good friday morning. it's 7:00 a.m. in canton, ohio it's 11:00 a.m. on wall street and "squawk alley" is alive. ♪ good friday morning. i'm carl quintanilla there is a lot to get to this morning. selloff continues. dow is about 1,000 points lower

for the week we'll start with bob pisani who joins us from the floor. >> we have made some feeble attempts at a rally. it's not going very far. i suspect there is a lot of selling pressure coming out of europe we'll catch the close. take a look at the s&p 500 rising a little bit of half an hour ago it's all very, very feeble and very tentative you can see not much in the way of a recovery. let me move on to show you some of the sectors defensive tone, consumer staples doing better we see health care doing a little better overall. tech, though, industrials, all the cyclicals are the ones that are the weak sectors today we're also in correction territory in the transportation stocks this hasn't happened in the broader market but transports have been down 10%. we noted that this morning here. we're seeing weakness in the airlines, in the railroads, weakness in fedex, the trucking companies like ryder it's just generally weak right across the board in all of the transport stocks we're waiting for europe to close in the next half hour or

so it's been very broad across the board in germany it's not just steel stocks and not just the auto stocks but the big conglomerates. all the financial names, the big financial stocks have been weaker as well deutsche bank, everything else in that group is also weak it's been a very, very tough week for the s&p 500 now we're only down .06% today other than that, we've had three down 1% days in a row. that hasn't happened in a while here we have four that is going to have to go back to august 2015 what you want to watch here is the 10% correction level that is 2585 that happened february 8th and we're not there yet, obviously. we've got 60, 75 points or so from that. but that's the key level to watch at this point. 2532 is the intraday low that we hit on february 9th here we're keeping an eye on some of the new lows though. the new lows are starting to expand a little bit. watch that

it's not big yet there is ford at a 52-week low whirlpool had a horrible several days they've been down virtually every day. down again nearly 2% merck is at a 52-week low. it hasn't done anything all year and there is a small smater of will oil stocks sitting near the lows, apache among them. still, sitting very close to the lows for the day right now on the dow. down 314 points. carl, back to you. >> all right thank you very much, bob for more, of course, on the announcement's impact on trade, let's bring in obama's council chair jason ferman and chief economist at american action forum. happy friday good to see you both a lot to get to today. >> thank you >> having just turned the commerce secretary essentially saying that the percentage increase in the metal and a can of soup is no big deal is it strange to have republicans defend higher prices >> i guess i would --

>> i would -- >> go ahead. >> oh, doug and i are going to agree on everything in this segment. if you think the big problem american manufacturing faces is that the price of steel is too low and the price of imported inputs to manufacturing should be higher in our automakers should have higher costs, our airplane makers, our motorcycle makers should have higher costs, then this is the policy for you. if you believe in capitalism and markets and you think we should get the best deals all around the world so that our manufacturer can be competitive, this is a terrible policy. >> let's see if you and douglas do agree first, let's listen to what the secretary said take a listen, guys. >> what i would like to do though is to emphasize again the limited impact this is a can of campbell's soup in the can of campbell's soup, there is about 2.6 cents, 2.6

pennies worth of steel so if that goes up by 25%, that's about .6 off one cent on the price of a can of campbell's soup i just bought this can today at a 7-eleven here and the price is $1.99. who is going to be too bothered by .06 of a cent >> douglas, your reaction to that >> well, first of all, i think it's fantastic that he brings his own props. i wish i brought mine. my prop would be the voice of experience and that is every living former cea chair, including jason who signed a letter to the president a few months ago that said please don't do this that includes glen hubbard, people who were cea chairman when then president bush imposed steel tariffs. and the lesson of that is these price increases are damaging to low income individuals

they may not bother wilbur ross very much. there are six million people in the steel using industries and about 140,000 people working in the steel industry so these are disproportionate impacts thattive think he's just understating you know, if you try to pin the entire stock market reaction to this on the price increase of steel, you're missing the point. the point is that there will be a retaliation, not maybe, there will be. that retaliation will be wto kplin come pli compliance and what the market's pricing is that fear that this is just first shot of bad trade policy out of this administration i think that's a genuine fear. >> so, jason, about retaliation. i guess it's not the first pufrnl that you're afraid of it's what happens by the end of the fight. are there specific industries that you expect to be affected what kind of tame frame should we be thinking about

>> any time you're having a debate about how much you're raising costs on consumers, how much you're raising input prices for manufacturers, you know you're on the bad side of that argument as doug said, there certainly will be retaliation. i don't know what industries you know, you heard everything from politically chosen ones like bourbon and motorcycles to other ones that are keys to the american economy fwhaut is not all. this now opens up a new national security argument that any country can use for anything we're going to have huge amounts of protection on american products around the world that will just escalate over time so the policy is bad the retaliation makes it worse and, you know, the trade war that could follow would be worse

still. >> i'm going to play devil's advocate for a minute and say we've seen the u.s. steel and u.s. aluminum industries absolutely coal industry as well which is involved in this, absolutely hemorrhage jobs for decades now. forget big business. this is about american jobs and restoking classic american industries what do you say to that? >> so if the problem was international trade and unfair trade practices by competitors in the steel and aluminum industry, then the appropriate thing to do is to apply anti-dumping countervailing duties indeed, we have over 150 such orders in place against products from about 38 countries. that's the right trade response. that has very different character across the board applying to allies and those that are not our friends all products 25% of steel and aluminum.

that is not a solution to anything the idea this somehow addresses a national security issue, the defense department said that is just not true. so it's the wrong instrument it's the wrong basis it doesn't solve a real problem. >> jason, we have a lot of history in terms of what tariffs have done economically you saw the steel tariffs in 2002 that were rolled back in 2003 because of potential retaliation across the world there were the tariffs back in 1930 that helped make the great recession a great depression would y. would tariffs be the answer now >> you look at what the bush administration did and the sympathetic version would be they knew that was a bad idea but they wanted to buy political space to expand trade, to get trade promotion authority and get trade deals. and having been in the white house, i have a certain amount of sympathy for the need to compromise the problem is that this is looking more like the smoot

hallie experience than the 2002 experience which the goal of this doesn't seem to be to get better trade agreements. the goal of this seems to be the first step towards more tariffs. and this won't, you know, if you thought they were going to do this for two years and the steel industry is going to use that time to retool and improve the productivity and be able to compete that, is one thing that's not what's going to happen we'll have to eventually take the tariffs off. when we do, it will be harder for the steel industry which will have grown used to them to compete than it will be now. so you're not talking about this being a long run interest of the steel industry >> one last thing, doug. you mention the most successful exporters. people point to boeing cramer's point today was china's not going to cut off their nose to spite their face. they need the planes delivery times are long. if they cancel an order, someone will happily take their place in line why is that not true

>> on a product by product basis, they're going to be arguments made on that but we know from experience, you know, you go back to the bush tariffs, i was in the white house at the time. we argued they'd be a bad idea they invite retaliation. they did it was our agriculture exports to europe that were hit first. they suffered significantly. and, you know, the point is that's going to happen you will incur the damages and you're not going to have these tariffs in the end the wto is going to say these are not fair and they're going to go away you can count on that. so what's the point of inviting retaliation and perhaps upending nafta if we don't exclude canada and mexico that seems an enormous amount of cost for no benefit. why do it? >> guys, it's opened up a whole new chapter for investors to think b we appreciate your insight as always. have a good weekend. we'll see you soon jason furman and douglas hotzig. >> tim timken joins us

and here is a look at wilbur ross who just joined us with some very on point props more "squawk alley" after this

welcome back we're looking at the reaction and backlash of the tariffs. and phil lebeau is looking at the next shoe to drop. let's start with cayla who can help us get color on how that meeting went down yesterday. >> the list of critics has been

long europe and canada strongly disagreeing and vowing to hit back business groups warning of undoing the benefits of tax reform then you have a host of republican lawmakers mincing no words to show their displeasure. in some cases calling this a leftist policy in response to the president's tweet that trade wars are okay and they're easy to win, senator ben sass of nebraska said trade wars are never won they are lost by both sides. protectionism will jack up prices on american families and will prompt retaliation. earlier this morning, steve stivers had this reaction. he said it's not all bad but it wouldn't have been his choice. >> i don't agree with the direction on this one. and the president was elected. he gets to make the call he made the call but, you know, we'll see where it goes as long as this is a stand alone issue, it might catc

i don't think it's a good idea i don't think they end well. as long as it doesn't get worse for our economy, i think we can get through this there are a lot of folks that use steel in ohio. >> and notably, one of the only republican lawmakers who was in support of the tariffs was the republican senator from ohio, rob portman. there is notable discord among the staff that were advising the president on this. you had gary cohen arguing against tariffs and peter navarro called them beautiful and said they're a strong step to defend the american workers somewhere in the middle you have the defense second, james mattis who was not in yesterday's meeting, who had been pushing for his preference of targeting tariffs. he said that is a route to get at the issue of chinese overproduction without angering allies especially nato allies and the u.s. needs in times of war and fighting terrorism as well as cyber terrorism.

they did not choose and even earlier this morning you heard secretary wilbur ross when asked by david faber about whether exactly any allies would be exempted he said that what the president seemed to announce was that there would be no exceptions and even secretary ross seemed to be scratching his head and trying to fill in some of the details. if the president decided to use yesterday despite the fact there is a lot of paperwork to be done and a lot of fine print to be filled in. the white house has about seven days to turn that around and there will be a lot of people trying to lobby the president in the meantime >> we're going to have our eyes peeled next week, cayla. thank you. >> carl, there's been a fair amount of speculation that if we ever see increased tariffs, targeted terr target tariffs, one country

affected is germany and the germany auto industry. in terms of vehicles imported in the u.s., $25 billion in value last year. we do export to germany, some vehicles as well as auto parts but it's far less. total of $6.9 billion. so what do we get from germany in terms of the auto industry? you're looking at mainly high end cars so you might be talking about a five series from bmw or a seven series or the e class, the s class from mercedes benz as well as the porsche automobiles, audi as well. just over half million of those were bought by americans last year in terms of the german automakers, expanding in the u.s., yes, that's been going on in recent years. and as they expand their production, we have seen some announcements since donald trump was elected president. mercedes, bmw, vw, they're all investing and expanding the plants here in the united states nonetheless, the shares, while we've seen voek wago voekz wagov

higher, it will be interesting if we see a tariff pointed at german automakers. there is a the love crying from people saying no that is not good >> yeah. thank you, phil. and canada is the number one supplier of aluminum and steel to the u.s already rumbles there about retaliation. we have more from vancouver on that >> hey guys. canada is bracing not just for the impact of terrorists but potentially a larger trade war it did not take long for the canadian government to respond yesterday. the country's trade minister warning that "canada will take responsive measures to defend its trade interests and workers. there are plenty of industry responses as well. let me run you through a few of them the chief of the aluminum soection of canada says the president has just initiated an all out trade war. while alcoa argue that's canada should be exempt from the

tariffs. even the united steel workers association says canada is not the problem and producers clearly must be excluded from u.s. import terrariffs canada is holding up hope for an exemption. last year prime minister trudeau received assurance that's canada is not impacted. but that notion of an exemption has entered a bit of uncertainty since tensions have arisen over nafta associations i spoke to some industry players that say at this point an exemption doesn't look good but like everyone else, they're waiting for more details from the president. now there's a lot here at stake for both canada and the u.s. canada manufactures 16% of all u.s. steel imports and 43% of aluminum imports meanwhile, canada is the largest market for american goods. so american industries would suffer if this does turn into an all out trade war. the most vulnerable ones being the industry that's turn out the most exports to canada that includes things like

automobiles, auto parts, machinery like semiconductors as well as agriculture products back to you. >> all right thank you. coming up, netflix disrupting the oscars this year. receiving eight oscar nominations ahead of sunday's academy awards what the streaming services nods mean for hollywood and the film industry next. the dow is down about 374 pots inwe'll be right back. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade.

> julia bore sten, they're set up better than last year, right >> it's all the red carpet right now, jon, is covered with white plastic. they get said for sunday night netflix is walking this red carpet because it is a big day for them with eight nominations compared to just three last year four of the nominations are for

"mudbound. that's broad acclaim for a film that netflix bought at sun dance. showing the netflix figured out how to break into hollywood's most elite ranks as the academy seems to get over the resistance to netflix's interest in shattering the studio's business model. netflix wants to release movies in theaters on the same day they're released on netflix. they are also nominated for "strong island" and "on body and soul" and a short documentary called "heroin." amazon drew only one nomination this year for the big six original screen play after drawing seven nominations last year and three oscars, two for "man cleft "manchester by the sea." the new oscar attention can help them draw more top filmmakers for choosing between studios for the projects now filmmakers that want reassurance they can earn traditional hollywood acclaim such as of that the oscars here

as well as wide digital reach. now netflix said in the last earnings call that we'll spend as much as $8 billion on content this year with a goal of half of that content being original. now it's worth noting that next flichl doesn't always care about critical acclaim or oscars attention for the films. one of the films called "bright" was absolutely trashed by critics. but netflix said they did well enough that it immediately approved a sequel. back to you. >> you are going to attend on sunday >> i am attending on sunday. full disclosure. my husband is one of the producers of "get out. so i have to say i'm not objective. i'm definitely rooting for "get out" and also universal studios film from our cnbc's parent company, nbc universal oenld by universal. >> as a film lover, i'm for it i'm not objective either i think it's going to win. >> all right you know, i have to say, the movie with the most nominations

is "shape of water" has 13 going in many saying it's favorite. we'll see how it goes. i'll be here and very excited. >> great thanks, julia. jul jul julia borstin. >> european stocks responding to president trump's plan to slap tariffs on steel and aluminum imports which is receiving backlash from eu officials with today's selloff, germany and spain have moved deeper into negative territory correction territory, excuse me. the german foreign minister today calling trump's decision "unfathomable. his country is europe's biggest exporter of steel to the united states speaking of germany, german steel makers each down sharply today. also a big steel producer is down by 4% and european autos which rely on steel as a raw material are also under pressure including fiat chrysler, volvo and volkswagen

all red arrow there's. in reaction to the trump tariff plan, electrolux is putting on hold a merging of the biggest appliance maker. the stock is down 2.5% the euro is moving higher as the dollar falls amid the trade worries about a potential trade war. and 123 against the green back and speaking of trade, uk prime minister teresa may outlined her vision for brexit saying she was the deepest and broadst trade agreement with the eu but she's not compromising enough to make a deal possible. sticking to politics two political stories in focus for the weekend. italians will vote in sunday's general elections. polls show a hung parliament is likely and in germany, the spd votes on whether to join chancellor merkel's party we have a busy week ahead. >> thank you very much, seema mody at post nine. we're seeing a little buying

here as europe is closing. let's get a news update with sue herrera. >> buzzy dsy day here. central michigan university police confirm two people were fatally shot at a residence hall on campus. they are not students and police believe that situation started from a domestic situation. there are no additional injuries reported yet a 19-year-old suspect is still at large and is considered armed and dangerous. a five hour truce is in effect in damascus in the suburbs there for the fourth time this week number civilians left the area in what is known as eastern guta. the government run tv says that she shelled a crossing point to prevent residents from leaving and the unusually cold bitter weather gripping europe has caused traffic delays throughout the uk. britain's military deplayed ploid in central and western england to help get hospital employees to work and assist police in rescuing people from snow bound vehicles. hundreds of flights were

canceled at heathrow's airport and graco is rolling 30,000 high chairs sold exclusively at walmart. after several reports of children falling it involves the company's table to table six in one high chairs. the rear legs can pivot out of position you are up to date that is the news update this hour back to you, carl. >> sue, thank you very much. when we come back, a lot more on the tariff story but first, a check on where we stand. dow is down about 350. maybe some short covering as europe is winding up for the week dow is now down 282. hi, i'm bob harper,

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the things we do every single day that puts ourselves in harm's way, and to have a partner that is so skilled at what they do is indispensable, and i couldn't ask for a better partner. the president announcing that new set of tariffs on steel and aluminum yesterday sent global markets lower our next guest was there, tim timken is the ceo of timken steel. he joins us to talk about the meeting and the market response. tim, great to have you thank you for coming to the phone. >> nice to be with you, carl >> we heard from a lot of constituents members of congress, obviously other countries, beverage makers, steel producers. the journal today says this is going to turn this into an eye loaned of high priced steel and aluminum i'm assuming you disagree? >> well, you know, you start by saying we appreciate what the administration did yesterday, obviously, the president and secretary ross, we believe,

taken an action that is necessary to stop the flood of imported steel that we're seeing coming into the u.s. you know, i believe that the fears of global trade wars tend to be overblown. at least history would say that. i'm confident as we go forward the administration will able to work with our trading allies >> tim, this is morgan brennan i'm looking at a map of where do you business around the world. you have three plants located in the u.s. you're also doing business in mexico and europe and business in china are you worried about potential retaliation from our trade partners >> you know, i was in the industry back during the section 201 that was done under the bush administration and we heard a lot of the same, you know, issues of well everybody is going to come back after us and quite frankly, we didn't really see that materialize.

a lashlg portirge poshgs of ours is in north america. we've been suffering for many, many years as the result of unfair trade practices by people that target the u.s. they're trying to get to the united states and that had a significant market distortion. so we believe that the 232 is the appropriate action to help deal with that >> so what does that mean in terms of these tariffs what would it mean in terms of your business in the u.s.? would you increase production? are you going to hire more workers? are you going to open up more plants >> so, you know, the global steel industry is a pretty heavily capital intensive industry over the last six years we've invested close to half a billion dollars of -- into our operations here in the united states we believe that we have the firepower to handle the demand here in north america. over the last 12 months, we brought on gloes to 175 new

people to staff up our operations recognizing that the markets were beginning to turn so we think we're in pretty good shape. i invest close to $45 million annually to support the operations of the business i intend to continue to do that. and, yes, i will grow my business here in the united states >> tim, as we're talking, i guess we're going have to get used to this reuters has a flash headline right now they're citing sources eu considering setting duties on about $3.5 billion of u.s. imports if u.s. goes ahead with global import tariff plans how are we supposed to process -- i assume we're going to get more headlines like that in the days ahead. >> yeah. i think a lot of things happen between now and next week when the president is indicated he will sign the bill you know, the u.s. market is still the most open market in the world. and quite frankly, it it's very attractive market to trade with. so i think we're just going to have to work through this on an on going basis i think secretary ross is on

earlier this morning and he said at the end of the day if you look at the overall impact of the 25% margin on steel will have on steel consuming products, it's not that significant. and so a lot of these -- a lot of the bluster that you're hearing today, you know, we're going to have to see how it works ut >> tim, i want to dig a little deeper into the economics of steel making here in this country. it seems to me, i know you mentioned you already been adding workers the fundamentals are sort of turning more into your favorite recently i mean, you've got even before these tariffs, you've got corporate tax reform you've got less regulations and regulatory reform. you've got higher global steel prices you've got relatively low energy costs in this country amid the shale boom were these tariffs really necessary? or were the fundamentals already moving in your direction >> yeah. morgan, i agree that our markets are getting better there is some legislative action and regulatory reform that will

all help us long term. but you have to recognize that i ran this business for close to 24 months at under 50% utilization. and a big part of that was the impact of imports. on top of weak markets and yet, because of the action that's we took and the investments that we made in the business over 100 years, we were able to survive that things are getting better. things are returning to a morsteady state. but quite frankly, you know, we still see imports and we still see the influence of low pricing coming in from overseas. and long term, that's a threat to my business and we believe ultimately a threat to national security >> tim, a question for you on targetted versus blanket tariffs. did you make a specific argument one way or the other did you argue for blanket and that targeted impact would be limited? >> well, obviously, you know, the steel industry and our -- my company specifically provided a lot of funds to the administration leading up to the

announcement last april. then obviously through yesterday on what we prefer to see at the end of the day, i trust the add manition to do the right thing. they're -- sounded very committed yesterday obviously to the 25% off across the board scenario and we support them in that. >> finally, tim, if utilization starts to tick up, how do your hiring plans change? how many people are in search for now? give us color on what you expect wage pressure to look like >> we added about 175 in the last 12 months that takes us to pretty full crewing at this point. i'm constantly in the market looking for people which as we all know these days is a little bit more of a challenge because of some of the opioid issues that we're dealing with in ohio. but we're able to tract and hire and retain qualified people and we pay them a lot of money

that's my plan and i'll continue to work it >> tim, we hope you'll continue to come on and help our viewers understand exactly what is moving here. thank you for your time. >> i appreciate it have a great morning >> you too up next, the ceo of vmware and exclusive interview on the company's earnings beat. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity. feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it.

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what new tariffs could mean for the stock market and your money. and the financial stock john just found with unusual activity the big reveal is coming up in about 15 minutes jon, we'll see you soon. >> all right thank you. vmware reporting better than expected fourth quarter earnings the company facing reports about a potential reverse merger with dell which spurred a selloff patrick gelsinger is the ceo of vmware and joins us now. >> good morning, jon always a pleasure to be with you. thank you. >> i know you said on the call last night that you didn't want to address the things relate odd to dell in that filing maybe you feel differently this morning. dell related uncertainty has been a perennial challenge for the stock. to what extent does it have an impact on vmware's business as customers wonder about what the structure is going to be going forward? >> yeah, as i said, i can't comment on the 13 b filing, jon. what i can say is that boy the

customer response to the business for vmware is very strong as i soend the call, we had very good strength across the entire portfolio of our businesses and we're really saying it's the power of the portfolio as well as great geo performance and across the globe as well as particularly in emea we saw great strength. so overall customers are responding extremely well to our product portfolio, the strategic future for us. and despite any speculation, boy, we're just performing really well. i'm quite proud of my team at vmware for executing so well in what we think is a robust tech market for now and for a long time into the future for well positioned technology companies like vmware. >> i want to talk about network virtualization and cloud how much of your time is it taking making sure that vmware is best positioned whatever happens structurally >> well, my job always is to keep the company focused on moving forward that's where the vast majority of my time is going. and, you know, it's another

topic for us to discuss to make sure that the curiosity is addressed and simply put, we're performing well. our customers are resonating well with our product strategies and we see the future in a very bright and wonderful way for a company like vmware who is performing as well as we are >> now we're used to talking about server virtualization when it comes to vmware a lot more talk about network virtualization explain what is going on with containerization and how that drove some positive results for you guys that had some investors excited. >> yeah, so overall the container trend is a important next generation wave to deploy applications you might have heard other phrases like micro services and 12 step factor models for applications and all of these are really introducing powerful new ways to deliver applications and it's really an application or software driven world and against that, vmware and our network virtualization, we announced two major new

initiatives. one is branch based and through our cloud acquisition or sdwan and the other is our pks initiative, pivotal container service. vmware and google cooper to deliver a new container capability which includes nsx. so we're bringing it into the container space to deliver networks, security models, policy manage meblt. so an exciting new development from one of the hottest products of vmware. >> you have a lot of partnerships with major cloud providers. amazon, of course, microsoft, ibm. just to name a few google, i imagine. what can you tell us about the way those businesses are growing versus each other. amazon is the biggest. does it continue to accelerate at the same rate as the others >> yeah. you know, we're very excited about the amazon partnership we have tremendous customer interest i think of any one of our cloud

partnerships, that's the one that captivated the industry most significantly the idea of the best the public coming together with the best of private. what a powerful hybrid cloud combination. but in addition to that as you suggest, we expanded our partnership with google and microsoft and our end user computing. ibm, we had a tremendous quarter with ibm we announced a couple of customers such as verizon, amdox, rico and the ibm cloud through our vmcloud partner program very successful as well. so overall, great resonance to the multiclouds hybrid cloud strategy for vmware and the marketplace and great results in q-4. >> lots of talk this morning about potential trade wars as a follow on effects. some of the areas that could be hit industries from the u.s. that are high profit and, of course, you think of technology. are you looking at all about how perhaps not vmware itself but

people who are in the data center business could be affected by this and it could have some impact down the line on your business >> yeah. i think as indicated by the last comment, you know, sometimes the trade war rumors may be overblown in the real business effect and similar to brexit, there are lots of conversations. and didn't really materialize as expected and so far, i mean, we'll of course watch it. but we see the overall global economic strength, the technology strength occurring to really give a great outlook for our business the tax reform has, you know, maybe even put a more acceleration into a very positive outlook we believe tech is in for a very good period into the future for companies that are stra teetegil well positioned. >> can you give a little bit of color speaking of tax reform and potential acceleration on how you expect to use the benefits of tax reform specifically to

accelerate vmware's growth >> overall, you know, vmware is extremely well position pd we have a great balance sheet obviously with tax reform that will further improve we have more opportunity for shareholder returns through buybacks and our m & a strategy is one of the best in the industry, jon. we've had great success with it. and we execute our m & as as well or better than any other company. those are the two primary ways that we use it overall, with the great guidance that we set for double digits growth, you know, we have plenty of cash, a great balance sheet to execute both buybacks as well as m & a in the future to further accelerate vmware. >> yeah, you have been buying a lot of companies keeping my eye on. that pat gelsinger, thank you for joining us >> thanks, jon great to be with you as always coming up on monday, my sitdown with lockheed martin's ceo. we get her thoughts on tariffs,

trade, the trump bump and more more "squawk alley" after this you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. zblmpb zblmpblt. president trump's -- sparking retaliation from china. >> hi, morgan. china's urging the u.s. to cherz

restraint when it comes to trade. a press briefing said beijing has strong discontent for washington and said all countries would suffer if they followed the u.s.' example there's widespread belief china won't retaliate and won't really be affected by this at all now, the reason for that is because of u a lot of the steel companies and aluminum producers who we spoke to today said that china just doesn't directly export to the u.s. very much at all. so if you run through the number, less than 3% of u.s. steel imports are from china chinese aluminum makes it about 6% of aluminum imports also, we called the china iron and steel association and they said this action is actually going to hurt the u.s. more than china. especially companies that consume steel. in fact, the official there called it a stupid trade

protection measure inste instead on retaliation, guys, analysts say china probably won't move on this one, but would be moving on something much more important to their economic future. they're waiting for the results of section 301, targeting accusations of intellectual property right, as well as i.t >> the one probably potential retaliation target from china that people think the most about is iphones high volume. high profit. but apple also has a lot of stores in china right now employs a lot of chinese employees. any take on the likelihood of the iphone in particular getting hit by tar rf i have retaliation if there is any? >> well, it's interesting that you said that. there is nothing absolute when it comes to china, but it has a history of taking out its anger

on a completely unrelated item or unrelated field so there are a lot of companies here that are concerned they're going to become a political football what's interesting is you hear a lot about the ache anger could be taken out on agricultural goods, but there's a reason to believe companies like apple or some company that has to do with technology could be targeted if china wants to build its own national champions and get people buying their own company's products >> thank you from beijing guy, i would note on all this talk about tariffs, a potential for trade retaliation, we've got a note the transports today, definitely an underperformer in all the ovrnlgs nouchlt names ryder system, fedex, ups, the railroad ls like union pacific transports are on the front lines of the trade situation we

had the ceo of csx, jim foote on yesterday. he said a lot remains to be seen they could see negatives on gold sides, and some of their u.s. shippers might be benefitted by this they also consume a lot of steel. they said that ultimately if those costs do go up, they're going to have to be pushed out to their customers as well if this gets worse with a country like china, these are the guys that are going to be the first ones hit >> we should point out though, the russell 2000 and nasdaq have gone green apple working its way back to the flat line. when we come bam, the oback the one year anniversary of snap did beat expectations for the first time ever last quarter we'll taub about whatlk about wr the company after this break

moving in together and getting two of everything thing. those fur babies preparing you for real babies thing. that one for me, one for you, us together for the rest of forever thing. buy one iphone 8, get one iphone 8 on us. more for your thing. that's our thing.

at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest. it's been exactly one year since snap went public here at the new york stock exchange. the stock is down nearly 30% since the ipo. last month, shares however jumped 47% when the company reported revenue that beat the

street for the first time. today is not only the anniversary of snap's ipo, it's also the final lock up expiration up to 50 million shares are newly available to trade, guys >> 17, the price back above first time in a while. let's get to the judge and the half >> our top trade this hour, the tariff turmoil stocks down again. more than half the s&p now in correction did the president just spark a trade war? with us today, joe, jim, josh. also onset is ron insana stocks down sharply. newest concern this is hour, a pending trade war, a protectionist president and what the impact could be on the economy. all right, joe, what do you make of this? russell has gone green dow is off