wow, youea the earnings tool from td ameritrade. 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 another volatile day for your money the dow swinging street" time i told you between triple digit gains, >> thanks larry. >> make sure you join us more, utilities led and financials led, so clearly people are "squawk on the street" is next trying to focus on kind of you didn't get the last word >> it is all right anti-tariff stocks >> this is not the first time a shot of the white house we've had trade skirmishs. autos in the 1990s, steel in the 2000s, neither of those trade this morning of gary cohn wars had a meaningful impact. announced his resignation on tuesday. >> marks move when you hear questions on how this may affect tariffs one way or the other. policies and the markets well, the bull mark just good morning, i am carl turned nine-years-old, can it

make it to ten quintanilla and david faber and check our ryan deitrich on jim cramer "trading nation" more "squawk on the street" coming up. adp did come in strong although q 4 productivity is flat a cohn dip, another white house break up futures do point to a lower opening. >> are we escalating towards a trade war. eu is now threatening tariffs on u.s. products as well. >> netflix boom. market value ils mos more than ford and mcdonald's and closing in on competitors like disney and comcast. gary cohn is leaving the white house. his departure comes as the president plans to impose tariffs on steel and aluminum imports. take a listen to what cohn told

us in november >> it is my plan to stay and work as long as i help the president drive his economic agenda a year ago today i didn't think i would be here. for me to tell you where i am going to be four years from now -- i have no idea. >> last summer when we talked to him, he called it a dream job. welcome back to "squawk on >> i don't care for long time. the street." he got the president's tax form each of the sectors had been negative all day, three are picking up in positive through and he did a fantastic territory. technology holding up better than most, helped by positive job. this is obviously an issue of performance from auto desk, adobe and sales force. china or something that our country is divided on. do you want a lot of business each hit record earnings done with china. computer chip and storage well, the quick info. is you got companies, all hit at least 50 to accept the fact that they two week highs targeted certain industries and that's the way the bull bounces. back to you. we have more on "squawk on that's been the policy the street." stay with us you know what's awesome? gig-speed internet. i say unfortunately because it is good to have the discussion of what the policy really is we sacrifice some in order for us to do well.

i think gary cohn did not want to sacrifice the broader trade experience on the 350,000 jobs that are steel and 5,000 jobs that are aluminum. >> other reporting on this indicates as well it was the process itself, we talked about that process a bit we felt like we were apart of it with our first interview with wilbur ross last week where he says the president seems to say something, that points to the process of lacking certain discipline and reports are that mr. cohn was not happy with that as well. >> yeah, look, discipline is not necessarily -- yes, because like i would tell you. >> of course, policy when you roll it out, you would hope that everybody is on the same page for there is a debate of administrations moving up. there are reasons for this process. >> i totally agreed. what has to happen right now you

have to see the president comes out and say we are going to exempt mexico and canada on tariffs. t that's what the president must do in order to be able to make it so there is some coherence to this plan. i think that could happen. >> well, secretary ross was on "squawk" this morning says we are not trying to blow up the world and it is not conceivable that others could be exempted. here is what the secretary told the guys on "squawk. >> this is not about some sort of a code. as you know from all kinds of media has been contemplating some sort of a move through some you know what's not awesome? when only certain people can get it. little while i think the important thing is he made very good contributions. let's fix that. let's give this guy gig- really? and these kids, >> i would not get into and these guys, him, placement agent game in terms of ah. oh hello. that lady, these houses!

who may replace cohn yes, yes and yes. and don't forget about them. uh huh, sure. the names out there, navarro. still yes! xfinity delivers gig speed to more homes than anyone. >> i would go back to something that the president did in now you can get it, too. welcome to the party. january of 2017 -- ford cancelled his plant but bmw and mercedes with full speed ahead it is amazing, there are a number of factory jobs and that thing generates suppliers and opening factories right around there. off of bmw, that's where the series 3 is going to be make >> where is this >> mexico. >> absolutely. and mercedes is going its big plant and goes for the two plants, they're about to open 2018 and 2019. one could signal a market pull they're going to be -- among the back >> a pull back for the market

that the etf focuses on which is biggest plant in the world those two companies did not. china. this is the fxi. that's why you hear them in the i share china etf. dialogue it is mercedes and bmw because large cap stock, mostly traded they said to the president, nice to meet you, we are not changing in hong kong core basic industry and nafta. this is apart of that. financial companies based in i wish bmw had not put the mainland china had a pull back with the market. series 3 plant there because it big outperformer last year, it is right in the president's has come back in face i did see some research by wait a second, why should they make it in the cheapest place on renaissance macro that looked earth? the number of jobs are being into the in flows in the last produced and i know the bmw several months, and being very plant and i know mercedes heavy, which basically means that perhaps sentiment in this area is running a little hot you have year to date net plants and with audi 150 cars this inflow $480 million, more than 10% of current assets year now they're going to pay you look at past periods the past several years when that's what i think happens, influence was that heavy unless we get quickly some sort relative to assets, you've seen of nafta resolution. that's what it is about bmw and this fund pull back, underperform awhile. mercedes they did not listen to the hasn't ended the overall up president. the president does not like trend. it is worth keeping in mind, that >> does he expect them to all go

this is the hot money effect in to south carolina? a lot of etfs that can give you that's not going to happen >> it is interesting you say a signal on trade. that south carolina was the biggest it isn't about trade or the tariff impact but maybe plant they had it was not enough for the sentiment towards chinese industry a little overexcited, time for a president. break, something like that mark field caved >> any idea how the rate influenced historically? >> doesn't seem particularly it is 87% complete right now seasonal if you look at the chart over the years, once a year, year and i think he felt that they would a half, they seem to peak out roll over and on march 22 of awhile the absolute amount isn't as important as how much relative to the assets and how much 2017, we are not rolling over. these are the two plants that relative to recent trends. can improve on huge numbers of >> notable good eyes. thanks, mike when we come back, cohn calls it quits cars very cheap there jason ferman weighs in those were the two places that did not play well and now you dow down 112 are getting what happens and gary cohn is not there >> do you worry that the white house has one set less of eyes of how markets behave and

realtime and intelligence i institutional knowledge and markets and finance. gary cohn understands fixed income better than anyone. he had a great knowledge base of how the bomb market works and how to do finance and public finances and creative thinker. he'll me mibe missed. >> he still has a lot of establishment that has an understanding -- i am talking about staffs and not the guys at the top. there are still people in these mike and i are both veterans, jobs who do have some capital both served in the navy. i do outrank my husband, market -- not just being in the military, >> but, gary is gary but at home. she thinks she's the boss. >> it is not like he's -- cher she only had me by one grade. we bought our first home together in 2010. his family had used another insurance product but i was like well i've had usaa for a while, >> the guy from philadelphia why don't we call and check the rates? sunny or cher? it was an instant savings >> she's in the new movie again. and i should've changed a long time ago. >> that's not the point. there's no point in looking elsewhere really.

the point is -- beyonce -- gary we're the tenneys and we're usaa members for life. usaa. get your insurance quote today. and beyonce, that's everyone too hard to fathom gary and the u.s. bonds. gary is the guy you think oh, gary's here, i don't have to worry. gary knows everybody so as long as he's there, it is fine. that's gone. i think that's not good. that's why the markets down. is peter navarro is some guy that you -- i think peter is fiery and gary is not fiery. today, the new new york is sparking innovation. i think those who settle down you see it in the southern tier with companies to -- what are we going to do? that are developing powerful batteries we have a number that's going to that make everything from cell phones to rail cars more efficient. which helps improve every aspect be too hot of advanced rail technology. if you sell again, why did i all with support from a highly-educated workforce sell it and what was i thinking and vocational job training. when i sold ammazon across new york state, it is business as usual. we're building the new new york.

all right? to grow your business with us in new york state, >> except for maybe buying a new visit esd.ny.gov. core >> buying what >> i don't know why i am not hearing you. >> who's the duke seller >> duke energy >> 2.5 million shares. >> yeah, i know. >> oh, who are you referring to? >> well, depends >> well, that's very helpful >> let's go to eamon javers on how this departure or the announcement of this departure went down last night hey, ammoeamon. >> you guys point out, the strategy here before the markets opened, ross and mnuchin is out on national television of a united white house but also talking about some of the -- a good morning welcome to "squawk alley."

softening in tone this morning from the white house beyond just this trading the big news of the morning, session, the bigger question is gary cohn's departure from the white house. what does cohn's departure means we trimmed early losses as investors appear to be focusing for the economic direction of on other things as well. this administration, here what i say an administration official digesting how the president's moves are effecting the markets. told me last night of gary cohn's departure here calling it kayla joins us with more a big win for the national >> good morning to you lists. peter navarro won the trade battle and now gary's given up national economic council is the driving force behind most and literally reestablishes the financial policy the markets have been watching why this cohn news is big. cohn has been the public face of intellectual framework we can let trump be trump. the nec, but it is comprised by that's telling inside the white a dozen high level officials, filling vacancies at the fed, house of what's going to happen writing infrastructure plan next passed around capitol hill, will the president reverse to coordinating the u.s. positions at summits and trade where th his in clclination that he heldr years. he likes the idea of advisers disagree and likes to get out

before him in the office >> i like conflicts, i like people with two different points of view and i certainly have that and i make the decision like watching it and i like seeing it, it is the best way to go, i like different points of view >> so the president would bring on somebody who does not agree with him the president has been doubling down on his tariffs rhetoric here is what he tweeted out. from bush one to president, our country has lost more than 55,000 factories bad policies and leadership, must win again the president is sending mixed signals here yesterday and today. peter navarro is one person being considered for this job

and larry kudlow is another person peter navarro, some interesting report last night, i want to share with you i am told, john kelly, ordered navarro to seize gary cohn's e-mails of every e-mail he sent. that's an indication that maybe the chief of staff here did not necessarily trust peter navarro to operate independently of gary cohn's supervision would he be a candidate for a higher job if john kelly is the gate keeper. that's one question. there is been speculations of the chief of staff's fate here at the white house so a lot of moving parts >> eamon, quickly, we like to correct things in realtime u.s. trades and deficits last

year is 5 -- an enormous number by the way good deficits with china did rise 8% during that year but not quite the numbers in the tweets itself, just to put in the record >> look the tweets give you a sense of the president's state of mind. there is a basket of a new trade initiative they are considering behind the scenes there. you heard jim talking about potential tariffs and car manufactures that's one. now that gary is moving out. he won't leave until a couple of weeks we are told. now that he's moving out, other voices of the administration will be able to push some of those ideas onto the president's desk we'll see where all that shakes out. >> and it is great that you are on if anyone wants to know of mexican car productions, no one

knows more than phil lebeau. navarro is the most vocal, in terms of -- larry is free trade and we got to make it so where there is no barriers, is it possible that they both can be considered >> they're so different, right larry is critical of the president on tariffs as recently as yesterday does the president want to have another voice who disagrees with him on that. you heard the president said in the conference yesterday that he likes aids and he makes the decision on where to go or does he want somebody that back stabs his inclination. you may see gary cohn backing an

internal candidate, somebody that's not as well known that's another possibility of course, there is always the possibility that they go to somebody from the outside. the question from the white house is people from the outside looking at the chaos and the drama that's been happening here at the white house would they want to join this team, can they get the a-list ere er of this point? >> that could happen, too. >> it is not "the apprentice." >> we got kudlow and navarro it is not "the apprentice. you don't need to tell me that it could be a project. only two people going -- two go in on your right but i just feel like this is an apprentice situation. kudlow and navarro, that's a inclination death match, okay?

>> just wait until you are call inside the board room to make a decision >> i have been a judge i know what it means >> that's my point >> melissa rivers was there. >> maybe she's being considered. >> some interesting ideas of fiscal policies. >> that's behind the scenes, you don't reveal that stuff. >> eamon, thank you for that and we'll talk to you in a bit another look at the premarket here, we have a ton of data. trade deficits and labor costs and facebook is on the wave. vix hit 20.5 that's the highest level since monday we'll be back in a minute. i grew up in the projects and so home ownership was not an option for us. i am taking the steps to own a home

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plenty moves in the markets today of move of gary cohn's departure. there is futures off the lows last night we'll get cramer's "mad dash" in a minute as we count to the opening bell

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it is hump day time for "mad dash." dollar tree is a name that you would like to discuss today. not looking so good. >> they're fresh as daisy and you can eat off the floor. my late father used to say that and i would say pop, why would you eat off the floor. they reported good enough. people are looking at a buck 31

or $1.85 there is a lot of people who say this is china. when you go to dollar tree, the stuff are made in china. it turns out people got lucky. this is a big hit. >> do you think it is an over reaction to the guidance that they put out or justify to have a 12.5% defined. >> reaction because they're still sticking to the good guys of the year. i don't understand the first quarter is weak. the family dollar's numbers that they bought is still not good. they have not been able to make that transaction work to a lot of our satisfaction. dollar tree basically, -- dollar tree stores are exceptional and really clean and good. family dollar stores are not

that good. >> i wonder what the issue is, is it time to get it right >> time and execution, it is a really good company. they're very quiet when i saw the numbers, oh, that's going to be good but the guidance did shocking. that's what happens when you shock people in this market. >> we'll get back talking about stocks and we got the opening bell in a few minutes right here on "squawk on the street."

thank you so much. thank you! so we're a go? yes! we got a yes! what does that mean for purchasing? purchase. let's do this. got it. book the flights! hai! si! si! ya! ya! ya! what does that mean for us? we can get stuff. what's it mean for shipping? ship the goods. you're a go! you got the green light. that means go! oh, yeah. start saying yes to your company's best ideas. we're gonna hit our launch date! (scream) thank you! goodbye! we help all types of businesses with money, tools and know-how to get business done. american express open. i'm not really a, i thought wall street guy.ns. to get business done. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman?

hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade you are watching "squawk on the street," the opening bell in about 90 seconds gary cohn's departure is one of the key stories of the day last summer there were concerns that he would leave at the time in july, you spot the bull of 5% on the cohn's departure, that was before the tax reform. he got the president's agenda

went through a lot of people felt there is no way it could go through. we got that hot number, remember we got a number on friday. the hot number combined with the destruction of the sell all, the vix trade which is back by the way, you have to wait until the vix to fall before you can buy all combined to be able to make it where cohn should put while he was ahead it would have been a great moment now we got this whole idea that he's against the president and the narrative was terrific >> he was planning to leave but did not want to pile on with all the hope hicks >> he came out clearly of some of the comments that the president has made after the

charlottesville. >> regardless of being a terrific spokesperson -- >> let's get to the opening bell and the s&p is at the bottom of your screen. it is the big east, celebrating their big tournament today at madison square garden, becoming the first bank to achieve 100% renewable energy, celebrating that >> that's terrific so many companies are involved in the sustainable it always takes your breath away there are some numbers out there from russia/brazil talks about the incredible natural gas numbers.

it is also renewable we are using so much less energy and it is a positive feel. a good story does not get talked about it enough. >> we should get into the netflix downgrade on evaluations. they have been vocal bulls for a few years now. stocks up 30 points in three days >> it is a run away train. >> incredible. >> watching it yesterday and what w what was it? >> it is hard to imagine it created value in such a short amount of time >> yes >> someone was buying and buying and obviously there were a lot of short in the names and i don't know whether this downgrade is enough to stop this or not the owner and those buying, it is just a perfect story right now. think about that >> did you like that >> that's what they'll say an international entertainment company and there is another one

calls disney, what, $14 billion? >> they said of a rapid rate and that seems to be dominating everything it touches. >> amazon. >> facebook, amazon, netflix and google interesting when we get spotify in a couple of weeks here and how it will be perceived similar to netflix >> we'll be taking a closer look as we get closer to spotify listing. > >> the data center is benefits to all of this stocks are already up. i -- they make all these difficult equipment from silicon that allows you to do the data center they'll not be stopped by gary

cohn's departure they're buying back stocks, the story is just not stoppable by someone leveriaving the white h? >> did you have the ceo on >> lam we are talking about sustainability, everything has to be figured out and sent to the data center. the number of the data center of autonomous driving car, i mean we are talking about 21 figures, i thought it was zeta-jones. 21 figures that's how much for it to be produced >> scientific notation, that's amazing. >> 21 zeros. >> walmart and cat is at the bottom of the list >> time to do zombieing.

>> c . >> i think it is people are saying their costs are going up and chinese sales are going to go down i say be careful of that if we get a little bit of -- i got to be a little lighter on that scope in canada the numbers for trucks in this country is up 75% and 80% over last year and common engiumminss are so clean and the chinese need them. it is a killer >> moody has a note this morning. mark sandy whom we noeknow well. u.s. industry may cut manufacturing jobs on the other hand, they say the

jobs rate could go to 3% or 3.5% >> you know those again -- you cannot have both of those, it just does not work that's like having kudlow and navarro taking the job are you kidding me >> let's call it as we see it. you got to have one or the other. this market does not want to go down >> no. >> what's going up is this data center the lam research presentation was one of those where you said wait a minute, micron can go to 70 these data center -- they're blowing up because of these autonomous cars. >> on your bull case for autonomy in transportation, why

does the president does not see that is the opportunity for autonomy >> i think the problem is when gough go to the data center, the reason why it is so great is there is no units. >> i remember i would go to the plant that's opened, i went to a plant in is rerael it was opened on a saturday but there were no people needed. that plant did not employ a lot of people. it was making a use number of semiconductor and we are talking about 386 but there is no people because you are not allowed to work on a saturday that does not create jobs. there is nobody in there, okay that's a problem >> right >> there are still mills when you go to crawfordville which is the big plant in south carolina, there is a huge number of jobs connected but there are no jobs connected a the data

center other than if you want to buy hf-- a lot of those are made over seas. >> that's the growth industry and we are going to get autonomous vehicles at some point and that's going to put a lot of people out of work as well it is going to run on 5-g which we'll talk about when we get back to qualcomm/broadcom. it is going to store an amount of data to your point. >> the jobs that's plentiful in the country, truck drivers, we need more. three years from now, we are going to have much less need and fiv five years from now -- if you want to know the battleground, it is like we train truck drivers and just when we get them rolling, we got the autonomous trucks. >> what happens? >> we have a dislocation and we have more societi societal unr s

>> that's a powerful word. >> broken promises and social destruction. >> that's what political parties are trying to address. >> well, i don't know, i sit down with the finance sisters and people at intel and anybody at western digital this thing cannot be contained every industry is digitalized quickly. when you look at abercrombie & fitch, these are extraordinary figures. it is just all data center data center and data center. direct consumer for abercrombie & fitch is 28% >> micron is affected by cohn. speaking of abercrombie & fitch, i did want to get to nordstrom

we did discuss yesterday the nordstrom family and as well as private equity, getting rejected at 50 bucks per share a couple of things to share. the cost and capital when you are trying to raise your financing, when it comes to retail, it is a bit more difficult than any other industry, of course, you don't need to go far to look at why whether it is toys r' us or neiman's or jc penney, it is not easy raising it so it is been termed to struggle to me in terms of getting the higher amount of financing needs to meet the ex peck tapectations o committee. you thought 26 to get it done. the question is can they get financing to the level that they want in terms of capital and how it works and they would also be tiebl g able to get as a result of

taking it private. we'll keep an eye on it but said to be a struggle >> so in other words, if we look at say the ratings of the debt for a lot of retailers that went private. i know the s&p have been cutting them and directly impact the ability. that brings up questions of the cvs bonds. >> they made the decision to get ahead of what they believe in potentially rising rates >> people want those bonds though >> some of them are callable the 30 years portion of it was above treasuries and it is sold out. >> they see the writing on the wall >> the acquisition that you are making is much less amazon which unless amazon goes in direct le. i have been watching that and surprised of the fabulous reception.

that's one of the things that made me feel bullish of a nordstrom deal >> cvs is cvs. >> oh please, it is not the old days that front of the store, david, i get it off at amazon everything that i used to buy, i get it on amazon, everything >> i think their credit rating is a lot better than a group trying to buy nordstrom and loaded up with debt. >> what i would say that vccvs. >> last point here on amazon, vp who over saw prime going to air bnb. >> and the new chief that we got at disney, jimmy patari, 48-year-old. some key executive moves this week >> i am watching e sports as

something. this whole world is going the change i am telling e sports thing, there are powerful people bidding for franchises and espn is not in front of the coverage but this is a very, very big and i think nca sports. you can play and have quic quick -- like you know this is like you can get -- >> no, i don't get that either >> i think you can be a great pianist. >> no, i am slow i am slowing down. >>s a >> all systems are slowing >> and your hearing as well. >> let's get to bob pisani a weak open, carl, 8-1 take a look at the sectors, we

have utilities doing a little bit early on and those are lower but not dramatically so. the big issue and the question i got all morning, gee, why are we not lower of the cohn ceanews we are having a global economic expansion along with record earnings tariffs mess with that paradigm so that's why it is not good for the moment, most of the streets still believe that a major trade war is unlikely and that's why we are not dropping that much. a lot of people are saying you are delusional and look at what's going on. that's the prevailing paradigm if you look around you will see that people are trying to thread the needle carefully here. they said this morning there

will be no trade war but there will also be no trade peace. the new normal from washington will be a use of trade policy. whether the markets can mentally thread the needle, i don't know. that's the contort of the debate right now. the tone of the market has changed. the last few days since the whole thing started. s&p is flat for the month and tech is under performing a little bit industrials and financials have been under performing which are what you want to watch right now. overall market, europe, you can watch everyday, watch autos and materials. they're a good example of how the markets going up and down. modest declines in some of the autos and volkswagon

they're all fractional liloer right now. and the china markets, all the chinese markets were weak, again, not dramatically so uma i l you may look at companies that's affected zte, they're often mentioned in these trade wars clearly, china stocks are the ones to watch in the next couple of weeks tl d the dow is way off the lows. >> david, back to you. >> the big story, cfius' unusual decision detailing its concerns with broadcom acquiring qualcomm people of many areas still trying to figure out what this is going to mean not just for that deal but many deals in general when it comes to technology and u.s. champions of

technology if you want to call it that and our foreign accusations. this morning broadcom seems to be changing the debate a little bit or engage in that debate with cfius that's their key opportunity here as the investigation continues over the next days and weeks from cfius' point of view. they are expected to hear from broadcom's side. we are getting a bit of that this morning broadcom did make a number of promises in a press release this morning. they're going to say make the u.s. global leader in 5-g. that's the key and do you remember the concerns from cfius relate to 5-g and the chinese champion that's becoming very, very globalized. they're going to create new

$1.58 fun $1 billion 58 billion fund we are going to create this fund and focusing on r&d essential to the u.s. we'll also focus on r&d to those technology that's essential to the u.s. and they'll do everything in a lawful manner. when they complete that acquisition, they expect to have more than 25,000 employees in the united states. but, when it comes to what we can expect from cfius, that's the key question for many. it would not appear that once broadcom becomes a u.s. corporation, the jurisdiction for cfius still applied. clearly, that's still a question i did not get a true answer to that question everyone though they say yes that would seem to be the case but you cannot argument it is the acase so much of this had to do with

the large pletolitical backdropn china in particular and from the white house and senator john cornyn and many others i think you have to view it in the broader context. cornyn wants to rewrite cfius to make it much more restrictive so we'll watch. finally, i would add nxp no words yet >> this that going to get broild that we have between the two countries? >> david, the narrative continues to be that hock tan is running a foreign company and it is dangerous >> hock tan is an american >> yes, he is. >> he's running an american company. i wonder sometimes whether that's not dawning on people but that's fair. >> it may not be fair.

>> it is the markets >> they may have been drawn into a much larger political debate >> i hope it is not a nativist instinct that's hurting -- some people from nationalists, i think it is native >> dow's down 176 and the 10-yr as well. a couple of headlines from bostic and we are expecting at 2:00 p.m. as well. don't go away.

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it's pretty negative here this morning. the dow down a little. s&p is down 15 a busy morning a lot more on our

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fidelity. open an account today. [ music playing good wednesday morning, welcome back to "squawk on the street". sarah is off today dow down 200. not quite the decline we were expecting as news of gary cohn hit last night the s&p is down 18 our road map begins with cohn quitting we'll look at the fallout from wall street to washington, plus warnings at least of a possible

trade war. the eu now threatening retaliation if tariffs go into effect here. what that could mean for the u.s. and the global economy. the u.s. coast is preparing for a storm in less than a week. a look at business and travel straight ahead first up, top economic adviser gary cohn, leaving his post at the white house. let's bring in kate kelly of the "new york times" who broke this story, has it in the paper, kate, good to have you on. is it absolutely the trade situation that pushed them out the door or was there more to it than that? >> i think both. i think the trade dispute was the final catalyst for sure. he had been not shy about expreg e pressing his frustration in the way the tariff had been going on alluminum and steel announced unexpectedly last week >> that said, i think there had been an accumulation of concern. i think post-recently, at least

this calendar year, you had infrastructure sort of delayed and delayed. that was going to be his next big initiative after trade or along with trade that he and his team were expecting to work on kind of the president made some noise about it last year and again this year, certainly in the state of the union speech, but there wasn't a lot of follow through, there was an inability to move that to the top of the list on the trade issues, not only did he disagree with wilbur ross and pe tore novarro, but -- peter novarro, there was a process that broke down. >> policy, right it was also the process that bothered him the way this came about? >> correct so john kelly has as you red and know put in a whole bunch of procedures to guard the president's time, make sure people were booked in advance and kelly reviewed the list and among other things, so the policy was not made willie

nilly. in this indication, it sound like that process broke down a bit, they orchestrated a meeting with the president with private industry which then led to his unexpected announcement, the tail end of a public availability so it wasn't able to run through the typical fashion. i think cohn and others who shared his mindset were taken aback and felt you know what, maybe this isn't a white house ki work in anywhere. >> do you know, kate, to the degree that he is pro free trade for sure gary cohn lot of the discussion consequent scent to t -- subsequent to the tariffs, was he on board about let's be targeted about countries we are concerned about dumping or was he just an advocate in general for not doing any tariffs at all? >> reporter: i moon i think my

understanding was that generally speaking he was anti-tariff. that said, if the president was very committed to imposing a tariff policy, he wrofb in favor of a more moderate approach like you mentioned a targeted tariffs or some other middle road. but he definitely was concerned about trade wars, deafening allies, particularly china, when we have the chance like geopolitical and impact on american workers whose companies were dependent upon relatively cheap influence. >> anything you left out you want to put in right now >> you know, my colleague naggy haferman was -- haber man was great. trump on the one hand opposed gary cohn strongly on this tariff or publicly did on the other hand, he was serious by cohn's res ig nation. there was this school of thought

that cohn made it about himself, as opposed to the issues, which is a big no no with quotas as you know, cohn publicly, not publicly, it leaked he had threatened to resign once before in the wake of the charlottesville violence he may have been out of cards when he invoked that again >> thank you, kate, of the "new york times". >> joining us here close to 9:00 this morning, larry kudlow, who it is worth noting is on the short list to possibly replace gary cohn, larry, it's good to have >> thank you appreciate it. >> you want this gig >> do i want this gig? i don't have any comments on any of that stuff. it all happens and the president said some nice things. i don't have any comments. look - >> if you were asked, would you accept >> i just don't want to walk through all these scenarios. i appreciate it. one of the things -- >> larry, you are with us here,

it's family. >> no, it is family. i just want to say this, larls of all this i love cnbc. i have been here a whole kumpg in my life, host, anchor, commentator, contributor, whatever, i love it here i love my hour every week with john, so you know, the lord has been very good to me i mean that with great sincerity, regarding this, we'll see, i can't spec l.a. i do want to talk about the trade story, for me i'm just kudlow this year, hanging out, 10:00, favorite show. >> how about let's talk about novarro instead. a few days at this dfk you said he's a good guy. >> yes >> she's straight up protectionist up and down the line >> yes >> do you believe that still >> he is a good guy. he is a regular guest on the "kudlow report" for years. he's an interesting character.

i like him personally. i don't like blanket tariffs that's point number one. i don't like anything that will hurt our prosperity workoutlooks improving the president and gary cohn and steve mnuchin have done a great job, lowering tax rates, rolling back regulation, energy, these are all really pro-growth measures it's already showing up in the economy. it makes america more competitive. >> that itself the key point so i don't like blanket tariffs. i don't want to punish our friend and allies and get the bad actors get off equal or not much i would have preferred different actions on this, i, mile, encourageled gary cohn to stick around look the president -- i was in the campaign the president has made a promise to protect american industries i get that one way to protect them is cutting taxes and regulations. he's done a great job. here off to the boom

if you must, i talked to paul ryan and other republicans on the hill, quite worried about all this sometimes selective targeted tariffs can work, if nothing else to gain the attention of a bad actor like, for example, china. i would have gone to coin first. what bothers me about steel. can you go as deep as you want i think steel has a bad impact on our economy i think it's possible steel workers will be hemmed, short run. although the alluminum lady yesterday said the alluminum people are against us. we have about 166 different quotas and tariffs on steel. nothing seems to work. therefore, something else is the problem. so i just wouldn't have gone there. and i understand there is an election, pennsylvania, next tuesday, and steel workers like it >> steel workers like it >> auto workers don't. that's how this thing boils down of course, as you've discussed, we've all talked the users of steel, whether it's business, small businesses or consumers,

they get hurt, they always do. >> when they say we will bring back 500 workers to illinois as the beginning of a renaissance, they say >> i'm all for it. but there's 5 or 6 million people likely to get hurt. you see these various estimates around about the impact on aggregate gdp. you know what, i don't have every answer, the steel business investigations me. for example -- vexs me for for example, the car business >> by the way, you can make an argument we improved 40 years ago because of japanese imports giving our goes competition. >> i love that argument. absolutely i can't physical out why steel with all it's current protections can't do what autos have done. >> new corps is a low cost producer they would say it's the dumping and substancization of steel is a lornl extent, they get ways

that the chinese production is completely subsidized by the state. >> if all that is true it may be true i tried to get up to speed on it go after china canada is not our enemy. you follow me. >> the administration's argument against that >> but the admin strags's argument is okay you block off chinese steel from this country. it will get dumped everywhere else it gets depressed. it will go into canada and we'll pim i import it. >> that's circumvention. >> i don't agree with that china is the culprit it's probably the most offensive trade deal break in the world. that's why i would have gone after them first i know there are north korean complications with it. but upon the the less. i've always agreed with the president that this is about china. i get that but why do we have to go after our friends

you see canada buys 50% of the steel that america makes okay and american steel has 70% of this market. so you just have to look for other causes now, with respect to subsidy, i get that, then let's negotiate it out it's better to bring down barriers on both sides than to raise barriers >> we thought that was the case within they signed out in wto in 2001 and it has not, i'm talking about china and of course we have thought that was happening and it hasn't. >> i'm curious to get your thoughts as well on the loss of cohn's voice in the white house and whether or not we will see a more protectionist point of view rule of the day? >> well, i don't know. i hope not look, president trump and i have talked about this, we agree on many aspects we disagree on some aspects. okay yesterday, he mentioned 25%

tariffs on european cars come nook the u.s. i have actually talked to him, i don't like that idea to answer your question, personnel policy, we'll see. >> it depends on the inflation, larry. >> i understand that i, myself, urge the buy the to stay around. by the way, he will be here for several more weeks and they're going to work. that see kate kelly mentioned process. if she's right, i mean, i think the process weighs bungled when rob porter left the white house. now they've got to go through the details. see there is no policy there is no document as i understand it the president has stated his policy okay >> the commerce department gave him a report he acted on that >> correct >> there is not a lot behind that >> there be exemptions i don't know the answer to that i think we should reward our friend and punish our enemies.

i think president trump is right. we got to have something steel i just don't know the best way to do that most of all, look, i'm a growth guy. i spent my whole career preaching growth let's try to do things that won't channel our growth and protectionism tends to be a prosperity killer. that's my biggest issue. >> that doesn't mean it can't be worked out i don't like this action other action may have been better wait and see, there is a lot going on here the hill will way in the hill won't like this >> as the chief thed said this morning, countries need their own commodity base you can't rely on others, 232, national security double that whole bit. not the medium term about slowing down growth or aefking thousands of jobs. >> about having enough capacity if we're ever to go to war >> do you think canada is a national security threat or are we one nation? >> or in fact north america is

one nation that's why i'm such a strong proe proponent. nafta needs to be fixed and refurbished. but it is essential to our economic and national security success. do you follow me canada will help us. we buy them. they buy us. i'm somewhat leery i understand what the president's thinking, it's logical. it's the ways and means of going about it so i'm not sure, let me come back to this i'm not against steel, steel executives, for heaven's sakes i just figure we have to figure out why is it to go being to this metaphor, why have cars done better and steel haven't? why is that? we've given them all these protections. some of these 160% why can't they do better prices and production in steel is picking up. that's a good sign, maybe you need an overall prosperity we haven't had one in 20 years

that would help everybody. kind of that lumbertask. one more we slap lumber tariffs on canada you know what happened lumber prices will soar. lumber is off to the races, so you talk to builders and peel in the -- people in the construction industry. they can't get enough lumber they're worried they won't get enough steel these economic consequences have to be in the mix before we figure out something to to me, usa and canada, we have a few things to do with canada i get that we have more to do with mexico but i just nafta is we are north america. i'm not giving up our autonomy, god knows. i want the moxie how about growth, lower tax rates, fewer regulations, build out good infrastructure.

weesh doiwe're doing it that's why i like mnuchin and cohn and trump so much trump is getting it done. >> coin has been asked to develop a year for a $1 billion trade deficit with the united states, our relationship with china has been a very good one we must act soon we did get the trade deficit today nine year. >> yeah. >> $1 billion. that's not a lot of money. >> i was going to say. >> i want to negotiate, the president is trying to juggle. it's a particular situation, it's a tricky situation with respect to nafta i understand that. i'm not sure i have all the answers. i just don't like blapg et tariffs. look, this can be worked out all things are possible. that's all i'm saying. but keep it in a growth scenario growth solves so many problems i want steel workers to have more jobs. but i want auto workers to have

more jobs. i want everybody to have nor jobs i want pay increases for everybody, for you, for you, for me >> this is picking winners and losers >> i'm afraid it is, again, i don't like blanket tariffs i'm not sure i have all the solutions, but we can work this out. we'll see, xemptions, there is a lot happening in the next few weeks. mr. cohn is still there the president is still thinking about stuff. somebody mentioned retaliatory threats. i think us u u.s. and canada acts as one. fix the deal, there is your economic security. there is your national security. >> good to have you always. >> tanks, larry. >> if and when you go to the white house, you better not abandon us >> he won't do that. >> you will come on all the time >> my great pleasure i have to tell you it's been a long time. >> we love you back.

>> when we come back, stocks falling over the shakeup key house and increased possibility of a trade war david kostin and kyle bass will join david esenhe is in favor of the pridt's new trade policy "squawk in the street" back after this oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown

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the market's reacting to the

top economic adviser gary cohn's impending department cure. joining us on a cnbc exclusive is goldman sachs chief strategist david, it's great to have you back at the deck >> i see you >> the cohn goldman thing here, overall, what is theiment i impact >> to think what he brought. he had decades of sophistication and an understanding of financial markets regulation he brought that with him it's incumbent on other individuals, americans to come down and serve the country what did he accomplish among the most important is the tax reform that has contributed a lot to increased confidence and business activity from that perspective. so what is the risk? who will replace him and who how, what might be the retaliatetory, you have to create the olympics. think of it another olympics for

every day, it's a type of war in this sport on the other hand you have protectionist initiatives, concern e concerned about higher rates. on the other hand, you have small business confidence, optimism you have big cap confidence and consumer confidence. you have corporate decisions, number one spending priority is to invest in a business. have you corporate bond stock. that's the tug of war. with that environment, you are looking at a 5% return to the equity market and that's not a great risk-reward trough tradeoff, that's the market we have >> if there were to be barriers, if you don't want to call eight trade war, whatever, what is the impact on the stock market, your worst case scenario? >> it will depend on different industries, some will be

positively affected. overall, economics perspective, the earnings, 70% of the revenues in most corporations are domestic if you have a tariff type of session, you have higher inflation. >> that will be a concern, pressure on margins, which translates into potentially lower earnings >> that will be an impact on the mark the market trades 18 times earnings, it's historically high multiple this year in terms of tax reform is 14% tax growth. i think the specifics will matter >> a year or so ago you had a list of companies growing margins. >> right >> we talked about this, it was a limited sample i wonder if it is smaller given the mark degradation sample us mentioned. >> margins, broadly speaking, will be higher, corporate tax rates are lower. the question is, does all of that benefit of lower taxes to the shareholders or does some go

to the stake holders which will be employees or customers in terms of lower price the consumer products companies, competitions from generics or private label. so the margin situation would depend on different industries, despite all rising import costs? >> it will affect some industries more than others. some industrial companies would face more pressures on that side i think there are two big issues, they are capital spending and deregulation the two drafrs of how to prof-- drio profit would be those areas the direct beneficiaries of regulation are financials and the capital spending increases is industrials zrels you have to create a potentially higher input costs on the other hand, you have more companies spending money, the number one share of capital allocation this year is capex.

>> how do you think the fed would look at rising inflation driven by protectionism and barriers and tariffs, et cetera. would they see it as something they need to combat with high interest rates, oh, this is going to slow growth, therefore, that tool doesn't necessarily combat the cause of the rise in prices >> so the expectation is to have four times this year most portfolio managers are in that three to four rate hikes camp this year without any other information, that path seems to be a reasonable path. this tech activity is very strongful you hear it from the conference calls we finished the fourth quarter results. and you know expectation is that things are actually going pretty well the idea of small business apt michigan at one of the highest

levels it's been is suggestive of people, business people are investing in capex that's what we hear at the corporate executive side >> finally adt today suggested a good jobs number on friday >> expectation is unemployment will continue to fall. >> that is another sourceof infrustration. it's only one of the impetuss for why we anticipate a good year >> it will be an interesting summer as we work around these levels >> we'll see who wins gold on that thank you when we come back, capital management founder kyle bass will join me we will get his decision on trade and he has decided on whether there are a lot of positives in that trade policy coming out of the white ushoe. don't go away.

good morning, everyone, i'm sue herrera, here'syour cnbc news update at this hour

the european union providing more details on how it might retaliate on steel and alluminum tariffs. it is proposing countermeasures on orange juice, levys jeans and pe nut butter. syria fighting between the syrian army and the rebel fighters a senior army official says the aim is to divide it into two areas to create a safe quarter for civilians to get out of that area saudi arabia's crown prince welcomed to buckingham palace and he will dine later with prince charles and prince william. his visit sparked protests against the war in yemen five crooks held up a security guard at a brazilian airport and drove off with $5 million in cash from a lufthansa plane they say it only took six minutes to

pull off the heist authorities have yet to arrest anyone that's the news update at this hour david, i will send it back downtown to you. >> thank you, sue. stocks are down in part on the news gary cohn resigning as the top economic adviser this as new tariffs on steel and alluminum continue to spark discussion of a possible trade war. my next guest says it is a step in the right direction joining me from democracy i should point out, you and your firm spent a lot of time researching china in part because of the investment choices you've made at ayman why do you believe these tariffs are the right move >> as far as steel and alull number are concerned, as i'm listening to the program and listening to kudlow talk about the fact that we need to do targeted tariffs you know, kudlow's wrong ability one thing.

if you are talking about a global commodity and trying to preserve your national security as far as having the production of steel or alluminum to defend ourselves in an ad verse scenario, you can't impose directed tariffs you have to impose broad based tariffs, it's a global economy he focused on canada, as far as steel and alluminum are concerned, we export one unit of steel for every four units of steel we import. for alluminum, we import 90% of our basic needs in the u.s our alluminum sales have been emask lated in the past five years by the chinese they play a long game. if they want to control the industry or bring our diplomaepn dense to them, they can do that. those two things aren't

congruent with each other every now and then so in this case, i am a believer that we need to maintain productive capacity in certain industries this is not about producer versus consumer. this is simply about national security i this i we get lost in that argument fairly often from what i've read and watched. >> right, kyle writes in the "wall street journal," specific to china, president donald trump, this could be an opportunity towards china's trade behavior instead, he's threatenning a trade war with the countries that would make up a coalition over economy and national security than the sectors threatened by china's exportation of intellectual property isn't that aco gent argument >> it is, the 232 is spl specifically a national security investigation. it honestly has nothing to do with our economy it's do we have industries dear

and vital to the united states national security interests in the long run that's all the 232 is about. >> people say we can always get our steel from canada when it comes to national security we would never be at risk in terms of our tanks and weaponry that require steel >> i don't /* /- yeah. one asuls there is a cost for jobs lost and opioid addiction and the fact that these people that have lost jobs in the rust best let's say since china sent in the wto in 2001, we lost many jobs many people haven't been retrade and they're permanent wards of the united states. those costs weren't factored into the economical can you lus of guys like larry kudlow. i think that again the steel and alluminum is a much smaller issue than the intellectual

property, they sent a report to the president, where they estimated those numbers to be on the low end $230 billion a year. on the high end $600 billion a year >> we actually had ha chart. let's bring it up again while we discuss this because i know in having conversations with you, kyle, you believe when it comes to china and within it comes to this overall trade why, the ongoing investigation by the u.s. trade rep and what we may hear soon in terms to their conclusions, what do you think will happen in particular given this number right here in. >> well, let me start by saying, we have been in a trade war for the last 20 years with china but china is the only one fighting it. and the trade war we have been engaged in, our policy has been unilateral disarm amendment. ie the u.s. has had a passivist trade policy with the rest of

the world, particularly choivenl we prostrated ourselves to the chinese in exchange for economic growth and the golden carrot the chinese hold out in front of us. i think the 301 investigation. i think what's interesting hein scenes, i would say the overwhelming majority of fortune 500 ceos agreed with the president and u.s. trade rep's view on intellectual property theft. we spend $500 billion a year on intellectual property the chinese steel, 50 to 75% of that every year we're talking losses in the trillions and trillions of dollars. so the point i'll make is i think today's job losses in steel and alluminum and manufacturing will translate in the future to job losses in silicon valley, which is keen of o -- kind of our, let's say the u.s. economic strength in the world. we have to think about how we combat that in the long run the chinese play the long game

we can't get caught up in shortism saying this might be a growth in the near term. i don't care about that. i care about the long-term national security of our country. >> yesterday as a part of my coverage of broad com and qualcomm for example, that was noted. national security as it relates to 5g, i would assume we would see more of that, given it's a key consideration of people in the white house and senator john cornyn >> we can't possibly let the qualcomm broad xoim american tore go through. >> why would you say that, why >> broad com is a company acquired by avco they left the name avago. this company is a singaporeian based company. in cma what qualcomm does is optimize the cell phones, the technology is used by apple and

samsung, we can't possibly allow that technology and know-how to fall into the hands of let's say a non-u.s. company. >> i don't want get dog bogged down on the debate i'm surprised how protectionist you are. most guys on wall street are not. you benefitted i assume a great deal from globalization as have so many others in your business. >> at some point in time this is key, we're sitting here on the ten-year anniversary of the financial crisis, or we're about to be there and we take wall street's advice, investment bank's advice and sage advice. we hold them out to be the thought leaders in the u.s., sometimes those, you call me a protectionist. at some point in time the idea tuned i kind of financial gain is not conkrunt with that of the national security policy and the betterment of our nation in the

long run when i think of us giving up the 5g rollout is so key to the u.s. national security policy going forward and the ability for to us continue to run our country on a secure basis, not an unsecured basis, that i can't believe that we would even consider allowing broad com for qualcomm that's my view >> that's your view, obviously, broad com feels differently about it >> of course, they do. >> they will have 25 different employees. kyle, in the short time we have, left, first of all you have a chinese fund or chinese related fun i know that how does that play into what you are doing in terms of making money for your investors? >> we didn't make money for our investors last year because of china's policies with their basically challenge. i think as you look forward, our views aren't simply trying to

focus globally china is an important piece, there is so much money in the world, cash and gdp is north of 100% so worry a believer that you are going to see global inflation. you will see continued asset prices moving higher we think there are some opportunities in countereurope and greece, in asia, we think there will be differentties. when we think about investing, that's where we do we are more bullish about asset prices globally, especially in southern europe. as far as what's going on in asia, from a national security perspective. i think it's something we as a nation must focus on and fortunately, i think the trump administration is focused in the right place. >> you do, although they're not that focused on examining

container strip shipments that i understand that can contain just about anything >> this will be a fun fact him fun fak is china ships 200 million shipping contain torres the u.s. every year. how many people do you think in customs and border security do you think inspect 200 million shipping containers? >> i don't know, how many. >> hundreds. >> we have four people two in shin zen, two in shanghai, they're actually not allowed to enspec them they can only alert chinese customs official to go inspect those chinese inspectors get fined if they slow down the shipping process we only have four people inspecting 200 million shipping containers our policies in the u.s. have to be changed they must be changed quickly >> kyle, we're done here for now. perhaps the president listening, because he just tweeted the u.s. is acting swiftly on

intellectual property theft. we cannot allow this to happen as it has for many years thank you for joining us appreciate it. >> thank you >> great stuff, david, for that. when we come back, art cashin will join us. reacting to area is hnco's departure from the white house "squawk" on the street back "squawk" on the street back right after this stay with me, mr. parker.ck right after this when. critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker.

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welcome back to "squawk in the street". i'm carl cantonia. futures down, do you is now down about a third of a percent obviously oil inventories in the news as well as we watch the reaction to gary cope's departure from the white house art cashin joins us here before we get started, happy

birthday we love having you on every times your birthday. >> once is year isn't that bad >> reaction to what you heard last night out of d.c. >> well, it's a little bit strange in that originally the question about cohn came up when people noticed that the supposed thursday meeting that he had arranged was not on the white house schedule that raised some questions it was clearly a big surprise. a lot of people thought that the president might be deal postureing, using this as a lever to get more movement in the nafta talks and to see what was going on but when cohn resigned, that raised a lot of questions about the philosophic balance in the white house and did that leave the trade protectionists in charge and where they are. obviously the president wants to go back to the base that elected him and said, look, i told you i

was going to do something on this i have done something. but i don't know that it's going to be as extreme i think your previous guest kyle best made a good point you have to be careful when you do tariffs on basically global inports that come from more and more places and come from anywhere that's the big thing the president is pushing that while it looksle like we get 2% of our iron and steel from china, we're actually seeing them resell all over the world to others, creating surpluses that then come in here so i think the markets are calm now. if there were further changes in the white house that might destabilize things the bargain hunters have come in, taken out the recent lows, we're circling the wagons at minus 100 to 210 in the dow we'll see if we can guild on it.

>> our nasdaq goes green even though we spent the last few days imposing tariff, sanders is on tape saying that i are on track to do something by the end of the week the theory it is a gambit so far has proven not to be wrong >> you are right, lacking detail it's hard to figure out who will suffer and where things will come from, so i think you will see the market try to come back here and see if there is another shoe that drops in the white house. >> before you go, it wouldn't be a birthday on set without a gift from us. >> happy birthday. >> thank you, as always, we love you. art cashin as we head to break, don't miss today on power lunch, mary barra will weigh in. "squawk on the street" will be "squawk on the street" will be right back.

well, it's earnings season "squawk on the street" will be right back. once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too.