♪ live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli. let's look at the u.s. equity futures. you can see the dow futures are indicated down down by about 335 points big point number to look at when you come in in the morning s&p off by 29. nasdaq down by 65. a lot of this happening, it started yesterday when we got the news, this started in the after-hours market yesterday you can tie this back to the news that gary cohn is leaving, you can try to figure out what wall street expects, does this

mean the administration will be taking a harder turn towards tough talk when it comes to trade and tariffs, or is this a move that's been in the works for a while? there's a lot of speculation about this gary cohn said about six weeks ago he would like to leave >> supposedly all along he said i want to get everything done in a year, most importantly deregulation and tax reform. he's a registered democrat didn't want to pull out of paris. didn't like the charlottesville comments we talked before the show. if robert rubin had resigned it would have been a 5%, 8%, 9% drop back then he was goldman sachs alum. i would hope, if i left comcast t would be 2%. cohn is not good for 2%. >> when cohn leftgoldman sachs for the white house, that stock was down by 1 m.9%.

>> i'm sort of kidding, but last week, we had three days down that were 300 plus points or more i would like to think that i'm worth more than three basis points on the ten-year like three basis points on the ten-year, when it goes -- >> you may be stroking your ego. >> i would be hoping for 2%. >> when the vix is at 18 or whatever we're at now, it implies a lot of days coming up will be 1% moves >> i think it might stroke your ego if you were responsible for a 1% decline in the futures. >> it's not over yet if it happened before the tax plan was passed, or all these goodies, it would have been a different story. the president wants to go full speed ahead with the tariffs some reluctance with some

factions in the white house. >> and that faction just got weaker >> it's 5% below its highs and it's knock around this range >> on edge, n not only about th tariffs. we will talk to wilbur ross. if it's possible any way -- threw me for a loop >> it's a huge deal, but what else -- >> but the chaos in the white house, mcmaster, sessions, cohn. >> even john kelly being brought into this. >> they were supposedly talking about cohn taking over for john kelly as recently as last week that's good. so this should be 600 points if it was really about cohn. the chaos itself is worth at least 300 points >> some people have said this is the cast from the white house being felt in the markets. it's the market's problem on

this overnight in asia, there was a pullback there as well we have gotten used in the last couple of months to seeing big swings up and down every morning. the nikkei down by three quarters of a percentage point the hang seng off by a percent the shanghai off by a half percent. and we heard those comments from pruch about t president trump about the e ushg and o eu and our trade relationship with them. the cac is down by a half percentage point getting to treasury yields, this has been the market that's been leading all others by the nose ten-year trading at 2.853%. today's top story, gary cohn announcing his resignation eamon javers joins us with more.

>> both sides like to mass taj the story. >> a lot of massaging going on last night i'm very relaxed i've been massaged a lot >> let's not go into the massage jokes this morning i wonder if you were serving at the president, he wants you to serve, you give him your opinions, if he doesn't take your advice, like if mnuchin did something, i think he'll say no m stay no matter what. if he gives his advice, he says i gave him advice and i'm moving on if you say i'm leaving if you do this tariff deal, i made my point here if you go against me and go with navarro and ross, i'm out of here, it's not about the tariffs, it's about you.

is that part of what's happening? was he going to leave in a year any way? if i were gary cohn i wouldn't want it to look like i didn't get my way on tariffs, so i'm out of here. >> right this is about tariffs but also more about tariffs speak being that massaging last night, i spoke to a senior administration official who gave me an explanation for what happened with gary cohn. he said this was a mutual agreement here, and it was the end result of four to five weeks of discussions between trump and cohn about what his role in the administration would be after tax cuts i'm told they discussed a wide variety of roles for cohn including possibly a cabinet position you mentioned he might be in line to take over for john kelly. cohn does not have a firm exit date he offered to help for the search for a successor but he has not named a specific name to

the president of somebody he would like to have in that position so who are the front-runners i'm told peter navarro, the trade czar you mentioned is one candidate. another possible candidate is larry kudlow what does this mean for the president's views on trade an administration official telling me last night this is a huge victory for the nationalists peter navarro won the trade battle and now gary has given up it reestablishes the intellectual framework and personnel who were envisioned after trump won the election we can let trump be trump. that last point is important gary cohn was sort of a new york democrat, a goldman sachs globalist who came in and was operating counter to the president's natural instincts on trade. we moving that puts the president in position of getting advice from people like wilbur ross, peter navarro who are much more nationalist in their

orientation on trade that will fuel trump's tendencies on trade. that's the way the nationalist faction is describing this inside the white house the free trade faction inside the white house is saying other people are there who can still make that free trade argument to the president. in the absence of rob porter, the white house staff secretary who helped gary cohn make sure his views got to the president and other views did not get as much air time in the office, and now gary cohn, those free trade voices will be fewer and further in between in the office >> i guess navarro for a while had to cc koechb fcohn for a whe >> peter navarro was told by john kelly that he had to cc all his white house e-mails to gary cohn so cohn could keep an e-mail on him. >> so weird. >> you understand that >> kelly doesn't trust navarro,

and that may play into whether navarro can get this job >> is it that or simply if somebody is your head economic adviser, they should be on all these things, you should go through a chain of command >> sure. >> kelly is very military. >> kelly is a chain of command guy, absolutely. if you're an independent official trusted inside a white house in general, it's not often that you would have to cc your boss on every single e-mail you send >> larry has been outspoken about -- he's not in favor of tariffs either i see him in the role i was describing earlier the president and cohn clashed on a lotof things. but the president always listened to cohn's side of things, considered both sides. i think that's all kudlow would need, to know -- to serve that way is good. that's why cohn, i think it's an

impactful job he had to be there representing that side of things, even if you don't always prevail, i think that's a good way to do things >> you heard the president say this exactly verbatim yesterday with the prime minister of sweden the president said i like conflict i like having people with different ideas. he described a scene where lease sitting back watching his aides fighting with each other the president likes that he says it gives a full airing of all the different arguments and then he ultimately is the one who decides. so he would he bring on someone who disagrees with his natural instincts on trade to fertilize that conversation and make sure there is conflict and he's not just getting one side of the view that's a possible scenario >> i think larry would be a great pick he's through and through knows the -- knows this stuff.

at the bow beginning eginning o administration, larry was up for something and they said, well, he didn't have a ph.d. that's a benefit that should make him have real wovrl world experience >> the other possibility is somebody deep inside the national economic council, not a household name somebody from inside there mick mulvaney has been touted for just about every job that's come up. >> he has a couple jobs now, too. >> he has two hats on now. he might have a third. all of those things are possible we'll have to wait and see what president decides. the president tweeted he has a lot of great candidates and despite all this reporting of chaos in the white house, he has a long applicants list for jobs. this chaos will feed on itself a lot of a-list people will look

at the dynamic of this white house and the drama and say i don't want to spend 6 to 8 months there and get fired >> they can stay in their own labor and obscurity or become one of the most -- >> that the the choice >> people go there for a lot of reasons. >> the president said yesterday everybody wants a piece of the oval office. >> gary goes back to being plain old gary is there any way he can still be in the position for some other cabinet position >> i think there is. >> he's a talented guy he could step into any of those roles and probably be effective. >> i think treasury secretary at some point under trump is a possibility. look, gary cohn, depending on how he handles the coming weeks and hiss exit could be somebody -- speaking of massaging again -- he could come around and come back into favor later on in a trump administration if there were

vacancies higher up the food chain. we'll have to see. anything is possible >> that hurts. i never had someone kneading my shoulders. >> nice ties, you guys >> eamon, think about that s >> we're on the same wave len. >> you start a sentence, i finish >> it's a bromance >> it is >> can we come back and talk to you later? >> i'm here. not going anywhere >> we'll do that >> the news on this front keeps coming happening right now, the european union's trade chief making comments about trade tariffs. she thinks the eu will respond in a proportionate way and said

they hopes the eu will be excluded from the president's tariffs. she says she has serious doubts about the justification about the tariffs on steel and the trade action will damage transatlantic relations. she goes on to say the eu is talking to other trading partners about challenging the trade action we will keep monitoring this speech and keep you updated throughout the morning. we get adp private pay roms this morning joining us is david leibovitz and covering the economic angle is brett ryan. brett, anything happening the past three weeks dampen global growth expect takes, whether it's tariffs orb -- >> no. no we've known these investigations have been ongoing for a while. the important thing to remember is that the president has until april 11th and april 22nd to

give a final decision on these tariffs. the key thing is in canada and mexico are included. 25% of the u.s. steel comes from canada and mexico. if he does include canada and mexico, it signals that nafta is going by the wayside that's an important one. the second thing is that the section 301 investigation, which involves intellectual property transfer, that final decision is due in late august that's where you're talking about large chunks of market cap in the s&p talking about amazon, google, alibaba. those are the companies imacted. that will be much more important. cooler heads i think will prevail when it comes to steel and aluminum tariffs you know, really it's the other investigation that will ge'll gt more details on later on this year that is more important.

>> what other investigation? >> 301 on intellectual property. >> okay. is -- are we fiddling while america is burning does it feel like the country is burning now? >> i wouldn't say that >> does the left feel like we're one -- like we're just ready to step into armageddon what do they see that i don't see? can you tell me that, in terms of the economy >> in terms of the politics of the economy, the risk is that -- >> they're delusional. >> the risk is that business sentiment which we're talking about post ---cyclical peaks in the pmis so should sentiment deteriorate based on the politics, that's a bigger problem down the line given a lot of the chicago pmi and click go manufacturing ism

are at ten-year highs, they don't tend to stay there for longer than a quarter or two they should start to cool off a bit. if they start to tumble at the same time that inflation is rising because you will see a pick up in inflation coming up in the next few months, that could be problematic >> i also -- i don't think a lot of these people say how many times does the market have to crash before you realize -- it's like -- it went from 17,500 to 25,000, 26,000, now we're at 24,800 we're still up 35%, aren't we? am i confused? >> i don't think you are part of it is that 2017 was such a low volatility year that now we're seeing more normal type of shocks >> people don't have stocks and don't understand don't look at their statements, they have no idea though read it on a daily basis, it's crashing, it's up >> if you think about the correction we saw at the beginning of february, peak to

trough the s&p went down 10.2% on average during the past 38 years, the stock market falls. what we saw in february is less than what we've seen on average over the next 40 years >> a lot of points >> but not a lot of percent. it's one of those things where you need to separate the two i would echo some things that brett was saying the economy looks healthy. business sentiment is high profit growth is coming back looks like it will remain relatively solid this is still a good fundamental ba ba backdrop, but volatility is back in the market. we need to be sensitive to that dynamic going forward. >> when you dial it back, all that stuff makes sense but the way the market views these events is policy was our friend coming into this year, maybe right now it's more complicated. so maybe there's policy clarity with these staff changes in the white house about what tariffs

will be about and maybe what that means and what costs we're willing to bear if we want the trade deals changed, but that doesn't help the pe multiple of the s&p 500 in the short-term. those are some things i think the market is grappling with >> absolutely. you layer on top of that the fact that interest rates are looking like they'll pick up from low levels. that changes the calculation around balancing a portfolio around stocks and bonds. when fixed income starts paying you again, an 18 plus multiple on the s&p doesn't make much sense. political risk breaks down valuation. what we're coming back to is a more normal market stra central bankers are no longer manipulating fixed income. equity multiples are back down to levels more consistent but the economy looks solid. for the next 12 to 18 months, there's not a reason to pull back in your allocation from risk assets. perhaps just be a bit more

targ targeted, more active and seek out those opportunities that could benefit in the changes in the current environment. >> i think you're on to something. nationalism, populism, trump there's the good trump and the bad trump for conservatives. >> for free market types >> sure. >> and tax reform, deregulation, all these things that trump did, in the back of their mind it was always what about trade? now he finally did i think the policies were all positive until last week >> was all in the risk disclosure section >> it was. everybody knew >> so far so good, but what about trade? i don't know i'm not convinced. >> you don't know how much of it is a psychology change >> how much is negotiation, how much will stick. we've seen steel tariffs put in under the bush administration and got rolled off >> he is speaking in pittsburgh

on march 10th, trump >> okay. there's -- >> timing is everything. >> timing is conspicuous >> what is their football team >> steelers. >> that's right. okay >> right timing is conspicuous. april is when the decisions are du due. >> gentlemen, thanks when we come back, the new york area bracing for a second nor'easter in less than a week we'll get an updated forecast and tell you what this might mean look out if you're looking to travel for business. "squawk box" will be right back. we had long deployments in iraq. i'm really grateful that usaa

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welcome back, everybody. weather watch today, the east coast bracing for a major winter storm. it's the second nor'easter in a week contessa brewer has more the snow has started slowly, but we're expecting much more to

come >> here at the edges of the financial district in new york, we're feeling a lot of wind. it looks like the snow fall predictions for new york city are trending lower, but still would be ten inches, much more north and west of the city, up to 18 inches a lot of flight cancellations. 2100 nationwide and almost 4,000 flight delays. amtrak canceled dozens of trains, commuter trains are on modified service new york state through ways advising motorists they should not be on the road around the evening hours. that's when the snowfall should be at the heaviest combine that with the blowing wind visibility will be bad we were told that these two nor'easters, the one last week and this one has a $2 billion impact on consumer sales in the northeast. hardest hit are the bricks and mortar restaurants, any small businesses that depend on people

coming into their shops. but some businesses have been help the thi helped right now, as the workday gets going, it looks like people will be able to get to work, the question is will they be able to get home guys >> i know. we're already thinking about that here. looks like it will be a long day. thank you very much. >> the kids preempted thing yesterday? >> 4:00 yesterday they canceled school >> mine too. so they're saying -- we'll all be home tomorrow do we have enough firewood dad, you're not going in, right? you can stay home with us. you can't be expected to go in i said, you know -- >> neither rain, nor sleet -- >> i said scott, do you think -- is this going to work tomorrow

i said take a shot at chair. >> can we survive? >> i think they can take a tighter shot >> that doesn't work in tv, does it >> can't call dit in from home. >> i think that morning person does you don't have one in your basement >> morning chuck does he still -- >> we're here. it wasn't bad coming in. >> not yet might be hard getting home >> city kids are going to school >> anything better than if you're a kid, the day before you know >> you don't are to do homework. >> coming up, a white house shakeup? it did happen. we will talk again stay tuned, we will talk about it that's not gary cohn kind of oks keloli him that's bill daley. we'll see what he says with the united mileageplus explorer card, you'll get a free checked bag.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back it's time for the squawk planner. the february adp employment report is out at 8:15 a.m. eastern followed by the january trade deficit and the revised fourth quarter productivity numbers. the fed releases its latest beige book report at 2:00 p.m. eastern. new york fed president bill dudley and atlanta fed president rafael bostic are speaking today. brown-forman, dollar tree and abercrombie & fitch reporting before the opening bell.

we'll hear from costco and thor industries after the close the u.s. futures have been under pressure since yesterday since the close of the session yesterday when we heard this news about gary cohn leaving the dow futures are indicated down by 331 points s&p down by 30 nasdaq off by 66 national economic council director gary cohn announcing his resignation. ylan mui has more. hi >> republican leadership saw gary cohn as a critical ally in tax reform and his resignation is coming just as the gop is launching a big push to sell those tax cuts to voters and lay the groundwork for the midterm elections. senator bob corker called cohn invaluable

jeff hshg ensarling called cohn a voice for free markets and kevin brady said cohn served for all the right reasons. gop leadership has been warning the white house that enacting steel and aluminum tariffs would undermine tax reform economically and politically the tar kif iffs could be the equivalent of a $9 billion tax increase and hit small whatever businesses hard. the majority of americans say they do not support the way the president is handling trade. the republican leadership does not want to get bogged down in a trade war when tax reform is trending up. 50% of americans in a recent "new york times" poll said they do support that legislation, there was a big jump in democrats who approve of it as

well there is definitely a dissidence between the messaging you're hearing from establishment republicans, that's what they believe will keep them alive in the midterms, talking about tax reform, but the white house wants to talk all about trade and tariffs. >> thank you very much a developing story out of brussels the eu's trade chief responding to the u.s. tariffs warning that the eu will react in a proportionate way. willem marx is there and joins us live. wall street has been waiting for any signs of retaliation, maybe this is -- they're getting it now with this what's happening >> so, cecilia malmstrom is the commissioner for trade here in bl brussels, she outlined a three-pronged approach she will look to retaliate when it comes to certain goods coming from the u.s. to europe, try to match the amount of money they think they would lose because of steel and aluminum tariffs by trying to restrict and add taxes andtariffs on some items

but a draft list talked about bourbon, harley davidson and denim from the northern california area. i had a chance to ask her during the press conference whether she thought the u.s. pretext for these tariffs, that of national securitywas realistic. here's what she told me. >> we can't see that the -- that this section 232 referring to national security in the case of europe and some other allies, but they have to talk for themselves, would be relevant. how can possibly such a small import of european steel, very specialized high quality, that the american industry needs, how can that be national security? politically it's hard to understand but also legally it is hard for the americans to make that case >> so they'll work with other partners, she said, to try to bring this to the wto, where she

thinks they have a good case that will take longer. so they're worried about steel being diverted from the u.s. market to europe that's being produced elsewhere in the world they will try to introduce their own safeguards to prevent that dumping, impacting steel producers in europe. >> so they're worried about steel produced in the united states being dumped there or with the walls going up around the united states, they're worried about the chinese steel being produced getting dump eeeo europe because it's not being dumped here? >> it's being diverted, that steel instead of being sent to the united states is being dumped in europe they're worried about the european producers >> that doesn't sound like it's a retaliation against us as much as a retaliation against china >> of course, that's one of the three-pronged approaches that's one of them the other is retaliation on specific goods we don't have details on that

yet. the other is trying to engage with the wto to try to make sure the u.s. rolls back any proposed tariffs that are introduced. >> willem marx, thank you for joining us joining us now to talk about this and much more is bill daley, served as special counsel to president clinton on nafta issues and white house chief of staff under president obama. secretary daley, a lot to talk to you about let's start with the trade issues what we just heard from willem, the idea that the eu is now concerned about china's steel getting dumped on their shores how do you break this down what happened here >> what's happened is obviously the president has made some bold statements unilaterally without consultation or with very little against our allies here we are seemingly stumbling to a trade war with our allies

in europe. the president has been clear from the beginning of his campaign that trade was a big issue for him and his voters, his 30%. that reflects the polling that was just mentioned earlier in your reports but the focus should be on china, if that's where the real problem is the president with his tweets last week and yet to see real policy seems to have started a war with our allies or at least a war of words it may stumble into a serious economic problem >> i agree with you in terms of the broader picture on there but the details that willem gave us, the idea that the eu is worried that china will not be able to dump their steel here and it's going to go there, that is a broader problem. everybody is thinking okay, we've been accepting and soaking up that additional steel produced maybe this is something -- how would you target it? if you think we need targeted ways of going after the chinese, how would you do that? >> there's a couple of bills

that are not about tariffs you have a bill on reciprocity right now that what the chinese compa companies that are coming to the u.s., there's a bill that u.s. companies should have the same reciprocity across the board if they can do business here in certain ways, our businesses should be able to do that -- >> our congress can't mandate that >> no, they can't mandate that, but they can passed that -- >> they can pass that, then it's talking again. it doesn't do anything china says thanks for your recommendation >> no, it affects chinese companies that come here they can put strikes behind it if you're going to do trade actions like the tariffs on steel and aluminum unilaterally, first of all they should have come out with a policy, not just conversation or tweets then consult with european allies there's no doubt the europeans have a fear of the chinese or

russians dumping steel in europe this trade debate -- let's admit one thing here we have an extremely strong economy going. we have basically full employment going on. we have a very healthy and the strongest economy going right now. so this idea that somehow we have to go into some trade war to protect our economy -- our economy is doing quite well, thank you, under the rules -- albeit in should be changed whether it's nafta or some others >> that's the key, you're right. the my is doieconomy is doing wt some pockets feel they have been left behind, they have not been addressed, and you think there are things that could be addressed. i guess you agree with the overall take on some of these things but not the way it's being done or carried out? >> exactly it's got to be a thoughtful process with our allies, with allies that we negotiate with and discuss with

no doubt you have to have uncomfortable and difficult conversations. we're doing it now with mexico and canada my sense is that will not go anywhere i think the president's promise repeatedly in the campaign to end nafta will come about shortly. >> some people are saying this is the way to extract what we need to stay in nafta, with whether -- that's the hope of many people. i'm surprised, bill, the democrats are the only people who like these tariffs, you just don't like the way they are done i'm surprised cohn didn't like them he's a democrat. we heard from a lot of people in ohio, pennsylvania that something eventually had to be done now something else, bill i saw that it does help if we have a steel industry in the country. and it's becoming automated. we'll lose jobs probably no matter what.

there will never be hundreds of thousands of people employed like they used to be so much of it is automated you better have your own ability to make steel for infrastructure and defense. i can see that we do want to -- it may not be the answer, we may not bring all the jobs back, but we don't want to be relying on china for steel when building infrastructure or defense. that must appeal to you a little bit? >> absolutely. it's not as though we don't have a steel industry >> it's compromised to some extent >> it is challenged because you do live in a global world. the people who buy this steel and use this steel want to buy it at a cheaper price, if it's quality steel. if they can find quality steel from europe that may be cheaper, they'll buy it if you're going to stop that and say you have to only buy it from u.s. companies, that's another story. >> you don't want a centrally planned statist economy where they keep the things -- they'll

make it -- it doesn't match up supply an demand at all, they do it because they're bringing peasants in to work in the steel mill >> then, joe, you're right, then focus on china where that sort of abuse is going on the whole report was about eu. >> trump must be watching. he mentioned you specifically. no he doesn't he did just tweet, from bush one to present, our country lost more than 55,000 factories, 6 million manufacturing jobs, and we've accumulated trade deficits of more than $12 trillion last year we had a trade deficit of almost 800 billion. bad policies and leadership. we must win again. that's just moments ago. >> you forgot #maga. >> you know what else i was doing? just to bring it current, i searched bill daley departure.

they were writing stuff when you left that was just like with cohn, you left a year early. there was tumult, you lost some people under you and -- it is similar that's a meat grinder in d.c., is it not? >> there's no doubt. i don't think anyone is surprised that gary left it's been speculated for almost six months since the charlottesville comments i don't think it's a great surprise he left i do think the timing as a result is obvious. he lost the fight around this issue of tariffs -- >> you think he should do that you're there to serve at the president. you give him your opinions, other people give opinions, and then do you have to leave when he doesn't do what you want him to do? i think he was leaving any way >> i don't disagree with you at least you all have speculated numerous times, as the media speculates on other people every day who are allegedly going to

leave at any given moment. >> right >> secretary daley, great to see you. >> thanks. nice talking to you. >> thanks. when we come back, much more on the impact of the president's tariffs. commerce secretary wilbur ross will join us at 8:00 a.m he will tell us why in his words the tariffs won't blow up the world. u.s. equity futures we are under pressure after gary cohn's departure and concerns that trade rswa will continue we'll be right back. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom.

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welcome back, everybody. u.s. employers added a nice round 200,000 jobs in january to kick off the new year. we're going to be getting february numbers on friday joining us ahead of all of that for an early look at february hiring is dan rod, he is linked-in editor in chief. dan set us up for this we get adp and the linked-in numbers now. >> another strong month for hiring 18.5% increase year over year. at a dip month over month about 8.5%, but what you are seeing is probably not that worrisome for the month over month because january was so strong. so over an 18% increase month over month and year over year in

january. this is the fifth straight month where we've seen 18, 19, 20% increases in hire. >> month over month, is that a seasonal factor? >> yeah, it probably is. january was so strong. ridiculously strong. is this a step function change and now we're going to see hiring really strong every month? doesn't look like that's the case. >> what kind of read can you get on salaries, wages obviously that's the focal point right now. i wonder, there's the sense that employers, private employers would be willing to do almost anything, throw perks around, make flexible work schedules rather than raise wages and salaries what's going on right now? >> if you're looking at where the hiring is happening. the wages question is interesting. what is even more interesting i think is watching the companies start hiring in different places. >> right. >> if you look, for instance, one of the sectors that's doing the most hiring in the last month was finance. where the jobs were by volume was new york, san francisco, l.a. but if you look at the cities where there was massive

hiring were places that were low cost places to hire people with finance skills, kansas city, salt lake city, raleigh, durham, austin. >> meaning instead of having to pay people more, you give them a money at these cities. >> goldman sachs in salt lake city is running their electronic finance business. >> the whole retail market salt lake city, goldman. massive hiring every month the companies that are doing the hiring who would have thought goldman sachs in salt lake city. >> it has been hiring in some of the oil towns that we have seen some of the recovery you say that's starting to moderate >> last year the story was oil, massive hiring, massive hiring, that's not happening if you look at the other industries doing the big hiring this past month, all places, all companies and industries that are going to be affected by the tariff talks >> ah, interesting >> yeah, really interesting. >> you're already seeing that? >> we're not seeing it yet the question is in the next couple months will we see it >> if these tariffs go into

place what happens if autos, aerospace, manufacturing, these are the places that are seeing 19, 20% increases in hiring. what happens when their input costs go up? do they keep doing the hiring? i can't imagine. >> dan, thank you so much. >> thanks a lot. coming up, the market response to gary cohn's departure -- pending departure from the white house u.s. equities futures indicated down 329 points. what is that mike santoli, you're an expert, is that 1 1/4% about 1 1/4%. >> s&p is 2700 and change. just over 1% >> just over 1%. see, you know, if i was trying to make a statement as cohn, i'd be disappointed it wasn't worth more anyway, our guest host for the next two hrs wl ouilbe former honeywell -- no one wants the market to go down but if i was feeling like i was - and gold markets.

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gary cohn is out president trump's top economic adviser resigns from the white house as a trade war might be brewing. the full fallout from washington to wall street straight ahead. doubling down. president trump threatening a new round of tariffs this time aimed at the eu. the full details ahead. and mega deals discovery ceo david zazlof joins us to discuss the company's strategy and latest media merger talks as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." good morning, everybody.

welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick with joe kernen and mike santoli if you are waking up, we are down less than 300 points which is something to write home about after what we've seen this morning. dow futures down by 3 points s&p off by 26. nasdaq down by 55. futures last night were under pressure on the news that gary cohn would be leaving the white house. we'll talk more about that in just a minute. in the meantime, check out the ten-year note. take a look at what's been happening there as well. treasuries, the ten year yield being 2.85%. >> now we're down 300. down 295 >> unimpressed >> unimpressed we had three 400 point losses last week. >> not too many left to leave the white house so you can't -- >> it wasn't about that last week it was about three basis point move in the ten year is good for

400 points >> s&p if it opens here around 2700, it's above monday's close. it's a level that the s&p has crossed eight times this month it's in this churning area that we've been in for a while. >> larry is here good to see you. if we did january -- if we had every month like january we would be up 800% there had to be a reversion in the mean. >> there's always an event that seems to spook the market one way or another it's true certainly this morning. we'll get by this one as we have in the past. >> right >> and maybe they're going to put kudlow in there. that would be nice. >> wouldn't it >> yeah. >> he's against tariffs, but we were talking about it earlier, larry. you've written books about leadership you can have someone there that's serving at your pleasure that disagrees with you and you listen to it but the guy doesn't have to leave if you don't do everything he tells you to do. >> it's hard to think this was a one-time event. >> right >> i think he had some

frustrations. >> could kudlow go there and be effective since he's against tariffs? >> no, he's amenable to things, i believe. >> right >> if you can serve -- if you can make your case and represent that side effectively, that's serving right there even if you don't -- >> i think the -- i think the argument about tariffs is interesting in this sense. it's indisputable that people were dumping in this country. >> yes. >> the question is do you want that to be a permanent state or do you want to change it if you want to change it, what's the right time to change it? >> and what's the proper wayto change it. without retaliation. >> i'm a trump advocate admittedly, but it seems to me one thing you can rationalize is the nafta negotiations are going very slowly. it's stated that canada's been the recalcitrant among the three parties involved in this negotiation and it might well be this is a wake-up call to canada if, in fact, the nafta negotiations are accelerated and concluded in a reasonable way, that mexico and canada will get

carved out >> you're still looking at this as a negotiation, not a done deal >> i am. i am at the end of the day i don't think it will go to canada or moeks i could he and i hope it does go to china. >> the futures are moving lower following the announcement that president trump's top economic adviser gary cohn is leaving let's get straight to cnbc's eamon javers in washington i skipped a word bombshell announcement. >> reporter: you don't think it's a bombshell >> no. huh? >> reporter: it was expected there was a lot of speculation about whether gary cohn would leave. we've been on gary cohn watch since mid summer people were telling me they were getting gary cohn resignation fatigue because it had been going on for so long yesterday they ripped the band aid off. now the question is who is the president going to turn to as his top economic adviser here's what an administration official told me last night in terms of who wins and who loses in all of this

this official is saying to me, this is a huge victory for the nationalists peter navarro, the trade adviser, won the trade battle and now gary's given up. it re-establishes the framework. we can let trump be trump. so the implication there is that the nationalist wing of the trump economic team is in the ascendency but president trump said something interesting yesterday in his press conference with the president of sweden how he likes his advisers to argue it out in front of him. >> i like conflict i like having two people with different points of view, and i certainly have that, and then i make a decision, but i like watching it. i like seeing it and i think it's the best way to go i like different points of view. >> reporter: so that would suggest to you that the president is open to somebody who doesn't necessarily agree with him on trade and tariffs, like a gary cohn figure, but then this morning the president's also been tweeting here's what he put out this

morning for doubling down on the tariff rationale he said from bush one to present our country has lost more than 55,000 factories, manufacturing jobs and accumulated trade deficits of more than $12 trillion last year we had a trade deficit of almost $800 billion add policies and leadership must win again #makeamericagreatagain doubling down on the pro trade rhetoric where's the president going to come down on all of this it's very hard to tell someone to watch will be john kelly, white house chief of staff, who was himself rumored to be on the outs with the president, perhaps leaving the administration now seems to have been able to strap himself back into the chair and we'll see how long that lasts john kelly will play in the short term a very important role here in picking the successor. who's up for that job? well, larry kudlow, as you guys were just discussing, is somebody who has been mentioned inside the white house has a

possible successor to gary cohn. peter navarro and somebody maybe inside the national economic council, shara knight figure think of all of those names. the big diversity of opinions that the president has to choose from here. he says he likes conflict. he might be about to get more. >> thanks, eamon stay tuned this person looks very familiar to me. kate kelly kate kelly >> how are you >> i'm doing great >> how's the fam >> they're awesome. >> great for you to be here. >> yeah. >> you're with the "new york times" now i liked your piece, and it went balanced and you noted that regardless of whether trump ends up not agreeing, he really does listen that was in his piece. >> i was wondering if you were going to throw open your mouth when you mentioned "the new york times." >> i was going to say balanced and your editor was on vacation, he wasn't able to go in and change that part that made --

that didn't make trump look awful for a second where was he or she? >> we try to be very balanced in all things. >> i know you try. we all try >> we do >> anyway -- >> okay. >> we'll get to that joe watkins, former george h.w. bush white house adviser he's balanced, joe is. >> fair and balanced >> i'm very balanced i'm a balanced guy >> with us for the rest of the show, larry bossidy, former honeywell chairman and cnbc contributor. after reading your piece, kate, it made me think that in a perfect world you have -- you go to serve in the white house and it's not about you, you present your side and you stand up as strongly as you can for your viewpoints but if you don't prevail, you're glad you were there to present your side of things and you probably think you'd like to be there the next time your side needs to be presented. i don't know if you kick your ball and go home if you don't get your way maybe that's not what happened.

>> it seems to me gary cohn is trying to be all things. he's leaving on a gracious note. there were, you know, affirmative comments all around from him, from general kelly, from the president about the term he served. >> yeah. >> he comes back in the cabinet. >> exactly we even heard some talk that he'll continue to talk to the president as others have, possibly including steve bannon on this issue, and that he would consider coming back and the president had talked to him about maybe a different type of job now or down the road so that possibility seems to be open on the other hand, he made it clear that -- i mean, he threatened to resign over this tariffs issue if it didn't go in the way that he thought best and then if you read our story you'll see the president was quite annoyed and the staff talked about how cohn had made this about himself. >> right. >> as opposed to the issue. >> that's bad. >> it may be bad or good depending on your world view, but it definitely doesn't sit well with president trump. >> exactly we talked about kudlow if it was

kudlow he's anti-tariffs but i can't see that -- >> you think he would work with the administration regardless? >> he wants to present his side of things. that's why you're there. if you don't always win, at least you're there -- i don't know, larry. how do you do that >> i don't think it's a good idea to ever say i'm going to quit if it doesn't go my way that's not a smart way to play. >> you have reporting that that was the case >> yeah, i think -- i know that he threatened to resign over this issue the other problem for him, very different set of issues. >> not smart. >> he had actually drafted a resignation letter last summer after the charlottesville violence. >> watkins, i'm hearing you're threatening to leave if you don't get to talk right now. >> have you drafted a resignation -- >> you're walking off the set if you don't get noted so go ahead. you're getting your way here don't leave. >> look, i think gary cohn is smart to leave when he's leaving. he's a strong personality. he's had his day he can claim some success

because of the tax reform bill that got passed so that's a good thing for him. he did agree with the president on charlottesville as most of us didn't, his response to charlottesville. at the same time gary cohn can be a player. he can write a book if he wants and he can consult with president trump. what president trump knows a staffer leaving, it's a one or two-day story for the white house because the next big story becomes whoever it is that he replaces him with. remember, this is not a congressional -- you don't need senate confirmation for the replacement. it will be somebody that president trump chooses and whoever he chooses is going to be the next story of the day, whether it's kudlow or somebody else, that's going to be the next big story cohn is maybe a two-day story, three-day story, he goes off into the sun set, writes a book, stays close to president trump he advises from time to time president trump has the option of taking his advice or leaving his advice. >> can i make two quick points here >> yes >> i think in gary cohn's defense the rationale that he was apparently articulating as to why these tariffs were such a problem is that they would

inflict, in his view, long-term damage on american companies that rely on these metals to make products, that those price premiums would be passed on to consumers, that you risk alienating our trading allies and you could get into a very sticky situation with china at a time when we have potential threats from the korean peninsula and that the world trade organization might take years to sort of unwind these decisions. so in his view not only was all of this damage possible or even likely, unwinding it would not be half as easy as imposing it. >> and he's right. and he's probably right. >> there's one other thing here, too. i think in terms of his replaceme replacement, it looks to me like navarro is a bomb thrower. you have to get somebody in there that's going to have reason in terms of balancing the equation on the issues at surface. i hope whoever the selection is, they have enough courage to stand up and state their position and ultimately prevail, at least sometimes. >> well, the interesting thing about navarro, as somebody who ran a huge company, you would have a view on this, his

management or lack thereof has kind of allowed his influence to wax and wane i mean, he was a bomb thrower and continues to be from what i understand at one point he was put under gary cohn's thumb and gary cohn was getting a cc of every e-mail he sent and they were attempting to rip up nafta on three occasions but then he seemed to be ascendent again the last person to have his ear is often the person whose view prevails so that's a tough environment to work in. >> but this is the president though whose comfort zone is the counter intuitive. he excels in the counter intuitive zone so don't be surprised when he does what doesn't seem to make sense i mean, i would agree with gary cohn with regards to raising tariffs on steel imports and aluminum imports, but at the same time donald trump has been a very, very shrewd player so far. he shows the ability to be

nimble as a chief executive. he's the guy -- the same guy that said that nato was obsolete and then turned around and said, no, it's absolutely not obsolete he can change his mind in a new york second, so to speak, so don't be surprised if he changes course on this one as well joe, he lives in the counter intuitive. >> sometimes his gut instincts, i mean, it seems sometimes in spite of himself it ends up working out. like there's almost -- >> that's exactly right. >> sometimes he's stepping in it or he actually -- there was a method to the madness or whatever i thought it was weird that we heard from the korean peninsula yesterday. >> exactly. >> threaten china with tariffs and it's -- >> all of a sudden we have the possibility of talks between north and south korea. >> everybody would have told you that the tweets to north korea were insane, calling the dictator little rocket man, but guess what, if it works, if it brings him to the table, if it

opens -- creates an atmosphere for some kind of an agreement, that ends up being brilliant so he lives in the counter intuitive zone and he excels in it as well. >> staple of genius. don't count him out. >> i don't know what the governance process in the white house is or if there is one, but i do think this, you've got to give the guy alot of credit fo finally taking it on whatever the ramifications are now they will be down the road whenever someone does it, so you take this as i stated earlier as a permanent condition or you try to do something about it so at the end of the day, by the way, it's not going to change the world economy. >> this job that gary cohn left, the chief economic adviser, you're supposed to be kind of sketching out and executing the broad economic agenda of the administration outside of trade, which now the president wants to, you know, go in this particular direction, like there's not five next obvious steps that the economic agenda is going to take, right theoretically there's infrastructure you're going to be there to be the voice of here's what the

american market might think. >> i don't know if i would agree with that, mike. infrastructure, granted, has been delayed, telegraphed, celebrated, yet we haven't seen almost any substance infrastructure as it's been sort of articulated by the president is a 1.5 to $2 trillion ip initiative where you need to corral the private groups and deregulate -- >> you think infrastructure is less likely to pass with cohn gone >> it's hard to know, becky, until we know who his replacement is and who stays on the team there is an infrastructure point person d.j.gribben moreover, can it get air space as a priority in the trump administration personally i've always been surprised that they didn't work on that earlier because it just seems to have such bipartisan support and too many people certainly in the business community would be a no brainer. you see private capital already

lining up. so i don't know why, but, quickly -- >> we have to run. very quickly, what does gary cohn do now? >> i think he'll stick around for a few weeks. he'll still be weighing in on this issue i'm told he'll take a month off and kind of chill and then i've heard he might open an investment firm. i'm sure he'll be fielding offers dena powell wasn't out of work very long. we'll see, but i wouldn't be shocked if he returned to finance in some way. >> kate, thank you joe, thank you. >> thanks so much. >> whenever the media talks about adults in the trump administration, why are they always democrats have you ever thought of that? >> i have not. >> why is that, larry? why are the adults in the administration always democrats? >> i think the press probably features them when the time comes. >> unbelievable how that works not just "the new york times," just -- i said media thanks for coming. >> uh-huh. >> so the family is good, the kids >> they're good. >> invite me back, i'll accept. >> don't be a stranger. when we come back, we have

much more from larry bossidy from the break later, commerce secretary wilbur ross will join us to talk about all of these issues. stick around, squawk will be right back

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uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. all right. welcome back, everybody. let's get back to our guest host, larry bossidy. he's a cnbc contributor. larry, i want to ask you to play some of this out with us the markets have been wobbling on the idea that these tariffs are going to lead to bigger trade issues with other nations that could eventually lead to trade wars this morning we've heard from the eu, which is very concerned about issues, and saying that it may very well be escalating

things as somebody who has watched this from the ceo's suite, who has seen this play out over a while, where do you think we stand right now? should people be worried tha this is going to step into a larger issue, that there will be retaliatory tactics and that this will play out in a big way? >> you know, i certainly think there should be a concern. i would think you would miss the mark if you weren't concerned. on the other hand, we have the most attractive market in the world. no one's going to do things to basically cut off their nose despite their face in terms of serving this market. will there be some retaliation maybe. is it going to be serious enough to change the world economic outlook? i don't think so i also don't think this tariff has been at least proposed will stick in the way that it has been proposed. in other words, i don't see everybody, as i mentioned a moment ago, being stuck with a 20% tariff, for example, on steel. maybe china, but i don't think at the end of the day neither canada nor mexico will

so i'm not concerned about it changing the economic performance. to have some concernsabout it and discussions is warranted the united -- european union, who was complaining they have dumped product in this country as well, particularly cars >> that's what i was going to ask you. larry, ge, honeywell, all of these places, you've seen how we trade around the world. >> yes. >> do you think we've ever gone into some negotiations, i know the other side thinks you're so wealthy, you can afford it do you think we've ever thought of ourselves as, you know what, we do have a lot of riches in this country maybe it's okay if we don't get a fair shake all the time? we do not always negotiate the way we should because -- >> some of it is actually wrapped up because we think we are trying to protect ourselves and that there's a national security interest. >> i think we're taken advantage of -- >> i think we give stuff away. >> that's what i mean. >> it's not just because we feel like we're wealthy part of it is we feel we are

helping ourselves stay safe and secure. >> as a businessman, you know when you're being put upon in terms of other countries. >> and we have been. >> and we have been. so i know it's against the common belief, but i'm glad we're standing up finally and deciding what we're going to do about this it may have ramifications, it might, but even if it does, it's worth the effort are we going to take this as a permanent state? >> you mentioned larry kudlow earlier. would you prefer if the president didn't refer to trade deficits as a loss, to talk about trade as a zero sum game and to have this idea that one side always gets the better of the other? >> of course i would i mean, i think he's misguided. >> right. >> but that doesn't mean that the underlying issue of people dumping things in this country doesn't exist. it does and so let's stand up and fight once in a while and see how we come out. pple >>eosay i pay -- i'd gladly pay $100 more for a car if our steel guys -- anyway, we'll be back.

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welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories front and center this morning, u.s. equity futures. we've been watching this and they are trading lower after the news of gary cohn's resignation from the white house we've been watching since yesterday when this first came the dow futures are down by 264 points we were down by over 330 earlier. s&p futures down by 21 nasdaq down by 43. reaction coming in from wall street including goldman sachs ceo lloyd blankfein who tweeted gary cohn deserves credit for serving his country in a first class way. i'm sure i'm joined by others who are disappointed to see him leave. she says she hopes the eu will be excluded from president trump's tariffs but warns that the eu will respond in a

proportionate way. in the meantime, we're also hearing from the world trade organization a spokesman there says many wto members are expressing both commercial and systemic concerns about the u.s. trade plan and fear tit-for-tat trade actions discovery just closed on its $14.6 billion acquisition of scripps networks joining us now to discuss this milestone and the future of media, david zaslov which is discovery inc. >> which is discovery communications. >> did you pay someone in marketing? >> that's how creative i am. >> disney, comcast, discovery, viacom >> we go way back. you were at the mothership, nbc from the very beginning. >> from the very beginning with you guys. >> for 18 years. i met you at a poker game, which was scary. >> we went to a poker game we created a poker game together >> yes yes. i'll tell you, this is the way i

want to approach this, david a lot of media mergers hang right now because there are some daunting challenges facing old media and we don't need to even mention who they are we know who they are. >> right. >> now they're creating checking accounts at amazon i wouldn't know how to go into the future when you and scripps get together, is it about growth or is it about defense? because you can take that sales force and rationalize it you're going to save, i think the estimates were 300 million now you're up to, what, when it's all said and done you can save how much, 400 million? >> we said our synergy is 350 million in cost but we think it's going to be more. >> that looks to me like you're rationalizing things. >> it's two things. >> is it growth? >> in terms of offense and growth, we'll probably be the largest media global i.p. company in the world so we have -- we have oprah, discovery, animal planet, tlc, i.d., we have these brands where

we create content. euro sport in europe for almost all of our content we own it globally on all platforms for everyone in the world. and so, you know, when people look at scripps they say we're buying hg, food, travel, cooking, but what we're really buying is a basket of global i.p. so when we put these two companies together, we now have a huge amount of great brands that people love these are affinities people love cooking. they love home and decorating. they love oprah. they love science, cars, velocity which we have so traditionally we've done this with channels all over the world, and we'll do that with scripps. we'll take their content they haven't used their content around the world >> that was your -- you're known for that, taking all -- >> we're the largest paid tv international media company. scripps hasn't done that what we'll do, we'll take their great content and we'll move it around the world and so that's one. two is people are starting to

consume content on all platforms and when we say that -- we talk about old media, it really isn't old media. it's that people are consuming content on more screens. people are consuming a lot more i.p., it's just that they're consuming it differently so for us, we need to make that transition, as all media does, to devices and those 2 billion screens. and so when people are looking for what they want to watch on their phone, we think it's not going to be that scripted movies and scripted series, that we have all of this kind of functional affinity content. people that love food or cooking or home or science or cars or oprah, that we can create content on those screens on a parallel track our traditional business will grow, but we now have more i.p. than any other media company in the world and more brands. >> let me ask you this i think you have put together a fabulous network, by the way that's terrific. i think you missed out on hulu

i don't know why you did somehow or other that didn't come into your heaven. i ask you this you see the viewers migrating to streaming and to mobile screens and will you have access to that at some point down the road or will you just compete with them? >> well, the scripps deal is really about us having what we think is the type of content that will give us not only access but it will give us an ability to have either a dominant position or significant seat at the table. for instance, you've seen two pieces of consolidation. as you look across europe, you have distributors now doing mobile, broadband and cable, but it's really just a pipe and that pipe more and more is getting commoditized and so they need to offer content, and so for us, whether we're in europe, asia, in the u.s., we have great content that we can offer. >> let's talk about that mike was bringing this up earlier today. there's been this talk that content and the tubes, pipes should be merged together.

we watched that with comcast and nbc universal. there's a boutique firm called news street that has a note out saying the case for separating nbc-u and comcast has become too strong to ignore saying that content shouldn't be wrapped up with the pipes that's kind of been the dream that everybody's been chasing for the last several years do you agree with that also looking out there, it just seems like everybody is going to get bigger and bigger or risk getting bought. >> any regulation i think that encumbers growth is bad. we hope that randall and the at&t deal will go through. we think it's smart. we see how comcast is so effective in the u.s., they're investing in broadband and content, that's a big positive so consolidation generates a lot of positives one of them is scale you know, for us as the largest now player in nonfiction around the world, we have some meaningful scale, and scale really is important. the other piece of our transaction, you know, that i

think is -- that larry will appreciate, i spent a lot of years at ge when larry was there, is free cash flow so part of this transaction is buying i.p part of this transaction is getting more scale we'll be one of the largest players here in the u.s. people aren't watching news and sports or scripted content, most of them are going to be watching our stuff. but maybe the most important thing from a financial perspective is we have an opportunity to double our free cash flow. we're buying a company, we're in the business of cable and free to air channels around the world and owning i.p they're in the business of cable channels so our 12 channels, their 6 channels, there's huge synergy there for us so in a turbulent environment, which we are in around the world, and as larry said, some of us are going to be winners. we think we're going to be one of the big winners because we own all of our content globally. most media companies don't, but we do have the opportunity now to not only double our free cash

flow over the next few years, it's like a moat we have all of this flexibility because we have cash even if subscribers decline or not on the right skinny bundle, we'll fix that because we have great quality content. ultimately, we have a massive amount of free cash flow >> right your stock after the scripps announcement, i mean, you know, there's arbitrage and stuff like that, some people attributed a downward move, you know, t having more reliance on paid tv, i guess. so then comcast suddenly is perceived maybe to be, you know, supplanting disney in this deal for fox and that stock goes down $3 whether it's because they're betting on old line satellite, old media satellite or the same thing with you your stock has recovered is that -- i mean, is that the right way to look at it, that you're not moving into where the growth is going to be? you're still doubling down on the old stuff? >> we look at disney and iger,

great company, very smart ceo. we look at rupert selling, and the first thing that that says to me is that that ecosystem, the media business used to be one kind of ecosystem. we see it as two now one ecosystem is scripted series and scripted movies. you have netflix spending 8 billion. that could be 10 soon, could be 12 you have amazon spending 6 billion. you have $14 billion in two companies that are valued very differently. and then you have the traditional companies like rupert's company, great company, and you have disney, you have us so we trade at multiples of 7, 8, 9, 10 these companies trade at huge multipl multiples. so when rupert wakes up one day and says, i'm going to sell twenty first century fox to disney, that's an earthquake that says that there's a lot of disruption on this side. it means that when twenty-first century or when universal, pair

a month steps up, they're not the first in line. there's huge checks being written by amazon and netflix. there's a lot of disruption on that side. we look at that side of being scripted rubis and scripted series, there used to be 200 scripted series. you and i were talking the other day about how full your dvr is there's going to be over 520 the cost is 5 million an hour. we look at that side of the game, and there's a lot of great companies there. we say, good luck with that. that's not who we are. >> i have shark week going back 15 years i have to erase it. >> our content is 400,000 an hour our content cost isn't going up. that side -- that's almost like a soccer ball at a kid's -- at a kid's soccer game and everyone is at that ball. >> yeah. >> we've got the majority of the rest of the field everywhere in the world. >> but are they not taking a larger share of eyeball hours for everybody? in other words, is there still

enough for you in non-scripted content at a good price, both on the ad side and the subscription time >> the amount of time that people are spending with non-scripted content around the world, real life entertainment, has been relatively steady or higher when people are looking at content on their phones, we spent a lot of time going direct to consumer and around the world, we've been at it around the world big time in sports in europe, they consume content differently. it's more functional they will watch a live sporting event, but very often they want to see a clip or what's going on they don't want to watch the crown on their -- >> why do you think -- you heard that comcast offer was superior to the disney offer, right why didn't that go through and that probably didn't sit well with brian roberts. and he thought of let's try sky. did he think if at&t goes through, is he thinking about going back and bidding for the whole thing? how does it finally play out

>> let me tell you why i love this we've been in europe, latin america and around the world for the last 25 years. we are in 220 countries. sport was a leader, leader fiction. biggest media company in europe, we beat disney with kids in latin america and with women so we have huge scale in europe and in latin america the idea that brian and comcast, one of the finest -- one of the smartest guys in our business is saying, i want -- i want to get some chips over in europe. sky's a great company, but part of that is i need some i.p., i want 25% of my revenues to be in europe disney is saying, i need to be more global. you know what i say, come on in. the water's warm i've been there. what it says is -- but what it says is our position in europe and our position in -- >> let's talk about me let's talk about comcast stop talking about discovery

>> i'm here to talk about discovery. >> does comcast get sky? does it thwart the whole disney deal and get all of it >> does disney reup the bid? >> they probably have to react it's a 17 multiple what it says is i.p. and some scale in europe. remember, sky is the u.k. and it's sky deutsch land in germany which is 3 million subs and it's sky italia it's a very compelling business in the u.k it has good i.p. -- >> you don't want to insult anybody. who's the better bidder? >> i think they're both formidable and it's going to be -- it's -- what it says is that there's not that many great scale i.p. assets. the other thing that people focus on with sky is that they have a platform called sky now you mentioned hulu, okay sky now is a fantastic direct to consumer product that they've developed. so when you acquire sky you get

distribution, you get i.p., but you also get to a direct to consumer business and platform i think when disney looks at that they say that's something special. when brian looks at that he says, i've got scale and a direct to consumer platform. we look at it, we do business with them and we say that's the best of class direct to consumer platform, which is hard to build from scratch so i think it just reinforces, i think, that in -- where we're playing and where we've been for a long time is an important place to have scale, it's important place to have competency and it reinforces for us that we've been doing the right thing by spending a lot of money in europe and latin america. >> so how many bids and counter bids could you envision and still make economic sense? does disney and comcast -- do they both want it so much -- i wanted a gulf oil -- do you remember that? it went higher and higher. >> some people think that media -- that thinks that a lot of media is under valued >> everyone would want it.

>> media is under valued because no one knows who is going to be the winner it's not clear who could come out. >> there could be a counter bid, comcast could make a counter bid. this could go on >> i think there could be a counter bid but it doesn't go on forever. it's not completely clean. there's regulatory issues, timing issues. if you're disney and rupert and you already own 40% of an asset, you have some kind of installed -- >> do you see someone coming along like amazon or anyone like that >> i think it reinforces that having scale in europe is important and a lot of companies are going to be looking at -- and saying who has scale how do i -- how do i play? >> how was the olympics for you? >> olympics was great for us we had the olympics in all of europe with euro sport and -- >> i hear they watch the olympics in norway i wonder why they did okay. >> we had over 90 share in norway and sweden. >> i'm reminded, david, there are no people over there

>> the numbers weren't bigger. >> ugly. >> the people are great. >> tell me something, why is poland such a good place to be for your business? scripps did a great job in poland, right? >> we have tv in poland. one of the places why poland is a good place to be is that the industry is getting disrupted you get amazon and netflix spending money on local content. >> yeah. >> so they're doing it in languages that have scale. let's do -- let's do local content in hispanic. poland is a great country with a great economy but it's scale and the polish language is small so they're not being infiltrated by a lot. >> are you sure the europeans are going to listen to an american about making food i'm not sure i'm worried about that >> we do a lot of local content, joe. >> you've got it i've got it. >> zas, thanks for being here. >> playing hughes sick. it is time for a quick break. by the way, take a look at these live pictures of the white house this morning that's where all the talk centers on the resignation of

gary cohn. at the top of the hour we have commerce secretary wilbur ross, he will be our guest we'll get his thoughts on cohn's departure, much more on nafta. as we keta a break, dow down 280. s&p off 23 and nasdaq off 48 stick around, "squawk box" will be right back. nah. not gonna happen.

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welcome back, everybody. carson block has been exposing frauds for a decade. his latest claim is on china calling out the country for what he calls cheating the multi-lateral trading system and using state-owned assets to try to subsidize the production of billions of dollars worth of aluminum carson block is the founder of muddy waters research. he's the founder and cio of muddy waters capital thank you for being here today. >> thank you. >> this report plays directly into the news cycle with the tariffs that have just been slapped on china and other nations for dumping steel, dumping aluminum what happened? how did this report come about >> well, so back in 2015 my firm, we researched the large chinese aluminum producer and we ended up writing a report under a pseudonym and that was to

protect the identities and safety of our researchers, especially in china. but what we found in writing that report is that china's state-owned banks have made billions of u.s. dollars of loans to shell companies, companies that weren't remotely credit worthy, and those companies were then purchasing aluminum from a company called jolong from klein na that aluminum was largely attempted to be exported to the u.s. some of it did reach the u.s. and the department of justice has filed a case against a company in california that the doj alleges is an affiliate of jolong it says in the complaint that this company called perfectus has evaded tariffs on aluminum in my view of the aluminum industry and also of the capital markets, china is a systematic

cheater of the multi-lateral trading system and does funnel state resources into producing goods that it sells for subeconomic costs in western markets. >> are the tariffs that the president has talked about levying against both steel and aluminum, is this the answer in your view? >> the way that it's -- the way that this has come about could actually end up creating more problems than it solves. >> how so? >> i'm not against the imposition of tariffs but two things, one, this cheating is i think much wider spread than steel and aluminum but, two, this is really about the multi-lat rl trading system works well if you have one member, one major member that consistently flounts the rules it needs to make clear to china

that it has to reform its behavior by handling the tariffs the way we appear to be handling them, we're being painted as the bad guys here. we're -- the united states, we're the ones who are looking like we're the loan wolf bad actors here when in reality what we're doing is actually representing not just our interests but, i mean, this is something that the other major trading nations should also be doing or looking to do in some form >> carson, larry bossidy, nice to see you one of the things that puzzles me is in the united states, of course, we have the sec. some people like it and some people don't, but there's no such agency, i gather, in russia that can keep tabs on these chinese firms that, as you suggest, are acting illegally. what's your thoughts about that? >> well, you know, it's really -- it's interesting because we've assisted the sec in a number of investigations of chinese companies listed in the u.s., and there are so many

limitations when it comes to the u.s. government or any government's ability to get information out of china so, for example, we can send a lawyer to get government filings in china pretty easily i can have those done in -- i can have them back in 24, 36 hours. if you're talking about the sec, they need to contact the state department which needs to send a request to the foreign ministry of china which has to send a request down to the government over there and, i mean, that level of complexity and bureaucracy assures that it's almost rarely done so the kind of work that we've done on the ground in china, i mean, i don't want this to come off sounding the wrong way, but the reality is the only government agency the u.s. is really equipped to do some of this work is the cia frankly the cia generally has higher priority items than stock fraud. >> we're almost out of time. quickly, have you spoken with anyone in the administration about this >> not yet, but i am certainly hoping to.

>> and you're grander take fits with what we heard from greg ipp and we should be teaming up with our allies and focusing on china. >> all lights are flashing red here, not just for our economy but from many others so i totally agree with that. >> carson, thank you for your time we do appreciate it. >> thank you >> let us know what happens. update us. >> we'll do. coming up, the adp jobs report, that's every wednesday before the big number comes out on friday, a special one we'll get an idea of what's happening. plus, commerce secretary wilbur ross on trade, tariffs and of course the resignation of gary cohn. the president's top economic adviser. later, senator heidi heitkamp joins us she's from north dakota, and we may talk to her a little bit like that because she understand us better. "squawk box" will be right back. obvious.

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gary cohn quits. dow futures point to a triple digit decline as investors grapple with the departure of president trump's top economic adviser and fears of a potential trade war. a lineup of newsmakers ready to react a first on cnbc interview with

commerce secretary wilbur ross, plus lawmakers from both sides of the aisle senators heidi heitkamp and david purdue. breaking news, the february adp report is just minutes away. we'll bring you the numbers as we count down to this week's big employment release the final hour of "squawk box" begins right now live from the most powerful city in the world, new york. this is "squawk box. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and mike santoli andrew is off today. our guest host today, larry bossidy. former ceo of honeywell and cnbc contributor. the markets have been down as much as 350 on the dow, now 265 indicated lower. now we're getting almost -- you

know, that's -- that's getting close to 1%. getting further away from being down 2%. we have to realize that now when you're up at 24, 25,000 that the triple digits aren't what it used to be the s&p indicated down 23. nasdaq down just under 50. in europe, rightly so h they have trade war worries and reacting to what's happening here as we continue to look at the u.s. markets in europe, you can see mixed not big moves either way in any of them. treasury land, the ten year, i was reading something earlier, becky, i just happened to click on it because i saw the alert about the ten year in portugal you know portugal, remember what was going on in portugal >> yes. >> they were barely -- >> what's the yield? >> 1.8. >> really? >> yeah. so the world is still upside

down. >> that's crazy. would you rather take a ten year at 2.8 in the united states or 1.8 in portugal? >> draghi. >> growth has been stronger than expected. >> credit worthiness kind of extends to all e.u. members. >> germany's ten-year is 70 basis points. >> premium. >> screwy. >> that's up. >> right right. >> today's top story, president trump's top economic adviser, gary cohn, is leaving the white house. this is the day after -- days after the president announced steel and aluminum tariffs that cohn opposed reaction coming in from wall street including from goldman sachs ceo lloyd blankfein tweeted that gary cohn deserves credit for serving his country in a first class way i'm sure i join many others who are disappointed to see him leave. the fallout from president trump's tariff announcements the eu trade chief warning today that the block will react in a proportionate way. in the meantime, a spokesperson for the world trade organization

says members have been expressing what they call both commercial and systemic concerns about u.s. tariff plans and feared tit-for-tat trade actions. canada also weighing in saying that the tariffs could be opening pandora's box. then there's president trump also weighing in with his thoughts on the issue this morning via a tweet. he writes from bush one to present our country has lost more than 55,000 factories, 6 million manufacturing jobs and accumulated trade deficits of more than $12 trillion last year we had a trade deficit of almost $800 billion bad policies and leadership. must win again #maga. let's get to u.s. secretary of commerce, wilbur ross who's also joined with a special guest, that's u.s. steals president and ceo david burrett. gentleman, thank you both for being with us today. >> good to see you, becky. >> good to see you both. wilbur, we know we're talking about trade and tariff i'd like to get to those issues.

mr. burrett, you have news that you'll be talking about this morning. you have facilities that have been idol because of the price of steel that you are planning on reopening why don't you tell us a little bit about that >> thank you very much for having us, and we're really excited to be able to tell our employees and the community in granite city, illinois, that we will be calling back 500 employees. this feels like the beginning of a renaissance for us we're finally doing the right thing for american workers after decades, decades of unfairly traded steel into the united states so we're really happy and delighted to share with everybody that we're getting back on track after so many years. >> mr. burritt, granite city facilities have been idol since december of 2015 what happened? what caused the idoling? >> it's the unfair trade if you don't have customers here to sell to and you can't make money, you have to shut them down, and we've seen our facilities go from 15 facilities

here in the most recent years down to seven. the thing to remember here is that u.s. steel was the original iconic corporation back in 1901 we actually had a value of a billion dollars the market capitalization of a billion dollars and in january of 2016 we were actually in less than $1 billion. here we are working hard every day trying to get the things back on track and we finally get some good news because we've got some courageous leadership in the administration and big, big thanks to commerce secretary ross and certainly president trump for taking the leadership and righting some wrongs it's really important that we get this right and finally it's happening. >> one more very quick question. what we've heard of the push back from people on the opposite side of this issue this week has been that, look, the jobs aren't going to come back regardless, that so much has been automated in the steel industry and in the aluminum industry. what do you say to that argument >> well, i think the jobs are

coming back, and for every job that comes back, the statistics that we've seen, for every job that comes back you multiply that by seven. you think about u.s. steel, we're an integrated mill we have mine sites in minnesota, we have -- we go to appalachia for our coal and so when we bring back jobs, it has impacts on our surrounding communities but the more important issue here is you've got to be able to make stuff in the united states. if you take away our ability to make things, to manufacture things, you don't really have a society. just think about the way the u.k. was used to have a big manufacturing base it went away if you don't make stuff, you can't have a strong country. you can't protect yourselves and you go by the way of greece or maybe puerto rico. we have to be able to make things in the united states. it's really important that we do that's the bigger issue. if you take away the steel industry, you're going to be held hostage to those outside this country and you won't be

able to take care of yourself. that's the real issue. >> secretary ross, we have heard from you since the president first announced these tariffs that we're expecting just weighing in at this point, there have been so many republicans from the head of the house, from the head of the senate to business leaders who just pushed back on this from the wto, from canada, from the eu today is it your understand iing, wil there be any carve outs or exemptions for these rules >> well, the president indicated the other day that he has a willingness to give an exemption to canada and to mexico provided that we work things out in nafta to where the economic security of the country is at least well protected as it would be in the context of these tariffs so he's already indicated a degree of flexibility.

i think a very sensible, very balanced degree of flexibility i think that you're going to see as you understand the details of what actually is going to happen that we're not trying to blow up the world. there's no intention of that we want to balance our needs to fix the trade deficit with the needs of the economy and the needs of the global economy itself >> david, i have a question for you if i may one of the aspects of the -- of the imposition of tariffs is in terms of steel is that you are going to be able to raise prices now, and that's going to be a very visible aspect, it seems to me, of the aftermath of the tariffs if they're imposed how do you think about that? >> well, certainly the market forces will be adjusted, but if you just think about what the impact would be perhaps on the automotive market, our customers

there. the average cost of an automobile is about $30,000 and yet the steel that goes into that is somewhere between 800 and 12,000 so even if the prices would go up 10%, maybe even 20%, that's really not that,000. so even if the prices would go up 10%, maybe even 20%, that's really not that significant.if you think of the changes from 2014 to 2016, the whole thing about the big impact is completely over blown. what's important here is the safety and security of the united states of america and if you don't have a robust steel industry, you're not going to have a strong country. you have to have strong commodities business to make sure you have strong manufacturing, full stop. >> mr. burritt, that's something that i suddenly started thinking about. there's an idyllic notion that we can return to the '70s and '80s and have hundreds of thousands of people in the steel

industry and factories reopening. we've heard about automation in some of the -- even in some of the foreign plants and we know that the employees, the number that it takes to make steel is, i don't know, maybe you know better than i, 10, 15, 20% of what it was maybe in the heyday. but when you make the points that we -- you know, whether we ever get back to a large employment number, we need to be able domestically to make steel for defense and for infrastructure even if we don't get back to the previous numbers for a number of people in that industry, i mean, that's why i think you're talking about it a lot we need a domestic steel industry that can't be put out of business by dumping. >> yeah, you're absolutely right. if you think about it -- i always go back to mazlo's hierarchy of needs, safety and security, manufacturing is there, too, self actualization is the instagram, facebook, twitter, all those kinds of things that are going if you take this away, our country can't self-actualize

if we don't have manufacturing, we can't build the weapons to protect our nations, we can't make things that make this country viable you know, you can see a dustup at some point in time and if we're not manufacturing anything, we have these countries come against us and about the only thing we can do is unfriend them on facebook we have to be able to make things in the united states to be viable. that's the key issue. >> the other argument might be a losing one because maybe more people in other industries are affected by this negatively, millions of people theoretically instead of the 140,000 in the steel industry, but when you make that point that, you know, even if it does automate, we should have the automate factories here, we shouldn't be having the automated factories somewhere else. >> i'd contend that every country needs a strong commodities base you can't have other people take care of you. you can't outsource your ability to take care of yourself if you're doing that, you're dependent upon others. this is foundational to the

united states of america and we have to win this. >> sorry, mr. burritt. secretary wilbur, we spoke with m and they said that the tariffs don't directly attack china. this puts us against countries that are our allies. greg ipps says the same thing in the wall street journal and we should all be getting on the same target and get the bad actor. >> that's very true in concept but the reality is trade is much more complicated than that chinese direct shipments to the u.s. are actually a fraction of what they were several years ago but the reality is that they're turning shipping material through other countries and that's why this has to be broader. you can't do it just by

pinpointing china. we've already got lots and lots of trade orders against dmien on steel products and all that happens is it's like whack a mole, they come up somewhere else so it has to be a little more all encompassing we hope and we believe that at the end of the day there will be a process of working with the other countries that are our friends who, by the way, are also some of them victimized by the same practices this is not going to be a big trade war. the president would not have indicated flexibility on canada and mexico if he just wanted to do very extreme things this is an idea that's been thought through over time and watch the execution. >> wilbur, were you in the room when gary cohn said if -- i mean, was there a comment like if you do this, i'm out? do you know -- can you give us some background on the workings

of what was happening with navarro, you, gary cohn and the president? >> well, i have a great deal of respect for gary he was the president of goldman sachs. he's made a very major contribution to this improved economic environment that we're in he did very good work on the taxes. he's doing very good work on the infrastructure so this is not about some sort of a palace coup gary, as you know from all kinds of media, has been contemplating some sort of a move for some little while i think the important thing is he made very good contributions. we're not looking for a trade war. we're going to have sensible relations with our allies and the very fact of people like u.s. steel increasing their production is going to moderate any price increases that there

may be as more capacity is brought on stream, there will be a lot of competition. >> wilbur, we're going to do the adp number with steve liesman. if you and mr. burritt can just -- if you can stick around for a minute or two, can we come back to you after we get the adp number. >> surely. surely be happy to stay here. >> steve, do you have those numbers? >> i do, joe, 235,000 adp reporting that february private sector payrolls up by 235,000. they were revised january by 10,000 to 244,000. this is the fifth month in a row adp reporting plus 200,000 and the gains were broad based if you take a look at it, goods up 37,000. that's a pretty good number. services up 198,000. if you jump through the screens, we get back to wilbur, small business, medium business, large business all adding. the next one i want to show you where you look at the gains very broad based, up 50,000, 44,000, 43,000 for education and health

services, 21,000 for construction i'll ask mark zanby, i want to ask you what's not in the report the strong gains of 200,000. you have to think this means unemployment rate is going lower and you're going to get stronger wage gains. >> yeah, exactly and it's only going to get stronger because of the deficit finance tax cuts and spending increases. we're going to get a consistent string of plus 200,000 which is double, more than double the rate of labor force. unemployment is going lower, a lot lower. we're going into the 3s. >> mark, i'm going to leave it there unfortunately because we have the secretary of commerce, wilbur ross standing by, but thanks very much we'll see you for a lengthier interview in the next month. big number, 180 was the forecast from the street. so we'll be watching to see if economists are going to revise up their forecasts fifth month in a row north of 200,000. >> steve, when the movie's made

are you willing to play gary cohn if asked? >> there's a lot of talk about that, joe. my agent is negotiating -- >> okay. >> -- with hollywood at the moment right now. >> you didn't scale. we've got to go. >> thank you for the question, joe. i appreciate it. gary can play me, i can play gary a lot of possibilities. >> interchange. >> anti-baldism is rampant in the stock market. >> let's go. larry, you had a question for the commerce secretary >> i do. i do the question is this, mr. secretary. what's the sequence of things now? we've announced the possibility of imposing tariffs, but what happens now? >> well, let me first reflect on the job report that just came out. remember the prior administration, many accountants were saying you can't have rapid growth you can't have much more increase in employment it's happening these reports, five in a row, are very, very strong reports.

i think you should judge the president and you should judge his decisions by what actually happens, not by speculation as to what might happen or some fantasy thing. this president is determined to make a strong economy continue, make job growth continue and to do it in a very orderly and organized way. that's what you're going to see as this rolgs out. >> keep going. >> so, wilbur, i just want to go back quickly to, you know, do you have a person in mind that you'd like to work with on these things in terms of a replacement for gary cohn? you've probably heard of one of our colleagues, larry kudlow you know larry is that a possibility? is that something that would make sense to you even though he's anti-tariff >> well, i don't think i'm going to play placement agent on

television it's a decision for the president to make. it's an important decision he's thinking right now about who will be the replacement. i have no doubt that there will be very well qualified candidates and people who can continue the very good economic progress that we've been making already. >> would you resign if the president went -- let's say you had lost this and he went with cohn on this, would you have resigned, wilbur >> oh, that's a very real hypothetical question. i don't think that that's something that we have to deal with today the important thing today is this is not going to be a rags thing. this is going to be a sensitive roadmap. there is going to be quietude in the white house and in terms of the economy. we're not going to disrupt the very good jobs report that you just heard this morning and that you've heard for the last five months in a row.

>> just to put a fine point on that, mr. secretary. does that mean that you think it is very likely that we will carve out exemptions for some of our trading partners and allies, that this will not be unilaterally placed across the board? >> i think what's going to happen is this has focused everybody's attention that we need a real solution to the problem, to this problem of over capacity and over production i think everybody now is really focusing on solutions rather than just on talk. the this global steel forum that had been set up over a year ago got no place it was talk, talk, talk. no action. now we're moving into a phase of solutions, and i think you will find it will end up being a very constructive solution. it's not going to blow up anything at all, but we are going to help solve this problem of over capacity and over

production >> david, let's talk about this from your perspective. you are now saying that you're going to bring 500 workers back to one of your plants in southern illinois? that's based on if the tariffs don't go through if this winds up being tackled in nafta and other ways, does that make any difference to you at all >> well, we're opening up granite city, one blast furnace at granite city because of the pending 232, and we're going to not speculate what happens after that but based upon feedback from our customers and the orders that we see in it and the belief in the 232, we're moving ahead. beyond that we'll have to see. i'm ready to turn on another blast furnace if the volumes are there. it's all about demand. >> one analyst on wall street downgraded because of the long term contracts you already have with your customers and based on

this analyst's idea that even if the tariffs went through would be unwound before you're able to capitalize on it in 2002 those tariffs lasted over a year and a half what do you say to that? >> well, we do think these things will last for some period of time and it will be helpful for us remember, we announced over a year ago that we're investing $2 billion through 2020 because we believe that we can revitalize these assets just not fix these assets but put them in better state than they've ever been so we're committed to u.s. steel, and when there's a pro business climate like right now, we have a really great future. i'm not going to debate the downgrade from the analysts, but the reality is we feel like we're in a good spot and it feels like a renaissance now that the 232 is coming forward. >> wilbur, last question i know you gentlemen have to run. wilbur, you've done the campbell's soup can and bud wise ser can and talked about it's de minimis. people have done some

calculations when you look through the whole supply chain and that it could add up to x amount of dollars. you've talked about the jobs number and how that has tax reform and all of the positive things the administration has done critics say this takes 9 billion out of that. this is the first sign you're going to reverse some of the pro business things that you've done how would you respond to that? >> well, let's put the 9 billion into perspective we have a very, very big economy. this is less than 1/2 of 1% impact on the economy. 9 billion sounds like a big number when you put it in isolation. when you compare it to the economy, it's not such a big number that makes the assumption that every penny of the tariff increase gets put through and is reflected in product prices? i don't believe that will be

true i believe you will see other mills opening up i believe you will see very intense competition for the incremental volume that's freed up by the tariffs or whatever subsequent measures to be put in that competition will resist the prices going up quite as much as they otherwise would second, inflation has been very, very mild. we actually could use a little bit more inflation remember, the fed target is for 2% and we've been struggling to get up to 2. a little bit of inflation is good for the economy. >> right >> run away inflation obviously would be bad, but we're not talking about run away we're talking about fractions of a percent. >> right >> i would say there are very few economists who can even ak ourly estimate what it will do >> i don't know if we need the inflation on beer prices, mr.

commerce secretary thank you for all of your time today. we appreciate it mr. burritt, great to see you. i don't know if you've done much tv, but it was great to have you on "squawk box." secretary ross, thank you. coming up, keep talking about this let's move to capitol hill, senator heidi heitkamp, the futures right now, down about 230 now. so 229 coming back a little bit it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

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we just spoke to commerce secretary wilbur ross about the departure of gary cohn and the impact on the trump agenda here's what he said. >> this is not about some sort of a palace coup gary, as you know from all kinds of media, has been contemplating some sort of a move for some little while, and i think the important thing is he made very good contributions. >> joining us now, senator heidi heitkamp democrat of north dakota but, you know, you're in the middle of the country. you've got some, you know -- you have fossil fuel development you're -- you know, i don't expect just the normal answers i might get from someone from -- democrat from massachusetts. so with that in mind, senator, that's a big buildup for you where are you on the whole tariff issue and if you want to weigh in on

some of the tumult at the white house, gary cohn leaving, i know he was a registered democrat, probably sad, what do you make of the tariff issue? >> tariffs are really bad for north dakota there was a study out today showing the ten top states who will be affected by these tariffs. north dakota is number ten and what that tells you is we're a large equipment manufacturer plus there's a lot of pipe that goes into the ground in north dakota in the oil and gas industry, a lot of pipe that's not manufactured in this country that they won't have a choice, they're going to have to pay the tariff if they're going to build the pipeline i think this is absolutely the wrong direction. we should be promoting trade, not disrupting it. >> yeah. >> i think there's an incredible opportunity for us to have a meaningful discussion about what's happening with nafta that we're greatly concerned about in north dakota but as you know, joe, i'mpretty pro free trade. i believe it should be fair. i don't think people should cheat. we should look at how we're going to do better enforcement, but this is folly.

absolutely folly for the economy. >> the colleagues of yours in the senate that are pro tariffs are mostly -- there aren't many republicans. some you've seen -- i think sharon brown in ohio and others have welcomed this all politics are local this has more to do with north dakota than just an ideological -- >> actually, it doesn't. i started out every speech to the closeup kids holding up my happened and saying, remember the number five. they look at me and i say, that's the percentage of population that's the united states of america. if we're not trading, we're going to fail, and that's going to be less when they're my age it's like globalist is a bad word to me, recognizing that we're in a global economy is no different than recognizing that the sun comes up in the east we all need to get on the same page and realize that we have to compete but we have to compete in a way that recognizes that we have consumers that we want to access outside this country.

>> senator, larry bossidy. i just want to first of all congratulate you for your concern on banking deregulation. i think it's in the best interests of the country and it's a great effort. and specifically we all know that product's being dumped into this country and as a consequence we're at a disadvantage for some industries than steel what do you think would be a better time to take this on. i heard you say this is the improper time. what would be the best time to either attack this issue or accept it as a permanent position >> one of the things that i think we desperately need is to enhance and improve the wto appeal process that's one of the reasons why i have struggled with some of these trade agreements i think the process is cumbersome plus it's not transparent which to us is not american when you can't see what's happening i will tell you this, simply putting tariffs on where we're going to see retaliation, reaction a lot of these tariffs

everybody can talk about china china is 2% of the imports canada is the only country in double digits. are we going to include canada i don't think we know what that's going to be i think there needed to be a lot more dialogue and less knee jerk i heard wilbur ross say it was some kind of rogue decision but it was perceived that way. >> senator mcconnell said the same thing is there any formal or structured response by members in the senate? >> well, i think we're going to have to take a look at how this affects economic stability going forward. lots of numbers coming out today. you guys are applauding. this is the long game and trade is the long game to simply start this kind of initiative without a discussion on capitol hill and with our allies i think is just wrong headed

so tell me what is going to be served by this other than angering our allies. i don't think that it's going to mean that you're going to increase automobile manufacturing in this country. in fact, if you're looking at pivoting where you're going to manufacture things that use steel, why would you do it in this country when you can have a 25% increase in cost of goods sold i mean, it's going to have a ripple effect that i think people don't understand in the white house except for gary cohn. >> all right larry, you asked about bank reform, right? you want to weigh in anymore on dodd-frank today, senator? >> i sure do we're very proud of this bill. it's been five years in the making since i've been there i think dodd-frank was supposed to stop too big to fail. what happened is too small to succeed became the mantra in my state. we're going to reduce without jeopardizing the economy, without jeopardizing the security and soundness of the financial, you know, web that we

have in this country, we're going to get relief to main street bankers so they can get back into the business of relationship banking and that's the kind of banking i grew up with. >> you know everything that you -- this was all on tape. >> i know that. >> all that stuff about the private sector and free markets and fair trade, you know, there's going to -- your colleagues on your side of the aisle are going to be introducing all kinds of stuff that runs right smack dab into that and i'm going to come on and play that when you're supporting some of the other stuff -- it's never fair -- free markets and fair trade and private sector remember that. >> oh, joe. >> you are a unique democrat in north dakota one of the good ones senator, thank you. >> take care. >> we'll see you. what's next for the trump white house after top economic adviser gary cohn's resignation? joining us now is ed lazire, former cea chairman under president george w. bush ed, good to see you. you watched, like we all did,

these -- you watched the tariffs. you saw gary cohn, i don't know if he had one foot out the door or what. what do you think having been a person in a similar position >> the national economic counci director is a key position it's his personal views of policies that matter but he's actually the coordinator he's the guy who controls access of the economic team to the president. he's the guy who really organizes policy so the nec guy is really a top figure now that said, the question will be whether he is replaced by someone who has the same executive skills that he has the nec guy is not so much the economic guru in terms of technical expertise, he's really the guy who is the executive he's the administrator, and he's also the person with political skills because he has to communicate with the hill.

so, again, when i think about gary leaving and i think gary was a terrific nec director, i think he did a great job, i think he was instrumental in the tax cuts and everything else that went on in terms of deregulation, so replacing him is not going to be an easy thing to do. >> ed, you're out there, you know, surrounded by people at hoover. >> yes. >> is there any context where you've been stepped on by a country, a huge country dumping steel. is there any context where tariffs would pass muster at hoover or with someone like you? >> well, there are -- there are cases where raising tariffs actually can change what we'll call the terms of trade and can make a country better off. that's not going to be the case here the net effect has to be negative, and the net effect even on jobs has to be negative. so what i see happening here is

a relatively small effect absent a major trade war, and i don't think we'll have a major trade war. if you think back to the guy i served, obviously there's precedent here president bush in the early 2000s imposed steel tariffs. fortunately he removed them pretty shortly thereafter, but it wasn't a major disaster so, you know, i think in some sense there may be a bit of an over reaction here although the difference is president bush was inherently a free trader, president trump is not so the question i think that we really ask is is this a major change in policy by the administration i'll be honest with you, i would be surprised if we see a major change i think this is the kind of thing that president trump as candidate trump had promised, it's something he had to do in terms of satisfying his constituency it's certainly not something he

had to do in terms of growing the country. >> ed, larry bossidy i've respected your views for a long time. >> thank you. >> how would you go about changing these policies as they relate to people who dump product into our country if you don't like the imposition of tariffs, how would you go about it in a way that accomplishes the right end >> yeah, you know, dumping i think is a relatively rare event, and we have to remember that dumping, while it may hurt producers, helps consumers because what we mean by dumping is we're getting goods, other people are working for us. they're essentially out there working and producing goods which our consumers get at low prices so i think we have to be very careful about labeling countries dumpers. there are cases, larry, you know, you were in a very important ceo, you obviously know this and you've seen it firsthand, that there are experiences where individual countries go out and do this sort of thing to gain strategic

advantage. i would prefer for us to see those countries produce here one of the things we saw back in the '80s with the auto industry was rather than saying we're going to impose big tariffs on the automobiles, we encouraged companies to locate here we did that with great success we see lots and lots of foreign auto plants located in the united states using american workers producing fine products with american labor. i think that is a better trat gi than imposing tariffs. >> ed lazear, we appreciate it thank you. >> thank you. news coming in from the atlanta fed president rafael bostick saying he thinks it would help some sectors but it would be broadly unhelpful. when we return, senator david purdue will be joining us. we'll talk with him about all of these issues, too. as we head to break, take a look

at the u.s. equity david purdue is ceo of rebook. stick with us. stick with us. we'll be right back. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. it can detect a threat using ai, and respond 60 times faster. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it is... the cloud. the ibm cloud. the cloud that's designed for your data. ai ready. secure to the core.

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to grow your business with us in new york state, visit esd.ny.gov. welcome back futures down 257 now on the dow. the s&p indicated down 21. the nasdaq now indicated down 42 points lower. we spoke to commerce secretary wilbur ross just a few

moments ago about the tariffs that were announced by president trump. the commerce secretary said that the administration is not trying to blow up the world and that there could be some room for negotiation with all of this joining us is georgia senator david perdue he's the former ceo of dollar general and rebook he comes to this with plenty of business experience. senator perdue, thank you for being here. >> good morning. >> you've been called president trump's favorite senator you are somebody who has a pretty good working relationship with him you come to this issue with a different perspective than the president may when it comes to the tariffs. why don't you lay out what your thoughts are on all of this. >> first of all, i think this president's instincts have been right all along. he wants to create a more level playing field with the rest of the world. i think this is somewhat of an over reaction in my opinion, however, the president moved to help us make us more competitive by focusing on regulation, energy and taxes this year he wants to focus on trade, immigration and

infrastructure i think his instincts are right. i think you'll see a more targeted approach as we get into the details of this. this is a miatrix situation as w know there are can you be tris and product categories i think this president is moving in the right direction >> senator, let's talk a little bit about it because that's very similar to what we just heard from commerce secretary ross, just the idea that this could be a negotiation, that things are still playing out and you may not see the tariffs broadly put in without any exemptions carved out, without any exceptions, that maybe there's more than meets the eye here. >> well, always. i mean, look at nato the president during the campaign two years ago said we're going to drop out of nato unless they pick up and pay their fair share for their own defense. guess what's happening today they're doing that same thing with nafta. he threatened to pull out of nafta. we're in negotiations to make it better this is the same case where he's trying to make a level playing field. remember, we already have duties

in place today steel coming from south korea pays a high duty from a dumping situation from years ago what the president wants to call out is trans shipping from china to other countries that's what this is opening up and revealing. i think wilbur ross is right you're going to see this white house and all the people involved in trade moving in a direction that is not going to blow the world up but actually make us more competitive and open and give us access and open other markets to us. >> what are the specifics? what does that look like are we talking about the nafta negotiations being tightened up? what does that mean with the eu? when i get a lot of tough talk coming out this morning from the eu, wto, canada. all of that seeming like they're up in arms about this. >> here's reality. in the last seven years we've reduced global poverty united states single handedly almost has reduced global poverty because of our trade laws and our trade treaties and also because of our military we've seen global poverty

reduced by 2/3 while in the united states poverty is the same as it was in the '60s this president is saying, look, we've gone far enough paying the way. the marshall plan rebuilt europe, rebuilt asia right now we're trying to make sure that we can rebuild our economy here in the united states on the one hand i applaud the president. on the second level i think we need a lot more detail and i think that's what the white house is working towards to get a more targeted approach. >> senator perdue, you come from the perspective of a business leader that was importing a lot of the goods you sold both at rebook and dollar general. what would it mean if there were retaliatory measures to these tariffs, if walls started coming up more broadly around the globe? >> nobody wants a trade war. that doesn't benefit anybody that's not what this press wants. this guy is frustrated he moves at a business pace not a bureaucratic pace. he stepped out andi think we'v got the world's attention now.

so, look, the status quo is not acceptable to this president, to me, to anybody that comes from a business perspective at rebook, for example, we made in dozens of countries, we sold in dozens of countries that's the way most of these multi-national countries are formed that's the way most people are doing it even small businesses today make in multiple countries, sell in multiple countries the example your prior guest used to talk about the auto motive industry. if we make itmore appealable, we'll attract more jobs and more companies coming to the u.s. to access our market and export more. >> senator, this is joe kernen, do you think there's any truth to the notion that the nationalists now are going to have -- wield too much power and that he was a very strong representative of the globalists we are -- there's just no -- there's no going back on it obviously. i understand nationalism, too, but there's no going back on the

whole we live in a world that's global now should the next person that comes in represent that side of things and push back could navarro run wild now with wilbur ross and the nationalism? >> this nationalism protectionism is a fear. that's not where this preside president's heart is if you want to grow this economy, you by definition have to export more one of the ways to do that is build our infrastructure the ports need to be more competitive. we need to access and receive these. i think this discussion about protectionism, of course he wants to protect american jobs but the best way to do that is make us more competitive with the rest of the world. that's what the tax deal did that's what regulatory work is doing. that's what we can do if we get to the infrastructure piece this year we need help from the democratic side to do these things. everything we want to do is at 60 votes in the senate i don't think that's a real argument on the nationalism.

i don't think we should have any fears that he's going to take us into an isolationist era we've got to engage with the rest of the world and that's what he he's doing. >> senator, larry bossidy. a lot of us have been concerned about the pace of the nafta negotiation. since canada has been affected by the potential of it, do you think this will help accelerate bringing nafta to a conclusion that we'll all like? >> larry, i think that's exactly what it's inbe tended to do. by the way, guys, i love it when you have real world experienced guys like larry on here who ask really thoughtful questions like that one look, i think the president has a long-term game plan in mind, in fact, i know he does. this is not about a knee-jerk reaction around steel, aluminum, anything else. this is about the global situation. nafta is part of that. this is a great example where the president actually has reversed his position, just like he did on the border adjustment tax last year where i was very involved in discussing with the president why that weernt a good idea and he reversed himself this year he wants a nafta

agreement that works for the united states, but when he heard how it was going to affect in the short term the supply chain for agriculture, he backed up and gave us time to work that. so i think you'll see the same thing coming right now, larry, with regard to these categories that are being called out now. >> senator perdue, thank you for joining us today we appreciate seeing you >> when we return, jim cramer will join us live from the new york stock exchange. we'll get his take on today's top stories. here are the futures right now still indicated lower and down 264 right now. the dow will be right back flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses.

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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. jim cramer is joining us now. jim, larry thinks free market and free trader guys, just watching what's happening, i think it is the same kind of with you maybe there is a bit of cutting off. at least you are finally saying stop with the -- in some respect with the dumping taken advantage. >> larry might have agreed with me last time we had a good meeting with china

it was rather remarkable that mckinly was the last guy that got the deal by the way, the chinese caved in the end. people understand that the chinese need us much more than we need them it would be good to have some people come back to those businesses and maybe open here bmw and mercedes-benz, they did not listen to the president. they continue to build their plants in mexico when the president gave everybody a chance it is okay to say guys, ford came back, why did you insist on continuing to build your plant in mexico. it would have been smarter they built it in the u.s. the president going back to to 2017, why are people not listening. >> were you at goldman >> gary is my friend and i like

him and he did a great job putting the president's tax reform plan through. i thought he did a fabulous job everyone though there is different sides and navarro and gary, he did a great job i think it will be fabulous. there are different views on free trade, i think we don't have free trade because that means they have to take stuff from us at different prices and they cannot target our industry, you know what, we are no longer america making leguming aluminum everybody knew this was happening. and it looks like the president must have been listening he did care. >> we would like to talk to you more, jim. we got to run, we'll see you in a couple of minutes. >> thank you, larry, for standing up to people. >> a programming note, don't

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my guest host this morning,

the former and ceo of honeywell. even though he's very wise and been around for a long time still does not know when to polk the bear you want to talk to becki, she was fine and she was hibernated. you want to talk about carried interests. >> i love becki's vision and i want her to think a little bit differently. you have to wait for the tax three years. it takes the hedge fund guys out or traders >> what about the private equity guys >> they are investorsand produce jobs and take a risk and therefore they get rewarded. >> here is what i think. when you are given income. you are paid something and it is no difference than me getting restricted shares, i am going to pay 37% on that. >> you get capital gains or whatever >> no, i say it is income. i say that you are being paid

income >> becki, i did not think i change your mind but i want to introduce another aspect capital gains. >> three years verses one. if i held onto my comcast shares and they give me three years, why should that be charged at a lower rate >> well, you do get capital gains and stock gains. >> now, we are on "squawk on the street" time i told you >> thanks larry. >> make sure you join us more, "squawk on the street" is next you didn't get the last word >> it is all right a shot of the white house this morning of gary cohn announced his resignation on tuesday. questions on how this may affect policies and the markets good