>> focused on jobs tomorrow. get away maybe a bit then we'll be back to talk about how many times the fed is going to hike this year and all of this started to happen as well power lunch starts right now. >> scott, thank you very much, everybody. welcome to power lunch and here is what is on our menu today the president set to make a couple of announcements. one on tariffs in the next hour or so. following pressure from his own party and a number of industries will the u.s. take a softer stance and lambo tariffs. a potential trade war could really hurt the luxury economy we'll hear from him about that and the surprising stat about who is buying the very expensive

deluxe suvs. tennis takeover, venus and serena sitting down with cnbc. their advice for leveling the playing field for women on the court and in the corner office power lunch starts right now >> and welcome to power lunch. i'm melissa lee. stocks are turning lower the past hour or so we had been higher by 150 points investors seem to be in wait and see mode of course we're also waiting for the payrolls number tomorrow take a look here the dow is down by 42 points and the s&p higher by under one point. dow winners, johnson & johnson, nike, pfizer and coke leading there and lagging ibm, verizon, chevron and intel. wti down by more than a percent. hitting a new all time high on pace for the 6th straight day of

gains. and express scripts scoring. cigna will purchase the company in a deal valued at $67 billion. we have much more on that story straight ahead. >> good afternoon to you i'm courtney reagan joining the team today we begin this hour at the white house where president trump is holding two events today one addressing violent video games and the other on tariffs wow we had a very busy day so far. there's a lot of things to sort through. it's international women's day after all. where do things stand right now as we have an hour plus to go until that 330 tariff announcement. >> there is paperwork that is being prepared it is still unclear exactly what the president will do at 3:30. this is going to be down to the wire just as it was last week and there wasn't a policy paper or position paper as they call them here that was ready in time for when the put wanted to publicize his initial decision at that

meeting with steel and aluminums. they will see benefits from this that are gathered here at the white house today and the president clearly wants to use the availability of the people here that will be effected by this to show case the people who are going to benefit from this when there's been so much criticism of the decision he's making. >> it's a great political backdrop here today. he's also going to have a political backdrop with the video game executives in the room as well for an issue he wants to talk about. there was so much focus on gun violence the president and conservatives wanted to also bring in the video game industry into that discussion and say wait a second, children are getting exposed to a lot of violent imagery. the president today said he is ready to move forward on banning bump stocks but also wants to do something on the video game industry and we have to watch this meeting because it's not clear what the solutions will be there or what proposals might come up in this meeting. >> it looks like there's some

republican congress members that are going to be in that meeting. are there any democratic leaders that will be in the meeting with the video game companies >> we don't believe so but everything here is flexible up until the last minute as we have seen throughout the last couple of weeks and we'll see what happens there. the president likes these free wheeling moment where is he can be in front of the cameras, he can speak spontaneously and make policy on the fly. you've seen it the president makes an announcement that his whole staff wasn't expecting so we have to watch for a moment like that. >> as far as tariffs are concerned what we're seeing is the art of the deal at work. you start a month ago with the recommendations. the president rachets those up he wants something stiffer than that and over time when he hears from allies and critics and people with certain tayloring to those tariffs that's when he steps down and meets them in the middle so this is really, it's all very

fluid and i think it is going to be fluid from here even with this announcement today. >> i think so too. there's a lot of flexibility that needs to be had by all of us today following these developments thank you very much. both of you. live at the white house. >> as we countdown to president trump's announcement later this afternoon a growing group of republicans are trying to convince the president to reverse course on these proposed tariffs. let's get more insight now he's national political reporter with the washington post and also msnbc political contributor. whether there will be a full trade war or not globally there seems to be a trade war within the republican party. >> there certainly s. it's not just the house republican leadership and the senate republican who is are pressuring the president. the house freedom caucus, group of hard liners inside of the house pleading with the president to not make this move on trade it reflects the isolation the president has politically within his own party on his signature

issue. ahead of the midterm elections, a lot of the republicans are not rallying around the president. >> freedom caucus is one kevin brady, the head of ways and means, his greatest ally on tax reform is another one that opposes the president's position. >> there's a real divide in the gop. do you need to move on trade to try to make sure that the base trump voters come out this fall or just run a more traditional republican message most republicans in the swing house districts they want to just run on the tax bill they don't want to run on trade. >> robert in the letter that kevin brady and the house republicans sent to the president they basically praised him for standing up to bad actors so they're criticizing him with kid gloves. at what point or do you think at any point does this become a revolt of his own paerrty? >> you're seeing it inside of the white house too talking to officials there over the last day. peter navaro, secretary wilbur ross, they have been trying to pull back and tweak the final language of whatever comes out

on tariffs to make sure there's more exemptions for u.s. allies. the president is saying let me make this move as a way to negotiate on trade to try to make a movement. he says look back to the art of the deal seeing if people move toward you. that's at least his argument inside of the white house. >> i don't mean to con flat tfl issues here but the movement apparently has happened with respect to north korea and my way worked there whether it did or it didn't, who knows, but the hard line, the ague aggressive posture he has taken with north korea, it's very interesting in your article. we spent a lot of time talking about and the president talked a lot about trade imbalances in the united states and mexico, automobile manufacturing and other manufacturing. but he seems to be equally or even more angry with canada.

>> differing manufacturing products the president known politically for going after mexico talking about a wall he has really grown averse to canada when it comes to trade. and the big political test will be tuesday on the special election in pennsylvania they move toward that news on trade. fls flshl. >> down right now, oils down right now. how do you interpret the action? >> well, we're trying to, we're meandering around. volume is on the light side. it's been that way all week and we respond to headlines on the tariffs. that's what is going on. i want to note there's some things happening

some of the technology stocks. that's been a leadership group so seagate and western digital, intel. but melissa is right about the ten year yield we had a number of banks it's almost at a 52 week high they started going down as the ten year yield started going down today they're down on the yield issues oil stalled out at 66 and 67 now sitting around $60 so they're all moving to the down side. so in terms of what matters to traders, three things right now. the most important thing is will the tariffs hurt growth? we don't know. there's a lot of models floating around we need more details we're here tomorrow on the february jobs report we had a 2.9% in january that was a big number.

we saw the markets move down very big on that day february 1nd, the s&p was down 50 points. if it's 2.8 below that, that will be mod raerating. that will help finally that will be march 21st. back to you. >> thank you appreciate it. now is now the time to buy the dip. we are seeing equities trade lower at this point ahead of the announceme announcement. >> while they could still be a wildcard they remain intact. the latest developments on trade protection leave him less bullish. layout your theory of what impact tariffs may have on equities we'll take it a step further what happens if there's a trade war and how should you be positioned >> it's just a risk scenario at this point and it's one where the probability is rising.

i came into this year very bullish on equities but trade protection coming to the forefront, it's likely to result in a higher average level going forward. it's likely to result in higher risk premiums in financial markets. so that's likely to put more pressure under pe ratios. >> have you done anything? >> no, we're still overweight equities i'm not ready to flip to a risk off position i don't think you want to overreact to this because, you know, the president could still back off he could change the proposal in ways that make it less troubling by exempting key allies. so, no, we vnlt changed anything as of yet but, you know, we think you need to be nimble and know the risk are -- risks. i plan to be pulling back and raising some cash holding a little bit more gold.

>> it looks like we're on a holding pattern when you think about where the markets are today ahead of the announcement we think we'll get some more details. we may not get all of them if history is any guide so what are you doing? how are you positioned ahead of further details about tariffs? what are you doing with your equity positions >> if you look at tariffs, they're a work in progress, we don't want to get ahead of ourselves and make tactical changes on very short-term considerations with tariffs. i will say this, we are a bit more cautious. we still have that glass half fulmenalty when it comes to u.s. equities but the degree of difficulty has increased with tariffs near term. also with central banks slowing down, providing liquidity and in some cases like in the u.s so we have head winds but all in all if you look at the data it

looks good, especially westeith earnings being up 15%. >> does anything change tomorrow when we get the jobs report, we have a further indication of wage inflation that spooked the markets about a month ago. >> that's right. if we do get a very strong number on the wage inflation, that is going to give investors concern that the fed is going to be a bit more aggressive when it comes to raising rates but we don't think that changes the fundamental story of the global synchronized expansion rates are going up for the right reason it's been about ten years and the fed has finally, it looks like, succeeded in hitting that 2% inflation mark so we're not too concerned. we still think the fundamentals look good going into the rest of the year. >> i feel like every stock picker we have on tv has a fear of missing out you're treating this so

senquinly. if we do get more wage growth and inflation there could be rate hikes how does this, when does this mixture cause you to say now is the time i'm not going to be overweight and i'm actually going to pull back. >> yeah. >> you don't want to do it after the market right >> those are the two big risk factors. the rising probability of trade frictions and probably the economy running a little bit too hot here and that we could ignite inflation problems. you know, i still think the weight of the evidence is toward a positive scenario and, you know, we're not going to be eliminating our overweight risky assets but i do think the risks are building and now is the time to be taking chips off the table. >> all right thank you. we appreciate your perspective thank you for joining us here today. >> cigna spending billions to buy express scripts. is this merger between the insurer and pharmacy benefits manager mean for the health care

industry what's ahead and you wouldn't think buyers of lamborghinis would be sensitive to a price increase. we'll hear what the head says about the impact of tariffs on his customers. power lunch will zoom on after this at fidelity, trades are now just $4.95.

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there's pretty big deals in the space. united health acquiring aetna medical. are these deals good for the health care industry and the consumer let's bring in bill george bill good to see you. >> thank you. >> i would imagine that all of this is good for the consumer. isn't the deal partly in response to the notion that they have to cut costs and there's other pressures in the industry such as did the jp morgan berkshire amazon juggernaut that's going to attack the health care system. >> everyone is running scared of amazon but these deals are only good for the consume for the cost savings get passed on to the consumer in the past they haven't done that united did announce it was going to pass to consumers and they're under a lot of pressure from cms to do that it feels like two

jilted lovers that got stood up and this doesn't smell good to me they lost 5 billion on the market today they have to own the whole thing and get it done. meanwhile, they're consolidating everything generating huge amounts of savings. that's how they can pass them on yes we need to take out huge amounts of costs in this system. there should never be so much gap between the consumer and the manufacturer and i think amazon is going to show and some of them are running hard to get there. others are trying to get caught up. >> why would anybody want to be in the pharmacy benefits management area? why would you want to buy an express scripts. you just pinpointed the exact place where the most fat could

be cut out and believe me regulators are probably looking at this as well, right everybody on the hill wants to lower drug costs so why buy a pbm can you walk me through that. >> why have them in the first place? why do we need them? >> i'm not sure we do need them. i would be able to contract directly from the pharmaceutical manufacturers directly into the hospital and manufacturers and add the layers i think they want them because they control a lot of customers and that's who they're trying to get ahold of there's too many fingers in the pot. you have cardinal health, mckesson then the drugstores and i just think we have to cut a lot of this out and anything else you can buy online if you have a prescription obviously you have to control that but we have to take a lot of the players out and cut a lot out and that's why they're all running to consolidate

there's a lot of money going into it. i'd rather see it go into consumers and put it into staying healthy than filling prescriptions for disease. >> some of the health care deals out there, there's a lot of med tech deals out there why do you think there was such a drive particularly in 2017 where we have the numbers because activity in the space rose 50% in 2017 do you think more is to come >> i think everyone is looking at my former company did that big deal for 50 billion and it's paying off. >> do you think they're looking at it or you know they're looking at it? >> i think, they told me they're looking at it and they feel a need to bulk up and to get more strength visa ve the big hospital groups. i think you'll see more of that. but t i think the success is going to go to the strong. the people that have control in the marketplace and can deliver

top quality at lowest cost and i'm not convinced all of these layers in the whole distribution chain are going to do it you'll see more people wanting to sell direct rather than going through the layers right now. the way they make out in all of these distribution channels, they hang on to the savings. so even though they may cut the cost 90 or even 99%. a lot of that gets held on to it that's where the money is. >> great to see you, thank you. >> thank you for having me on. >> lamborghini is known for its sports cars but they too are making suvs. are people really buying them? they are but you might be surprised who. and you win some, you lose some disney had a huge smash with black panther but hopes not as high for the next big release. the ups and downs for the movie business and what it means for disney shares coming up on power lunch.

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>> a fight or a war, no matter if it's economic or another way of doing a fight is not beneficial to the world of luxury luxury is for sure sensitive and sensible to these kind of things no doubt you see that normally the growth connected to the growth of the stock exchange or the value all around the world for sure i really do hope that these will not come. >> now, in the meantime he said expect lambo production to more than double by the end of next year a lot of that due to the successful launch of the suv they are especially popular among the new crypto millionaires and here's why. >> it's connected to the profile of the young generation that are investing in these high risky investment i see the parallelism between young people that are really

willing to become very rich with a very high risky investment with the fact that our customers are very young. >> one thing that surprised me, 70% of the buyers of the new suv had never owned a lamborghini. >> unbelievable. >> fascinating. >> brand power. >> president trump saying today that he will announce a decision on steel and aluminum tariffs this afternoon if he goes ahead will it work to create jobs tinhe u.s. steel industry that's coming up on power lunch.

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hello, everyone. here's your cnbc news update for this hour. at a news conference in ethiopia, tillerson saying nuclear disarmorment with north korea is a long way off. >> i've said this before, it's to have talks, to have some kind of talks about talks because i don't know yet, until we are able to meet ourselves

face to face with representatives of north korea whether the conditions are right to even begin thinking about negotiations. >> for the second time in less than a week, a nor'easter wreakwrea wreakwrea wreaked havoc on parts of new jersey more than 300,000 customers in new jersey, new york and connecticut are still without power. tom brady and a good cause raising money for the dana farber cancer institute by shaving their heads. and they'll pledge $5 million if 1,000 people agree to shave their heads or beards for the cause. thank you. president trump on twitter today saying we need to protect and build the steel and aluminum

industries but would these proposed tariffs create jobs in the united states? economists are debating and steve is listening what's the answer? >> let me tell you what i hear unlike most issues there isn't much debate among economists over the broad economic effects of steel and aluminum tariffs. a lot more jobs will be gained by the tariffs why? first the u.s. has a lot more workers in industries that use steel than in those that make steel. second higher prices on steel will reduce cost investment. that often means fewer jobs. some estimates as low as only 55,000 lost jobs some are higher. a study by the trade partnership found that 33,000 steel and aluminum jobs will be gained by 179,000 jobs will be lost. many in the service business the authors of the study say they used the same data base to calculate the tariff levels. steel tariffs in '02 were said

to have had only a marginal impact on jobs but cost 200,000 jobs in the overall economy. clearly it's hurt by imports but a bigger problem for steel jobs, technology while steel output has fallen, the output has been stable that shows strong productive growth from automation that's the orange line verses the blue line. this is a rare area of agreement among economists not the overall effect on jobs and that courtney is solidly negative. >> thank you very much steve. >> we got a little break news out of washington. day kayla has the details. >> the white house putting out updated guidance for the president's schedule and that signing this afternoon has become official. the president referencing a 3:30 meeting with the steel and aluminum industry. that now is being discussed as a signing of the section 232 proclamations on steel and aluminum so these are formal documents

with the president's decisions on these tariffs and exactly what they will look like and all the fine print and that's coming at 3:30 p.m. this afternoon. back to you. >> kayla, it is a date we will be there for it. as you heard the president will sign these tariffs later this afternoon. it is now in the book. part of a larger effort by the president toboost u.s. manufacturing and joining us to discuss the state of manufacturing jobs is matt ferguson, the ceo of career builder. matt, welcome, good to have you with us. >> thanks for having me. >> how many fewer manufacturing jobs do we have in this country now than we did say 10 or 11 years ago? >> we have fewer, down from about 13.5 million to 12.5 million since 2010 we added back almost a million but overall we're down about a million. >> is there anyway to put a percentage on the number of job losses that are attributable to

unfair trading practices as opposed to those that might be attributable to organic change within an industry or automation within an industry >> it's hard for me to say, obviously steve was just on talking about that for the steel industry what i will tell you is obviously automation and technology are having a big impact on manufacturing in every country. the other thing i'll tell you is manufacturing jobs that are growing today are higher paying and much higher tech which means they'll be required to have higher skills. one of the things we're talking about today, the real issue longer term is how are we going to prepare people for the manufacturing jobs of the future to make sure that they have the skills and are ready one of the things i remember is steve jobs was talking about bringing back the manufacturer of the iphone here before his death. one of the things he didn't have was a certain skill set of worker here because we haven't manufactured that kind of product in so long we have to prepare the workers here for the jobs of the future. it's one of the things we're

focused on in our mobile app. >> when you talk about labor shifts, we have fewer workers in steel and aluminum in the industries we're focused on today than we did ten years ago. where did they go and if those jobs come back, even if they're not as many as they were before and it's in that negative, who are those workers? what industry then loses out >> well, i think it's an add because i think what you're going to do as manufacturing comes back here and i'm more bullish on bringing manufacturing back and while you may -- the overall number may go down because of automation you create transportation and ancillary jobs around a manufacturing facility i think we need to look at a way to educate high school students and community college students on the tech of manufacturing i was meeting with the ceo of a large auto company auto technology, auto repair is very technology and computer driven today they have days sitting open and

a lot of the workers make 75 to $100,000 a year. we have to figure out ways of manufacturing and other positions that we consider blue collar to prepare the students in high school and community college for the jobs of the future. >> we have 6.6 million more jobs now than we did in 2007. where are those jobs both in terms of regions and professions? i would bet a lot of them are in health care and related fields. >> yes, health care information technology, things about mathematics, big data, those are the areas where you see a lot of job creation the states that were hurt the worst were, you know, states like alabama, west virginia, mississippi and new mexico the states that did the best, texas, california, new york, and florida. when i think about the two sets of states, bigger states did really well. smaller states dependent on one or two industries did worse but

the big drivers of that were information technology and health care. >> thank you very much matt ferguson with career builder. appreciate it. >> thanks tyler. >> china vowed to cut back on production shutting down factories and declaring former steel towns as steel free. she joins us now from beijing. hi eunice. >> hi, melissa well just this week the chinese premiere pledged that china would continue to reduce it's steel capacity so we went to an industrial town that's in the heart of china's steel country to find out for ourselves and we went to a town that back in november the town declared itself steel free after the authorities checked the last remaining steel mill there and verified that it had been officially shutdown. now when we were on the ground we found that the 8 steel mills in the town had been completely closed but as is often the case

in china, not everything is as it appears because what we also learned while we were there is that the company that owned the steel mill organized a deal with another company in the south of the country to transfer the capacity to that other company so this is the reason why chinese trading partners, including the white house get so frustrated with the chinese. because they don't feel that beijing is doing enough and in this particular instance, we found that the authorities were reducing the capacity in that particular area but then shifting it elsewhere in the country. so if you look at some of the government statistics, according to the government statistics even though china reduced by 50 million metric tons last year, total produce increased. that means the program isn't having the effect that the u.s. or china's other trading partners want to see melissa.

>> fascinating thank you so much. really appreciate you joining us here with that story okay now over to the bond market. rick santelli is tracking the action at the cme. good afternoon to you rick. >> i'll tell you what, eunice's report is key. not only transferring capacity to other factories but to other countries. remember all of that aluminum that found it's sbie tway into e mexican desert look at that chart and you think we really dropped and indeed we have but it still looks like the tenth day in a row we settle in the 280s the one week chart puts a better perspective. they have their meeting today. they traded from 70 basis points down to 62 they basically covered their whole range in about 45 minutes. look at the chart starting in june of last year. a very key level and let's look

at the dollar index. euro currency had a lot of volatility still where it was yesterday not a lot of big moves but from the dollar index perspective the chart is still bullishly intact. back to you. >> thank you coming up a good old fashioned debate on disney is the espn decline killing the company or will the fox deal save it? will you be in or out on a new start up that claims to have a better tooth brush power lunch is coming right power lunch is coming 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. with the right financial advisor, life can be brilliant.

elon musk sent a number of tweets to president donald trump and the president responded. here's the tweets he wrote to mr. trump, do you think the u.s. and china should have equal and fair rules for cars?

meaning same import duties, ownership con trastraints and or factors. for example an american car going to china pays 25% import duty but a chinese car coming to the u.s. pays 2.5% also no u.s. auto company is allowed to own even 50% of their own factory in china but there are five 100% china-owned ev auto companies in the u.s. i am against import duties in general but the current rules make things very difficult it's like competing in an olympic race wearing led shoes within minutes of sending those tweets addressed to donald trump, the president responded saying china has been asked to develop a plan for the year of a $1 billion reduction in their massive trade deficit with the united states. our relationship with china has been a very good one and we look forward to seeing what ideas they come back with. we must act soon for some point of reference, last year, in the united states, we imported just over 23,000

vehicles that were built in china and then sold here in the united states. tesla doesn't break down it's sales by country but it's widely estimated that they sold about 20,000 vehicles, vehicles that were built in california and then sent over to china and by the way, those buyers, guys, they had to pay a 25% tariff in order to buy those teslas. back to you. >> just quickly, tesla just recently, correct me if i'm wrong, came up with a joint venture to manufacture in china, to avoid the tariffs. >> nothing is coming up. >> nothing is finalized. it's expected. >> could this derail that then >> at some point he has to make a decision china is the number one electric vehicle market in the world. if they want to ramp up sales they're either going to have to have buyers there agree to a tariff or strike an agreement or joint venture with a chinese auto maker to build in china and

that has been something that elon musk has been hesitant to do for all the reasons in the past when it comes to companies dealing with chinese organizations. >> thank you appreciate you bringing that to usment time now for power pitch where entrepreneurs have 60 seconds to convince a panel of experts that their business has what it takes to be the next big thing. >> grush is parents and dentists that struggle to get our kids to brush their teeth. dental disease is the number one disease facing children today. kids hate to brush their teeth because they can't visualize the results and they're not incentivized to brush properly that's why we invented and patented grush it's the smart tooth brush that knows where it is in the mouth while the kids are brushing. it connects with mobile games that transform brushing into a fun experience and lets parents track the results. you see, parents can use their

mobile device and see howell their kids have been brushing, track their scores and dentists can see what their parents are doing in between visits. we're selling on amazon right now. the price is around $35. it's selling great and we have wonderful reviews. grush for adults will be released in early 2018. >> you just saw grush's pitch. now let's meet the panel joining us angel investor. venture capitalist david wu and from seattle, start up adviser and venture capitalist matt burgess. you're in the hot seat. >> your delivery was great and i loved hearing about the problem but i would have liked to hear more about the backgrounds and the traction to date so i'll give you a b on the traction front, what can you tell me about revenues generated and units sold so far. >> since our launch last year we sold around 50,000 units with over $1 million in revenue we're selling on amazon and our website and this coming year we're focused on expanding more

to dental clinics and large insurance providers. >> i'd like to hear about how it can be a strong business so i give the pitch an a minus. what is the optimal age range for this product >> for the kids version we have 3 to 13. >> i want to hear more about as they said the team, the business model, how it's going to scale but that being said it's a good pitch, your passionate about it. i'll give you a b. feedback from customers. some of them are saying the app doesn't connect to the tooth brush. the on button doesn't always work are those valid concerns and how are you addressing the feedback. >> right now we have 4.5 out of 5 stars. for any customer that couldn't connect or had issue with the software we had a quick software update we don't have any issues with motion tracking or connecting with the bluetooth everything is working perfectly now if you check the reviews. >> what do you say to the parents of a 4-year-old that really aren't comfortable with their child bringing their phone into the bathroom with them every time they want to brush their teeth. >> this is an educational game

that gives them healthy brushing habits for life so this is a good use of technology to improve brushing habits. >> we heard what ethan had to say. now we want to know if the panel is in or out. >> i love the concept around this and i think the team behind it is absolutely fantastic but i personally would like to see the consumer demand over a longer period of time before i make a decision on this so for now i'm out. >> this is a great idea and you have really cash efficiently launched a product and got to your first million dollars of revenue but still feels more like a product than a business to me. >> you're selling to a customer that only needs this during a tight age range and also selling a consumer product that's potentially finicky although you're addressing those issues but for those reasons, i'm out. >> all right that is zero ins and three outs. ethan, what's your reaction? >> to address that, we do have the adult version coming out

there is demand. parents struggle with their kids over brushing. we're making brushing fun for kids and giving them healthy brushing habits for life. >> thanks to our panel list and that's today's power pitch. >> okay. well, you heard what the panel had to say now it's time to out if yo are in or out on grush follow the conversation on twitter using the #powerpitch. for more, head over to powerlunch.cnbc.com. >> a quick clarification a tweet from the president we showed a few moments ago was actually from yesterday, not moments ago. we just wanted to clarify that >> and coming up, bull versus ar on disney "power lunch" will be right back changed the game for us. we had this plan to go to the hottest place on earth, harness the energy from the sun to develop popcorn. we thought we had the right equipment, we quickly realized we needed more.

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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. disney holding its annual shareholder meeting today in houston after relosing a slew of blockpusters but will its newest movie "a wrinkle in time" keep the stock going? ring the bell because it's time for good old bull/bear debate. our bull is laura martin who says the disney/fox deal is a dream come true.

our bear is brian, he's gall got a sale rating on the stock laura, you really like the idea of the ott offering. and what that could bring from disney from the shareholder meeting today, we're getting glimpses of what they could do they have enlisted jon favreau to produce a star wars action series specifically for ott are you getting more detail on what the overall offering will be >> yeah, i think we are. i think ott is really a necessity for these traditional tv creators because they need the data, about what consumers want to view, and they need it for advertising targeting as well more data about -- they're going to launch it and then next year, they're going to launch -- >> laurie, we're having difficulty with your phone connection so we'll try to iron that out. in the meantime, i'll go to brian here brian, you have the sell rating on the stock is it the premium at which it trades versus its peers?

>> yeah, i think that while disney is doing some wonderful things strategically, there's lots of benefits to point to with the fox transaction, i think there's a lot of durabilities that they're bulding into the business by focusing on direct to consumer models all good stuff, but the problem is the core business and the media networks in particular is going to look an awful lot worse five years from now than it looks today. when you look at how dependent they are on sports and sports rights in particular when you get to the next round of renegotiations on major sports rights, we're looking at 10% or 15% annual inflation because you see more competition from facebook, from google, from amazon and others and i think that you're not going to see nbc won't let up, foch won't let up the united states, even after the transaction, so you have a weak underlying business from a cost perspective. advertising for television is not going to grow again. i don't believe it will grow again at a national level. that's more about the health of

marketers who dominate television it's got nothing to do with ratings. and i think that's another headwind you have espn in particular, really dependent from a margin perspective on sportscenter. how many people depend on sportscenter for sports highlights i mean, i'm sure some. but you don't need it. and so that's why i think we're seeing declining ratings on that piece of the business, too that would have been a great high margin low cost business. >> laura, you are in the bull in this scenario that we're pulling out here a wrinkle in time has not gotten a lot of strong reviews so far disney spent a lot of money. does that worry you? >> well, can you hear me better now? >> we can. >> i want to say y am a super fan of brian he's like my favorite competitor, so i respectfully disagree with him, but i love him. what i think brian is missing here is the film business. i have never seen a film streak like this. it is arguable that pixar, lucas

films, are the three strongest studios and they're all owned by that company and that is super charged by a consumer products business at the wall disney company that does $5 billion. the next closest is half that. a 40% profit margin. >> we're going to leave it all laura, thank you we're having difficulty with your connection still. laura and brian. big afternoon planned at the white house. the president set to sign new tariffs on the steel and aluminum industry. second hr ouof "power lunch" starts right after this. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow.

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i'm melissa lee. beans, buries, and birdb by they could be at the center of a possible trade war. the president set to announce a decision on tariffs this afternoon. will other countries fight back? who's afraid of a trade war? the russell 2000 has been outperforming the broader market plus, millennials go shopping. an inside look at the brands and stores where they're spending their money, and the stocks that

could benefit. "power lunch" starts right now >> welcome to "power lunch." i'm courtney reagan joining the team here today. the markets surged in morning trade, but dipping into the red. the dow now negative after being up as much as 149 points at the high, you can see, the dow down about 38 points here. the s&p 500 is slightly higher, and nasdaq is higher by about six points and change. utilities and skurm staples are the leading s&p sectors. energy and financials, though, are your laggards. ibm, intel, chevron, united health among the stocks dragging down the dow at this hour. helping to keep the nasdaq in the green, express scripps we know there's a deal there, wynn resorts, and ca technology hitting a new high >> thank you we're a little more than han hour away from president trump's tariff event, and even alt this 11th hour, there is still no certainty about what the specifics will be on these new taxes. our team is all over the story kaley tausche outside the white house, ylan mui following house

speaker ryan in an event in atlanta, and john harwood in washington kayla,io go first. >> tyler, the white house has officially announced that at 3:30 p.m., the president will be signing two proclamations as a result of the 232 national security investigation that has been going on since april. they will institute new tariffs on steel and aluminum, and the president, i'm told by sources in the roosevelt room, he will be flanked by workers from the steel and aluminum industry that will benefit from these new tariffs. we still have a lot of outstanding questions at this point. first, when will the tariffs take effect. at the end of january when they announced tariffs on washing machines and solar panels, those took effect within about two weeks from that announcement we'll wait and see what they say with regard to that. then, how long will they take effect will they be in place for the foreseeable future or for roughly a year and then the administration will reassess and see whether they have been

effective at reaching some of the metrics they're looking at to restore capacity for the industry finally, what countries will be excluded from these tariffs. the president this morning in a cabinet meeting reaffirmed that he will exempt canada and mexico but also said this about other countries that may be exempt >> we have other countries that are very much involved with us on trade, but also our military and working together with military and we'll be making a decision as to who they are we have a very close relationship with australia. we have a trade surplus with australia. great country, long-term partner. we'll be doing something with them and other countries >> the president is instituting these tariffs as one way to narrow trade deficits with certain countries and into hans the production of steel and aluminum here in this country. the interesting needle that the white house will have to thread

on this for other countries seeking an exemption is whether there's an exemption on a national security basis. they must fit through that lens if they're to be granted such an exemption. it's unclear exactly which countries could claim that based on what the administration has found. >> thank you >> meantime, dissension in the ranks. 1ver 7 house republicans signing a letter to president trump urging him not to follow through with his plan to impose broad tariffs on steel and aluminum. ylan mui is live in atlanta with more on this >> melissa, it was a very public and very unusual rebuke of the president by congressional republicans that led a warning that broad tariffs could have unintended negative consequences for the economy and its workers and instead, it urges a, quote, workable, targeted approach. that's very similar to the surgical strike that house speaker paul ryan has been calling for. also today, senator orrin hatch spoke with president trump over the phone about this very issue. so it's becoming increasingly

clear that gop leadership and the white house are no longer working from the same playbook ryan is out here in atlanta today to speak at an event at home depot's headquarters. home depot being one of the companies that had given its employees bonuses after the tax bill passed. it also lowered itseffective tax rate from about 40% to just about 26%. but home depot could also be impacted by this new trade action, and it's still working through the possible impact of earlier tariffs on washing machines a company spokesperson tells us it will review any price increases on a case-by-case basis. guys, house speaker paul ryan scheduled to speak here at 3:30. exactly the moment that president trump will be signing the trade actions, so we'll let you know how he responds >> very interesting, thank you so much. you'll have to keep us honest on the conversation that happens in atlanta. >> for more on what this could mean for president trump's agenda, let's bring in john harwood. hi, john >> hey, courtney >> how are you

so what do you think is going to happen here at 3:30 and what that means for everything else that this white house want to get done we have a lot of trading partners that could be pretty upset about this announcement that seems like it's coming at 3:30 >> the watch word for this administration right now is uncertainty. the white house policy process is chaotic we had mixed signals on exactly what the president is going to do and when. as kayla was talking about, potential exemptions for canada and mexico, but on what basis? is it exemptions to permit renegotiation of nafta in which case you can bet that the canadians and mexicans are going to have difficulty going along with a loaded gun pointed at their head on this subject is it on the basis of national security because they're friends and allies of ours if so, you exempt canada, then you have a much less effective tariff is this a symbolic policy or a

real policy? all of these things are up in the air. it splits his party, as ylan was talking about, resistance from republicans, and it potentially could counteract the benefit of the tax cut that republicans have been wanting to mount their campaign on. you know, they're in a very difficult race to hold on to both the house and the senate. tax cuts are what republicans are counting on to be their salvation in a difficult political environment, and the more the president steps on that message by talking about tariffs, which could have an adverse effect on the economy, the more hobbled they are as they make that argument. >> we're talking, john, about the gop and the rift within it but what if any political advantage is there for the democrats in congress or those who are campaigning as a result of this tariff that may be put on steel and aluminum? because traditionally, unions and workers allied with the democratic party and now at

least workers in these industries seem to be more favorably inclined to the gop. >> yes, but you also have a large number of union workers who are not in steel fabrication but are in steel consuming industries like automobile, who are going to face higher prices as a result. so labor will be split on this there are segments of organized labor that are for it. but democrats are going to use to split within labor the split by geography on the economic effects and the fact that president trump's proposing it and republicans are upset to simply foment discord in the republican ranks and try to use this as an argument to say washington is a mess under donald trump you need to change to a democratic congress. >> all right, john, thank you. john harwood in washington for us >> well, one group watching today's event very closely, ceos of america's steel and aluminum industries jackie deangeles is in america's

last remaining high purity aluminum facility with that story. >> good afternoon for you. as we're all awaiting the details coming out of washington, the steel and aluminum industries are ready for the green light. here at sentry aluminum, the competition in the field has brought their capacity down to 40%. they make high-purity aluminum the end product for that, the defense sector so this is a very key subject right now. i want to bring in to talk a little more about it president and ceo mike bless great to see you as we're waiting for the news out of washington, tell me what these tariffs would do for your business >> they would be extraordinary for our business as we have been saying, as long as the final order from the president, which looks like we're going to hear this afternoon, is in line with the objectives in the commerce depart report, to allow the u.s. production to be brought back online, you're going to see the plant behind you go from 40% of capacity where we had it since late 2015 back to 100%

that will mean we'll hire 300 persons. and we're going to put over $100 million investment into the plant to get it going again and to improve the technology. >> what about the opponents who say the risk of a trade war is not worth the benefit of what you're describing here >> we think, jackie, here, the hysteria over the so-called trade war has reached frankly above a fever pitch. we're not sure where the trade war is coming from for example, earlier on your show today, this morning, there was a gentleman from the beverage industry on and in fact, he said a very important point, which is in the beverage sector ahone, which has gotten a lot of attention here, 90% of the aluminum is recycled alumin aluminum it's not made in plants like this, which is one of the wonderful attributes of aluminum he correctly said the aluminum from plants like this is a national security issue. we're not exactly sure what the trade war is all about >> let's talk about the high purity aluminum. where is the united states getting it from now? and how are you going to ramp up

to try to meet that demand >> yes, so the facts are this plant at full production can make more than about one and a half times of high purity metal that our dod and commercial aerospace sector needs today, most of the metal is coming from places like the persian gulf and from russia and a little from canada we'll be able to supply a good portion of this when the plant is up and running at full capacity >> the defense aspect of this, how important is it to you, to the country, to the employees who work here to supply that industry >> it's a point of pride with the employees here i know it is we talk about it quite a lot here, but it's bigger than just that we say national security here, but as you know, section 232 has to do with economic securityas well as strict military applications and so you have to wonder, applications like our nation's electrical grid, which needs primary aluminum do we believe as a nation that's important to have an indigenous supply

yes or no. >> thanks so much. back to you. >> all right, thank you very much >> after being higher for most of the day, stocks are now in the red, as you see on your screen just by a little bit for the dow. let's bring in chris cordero, chief investment officer with region atlanta, and quint, managing director with jewel financial. quint, tell me, which is it? >> it's jewel. it's jewel joule. >> all right >> that sounds beautiful quint, we have been talking a lot about a couple metals, aluminum and steel you want to make a case for a third metal, gold. why? >> yeah, because everything we are talking about has a root, and that root is that it's founded in inflation, and we're going to be seeing that. and i'm not a gold bug by any stretch of the imagination, but all that we're talking about, whether it's tariffs or raw material prices or simply demand coming from infrastructure projects or bringing plants

online like the last guest said, all of that will lead to higher prices we're seeing it represented in the cpi right now, and the best hedge against inflation is gold. i think our viewers would do themselves a favor allocating a portion of their portfolio into gold, and again, it is an investment here. i'm not a gold bug it's an opportunity right here right now. >> what's the best way, quickly, to in your view, buy gold if i'm persuaded by your argument >> i prefer the etf gld. it keeps it simple and liquid and it's easy to purchase. >> chris, i want to ask about what's going on in the markets right now. we're at session lows, and granted, we're down by just a handful of points across the board, but we're seeing this leg lower in oil we're seeing pressure on interest rates as well is it reading too far into the tea leaves if we say there are concerns about global growth because of this tariff issue and possible trade dispute >> i don't think so. i think you have concerned over

it, but are they founded concerns the tariff we're talking about is going to have a small economic impact, but what it really does, it's a signal it's a signal, trump is giving a signal to the world that he wants to negotiate harder on the u.s.'s behalf. we'll see a little later on when we see specifically what happens, but it's enough to spook the markets and enough to drive oil down because thinking that tariffs overall are bad because they just hurt economic growth just about any economist will agree to that. and so what this is, in my view, is really just how are they going to negotiate what is the president going to do with this, and how is hao going to use it to negotiation >> usually, with you want less of something, you tax it if you want less trade, you tax it more. >> exactly and i agree, what does the tax do in the end, it, if kept in place for a while, it will stimulate inflation. because everything we do here will cost a little bit more. and so that's why in looking at some things that i like is

foreign stocks, i think it might seem out of character to think, well, foreign stocks will do better yeah, because if the u.s. has inflation, that means it's going to cause the dollar to go lower. you're better off in foreign investments than in u.s. investments. >> how does the jobs report we're going to get tomorrow and potential new numbers on wage inflation tie into everything we're hearing today with tariffs? what going to be the predominant market story tomorrow, tariffs or what we hear out of the jobs report and fears of inflation, which are also sparked potentially by tariffs >> i think we'll hear positive news with the jobs report. i think the economy will be what the predominant news is. this is the volatility that we see when we see rotation and that is money moving from asset classes that have been doing exceptionally well and are now probably very overvalued going into areas that are providing value. your materials, your inflationary, your reflationary type names i think investors to have to take a deep breath this is going to provide an opportunity. i would like the steel stocks, for example, that are pulling

back right here ahead of this announcement this afternoon, they're offering opportunities for entry. the numbers are great. the value is there investors need to pull the trigger on some of these names >> thank you chris and quint. >> here's what's coming up on "power lunch." millennials and generation z changing retail landscape and the way americans stock. s which companies are positioned to thrive. >> can u.s. trade partners threatening tariffs, we take a look at which u.s. industries could be at risk plus, kevin o'leary weighing in on potential tariffs and why one of his favorite sectors seems to be tuning out all the d.c. noise.

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. amazon is a clear winner in top brands for generation z and millennials. joining us is an analyst who wrote part of the report john kernan, manager director at cowen. i'm not supersurprised about amazon being popular, not just with millennials and genz, but also demographics. i am surprised about the decline in nike and calvin klein is this because of the '90s fashion, logos coming back in. is the the kardashian campaign is the lasting for a name like calvin klein >> thanks for having me. in terms of some of the survey results, some of them were intuitive like amazon dominating

consumption patterns, but you know, things like calvin klein scoring 2x higher, it was surprising pvh owned calvin klein, one of our top picks. we raised our price starg target on the stock $265 today. it's doing smart things. so we're not surprised they did well we like the stock here >> what about kohl's that was kind of a surprise, the top department store that surged ahead. shares are lower today, about 4%, but what did millennials and gen z see there? >> my colleague oliver chen covered kohl's, but they did well on our survey it does make it interesting as it relates to its competitive set in the department store channel. >> you raised the target price on pvh today

what percentage of sales is calvin klein, and is it a calvin klein call or the strength of all the various brands >> they have a portfolio of blands, and they're all doing well they also own tommy hilfiger the margin expansion of growth they're putting up domestically and international, particularly in europe, creates probably a mid-teens earning over the next three to five years. they generate a lot of free cash flow, so they can buy more brands as well so pvh sets up well here valuation is attractive. earnings and free cash flow, and we think the stock is going to go much higher in 2018 >> when i think about this report, i'm trying to tie a couple things together here. amazon is a shopping platform in a lot of cases yes, there are amazon branded products, but you aunch are going on amazon to buy other brands calvin klein launched an exclusive line of underwear over the holiday season on amazon should this send a message to brands, if consumers are going to amazon, your brand should be there? >> yeah, that's a good point,

courtney clearly, amazon, the scores they put up with gen z and millennials in terms of searching for brands on amazon and shopping for brands on amazon, and in the end, looking for more on amazon, i think clearly shows that brands are going to have to develop their first-party relationships with amazon more directly that's one of the key conclusions myself john blackledge who covers amazon, and oliver came up with the the collaborative report amazon is getting bigger, faster, and brands have to figure out a very direct first-party relationship with amazon in the future >> got it. thank you so much for joining us, john thank oliver and john for their work on the report as well appreciate it. >> all right, the williams sisters fighting for pay equity on and off the court we will hear from venus and serena next on "power lunch.

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to grow your business with us in new york state, visit esd.ny.gov. the corporate world. takes place in the world of sports too tennis stars venus and serena don't always get the same prize money as their peers >> they have really pressed hard for this in fact, venus famously went to wimbledon and said there should

be some parity in the kind of prize money available for women and men tennis players i got a chance to sit down with the williams sisters for a rare joint interview to talk tennis and careers. they started their week in new york at madison square garden for tiebreak tennis. a sudden death competition that pits eight top tennis players against each other for the sisters, this is an exciting chance to try a different format and get in some practice serena plays in indian wells tonight and she just had a baby in september >> so i just work everything around it. i know i like to be done at a certain hour and i like to be home at a certain hour at least, you know, four or five times a week after that, i have two days where i do work. >> let's talk about the issues that face women in the professional world one is equality in pay i know both of you have been very committed to seeing improvement on that front.

venus, can you give me some perspective about what you think needs to happen to make sure that women and men are paid fairly >> i think there's a lot happening. there's a lot more thad needs to happen of course, in women's tennis now, we have equal pay, but around the world, there's still discrepancies. as much as i can be a part of it, i am we have to have women fighting for it and men advocating for it as well. >> venus is the number five top paid female athlete in the world. serena grabs the number one slot on forbes overall top paid athlete list, venus doesn't break the top 100, and serena ranked 51st behind five other male tennis players. roger federer make $74 million than serena williams did last year she says this is where the endorsements really come into play, and there is no parity there. >> wow, incredible a lot of differentiation

>> europe is considering new tariffs on u.s. products like orange juice, peanut butter, motorcycles, even kentucky taaty ri reliortaffs could mean to business. that's straight ahead on "power lunch. you know what's awesome? gig-speed internet.

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hello, everybody i'm sue herera here's your cnbc news update at this hour. at a white house cabinet meeting, president trump joking about top economic adviser gary cohn leaving, saying he still likes him even though he's a globealist >> he's going to go out and make another couple hundred million and then he's going to maybe come back. he might come back, right? we'll be here, another seven years. hopefully, and that's a long time but i have a feeling you'll be back >> former trump campaign chairman paul manafort back in federal court today. this time in virginia. he pleaded not guilty to a second indictment and is seeking a jury trial the judge set a july 10th trial date for manafort on tax and bank fraud charges and christy's is announcing the personal piano or carole king will be auctioned off in new york on april 20th it's estimated between $40,000 and $60,000 and will be on view

to the public a week earlier that is the news update this hour courtney, back to you. >> thank you very much >> the oil market is closing for the day. let's go to dominic chu at the commodity desk >> prices for west texas intermediate crude oil falling again for a third straight day that means we're on pace for the second straight weekly decline in oil prices. we'll see what happens tomorrow. today's action driven in part by a rising value for the u.s. dollar as well as lingering concerns about supplies of oil, given yesterday's government data on inventories. that making u.s. oil relatively more expensive because it requires buyers to convert to dollars. you add some of the rising fears about possible import taxes and possible etaliation from other countries leading to a possible trade war, and you have a recipe for nearer term price declines like we're seeing so far today some traders are watching the key $60 per barrel level as a key towards price action in the coming days and weeks.

we'll see if it holds today. >> thank you very much >> in response to president trump's proposed tariffs on steel and aluminum, countries around the world suggesting they may impose retaliatory tariffs on american goods. which industries could be targeted landon dowdy joins us. aditi roy reports for us from san francisco. landon, let's start with you they're threatening bourbon? there they're threatening the bourbon. if the eu retaliates against the u.s., it probably won't be against u.s. steel because the eu doesn't import much steel from the u.s it's actually less than 1% for the biggest economies. a more likely target, high profile consumer products from states with political connections, wisconsin, the home of paul ryan, is home to harley davidson the company relies on europe fo 16% of its sales and wisconsin is the largest producer of cranberries. the u.s. exports about 95 million pounds of cranberries to the european union each year second, kentucky with bourbon,

another target, the home of senate majority leader mitch mcconnell and firms which give 26% of its revenue from europe peanut butter may also be on the list jm smuker has its biggest factory right there in kentucky, and one more, florida, orange juice. another mention on the retaliatory list, pepsi co owned 15% of its sales from europe we'll see how europe reacts when the president makes his announcement >> thank you >> china could also be fighting back by targeting agriculture. edyta roy is in san francisco with the most vulnerable tariff target >> hi, there, courtney that's right china is the top importer of a lot of u.s. adds and soybeans is at the top of the list china is highly dependent on soybeans the u.s. exported 14.5 billion dollars worth of soybeans to

china between september of 2016 to august of 2017. that's according to the usda that accounts for a whopping 61% of u.s. soybean exports. analysts tell me china could respond to u.s. tariffs on imported steel and aluminum by buying their soybeans from other top producers like brazil, which also supplies china with most of its soybean imports, but some analysts say it might be unlikely because even though brazil had a bumper crop this year, they don't have all the supply to meet chinese demand, and china is heavily dependent on soybeans. soybean futures have been up, analysts tell me that's on news of the argentinian drought that's a separate issue. also speculation about commodities like hogs cotton and the eu imposing tariffs on orange juice it seems like traders are focusing for the ag products on soybeans >> very interesting stuff. a lot of questions about will chi china, won't china

landon, i want to go back to sort of some of your thoughts and how it seems so mch like a messagic target, going after wsk whisk because of paul ryan, and jeans, denim has been thrown out there because it's such an american product >> exactly what i was going to say. you're not trying to get the president. you're going straight for america with the bikes and booze and, you know, this also isn't the first time this happened this happened with bush in 2003. he imposed it, took it back, and you know, he had prepared to do it then he saw it was going to cost too much and backed off on that tariff these companies are speaking out for sure brown foreman reported yesterday and they were like, you know what the ceo said if this were to come to fruition, it would obviously be a negtchb thing for our company. so they're speaking out. they're not happy about it we'll see what happens >> we'll see what happens. >> maybe we can send them a case of maker's mark and they'll reconsider this is a gesture of goodwill. >> landon, aditi, thank you very much we appreciate it >> as we mentioned, soybean farmers are worried about the

new tariffs and what they could mean for sales on the phone, kevin sales. also serves as the secretary of the american soybean association. mr. scott, welcome good to have you with us >> thank you, tyler. >> how worried are you that soybeans might be targeted for retaliation if the president slaps tariffs on, for example, imported chinese steel >> well, it's certainly a big concern of ours. we have 60% of our soybeans are exported, and a good lot of that comes from the central part of the country where i live we have less feeding and so forth, so exports are critically important for us and you know, we have $14 billion worth of soybeans that go to china on an annual basis that would be a huge impact to farmers. >> so what would it do to the prices of american soybeans? i guess it all depends on what the level of retaliation would

be we produce a tremendous number of -- amount of soybeans high quality products we send to china and other countries. would it make us cost noncompetitive >> well, that would be the risk. and you know, asa has worked on our relationships, and we have developed them over the years with importers, processors, and end users, and we really don't want those to be damaged the 232 tariff has the potential to do a lot of damage to those relationships. and united states soybean farmers would have to deal with that for a long time >> now, i'm expecting -- i suspect you have been in touch with your lines of communications in washington what kind of, both on capitol hill and in the executive branch who have you been talking to, and what have they been telling you? >> well, we have, of course, talked to our local legislators. and those who are usda people

who are handling a lot of our issues internationally most of the people we talk to are, of course, pro trade. and they want these lines of communication that we have developed over the past to stay open and be effective. and we want that also. and we will push hard for that we're hoping that the people who import our soybeans will still needs those and hopefully will not retaliate against us but that has been mentioned in their rhetoric so far. >> is senator thune with you on this >> senator thune is with us on this, yeah >> and the secretary, i believe it's perdue? >> yeah. absolutely our secretary is very pro-trade. and he's coming from an ag background, so he knows the

importance of trade with our partners we worked in the past on the nafta agreements, the korea free trade agreement, the peru, all of those things have been linchpins in the asa's -- what we do on a regular basis and it will continue to be very important to us to develop those trade relationships. and we won't stop. and we'll just have to work harder on it to make sure that we don't lose ground >> right kevin, love my edamame appreciate it. kevin scott. >> eat it up thank you. >> you bet >> very funny. i like edamame too that's a soybean, isn't it >> as a reminder, president trump will make his announcement on tariffs at 3:30 eerp time we'll bring it to you live, we'll have reaction all the way around it as well. >> who's afraid of a trade war apparently not small caps. russell 2,000 up nearly 4% in

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$750,000 policy for under $22 a month. give your family the security it needs at a price you can afford. all right, less than an hour from now, president trump expected to make official those steel and aluminum tariffs he talked about last week all eyes now on whether the president will include

exemptions for canada and mexico joining us now to discuss this is someone who has been very vocal on this issue and was right here in this space about a week ago, kevin o'leary, chairman of o-shares etfs. great to see you back again. i was very struck earlier in our broadcast when robert costa, very respected reporter with "the washington post" and contributor to cnbc and nbc news, said in his story today, trump told lawmakers while people might expect his biggest aggravation on nafta and trade to be mexico, he sees canada as a more vexing foe and that the united states needs to be tougher. what do you think of that, and do you think it's accurate >> it is accurate because although a lot of people think that the logistics in car and automotive manufacturing is very high with mexico, it's nowhere near as intricate as it is with canada the average chassis of a truck or car goes over the canadian border as it's being assembled in detroit seven times the idea of taxing it at 25% for

the steel and 10% for the aluminum component is ludicrous. it won't happen. there's no chance. so wilbur ross has reflected on this on cnbc in the last two days on the same issue so it's going to be far more complicated to figure out the canadian situation on the other hand, what's also complicated the situation is canada, which used to be the lowest corporate tax rate in north america at 26.7%, is now the highest, with the swoop of the pen of trump's new tax policy, and capital is leaving canada by the billions to come to a lower tax jurisdiction in the united states. it's an ebb and flow situation that the canadians are also concerned about because they haven't been able to adjust their corporate tax rate to be competitive, and 50% reduction in direct investment in canada as a result. that's a problem >> this was a point you made very forcefully last week. money goes where money is treated best, right, kevin

>> tyler, that's what i love about money. >> among other things, i'm sure. but yeah, it goes where it's treated best >> yeah, it's true >> if we put a tariff, as we have on canadian softwood lumber, if we put it on inbound canadian steel, this makes that product for canada, which is 53% of our imports or some such, even less competitive. >> well, let's take a story you just broke a few minutes ago regarding soybeans if in fact china retaliates with any kind of tariff, it could be a marginal tariff, it may not be near 25% on soybeans, guess who grows the rest the canadian farmers and they'll take up that slack they'll increase their production to china by three-fold that's the kind of thing that is the unintended consequences of trade wars so what i think is going to come out of this, it may be a masterful negotiation, is at the end of the day, there's going to be exemptions on canadian built

and canadian manufactured steel that does not have any element or proof of origin on chinese steel. in other words, if the chinese become the focus of the tariff and the canadian manufacturer can prove they didn't originate any of their steel from china, that will go across the border probably unhinged or unattached to a tariff. that's my guess. >> you have put your finger on the issue, which is this idea of transshipment of chinese steel into other places where it's then manufactured, refabricated in some way or another you have been a fan, a sweet spot of yours have been small cap stocks we had a guest on yesterday who made the argument, and i thought rather persuasively, that small cap stocks in the united states that do more of their business in the united states might be indirect beneficiaries if there is a real trade conflict do you buy that argument or do you buy small caps for

completely other reasons >> i was buying small caps origina originally, mining the russell 2,000 for the companies that make money their tax rate was going to go down from 30% to 21%, basically. that was my reasoning. now, all of a sudden, i get a second wind, and this wind is around this fact s&p 500 has 47% of its sales abroad taxed at about 12% on average. 12% to 18%, the irish european tax rate they don't have the major benefit anymore ofthe tax opportunity, which is why i went to midcap, but get this. almost 100% of the sales of small cap in the russell 2000 is domestic you get a vale resorts they only sell in america. or a medical supply, their customers are in the united states they don't have any opportunity to be affected by a countermeasure trade tariff. i'm very intrigued, but remember, you have to buy the ones that are profitable i'm talking my own book because

i designed my own index. i use ousm, but you can buy the ftse russell yourself. >> this means you believe there's limited impact from the trade tariff on the u.s. economy. if you believe the tariffs will have reverberating impacts because consumers will feel the prices are higher, maybe they're not going to spend overall because of the increase. you think that it stays isolated >> no, i hear you. think about this on the margin, let's take canada and mexico it is very clear that president trump, are things going to be better for canada and mexico for six months or worse? i would argue worse. the compromise is not going to be as lucrative as it has been for the last 20 years. he's taking it back in as a result of that, there will also be marginal countermeasures. if you think about the sweet spot of the companies that have none of that to worry about, it's the mid-cap companies in america that pay tax in america for 100% of their earnings and

sell 100% of their products in america. time to bulk up on mid-cap stocks, and the market is telling you that 4% to 5% this week alone, even in very volatile times amarillo, texas, i like des moines i love all amarillo, texas, i le des moines, all of small america because that's where the profits are. they're not affected by the political rhetoric. >> good to hear from you. >> take care. >> you, too. mr. wonderful, kevin o'leary. the original bank etf touching an all-time hire before going negative should you make room for regionals? we'll debate it coming up. where we are ahead of the markets turning. rrorand nasdaq all in positive teity.

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time for trading nation. let's take a look at the kre regional bank seeing a reversal. hitting an all-time high earlier. trading down 1%. the trading nation team is hoor for more on the regionals. craig johnson with piper

jaffray. michael, i'll start off with you. it seems like this is simply all about rates still. >> look, i think it has more to do with that we would continue to own the space. the economy's strong, credit spreads are widening as rates rise, credit spreads rise i think there's a massive tailwind that's gone on and i think they'll be a beneficiary of that. it goes to their bottom line goes right to earnings you also have less regulation. this may be a bit theoretical, but people probably want to see the regional banks do well more than the big banks the big baction have a higher fight alady of them. we think for the near term this could be like 2000 where the banks outperformed and kept outperforming. i think as long as the economy stays strong, rates rise, spreads rise and the tailwind is still there with tax reform, you'll see the whole sector rise. >> craig, where do you see the charts >> we called out one name this afternoon on the kre, so this is

a stock that's broken above resistance at $43. next comes in at $46 still see some upside there. that's technicals. i would point out on the fundamental side that one of piper jaffray's best and brighted follows this stock, overweight rated about 19% total return opportunity here on this stock so, both the technicals and -- >> sorry, i have to interrupt. thanks we have breaking news we want to get to out of washington let's go to kayla tausche. >> reporter: we're getting a report from associated press the tariffs that the president will announce on aluminum and steel will take effect in 15 days. the time in which the solar panel and washing machine tariffs took effect. it's largely in line with what we had expected. but the associated press is reporting, according to its sources, those tariffs will take effect in 15 days and will

exempt mexico and canada we'll get the final details in 30 minutes nor for you we'll send it back to you. >> we'll look for that thank you for that update. kayla at the white house for us. check, please, is next >> announcer: and now the latest from tradingnation.cnbc.com. and a word from our sponsor. >> when markets get volatile, it's a good idea to reduce the size of your trades or at least consider scaling in and out of your positions taking on a position larger than you're comfortable with in order to maximize gains only increases your risk. scaling in and out can help you buy and sell at aslet part of your position at potentially more favorable prices.

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the ibm cloud is the cloud for smarter business. a big event coming at :30. the tariff decision announcement and the president is set to formally announce and apparently sign a tariff proclamation under 232, a national security tariff, if you will. it may well include exclusions from these new tariffs for mexico and canada. tariffs will take effect in 15 days apparently mexico and canada will be exempt indefinitely. presumably to allow time for u.s., canada and mexico to real negotiate nafta. >> we'll wait for the finalization of this, whether or not this report is true. watch the automakers in particular they would have been impacted the most if canada and mexico had tariffs imposed on them,

particularly for the auto parts trade. we'll be watching all these things into the close. >> major averages are higher here with the new developments we want to mention treasury secretary steven mnuchin will join "squawk alley" tomorrow morning, so pay attention to that that's a key interview for tomorrow >> lots to watch thanks for watching "power lunch. "closing bell" starts right now. welcome to the "closing bell." i'm michelle caruso-cabrera in for kelly evans. >> i'm bill griffeth the countdown is on right now. you heard, we think we're about 20 minutes from president trump's meeting on tariffs where he's expected to sign proclamations on steel and aluminum imports we'll bring you live updates on that as we get started here. >> cnbc senior contributor larry kudlow will bring us his instant analysis steve liesman is looking at how tariffs could impact jobs. lein