this fight.” [35:07]
  • “How many other contexts in American life do you know where someone is forced to go to work and not get paid, especially if it’s a vital mission like aviation security?” [35:58]

• Threat of Sleeper Cells & Lone Wolf Attacks

  • “Terrorist organizations are not like conventional armies… for every terrorist you kill, you might inspire two more.” [37:39]
  • “There is the possibility of the lone wolf… sympathetic to the [terrorist] cause, [who] carries out an act of violence.” [38:24]
  • “Very often you could be taking somebody off the battlefield, but then you inspire two more.” [39:22]

• Operational Impacts

  • The National Terrorism Advisory System website is offline due to budget issues:
    • "There's a big red banner that says due to lack of funding, this site is not being managed." – Jeh Johnson [40:20]

---

Notable Quotes & Moments with Timestamps

• “It’s one of the most important economic relationships in the world.”
  — Jameson Greer on U.S.-China trade [13:37]
• “Our trade deficit with China in goods has gone down by 30% over the past year.”
  — Greer [14:16]
• “There were reports of a loud explosion and smoke in the skyline.”
  — Dan Murphy on Dubai drone incident [03:20]
• “It puts the agency and its workers under a tremendous amount of stress... at a time when there is no doubt a heightened security environment.”
  — Jeh Johnson on TSA and security risks [31:08]
• “The workers are the political footballs, and so often the workers have no voice in this fight.”
  — Jeh Johnson (re: TSA funding) [35:07]
• “How many other contexts in American life do you know where someone is forced to go to work and not get paid...?”
  — Jeh Johnson [35:58]
• “What’s notable is... they’re saying: we’re going to raise taxes on the wealthy and give tax cuts for everyone else.”
  — Robert Frank [26:34]

---

Timestamps for Major Segments

| Segment / Topic | Time | |--------------------------------------------------|-----------| | Market & Middle East Update / Iran / Oil | 02:33–07:54| | U.S.–China Trade probes / Tariffs | 08:01–11:13| | BuzzFeed business update | 09:48–10:59| | Interview: Ambassador Jameson Greer | 13:06–21:43| | Populist Tax Proposals Discussion | 24:03–30:09| | TSA Paycheck Crisis & Jeh Johnson Interview | 30:14–40:46|

---

Tone & Takeaways

• Urgency and Realism: Whether on international security, trade policy, or the plight of federal workers, guests and hosts stress the seriousness and interconnectedness of the moment.
• Political Frustration: Both hosts and guests voice dismay at partisan gridlock holding basic government functions hostage, especially when national security is at stake.
• Populist Undercurrents: The Democratic tax proposals point toward a deepening populist drive in U.S. politics.

---

For more:
Subscribe to Squawk Pod and visit CNBC’s “Inside Wealth” for updates on tax policy and wealth.

End of summary

Transcript

[Schwab Market Update Host]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] Market Update podcast or find Schwab Market Update wherever you get your podcasts.

[U.S. Trade Representative Jameson Greer]

Before we had AT&T business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route.

[Schwab Market Update Host]

A 14 point turn.

[U.S. Trade Representative Jameson Greer]

An influencer even livestream the whole thing.

[Jeh Johnson]

Not good for business.

[U.S. Trade Representative Jameson Greer]

Now with AT&T business Wireless, routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.

[Andrew Ross Sorkin]

AT&T business Wireless connecting changes everything. Bring in show music please.

[Becky Quick]

Hi, I'm CNBC producer Zach Felisi. Coming up today on Squawkpod Key, US Representatives head to Paris for trade talks with China. We speak to US Trade Representative Jamison Greer.

[U.S. Trade Representative Jameson Greer]

We want to ensure continued stability in the US China relationship. It's one of the most important economic relationships in the world.

[Becky Quick]

TSA workers are not being paid due to a partial funding shutdown. Jeh Johnson, President Obama's head of Homeland Security joins us.

[Jeh Johnson]

It puts the agency and its workers under a tremendous amount of stress.

[Becky Quick]

Plus Democrats introducing tax cuts for many that would hike the bill on high earners. Our Robert Frank reports.

[Robert Frank]

What's different this time is they're saying going to raise taxes on the wealthy and give tax cuts for everyone else.

[Becky Quick]

And a drone strike appears to hit a key financial neighborhood in Dubai. Our Dan Murphy.

[Dan Murphy]

This is walking distance from the NASDAQ Dubai and CNBC's own studio here.

[Becky Quick]

It's Friday the 13th of March. Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Becky by in 3, 2, 1. Cue it please.

[Becky Quick]

Good morning everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ marketsite in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is out today. It's Friday morning and let's get you caught up to date.

[Andrew Ross Sorkin]

US Central Command saying four of six crew members have died following the crash of a KC135 refueling aircraft in western Iraq. The tanker was supporting operations against Iran. According to a post on X by Central Command. The crash wasn't due to hostile or friendly fire. It says the cause of the crash is under investigation.

[Becky Quick]

Let's show you the price of crude oil as well, which as Andrew mentioned, is coming off its highest settlement since August of 2022. This morning, WTI is slightly pulling back by about 20 cents, still trading above $95 a barrel at 9553 and Brent is above $100 a barrel at $100.80. For the latest on the Iran war, let's get over to CNBC's Dan Murphy who is standing by in Dubai. Dan, what's the latest?

[Dan Murphy]

Becky, good morning to you. Well, an emergency alert was issued here in Dubai earlier today and authorities have confirmed an attempted strike inside the Dubai International Financial Center. Vision from the incident shows the damage on the outside of the Dubai Innovation One building. This is walking distance from the Nasdaq Dubai and CNBC's own studio here. There were reports of a loud explosion and smoke in the skyline. The Dubai media office said debris from a missile interception caused what they are calling a minor incident on the facade of that building. They said there were no injuries that have been reported. And of course, most banks and financial firms are now working from home after Iran threatened to target economic centers across the Gulf. Military meanwhile, as you mentioned, the risk premium in oil is intact this morning despite some reassuring words from the Energy Secretary Chris Wright on squawk yesterday suggesting naval escorts through the Strait of Hormuz could begin by the end of this month.

[U.S. Trade Representative Jameson Greer]

I think that is quite likely the case. But again, I mean, I'll be over at the Pentagon later today.

[Robert Frank]

But that is what the military is working on.

[U.S. Trade Representative Jameson Greer]

And yes, a lot of critical materials come out of the Straits of Hormuzzi.

[Dan Murphy]

That task has been made even more challenging with the New York Times now reporting that Iran is laying mines inside the Strait. It's understood Iran is aiming to lay these mines faster than the US Navy can clear them to create more chaos and delay through the channel. And at the same time as well, the Trump administration also trying to ease the price pain by issuing a 30 day sanctions break to make Russian oil available to the market. The the administration calling that a short term measure that won't really benefit Moscow because the oil is already at sea. Back over to you.

[Becky Quick]

That's the big question. Moscow ending up benefiting from all of this and seeing what's happening with it. You know, Dan, as you mentioned, we were told yesterday that by the energy secretary that they hope to be able to start escorting ships through by the end of the month. I would suggest the premiums that we're seeing in the market have traders wondering if that's even going to be possible given how things seem to be escalating,

[Dan Murphy]

not descaling really also reflects just how concerned the administration is about the elevation that we've seen in the price of oil as well. And the treasury secretary, Scott Benson, also announced that countries are now basically authorized to purchase Russian crude and petroleum products currently stranded at sea. And what's also interesting is that this follows a waiver that was granted to big consumers like India, for example, at the start of the month, reversing that previous US Push to have New Delhi halt Russian energy imports as well. And what's interesting here is as well on the mines, it seems like after the US military destroyed those 16 minelaying vessels, the IRGC pivoted to using these hundreds of small fast boats to deploy mines. Iranian officials have of course, denied that this is happening. But you'll also recall that the supreme leader, Mojtaba Khamenei said that blocking the Strait of Hormuz must continue to be used as leverage as he made that first statement as supreme leader late yesterday as well. So the situation still very live in the region. And as you can see, asset markets plus the price of oil still reacting firmly to the upside on that.

[Becky Quick]

Then you mentioned that that the drone that came in that did some damage in the building only a block away from CNBC's offices. Financial workers working from home. I take it you are too.

[Dan Murphy]

Yeah, that's exactly right. And look, it's been quite a long week here in Dubai. I'm not going to lie. I think the incident that we've seen inside the Dubai International Financial center is certainly a worst case scenario for authorities here. I mentioned earlier that Iran did say it would be targeting financial centers and banks and financial institutions that are associated, it believes, with the United States and with Israel. Of course, Dubai is one of the main commercial capitals of the Middle East. Nasdaq, Dubai, a really big brand, cnbc, an enormous brand. So you would expect that as a result that building that district firmly in the crosshairs. And that has also played out in the last few hours as well with the emergency alert being received this morning. So now, now the Gulf Financial center is certainly on edge that we have seen this incident in Dubai and all eyes are on exactly what Iran does over the weekend as well.

[Becky Quick]

Dan, I'm glad you're safe. I'm glad you're at home and we appreciate everything you are doing. Thank you.

[Andrew Ross Sorkin]

Meantime, the US launching new trade investigations into 60 countries to establish whether they've failed to curb imports of goods made with forced Labor. The so called section A301B probes will look into China, the EU, India and Mexico, among other nations. The announcement coming just a day after another Section 301 probe was launched. Those will focus on possible excesses in industrial capacity from 16 different countries. The investigations could provide an alternate route for the White House to replace at least some of the president's tariffs that the Supreme Court recently ruled were illegal. And we're going to speak to U.S. trade Representative Jameson Greer about all of that.

[Becky Quick]

And the government says that it is between 40 and 80% of the way toward building a system to refund the more than $165 billion in tariff collections that were ruled illegal by the Supreme Court. That's according to a court filing. A Customs and Border Protection official says that the agency is developing an online claim portal for importers and brokers to submit requests for refunds, which would come with interest. That system is expected to be running by the middle of next month. Chinese company ByteDance is reportedly working on building up its computing power outside of China using top of the line Nvidia AI chips. The Wall Street Journal says that the TikTok parent is working with a Southeast Asian company on plans to use Nvidia's Blackwell chips in Malaysia for AI research and development. That report says that the Southeast Asian company is also called Tier one. Nvidia is a Tier one Nvidia cloud partner. That means it can get priority access to the company's latest chips, which of course are prohibitive from being sold in China.

[Andrew Ross Sorkin]

I don't know what we're going to do about that. I mean this is, this is the problem and this, but this is if you were going to hold up the TikTok deal and all of the things and then this is the outcome. This is a pretty bad outcome that digital publisher buzzfeed. Saying that it has substantial doubt about its ability to stay in business. The company says it won't provide a 2026 forecast as it evaluates strategic options. BuzzFeed was popular in the late aughts and 2010s with newsy articles you might remember called Listicles went public in a blank check merger in 2021, but its stock has fallen 98% since then. Company CEO Jonah Peretti saying company believes its market value doesn't reflect the strength of its individual brands. And what's so sad to me about this story and fascinating at the same time is so many people tried to chase the buzzfeed game. We all thought that buzzfeed was the future traffic getting eyeballs, getting eyeballs. Living in this sort of listicles world as opposed to living in a stories based or reporting based world. And it and so many others at the time seemed to be upending what seemed to be the media ecosphere, echo sphere and here we are.

[Becky Quick]

Teas will be next, coming up on squawk pod. U.S. trade Representative Jameson Greer joins us from the White House North Lawn. As the world watches the volatile price of oil and the conflict in Iran.

[U.S. Trade Representative Jameson Greer]

Obviously you can't talk about trade without the Iran war coming up and the effect of oil and gas. I think we're talking about a matter of weeks. Our expectation is that any effects we see will be short lived.

[Becky Quick]

Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the trade desk. Our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy. Gut check. Need assistance?

[Schwab Market Update Host]

No problem.

[Becky Quick]

Get 24. 7 professional answers and live help and access support by phone, email and in platform chat.

[Schwab Market Update Host]

That's how Schwab is here for you

[Becky Quick]

to help you trade brilliantly. Learn [e-mail] trading a text says you're on my mind.

[1-800-Flowers Advertiser]

A bouquet from 1-800-Flowers says you're my everything. Heartfelt moments belong in the real world, not just your phone. For 50 years, 1-800-Flowers has helped millions of people make memories that'll last a lifetime with gifts they'll cherish forever. Their expertly curated arrangements and gift baskets shipped nationwide with a 100% satisfaction guarantee. Don't wait for the next big moment. Make it when you visit 1-800-flowers.com sxm today, that's 1-800-flowers. Com sxm. Busy work weeks can leave you feeling drained. Prolon's five day fasting mimicking diet rejuvenates you at the cellular level, lets you enjoy real food and does not require an injection. Developed at USC's Longevity Institute, Prolon supports biological age reduction metabolism. Skin, when combined with proper exercise and Nutrition, get 15% off plus a $40 bonus gift when you subscribe at prolonlife.com PandoraPromo

[Becky Quick]

this is Squawk Pod.

[Robert Frank]

Three two, stand Andrew by up and Andrew Q.

[Andrew Ross Sorkin]

You're watching Squawkbox on this Friday morning. I'm Andrew Osorkin along with Becky Quick. Joe is off today. The U.S. secretary of the Treasuries, Scott Besant and United States Trade Representative Jameson Greer are heading to Paris tomorrow to meet with Chinese officials. The meeting coming ahead of President Trump's expected trip to Beijing and a new wave of Section 301 investigations. Joining us right now is Ambassador James and Greer, good morning to you. Let's start with this meeting and then we can get into tariffs and everything else. What are you hoping to achieve at this meeting?

[U.S. Trade Representative Jameson Greer]

It's good to be with you this morning. Like a lot of our meetings we've had with the Chinese over the past year, we want to ensure continued stability in the U S China relationship. It's one of the most important economic relationships in the world. We want to make sure that we continue to get the rare earths we need for our manufacturing base, that they keep buying the kinds of things they should be buying from us and that the leaders have a chance to get together and make sure that the relationship's going the way we want it to go.

[Andrew Ross Sorkin]

Where do you think that relationship is given that it's one of the few countries, unlike the others that actually had reached deals on tariffs. They've never, they've never reached one. And how does that the conversation change given the situation in Iran?

[U.S. Trade Representative Jameson Greer]

Well, when you look at where we, where we are with China versus one year ago, we have a much more balanced relationship with China. I've been saying for a year where do we want to be with China? We want relations to be stable. We want our trade to be more balanced. We want it to be a non sensitive goods. And so our trade deficit with China and goods has gone down by 30% over the past year. 3, 0. That's a big change. Our imports from China in January were the lowest they've been since 2004. And again that's not to say we're not going to trade with China. We certainly are. But it's getting to a much more balanced situation.

[Andrew Ross Sorkin]

Can we, can we discuss this situation with Iran? Because clearly that's weighing on our markets, it's weighing on the price of oil and by the way weighing on their economy as well.

[U.S. Trade Representative Jameson Greer]

It is so, so when it comes to energy and the effect of the Iran war, it doesn't so much affect us China economic relations directly between us. Obviously China relies on oil from Iran. The United States, you know, we're a huge producer of both oil and lng but we do export and import a lot or next we're net exporter but we do import a lot and we refine here. We import refined products as well. I think what you want to look is what are the feedstocks doing in China? Because some of these hydrocarbons go into the plastics industry, the chemicals industry In China, I think we're more resilient on that front because we have a lot of domestic feedstocks and hydrocarbons. So we'll be watching how that might affect the Chinese economy and their ability to produce at the huge volumes they've been producing over the past several years.

[Andrew Ross Sorkin]

What is your expectation for how quickly this war in Iran is, is going to end? And if it doesn't, what do you think the global impact is going to be?

[U.S. Trade Representative Jameson Greer]

Well, I think that we're in, we're talking in terms of weeks, right? When I speak with, with Secretary Hegseth or the President or others, they're much closer to it. But obviously you can't talk about trade without the Iran war coming up and the effect of, of oil and gas and what that means. I think we're talking about a matter of weeks. Our expectation is that any effects we see will, will be, will be short lived. But we want to, we want to watch this, right? You could see, you could see other effects that affect cycles that we tend to see in commodity markets. So we're watching it very closely, especially in, you know, if there are particular spikes or if there are areas where we think we have more resilience.

[Andrew Ross Sorkin]

Which piece of this so far was not on your, your bingo card in terms of expectations? And I only ask this because I think, you know, when, when, when the, when the attack was first made, there was a sense that this was going to end very quickly. I don't want to say it was going to be a cakewalk, but I think there was a view that it, it would be something more akin to that and it clearly is, is getting more complicated rather than less despite whatever successes we, we seem to be having.

[U.S. Trade Representative Jameson Greer]

Well, I, you know, I don't work in the Pentagon. I, you know, I used to serve in the military many years ago. But all I know is the Pentagon for years and decades has been planning for these kinds of contingencies. We saw the President and, and his security team execute historic victories in Venezuela. We saw what they did with Iran and the Fordo side last year. I have full confidence in the team that they've planned out all the different scenarios, not just the military scenarios, also the economic scenarios. Again, I think that they're looking at a matter of weeks. You know, when I talk to the Secretary, we talk about their levels of, you know, missile launches and drones. All that has gone down by 80, 90%. You know, there is a finite amount of ordinance over there that the Iranians have. And you know, Pete and others are in a better position to talk to you about it. But that's how it looks from my perspective.

[Becky Quick]

Ambassador Greer, There was a court filing where a Customs and Borders Protection official said that the government is somewhere between 40 and 80% towards building a system to refund the more than $165 billion that in tariffs that were collected that were then ruled illegal by the Supreme Court. They said that they expect that system to be up and running by the middle of next month. They have an online claim portal where I guess importers and brokers will submit their request for refunds along with interest. Is there a chance that US Taxpayers will lose money on the tariffs that were instituted to try and bring money in if we are paying back those very tariffs with interest?

[U.S. Trade Representative Jameson Greer]

Well, remember, Democratic attorneys general, they argued for these cases. They asked for the money to go back to companies that were importing goods. That was their ask to the court. And they got. Their wish was to take money from the US treasury that could have been used by pay down the debt or other things and give it back to companies who import foreign goods made by foreign workers. So first of all, there is, there is money going out of the treasury or that could. And it's because Democratic attorneys general wanted that. Interest payments, those are, those are, those are par for the course if that happens. Anytime you know, the government has to refund money or anything like that, there's always some kind of interest associated.

[Becky Quick]

But it's US Taxpayer dollars that would be used to fund the interest if that's the case.

[U.S. Trade Representative Jameson Greer]

Well, you know, I don't, I don't know where treasury is going to have that. You know, I don't know where they pay the interest funds out. Talk to Scott. The point is that the attorneys general of Democratic states, they wanted this money to go back to companies who are importing foreign goods and they got their wish.

[Andrew Ross Sorkin]

Ambassador, would. Would you and the administration encourage companies that had higher costs during this period to seek refunds, that pay tariffs to seek refunds? And I ask because I've talked to a number of CEOs who have thus far been holding off seeking those refunds, worried potentially about the possibility for retribution for seeking such a thing?

[U.S. Trade Representative Jameson Greer]

Well, if I were these companies and somehow they get this windfall, the most important thing and the smartest thing they should do is give it as bonuses to their workers. The whole reason the President imposed these tariffs was to try to reshore, to fix our massive imbalance in trade that we've experienced over many years because of China, Vietnam, the EU and others. If the companies are going to get this windfall, they should pass it along to their workers as a bonus or a raise because that's the purpose of the program. It's always been the purpose of the program and the American people should get it and the companies should give it to their workers.

[Andrew Ross Sorkin]

In terms of the next stage of these tariffs, 301 and otherwise, these investigations that are taking place, how quickly do you think those investigations take place? What kind of reports need to come out of them and then how quickly can those tariffs be implemented?

[U.S. Trade Representative Jameson Greer]

So the Section 3 program, these are the types of investigations that USTR, my agency, has done in the past. They're very process driven, they're transparent. There's an opportunity for hearing, for public comment and then we typically prepare, produce some findings. It could be in the form of a report or otherwise. And if we find that countries have been involved in unfair trading practices like subsidies, excess capacity, allowing goods made with forced labor into their countries, we can quantify that harm to U.S. commerce and then try to resolve that issue with the country. If they can't resolve it or don't resolve it sufficiently, you can impose a tariff or fee or something like that. We're trying to move very quickly to your question. We're trying to move in a matter of months. And with that we can try to resolve some of these issues that have been plaguing the global trading system for many years. And we're finally trying to solve.

[Andrew Ross Sorkin]

Ambassador Greer, I want to thank you for joining us this morning as always and wish you luck in your meetings in Paris.

[U.S. Trade Representative Jameson Greer]

Thanks so much. Have a good one.

[Andrew Ross Sorkin]

Thanks. You too.

[Becky Quick]

Still to come on squawkpod, the tricky tax policy is changing where the wealthiest in America call home and the partial shutdown of the Department of Homeland Security leading to long lines at airports and missed paychecks for TSA workers. Former Secretary of Homeland Security Jeh Johnson is next.

[Jeh Johnson]

We're in a heightened security environment generally and the department of our government that is supposed to ensure our homeland security has been defunded and basically shut down for almost a month now.

[Becky Quick]

Now.

[Schwab Market Update Host]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

[1-800-Flowers Advertiser]

Busy work weeks can leave you feeling drained. Prolon's five day fasting mimicking diet rejuvenates you at the cellular level, lets you enjoy real food and does not require an injection. Developed at USC's Longevity Institute, Prolon supports biological age reduction, metabolism, skin health and fat loss when combined with proper exercise and nutrition. Get 15% off plus a $40 bonus gift when you subscribe at prolonlife.com pandorapromo

[Capella University Advertiser]

you've never been one to settle, stand down or stand still. You're a lifelong learner, energized by excellence. There's a fire inside you you can't ignore. You've got competition to outrun, momentum to build on and your own high standards to meet. Stop now. Not a chance. At Capella Unit University, we help you catch what you're chasing because you've always had the drive. Now go earn the degree. Capella University. What can't you do? Visit capella. Edu to learn more.

[Becky Quick]

Welcome back to SQUAWK POD Today with Becky Quick and Andrew Ross Sorkin, a

[Andrew Ross Sorkin]

group of Senate Democrats coming up with another plan to extract more taxes from the wealthy while giving millions of or millionaires maybe a tax break. Joining us right now is Robert Frank with more of today's edition of the INSIDE Wealth. What's happening here?

[Robert Frank]

Well, Andrew, it's really a sort of two sided process here. The proposal is called the Working Americans Tax Cut act, but it is also a large tax hike on high earners. So a group of Democratic senators proposing tax legislation that would exempt millions of Americans from taxes. Any income of up to $46,000 for individuals or $92,000 for couples would not be subject to any federal income taxes. But to pay for that, taxpayers making more than a million dollars a year would get progressive tax hikes. So that's about 1 million taxpayers who would see a tax increase. Those making between 1 to 2 million dollars would pay an extra 5%. For a top rate of 42%. The rate goes up. So those making more than 5 million dollars would have a top federal rate of 59%. So for someone in New York City making more than 5 million a year, the top combined state, city and federal rate would be over 73%. And since Joe's not here and he's going to ask New Jersey taxpayers, those who make more than a million a year, the combined state and federal rate would be over 69%. Democrats have made tax hikes on the wealthy a central policy. This year, Washington state is poised to pass its first ever income tax. Taxpayers making more than A million dollars a year would pay a state rate of 9.9%. It was just passed by the Washington State house after a 24 hour debate. Interestingly, during that debate, as we mentioned here on the show Wednesday, Starbucks founder Howard Schultz announced on LinkedIn that he's leaving Seattle, moving to Miami after 44 years. The longtime Democratic donor didn't cite taxes at the reason, but he said, quote, it is our hope that Washington state will remain a place for business and entrepreneurs to thrive. Now for more on the wealth proposals and what's happening in the tax world for the wealthy, go to cnbc.com inside wealth. Sign up for that newsletter.

[Becky Quick]

Okay, you did the numbers and the massive hike that's going to be faced with this. It's a group of Democratic senators who have come up with this. How many senators, how much support does it have? How much likelihood of passing?

[Robert Frank]

0 likelihood of passing. It's at least a half dozen senators. What's interesting about this and what's notable is that it's sort of a preview of what the Democrats are really energized about and what they will run on, what they will run on and what they will want to do if they take over the House, if, you know, slimmer chance they get the Senate. But this is really, they're looking for a message right now. And the message is not just we're going to raise taxes on the wealthy because that hasn't worked in the past. What's different this time is they're saying we're going to raise taxes on the wealthy and give tax cuts for everyone else. That is going to be harder for people to vote against because the Republicans are then going to be in a position to say wait, why are you voting against a tax cut for 60% of Americans?

[Becky Quick]

Right.

[Robert Frank]

Whereas before, but it also becomes, before they could just say, well, they're saying they're raising taxes on the wealthy, but they're actually going to raise them on everyone else eventually or it's actually going to spill out. And now it's harder to make that argument when what this proposal does is we're going to tax the wealthy, tax and give everyone else giant government checks.

[Becky Quick]

How hard is it to eventually stop a populist argument against that where it's the numbers are in their favor. Like if you're voting for your own pocketbook, this is going to get more votes.

[Robert Frank]

Well, I mean taxing the wealthy is broadly popular in both parties because again, most people aren't in that million dollar plus income group. But it faces tremendous opposition from lobbyists and from people that, you know, support congresspeople, the big donors. This, I think, will just add to that pressure and it'll be interesting to see whether, you know, it's going to be harder to stop this.

[U.S. Trade Representative Jameson Greer]

Who are the senators?

[Becky Quick]

Are they the names I would expect?

[Robert Frank]

Van Hollen is a lead one. Senator Booker is another lead legislature. So it's a lot of the Democratic leaders. You know, interestingly, it's not Chuck Schumer, Elizabeth Warren. Warren is not on the list. She is, you know, I think more in the wealth tax category. And that's something we're seeing in California right now. But I don't think she's on it. But so these are traditionally, I wouldn't say moderates, but not the Bernie Sanders, Elizabeth Warren wing, which is still advocating a wealth tax. And that's something I guarantee we're going to see come up again regardless of what happens to California.

[Andrew Ross Sorkin]

You got an update for us on the sort of Howard Schultz moved to Miami. What's happening in Seattle? Last time I saw you, we were

[Robert Frank]

discussing so yeah, Washington state, they just the House, as I mentioned, they passed that legislation. It'll now go to the governor.

[Andrew Ross Sorkin]

Right.

[Robert Frank]

And it's likely to pass.

[Andrew Ross Sorkin]

Is it out of the state now ahead of that? Is that how this works?

[Robert Frank]

It takes effect, I think, in 2028 or 2029. So unlike California, where it was retroactive and you already had to move by the time most people found out about it, Seattle, you'll have plenty of time to leave because it's at least two years from now that it will actually take effect.

[Andrew Ross Sorkin]

You'll probably therefore limit the legal challenges, not just the challenge. I'm sure it'll be challenged, but might

[Becky Quick]

make but the big challenge for California is the retroactive rights part of it.

[Robert Frank]

I still think there is already Republicans in the state of Washington have said this is not constitutional because the state forbids an income tax. This is the state's first income tax. And this comes after a long ago court ruling that ruled that income tax in Washington state was not constitutional according to the state constitution. So regardless, even though they did leave this generous timeline, it will be challenged.

[Andrew Ross Sorkin]

Okay, Robert Frank, thank you.

[Robert Frank]

Thank you, guys.

[Becky Quick]

TSA officers are set to miss their first full paycheck today as the Senate clashes over funding for the DHL DHS bill. Staffing shortages are already leading to long security lines at many airports, with some wait times stretching for hours, in some cases three to four hours last weekend. Joining us right now is the former Department of Homeland Security Secretary Jeh Johnson and Mr. Secretary, thank you for being with us this morning.

[Jeh Johnson]

Good morning.

[Becky Quick]

I think it's hard to think about this without thinking about the real impact on the workers who are not being paid. For the third time this year, they didn't receive a full paycheck on the 28th of February. Now they're going to miss the entire paycheck. And I heard stories at Sea Tac and other airports where they are actually asking people to come with non perishable foods with toothpaste and other items that these workers might be able to use because they can't afford them at this

[Jeh Johnson]

point, your average tso. We're talking about aviation security. There's the matter of long lines, but there's also simply the matter of aviation security. These are the people we depend upon to look for bombs and explosive devices on the airplane. You're about to get on with your family. They live paycheck to paycheck when they're getting paid. Morale traditionally in TSA is low and now we're forcing them to go to work without being paid at all. And it puts the agency and its workers under tremendous amount of stress at a time when there is no doubt a heightened security environment because we've gone to war against a nation that is a state sponsor of terrorism. There were apparently two terrorist attacks here in the homeland just yesterday. So it's a bit of a pressure cooker situation.

[Becky Quick]

Do you think that passengers in airports today are at risk because of this situation? Are we less secure?

[Jeh Johnson]

I won't say that passengers on aviation are at risk. Any heightened risk. I think generally here in the homeland there is a heightened security threat environment because of the fact that Iran is a state sponsor of terrorism. And we're not just talking about terrorist organization directed attacks like another 9 11, a large scale 9 11. We're talking about lone actors inspired by terrorist organizations or inspired by the simple fact that we've gone to war in Iran, someone acting on their own who is deranged and sympathetic to a terrorist organization. So we're in a heightened security environment generally. And the department of our government that is supposed to be ensure our homeland security has been defunded and basically shut down for almost a month now.

[Andrew Ross Sorkin]

So let me ask you, given this scenario of where we are right now, politically and otherwise, and the war that's taking place now in the Middle east, is there something that you would do if, by the way, if you were the President of the United States, is there something you would do?

[Jeh Johnson]

Well, 11 years ago I faced this exact situation. When I was in office, Congress held up funding for the Department of Homeland Security over the issue of immigration. In one sense, history is repeating itself. But the political dynamic was different. And I stressed over and over again that the Department of Homeland Security is not just the immigration enforcement mission. It's aviation security, it's maritime security, it's cyber security, it's port security, it's a secret service, it's training of federal law enforcement officers. I could go on and on. And in so many respects, we depend upon DHS to protect the homeland and protect the American people. And it's being used right now as a political football. In general, we have to get out of the business of linking a major policy disagreement in Washington with funding the government.

[Becky Quick]

Agree 100%.

[Jeh Johnson]

First job of Congress is to fund the government, keep the government open. They have the power of the first. But year after year, and now more often than year after year, we get into these funding fights that go over the line to the point where a Department of our National Security hasn't been open for a month now. Yeah, that's not good for the American people.

[Becky Quick]

It's not good for the American people. It's not good for the TSA officers. It is not good for our security. But I will also say you were appointed by Barack Obama, a Democrat. There are Democratic senators who say and congressmen who say that this is their only tool. They have no other tool to protest with, to use, to fight back. What would you say to them?

[Jeh Johnson]

That argument is made by whoever's in the minority constantly. Eleven years ago, I heard that from Republicans because they were upset about our immigration policies. So this is my message to both Democrats and Republicans. Republicans, we have to get out of the business of linking a policy disagreement with funding a department of our government. That is a disservice to the American people. We can have these fights over legislation, we can have these fights over border security, over immigration reform, but don't link it to funding the government. The workers are the political footballs, and so often the workers have no voice in this fight.

[Becky Quick]

So basically, shame on anybody who tries to do this. Rise above politics.

[Jeh Johnson]

How many other contexts in American life do you know where someone is forced to go to work and not get paid, especially if it's a vital mission like aviation security.

[Becky Quick]

Do you find that that's a message that resonates with the party that's not in power at any point in time?

[Dan Murphy]

Very.

[Becky Quick]

Because it feels like whoever's in party.

[Jeh Johnson]

I believe it does. If it's emphasized enough and it's said as loud as it can be. Because I think that the American people become frustrated with Washington in general when they see situations like this where we're not funding the Department of Homeland Security over some political fight, whether it's instigated by Republicans or Democrats. I believe the American public just throws up their hands and say, well, this is Washington. They're all children, and this is not the job that I sent them to Washington to do.

[Andrew Ross Sorkin]

One other related question. We had Jared Cohen here earlier in the week. He had lived in Iran, and he talked about the possibility of sleeper cells and other things that could be either here in the United States or other parts of the world that could present a real challenge to us. They have sleeper cells in West Africa. They have sleeper cells in the tri border area. They could hit an embassy, a cultural center, or a consulate in any one of the 11 countries they've attacked. They did it in Argentina in the early 90s. They tried to kill Adel Al Jaber when he was the Saudi ambassador to the US At Cafe Milano and Georgetown, of all places. If they were willing to do it then, why wouldn't they try to do it now? How real do you think that is? We talk about this thing that feels like it's a million miles away.

[Jeh Johnson]

It is real. Terrorist organizations are not like conventional armies. I once had a battlefield commander in Afghanistan explain to me when I was at DOD that very often for every terrorist you kill, you might inspire two more. And I have no doubt that there are terrorist operatives, terrorist organizations around the world, lying in wait either for a specific direction or simply because they've been inspired by world events to go carry out an act of violence, which was probably the situation we saw yesterday at Old Dominion and at the synagogue near Detroit.

[Andrew Ross Sorkin]

Oh, you think that was part of a larger plan?

[Jeh Johnson]

See, it's not so much a larger plan. It's very often deranged individuals who feel as if they're obliged to do this because of what's happening in Iran or elsewhere, not because of some specific order by a terrorist organization. That's somewhat conventional thinking. There is the possibility of the lone wolf. We saw a spate of these in 2015. For example, San Bernardino, the Paris nightclub in Florida, where someone who is sympathetic to the ISIS cause, for example, carries out an act of violence.

[Andrew Ross Sorkin]

How do you weigh those possibilities against, for example, if we can create. I don't know about regime change in Iran, but if we can eliminate their nuclear threat, would you say to yourself, that is a win, even if it inspires or creates some kind of other terrible challenge along the way.

[Jeh Johnson]

If you can decapitate a nation that is a state sponsor of terrorism, that is a legitimate government objective. However, that does not eliminate terrorism. That does not eliminate the terrorist threat. Because as I said earlier, very often you could be taking somebody off the battlefield, but then you inspire two more to act on their own who are sympathetic to the cause. That's where agencies like Homeland Security, like the FBI, play a role in this type of environment. Yet the Department of Homeland Security is defunded right now.

[Becky Quick]

Yeah, it defies explanation. You're right. You're right. Look at this from a non political perspective.

[Jeh Johnson]

Well, here's an example of what I'm talking about. National Terrorism Advisory System, something I created when I was in office. If you go to the NTAS website right now because you're interested in learning whether there's a heightened environment, it's not

[Becky Quick]

being signed right now.

[U.S. Trade Representative Jameson Greer]

Right.

[Jeh Johnson]

There's a big red banner that says due to lack of funding, this site is not being managed.

[Andrew Ross Sorkin]

Right.

[Dan Murphy]

Wow.

[Becky Quick]

Jay, thank you for coming in. Thank you for talking us through this. I hope your voice is heard in Washington. I hope there is some way to make sure that these employees are getting paid and that we are safe as a result.

[Jeh Johnson]

Well, thank you for your interest in that workforce. They don't have a voice in this fight.

[Becky Quick]

Thank you, Mr. Secretary.

[Jeh Johnson]

Thank you.

[Becky Quick]

That's the pod for today and for the week. Thanks for listening. Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest takes and analysis from our TV show right into your ears. Follow Squawkpod wherever you get your podcasts. We'll meet you back here on Monday. Have a great weekend.

[Andrew Ross Sorkin]

We are clear. Thanks guys.

[Schwab Market Update Host]

Olivia loves a challenge. It's why she lifts heavy weights and likes complicated recipes. But for booking her trip to Paris, Olivia chose the easy way. With Expedia, she bundled her flight with a hotel to save more. Of course, she still climbed all 6, 674 steps to the top of the Eiffel Tower. You were made to take the easy route. We were made to easily package your trip. Expedia made to travel flight inclusive packages are atoll protected.