8:30 p.m. eastern time >> green arrows for most of those markets this morning you can see that the dax is down by a third of the percentage point and others are higher across the board including italy and the political concerns weighing there this week right now italian stocks are up by more than 0.4%. finally, take a look at the ten-year which this morning is yielding 2.8 to 3% >> we'll see you tomorrow. >> national doughnut day >> doughnuts for you ♪ ♪ ♪ good morning welcome to "squawk on the street" i'm david faber along with jim cramer. carl quintanilla is at the conference in rancho palos

verdes, california he'll have an interview with dara kos row shah i had. >> let's take a look at the markets. what do you expect >> a mixed bag it's what i do for a living. >> that and many other things. >> how about that? what do you know there i'll take a guess. i got it right, 2.85 and you can see wti hanging on. >> down hard down hard this week. people -- yesterday oil spiked and oil stocks went up far more than what led the s&p and that was probably a mistake >> let's get to our road map this morning and it does start with trade war fears with negotiations under way and the trump administration considered producing steel and aluminum tariffs on the eu and possibly canada and mexico, as well

this thing called nafta and that takes care of nafta. >> uber is on track for an ipo in 2019. carl will speak exclusively with the company's ceo. take a look at gm shares this morning. they are up dramatically and we will show you why. softbank is investing more than $2 billion in the automaker's self-driving vehicles and we'll get to talk about the soft bank vision fund. don't talk about enough. >> they have a real vision because it's 19.6% of the gm cruise business. >> overshadowed and that's where bonds are trading. >> and we will spend some time on that, but first let's start with the markets overall the stocks are trying to continue an upward momentum from the big rebound yesterday. this morning's data showing consumer spending was up .6% in april and that was the biggest increase in five months. you also saw a drop in weekly jobless claims

heading into the final trading session in may, the 31st, the stocks are on track for the best run they've had since january. >> can we retire that stupidity now? whoever says that -- >> the nasdaq was up 5.6% in may. >> it's cummings or something like that, remember that guy robert frost walking in the woods on the stupid evening? >> all right we're waiting for clarity on any of that news related to trade from the white house that would seem, jim, when it comes, if it comes to potentially have an impact on how we're going to trade today if the eu finds itself with a 25% tariff >> that would be amazing the mexico thing, people are talking about what do we do? i don't know how these things happen, but a lot of people worry about whether toyota will continue to import whatever the heck it wants because they're building them in japan

>> because earlier last week on national security grounds, the administration introduced the idea of a significant tariff on automobiles. >> you can't do that under the wto, but you can invoke national security >> a rather extraordinary series of tweets involving the most major trade policies and that's not to play, okay? i'm kidding. i'm not kidding, the most important trade ever being brought out the same breadth and waiting for the bob iger apology. >> right >> what do we have 8 million autos imported every year >> that's a big number japan -- bmw didn't play by the rules. mercedes didn't play by the rules and toyota didn't play and nissan hasn't either, meaning you're not supposed to build plants in mexico

you're supposed to build plants in the united states and they didn't play ball and the president is vengeful when it comes to stop building its plant. >> if we do get these tariffs in the eu and a failure there to somehow negotiate some sort of reciprocal agreement and what they're allowed to have accomplished without -- what do you believe the response will be they talked about putting a tax on things like whiskey and teens. >> it's kind of a -- look. the president wants a tariff, and i think a lot of people feel that it is unfair that we let them do whatever the heck they want, and they put a tariff on our car. >> you're talking mexico, and i'm talking france -- >> eu is on the cars >> you said nafta. >> no, including nafta it con flights the issue.

nafta is a totally different issue from europe, but the fact is the european car companies have been the biggest skirter of the rules by building the most recent bmw-mercedes plants are in mexico and that was directly in the face of the president and the president does not like that. >> right >> he's not looking for a tweet apology. he's looking for a wholesale dismantling of the way that the european companies and the japanese companies have gotten around by using nafta. the peso is where it is and you -- >> we keep moving forward on trade. moving forward is one way to put it >> in terms of tariffs with both our allies and frenemies if you want to call that, china, what is the impact on the overall -- lighthouser to a certain extent, not kudlow

not mnuchin. >> correct >> wilbur ross is in the light houser camp, isn't he? >> what's the impact on the stock market what do i do if i'm an investor? do i care? do i worry about consumption trends >> do i worry about a real -- how do i play? >> there are two things, from geopolitical, you absolutely should be worried, but short term, that's all we get. when would be hurt the most by this >> a company based in detroit. general motors david, softbank. >> and i know, we have to get to that first let's get to eamon javers and see if he can make sense of any news we may get. eamon, what do you know and what can we expect out of your part of the world >> good morning. we're monitoring a conference call for 9:00 a.m. and they just picked up the phone on the

conference call. the content of the call will be embargoed for the plan until the end of the call and i can tell you as soon as that is complete we can bring you up to speed on what we know whafs told this morning is it is 99.9% likely that the president will, in fact, impose those tariffs on canada, mexico and the eu in terms of steel and aluminum, that the announcement was likely scheduled for this morning and that the united states expects the eu will retaliate for its actions today. what we don't have is official word from the white house and that's what we're waiting on as of right now you know there's intense debate behind the scenes inside the white house about whether or not this is a good idea. we'll wait and see whether the president himself makes this announcement or whether he leaves it to the commerce department to do that. we are expecting it shortly, but i am told that it is always possible that the president changes his mind right up until the last minute and we'll monitor this on a second by second basis >> so we'll be coming back to

you, eamon as warranted. thank you. >> the europeans, i don't think they know what to do i think they were taken by surprise they were talking about whiskey and trying to hit senator mcconnell and that's bourbon it got the wrong brown spirit. >> manny was on "mad money" talking about the incredible sales, calvin klein and denim. whatever the europeans are doing they're confused because they've never seen anything like this president ever they are so over their heads versus this guy. italy, no, because they don't have a government. i don't know, whatever is going on there >> are we worried about italy? >> we were never worried about italy. >> only the people that come on and try to scare you about italy. >> when their two-year moved by 140 basis points in a day? >> go check into the overlook hotel if you want to get scared, lloyd. the problem with all of this stuck is it's very difficult to relate. >> to relate >> to relate because we have a

banking system that has too much capital and they have a banking system over there that doesn't have enough. deutsche bank hada meeting yesterday, and that's one of the most solvent banks in europe, so that is -- >> that's saying a lot >> some of the swiss banks which are opaque unicredit in italy is a bank where you can leave money overnight. >> at least one night. >> yeah. one night. the other ones are tougher. >> got it. >> because you have to be worried that the fbi see over in europe is not as good as their fdic. >> no, it isn't. as we pointed out many times they did not take the markdowns that they needed to, and they didn't have the stress test that people believed in, and any number of reasons and we did do things better than they did and they capitalized in the banking sector and took the hits >> it's hard to slam wells fargo

in italy because wells doesn't have -- pnc was pushed hard and pnc's quarter wasn't that good >> why do we have to move one? this is an interesting discussion. >> we have people in our ear to tell us to move on >> no. i didn't go to college to -- >> we have to get to carl. he's in rancho palos verdes and he woke up very early and we have auto news coming up from a pair of billionaires, $2.25 million they'll invest in gm cruise. warren buffett considered a multibillion-dollar uber investment and there is carl at the conference and he just interviewed uber's ceo over to you. >> yeah. a ton of news. the gm softbank news today autonomous is happening very quickly and we talked to dara khosrowshahi yesterday and one,

they're on track for an ipo in 2019 and still needed a cfo and margins improving and better balance sheet, he argues and then the news that buffett and uber held discussions earlier in the year about an investment, but the talks failed dara acknowledged that it would be a departure for buffett, but it might be a bit of a portfolio diversification play and he definitely held out the possibility that talks could resume take a listen. >> and what i'll tell you is that i'm a giant fan i'm like a warren buffett fan boy for many, many years and one of my business goals in life has been to get warren buffett to invest in something that i'm involved in and so far i failed. so maybe, maybe one day i can convince him that, you know, times would be right and he would be willing to honor us with an investment it hasn't happened and he's, i think, warren can invest anywhere, any time >> david, the other big news, of

course, randall stevenson of at&t if a government wins? i don't want to go there and asked about sprint and he said they had a hill to climb, in has words and the doj decision did not surprise him and reiterated this vision of pairing and the ad inventory from the likes of turner with all of the customer data over at at&t and said we're on the cusp of very big corners in technology, which of course, we've talked about for a while here, that are going to change the ad-supported business model over the next five to six years. listen to that >> you're seeing a lot of things play out that are following kind of a set formula and that is nobody really knows what the future's going to look like five, six years from now, but i think the fact that most people are making is premium content is going to be very, very relevant five or six years from now a lot of bandwidth is going to be required to make all of that happen and there will be a new kind of business model

surrounding this particularly as it relates to ad-driven type business models. >> so it's interesting, guys, whether it's that or josi here yesterday talking about the importance of grocery or what the chinese call new retail. this whole conference has been the theme and it's been about technology taking responsibility and the advent of new regulation on the industry and its face, but some very big things continue to happen in innovation it's almost like water and it's hard to push it back whether it's mobile or today about autonomous driving gm is talking about doing this at scale on public roads next year and that's something that maybe some people think or still might not think happens, but that's what's being talked about today. >> i was watching your interview on brian sullivan's show 2019 ipo uber possibility? dara, by the way, what a difference, right, from travis these are first-name people, but

dara just impressed me as someone that loves so different, right? so different from fast travers. >> i agree we were also pivoting from the narratives that these companies want to stay private for longer and now there's sort of an underlying debate about is there going to be a race to be first air bnb talked about, we're also thinking about '19 and we'll be ready. we might not, but we'll be ready for it and maybe the companies are in a motive and let's get to the market first before this window closes again. >> carl, thank you we'll be checking in with you shortly again. let's give you another look at futures here before we get to a quick commercial break on the other side and hopefully we'll have more time to talk about gm. >> so important. >> because it is an important investment from an enormously important source that vision fund re" r u more "squawk on the

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♪ ♪ all right. as we've mentioned a couple of times or alluded to. gm shares are up in the

pre-market remember the hundred billion fund has agreed to invest $2.25 billion into the auto venture called gm cruise gm is investing $1.1 million of its own money into the unit and jim, shares are up and you see it up 12% on this, and tesla is down the vision fund, we talked about it here and there it's $45 million of that comes from saudi arabia 18 billion in equity from the saudis and 23 billion, i believe, is in a debt security in which they actually pay cash interest rate each year. so they have an obligation to pay the saudis, but uber, an enormous investment for them. >> right >> nvidia, these are one, two and three. what do they all have in common along now with this gm investment >> self drive. >> self-driving. >> i'll tell you what's

interesting about gm the stock is valued at five times earnings the least of the expense stock on the s&p 500 as of yesterday is closed. it turns out that the value people who sensed that there's something within the bowels of gm got it right. five times earnings for that company was low given the fact that this gm cruise division will be valued at 11.5 billion the moment it closes at 19.6 it looks like this is a good day for value even though this is a stock that you were sure there was going to be a tax. >> gm, have they had the conference call? i don't think they have yet. they were going to have a call to explain the thinking behind the investment itself? >> there was an interview with

bastion. he's brilliant >> the amount of capital they have committed, broadly speaking to autonomous. art holdings does a lot of other things. >> right >> but this is going to be an important -- not to mention 5g when you have softbank involved in a deal to merge its unit and that's so connected to into the networking of cars where they'll be able to see around a corner not because of the camera, because they have it networked from the camera around the car around the corner. >> by the way, t-mobile doing a buy one get one which is taking share again. david, a lot of people are viewing all of this as negative for tesla. tesla's bond, the most recent issue and we're talking about a 13% loss for the main tesla bond and you're trading at $87.25 in

yesterday's trade. remember, the bondholders are smarter when it comes to tesla why didn't they go with the online any idea who the leader is in autonomous at this point is it waymo? is it gm. >> carl has interesting stuff from dara about google teaming up with waymo, teaming up with uber and that's very important. >> well, the possibility. >> the possibility i don't mean to be all over the map, but there is a great story about google being the winner about gdpr they are steering and you have to be careful antitrust wise and the entities that they can bet which is what you need for praf see and they're all good way to backfire, germans. >> keep an eye on google, as well and we'll have a mad dash from jim coming up as we count

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>> you're watching cnbc's "squawk on the street," we're live from the financial capital of the world it will open in one minute jim, one minute. >> yesterday with dick's sporting goods. >> it was 25%. >> nike is having a great quarter and underarmour is having a great quarter the subtraction of guns, and sporting goods however, we are being driven down by tariffs and tweets >> right

how many is the tweet to iger ratio? >> i don't know. does anyone think this is funny? >> how could it not be [ opening bell ringing ] >> we're having very good meetings with north korea and bad meetings with our allies >> that's the bell at the nyse, the real estate exchange getting itself ready and composing itself and there will be more red on that board. >> and the banks are leading us down and the four-point lodging did the honors and it's celebrating its first day of trading from la quinta la quinta. i like saying la quinta. it's very satisfying >> rancho palos verdes.

>> girls right now, a non-profit mentoring high school girls from new york city. what's your take when you look at it? >> right now it will be micron because of the heresy committed by morgan stanley and downgraded micron. they do point out that the stock went up 40% in three weeks that's pretty big. >> they do point out that they are early in their downgrade, but they think that it isn't coming back. no one thought the flash was coming back, but it is really roiling the semiconductor move because of analog device is having such a good quarter the federal reserve, we keep hearing has designated the u.s. business to be in troubled condition. >> troubled condition is the term of art. >> troubled condition. kind of similar to suboptimal.

i would say suboptimal would have more gravitas than suboptimal. >> more information about their thoughts in terms of what defines troubled >> yeah. that's trouble with a capital t. right. >> david, you know who had a suboptimal quarter sears. >> you immediately say, jim, we shouldn't talk about sears they did come up with a transformation and an update. >> what are the same-store sales decline? >> they're down 11.9%, david >> sears or kmart? store sales increased with both kmart including apparel, footwear and jewelry david, i know every kit begins with sears you close every one of them and this thing could take off.

it could it could as you pointed out it's a $300 million market cap >> millions of dollars are still in sales and when you talk sears you always think about jcp and as the ceo just kind of like, say hey, you know what i'm kind of out of here. manny tirico said this is the strongest market he's ever seen since he's been at pbh, 20 years. he points out this is his jeff connect once again doing amazing. kohl's doing amazing remember, kohl's has the tie-in with the amazon where you can return at some of the stores and you can return things to amazon by just bringing it to kohl's. so keep that in mind >> i will if i ever have amazon returns. they should have an amazon return cubicle at 30 rock. >> my wife had that nettaport,

it's a sandwich company. you can't return that, but obviously, the deutsche bank, just like the other day, you hear these things and you immediately sell every bank because you say, wow pnc must be being hurt by the market conditions and that stupidity happens because it is xlf which is the etf that links every bank whether it has something to do with germany or not. so how else could you get wells fargo down other than an etf >> gm shares have backed off of the highs since we saw in the pre-market and the company's stock is still up 10% and that's got to be one of the bigger moves. >> and that's very important and undervalued, and ford feels they'll have a big quarter and they have a lot of bad markets >> i am positive and they're willing to cut their losses, so

to speak >> in terms of forgiveness in tech and they actually said on the quarter, listen, we did not have good service provider revenues and the stock was initially down about 10% and they then explained that it will be pushed back until later and the stock rallied and there's a lot of forgiveness here and at the same time we are all geared toward tariff and what wilbur ross is going to say and eamon javers will have the language that they've yet to put official and the potential brass on aluminum, canada and mexico. what does it is a for the nafta problem and it would say it is a critical breakdown is what you would say. can't be good. >> no. >> but you know what, david? the disparity between the nasdaq and the dow is interesting and the dow is filled with multinationals and they could get hurt and the nasdaq with many technology companies that

would not be hurt. including, by the way, google and facebook, google being out of it because they're the big winners in this privacy -- european -- >> i think we should try and explain to people because that was an unanticipated outcome i think from some. >> right >> google is making sure that any of its search results, the privacy demands are met and therefore, somehow they're benefiting. >> because they can't see whether the smaller sites have people given them consent so they're going to the larger site, google and facebook. >> right.gdp we thought that would be bad. >> you about an expected outcome. >> over time you expect their compliance and order with the new rules. >> they should, but this isn't

what we thought was going to happen >> aaron levy did not give us a really great forecast. >> i think aaron is doing a fantastic job, and if you had one little nick, it will go down. >> did you hear anything on twitter? >> twitter is up 44% for the year and the better performing i'm hearing they're getting more than their fair share of advertising these days particularly from retail. >> no kidding? >> doing better. we didn't mention burlington which still had one more incredible quarter and matthew boss retail is doing incredibly well. we are concerned they won't be necessary le hurt by tariffs >> any takeaway from tirico on mad money worth sharing that you haven't already shared >> worldwide worldwide. >> okay. >> europe doing incredibly well.

i think they would have given you a far better forecast had he not been concerned about a stronger dollar and they had huge business overseas, but both tommy hill figure and calvin klein are putting out numbers, david that are the best that they've ever put out and i think that's important >> the president did choose to come back again to this issue of getting an apology, and i've got to share this. >> you know what it's visible >> i go, where's my call of apology and that's referencing bob iger, the ceo of disney and this is related to the controversy surrounding roseanne barr and the show was canceled a couple of days ago by abc and disney they demand a response how is brian ross doing? he thanked the market with an abc lie, no apology. double standard? because i apparently called valerie jarrett who was the target of a racist tweet from

roseanne >> i just -- that iger, where's my call of apology, i'm going to keep that one. >> yeah. yeah, it's interesting interesting. as you point out yesterday, 15 times earnings and the market cap word with netflix which is now $4 billion >> 15 times and it's just here >> you've got a period here, jim, where it's sort of going, until we know definitively the outcome of the fox field, i think there's a number of investors who are just going to sit back because how much more is it potentially going to have to pay and they're willing and have lined up financing should there be a desire to have them include cash in the current

offer which is socks, you're not good enough to get the influx of investors who are going to come to the conclusions from the deal itself until they know the deal is done. >> it must be terribly frustrated for bob iger because he has had a series of terrific quarters, and i think that espn will be a success in the business i also think the company hasn't spoken about pbs. >> in a couple of days. >> i would share the com plants from earlier this week where they were discussing the back and forth between leslie moonves and redstone i like you more than him >> no. >> i think that these two stories are keeping a lid on some very good companies very good companies.

my charitable trust owns comcast. comcast, if they have that much fire hower what can they do to buy their own stock back if they don't get it you put a july deadline. >> well, july 10th is the fox shareholder vote and that could be pushed back and we have to wait and see what we get from leon people should be focused on that and june 12 suggest the what he said he would rule by. >> there is an argument to be made that there is a violation of seven of the clayton acts and you could have some sort of structural ram dee that he wants. most people believe he'll let the deal happen and then there's the question of appeal, if in fact, the government loses and you will stay with an appeals court unlikely, but you don't know what if that happened? what between the ruling and an appeal can the deal close most likely, yes, in terms of

the notes i read on this and the lawyers i've spoken to, yes, but not definitively and you'll need a court to rule, and we'll get an instruction to stay the deal, but irreparable harm most people say no, they won't be able to get that and sure thaw can appeal. so you're allowed to bet on sports. >> yeah. >> what is the legalized gambling arms thinking about this >> well, they're trying to focus that outcome suddenly they win, but then you don't really win you can't close the deal. >> wow we have to stay focused on that. >> there are so many other implications, if, in fact, your world is good for cbs and etna

vertical yeah, ooh vertical >> meanwhile, humana and united, and the stocks keep going up and up and up. >> let's go to seema modi and get a look at the broader market seema? >> good morning, david politics will be the beg driver the stocks today and that's what traders are focused on right now and they're waiting to see if president trump pulls the trigger on aluminum makers the largest steelmaker which in the past has spoke up against tariffs, that stock up 1.5% inside and donald trump protecting steel makers from overseas competition providing a best to nucor, and ak steel and perhaps more concerning is the support that says german carmakers will be targeting volkswagen, daimler, mercedes benz and porsche

autos are germany's largest export store and there could be potential negative implications of germany's economy >> the eurozone inflation just rose to its highest level in a year and some economists saying despite the political drama unfolding out of italy and this positive read on consumer prices could give the ecb enough conviction to bring it to a close sooner rather than later state side, consumer prices showed inflation is coming and now all eyes on tomorrow's jobs report and we'll talk retail earnings and dollar general and disappointing comps and women's retailer, j. jill, posting kochs of 3.3% and that stock up. costco, ulta butte's wieauty, al

three on track for the best months of january led by the nasdaq up nearly 6%. we've seen a climb on chips, and it's up 35%. hay we report there. it's supposed to be 3 to 3 >> the ceo goes up and you do the channels much better and ult on has been back if show ask we put steel and lum numb and canada, back to you. >> that's china because that's the way china gets around. >> so we just get the official news with, and see what happens in a few moments from now and rick santelli, take it away.

>> yes, the may read for chicago purchasing managers survey is 62.7 dramatically more than we expected we were looking for a number in the 58 area. this sequentially follows 57.6 and it is a lofty read by any measure. it's the second best read of the year and it comes back from 65.7 and stronger than the next best read which would have been february in 61.9 a very solid read. as for the markets, well, we are seeing interest rates still behave a little bit sluggishly if you look at intraday tens, you can see they're hovering down two basis points and we've come down from the highest yield levels between the personal income and spending numbers came out. let's look at mid-may for the

following charts look at boons and the reason i'm doing that is in the ten year which is a market reaction and unruly now under 3%. finally, if you look at what's going on in mexico there are a lot of trade issues going on 783 in the mexican tenure and the highest yield since early 2010 and the dollar index, if you go towards of october of last year, you can see we stopped right before 95 and even right about where we stopped this time. david, we have some news >> on those tariffs, rick and it will have an impact or it is having an impact on the steel stocks let's get to eamon javers in d.c. to get us the headlines >> wilbur ross, the commerce secretary wrapped up a conference with reporters. the decision is in the case of canada, mexico and the eu not to extend the exemptions that had

been granted to the tariffs and therefore, wilbur ross says they'll be placed on the 25% tariff on steel and the 10% tariff on aluminum effective midnight tonight also, he said there is another bucket of other countries that are involved, argentina australia and brazil there's been arranged limitations on the volume that they can ship to the u.s. in lieu of tariffs. while exempted from tariffs they'll be subject to constraint in terms of volume and we're saying in a few cases, it has changed from tariff to volume and the objective, wilbur ross saying that the president's campaign trail promised to fix u.s. trade deficit problems remains in effect and this is the president acting based on that campaign promise and his approach to the world. he said that the reason for the deferral here in terms of canada and mexico were because of the nafta talks which are ongoing. he said those talks are taking longer than we thought and

therefore they were added to the list of those who had the bare tariffs and then on the eu, wilbur ross, the commerce secretary said that they had made some progress in talks and apparently not enough progress because they have also added to those who will bear the tariffs and a new development from the u.s. will see whether the president addresses that he's on the way to texas and he's on the way now and we might see him address reporters when he lands there later on today, guys >> eamon, thank you. we should point out that commerce secretary wilbur ross will be joining us in the next hour of "squawk on the street," certainly we'll want to hear from him >> a weekly guest on cnbc, given this has been the year of trade. >> they came out of tax reform and it's all been trade, trade, trade. remember when they put the stay on steel and aluminum. a lot of people felt that was the beginning of a negotiation period and the market rallied on

that and the market is correct to sell off on this except for once again, the slow to mid-cap u.s. market that is not influenced by that the money just tends it go from the internationals right into tech and the small this is definitely not in keeping with anything we have done for a long time since the first couple years of the george w. bush administration >> i think we're going to take a quick break. we're going to look at stock trading. >> i have not looked at tiffany. are you looking for something? >> it's a brilliantly run company. >> coming up, we are going to be joined by will boar ross stay with us here on kwauk kwauk. "squawk on the street.

11:00 on wall street time for stock trading >> favorite companies. there's a company called align technology

he was talking about how japan is going to be a major market. i mention this because salesforce.com called them out as being the company that understands how to use customer relations management software. the reason why align is doing so well is the selfie generation. younger people won't walk out of the house without makeup on. and their teeth straight >> and japan being a great market selfies are universal. this company has done so much. it's been one of my favorites for a long time. >> this is multiple on this thing. >> it's got to be. >> it's about people looking good when they walk outside. you cannot have your teeth be crooked anymore. and you got to have makeup >> it's not cheap to get your teeth fixed. >> no, but a lot of people

thought this technology was going to run out of gasp it's the way dentists have been able to augment their business i think it's a remarkable company that's so overlooked because people don't get the importance of this group of instagram and what it means. >> you talked about it with ul ta andest ta lauder. i think the animal health business is going to be sold it's entirely possible to do it. but keep that in mind. lan cois humanization of pets. this is getting out of the bedroom into your bed. it's the circle of life. >> has he apologized

>> not now, not ever >> i can't speak for him what's on mad tonight? >> there's a companied called newtanics. it really does matter and and vici which is a real estate trust. >> i came, i saw, i conquered >> they are unbelievable you are unbelievable you can use my tuscan house. because you did that >> put me on the calendar. >> you can understand how the italian government works >> i need to understand that >> what a great show really great show. in the face of adversity >> we're going to find out mr. ross, the commerce secretary of the united states, is going to join us live. and we'll discuss that decision on tariffs on the eu, canada and mexi mexico ou oerhis tk toal abt as well. so keep it here.

good morning, welcome back to "squawk on the street." we are live at post 9 from the new york stocks exchange let's take a look at the markets. we have taken a turn for the worst after the announcement of the new tariffs that will be imposed on europe, canada, mexico and other countries dow is down 151. nasdaq is hanging in positive territory after a bumpy start to the week, things have looked better with stocks in europe continuing to recover. our road map for the hour begins with the trade turmoil president trump implementing new steel tariffs on the eu, mexico, canada and others. >> plus vision fund makes a big bet on gm self-driving business. gm shares are up double digits this morning

>> speaking with us exclusively at the code conference >> now if a car doesn't show up in four minutes, it shows up in it five minutes, it's a minute late i can't believe that so it's amazing how the fantastic becomes normal >> much more from that interview and the news from code this morning. >> look forward to it. we'll see you in a moment. we have some breaking economic data to get to on housing. for that we go o to diane. >> pending home sales down 1.3% in april compared to march the street was looking for a slight gain, so that's a miss. that was the third lowest level of the past 12 months. sales also down 2.3% compared to a year ago the fourth straight month showing an annual decline. these are signed contract s s to buy existing homes so shoppers in the neighborhoods in april and that was when mortgage rates began moving significantly higher realtors point to the continuing

supply crisis in housing that pushes prices higher and gives borrowers less wiggle room sales were down monthly, only the south is seeing higher sales compared to a year ago all these numbers on cnbc.com. >> thank you very much last ditch talks between top trade officials anden counterparts wilbur ross coming up short this morning. the trump administration announcing it will impose tariffs on eu, canada and mexico it begins at midnight tonight. joining us first on cnbc live from paris this morning, commerce secretary wilbur ross thank you for joining us >> thank you for having me on. >> did we just declare a trade war on some of our closest trading partners and allies? >> not at all.

as you know, this has been under discussion for quite a long time is and it's a very small percentage of the respective economy. a fraction of 1% >> talk to us about how it's going to work. it seems like in the statement you left the door open for more negotiations how would eu, khcanada or mexico get out of the tariffs on steel and aluminum at this point what do you need to hear from them >> as you know, there are overall discussions long underway regarding nafta so this would presumably be part of that continuing discussion. and similarly, we have had periodic discussions with the eu >> so do you expect the eu go to go through with threats to impose their own tariffs on $3 billion worth of u.s. products

including peanut butter and bourbon and other signature u.s. goods? >> you'd obviously have to talk to the eu, but think about how small in number $3 billion billion of product is relative to our $18 trillion economy. it's a tiny fraction of 1% >> secretary ross, is this about eu steel or is it really about overcapacity in china in terms of production of steel and a glut around the world? >> there's overproduction of steel and overcapacity throughout the world and so we have needed to deal with it in a very global manner. you can't just deal with it dealing with one country

>> so what does that mean? have we now solved this it problem? are we going to make our own steel makers more competitive? what about the costs, we have discussed this with you in the past i remember when you came on with the coca-cola can and the beer can at one point but what about the cost to the american consumer that this is actually taking place. >> as i said, the tariffs are a fraction of 1% on product. the beer, soft drink and soup cans, it's all a fraction of a penny on each of those in terms of an automobile that's also a fraction of 1%. and for the economy overall, it's a very small fraction of %

1% remember we're an $18 trillion economy. >> i'm out in california at a conference where china trade remains a big piece of the the conversation i wanted to play a piece of sound from you from yesterday where an executive essentially accuses the u.s. of trying to hold china back. let's play that piece of sound >> there's nothing wrong with a country wanting to upgrade its own manufacturing sector go higher tech, be more innovative. but from the chinese perspective, we're seeing a lot of people in america that want to stop china from doing that. >> he referred to iphone production and the amount of money they make by making it opposed to the money of apple gets how much does china deserve to upgrade their manufacturing versus some of the abuses we have talked about all the time

>> we have no objection to competing with any company, any country in any product area as long as it's a level playing field. but when there are sicyber security breeches, when there are force transfers of technology, whien there's stealing of intellectual property that's not right and we'll continue to fight vigorously against such abuses >> secretary, tariffs, no matter how you look at it, end up being a tax on american business i know you're making the point that it is small when it comes to steel and aluminum as a percentage of the overall products, but what kind of strategy is this

>> remember you're only look at one side of the equation which is the price side. u.s. steel announced its reopening of a facility. century aluminum is putting hundreds of millions of dollars into starting pop mine there are dozens of other steel industry and aluminum industry players, all of whom are adding employment and opening facilities as a result so when you think about the overall economy, it's not just the trivial increase in product prices it's also the increase in employment and the strength of the economy overall. >> secretary ross, the decision to also impose tariffs on canada and mexico and is that a reflection of a lack of progress on the negotiations over nafta >> it's a reflection that the

discussions didn't get far enough to justify another postponement over exemption. >> we're just getting response from our allies. i want to share with you from the eu he will introduce counterbalancing measures in the coming hours clearly, our allies and friends are not happy with this decision i think the fear here is they will retaliate and then potentially we will retaliate and this isn't just a small fraction of goods that we import and export it becomes an all out trade war. >> even if the eu does retaliate and even if some others do, it still will remain unlikely to be as puch much as 1% on our economy. remember just because they put tariffs on some of our products

doesn't mean those sales will go to zero. and in the case of agriculture, they may very well find other markets that are just as good. >> you often say there's one voice that matters in u.s. trade policy and that's the president. i was just looking back at his original tweet at the beginning of march where he said trade wars are good and easy to win. does the administration still believe that does the president still believe that >> any counterparty who has a surplus with us has much more to lose in the event of a dispute than we do i think that's very much what he was referring to

>> last week it was around automobiles. in terms of trade expansion, the administration is saying that it can define new tariffs under a national security reasons. where does that stand right now? this seems to have gotten the attention of our allies in europe i would imagine that a new tariff on automobiles would only exacerbate this current concern about a trade war. >> the investigation was just launched about a week ago. in roughly 30 days there will be time for public hearings probably a couple days of them there also will be a mechanism for public commentary. after we receive those, we'll

conduct our analysis and come with a report that will make recommendations to the president and then et he will decide what his course of action, if any, is >> are you still going to china this weekend >> i'm scheduled to go from paris to china tomorrow. >> what's your agenda? what are you hoping to accomplish with the looming threat of another $50 billion in tariffs on chinese imported goods? >> the objectives haven't changed. our basic objectives with china are to sell them more product, get less in the way of tariff and. non-tariff trade barriers and then ultimately, and most importantly, through the 301 mechanism deal with the problems

of intellectual property, technology transfers, the whole litany of high-tech things and other intellectual property that you have heard so much about >> talk to investors the dow is down 170 points clearly investors are spooked by this idea that the u.s. continues to impose tariffs on our major trading partners on major economies. it's hard to figure out what's happening. less than two weeks ago, the treasury secretary came out and said the trade war is on hold. then we get the china threats. now we get this lack of exemption for europe and canada and mexico explain the strategy the president wants the market to go up it's going down on a reflection of some of the trade worries

>> naturally if the market to the degree it was surprised, it will have to adjust to that. but markets adjust to facts. >> and finally, back to china for a moment zte, which has become a significant issue. where do things stand right now? i know when you were on with us last week you talked about your decision to impose what were the harder perhaps penalties on that company at the time. in part to try to change their behavior have they begun to change their behavior is zte going to be allowed to survive and start buying u.s. components for the phones it manufactures again >> well, i have taken the position which is my continuing position that the objective is

to modify the behavior to the degree that we can work out an adequate solution that does not involve shutting them down, we will explore that >> and finally since you're in paris, just wanted to ask about the status of our relationship with the europeans we pulled out of the iran deal we pulled out of the paris climate accord and now these new steel and aluminum tariffs what's the status of our friendship >> these are blips on the radar screen i don't think they change the fundamentals of relationship everybody has spats every now and again. every family does, every country does with others there's nothing weird about t t that

>> when did the president make this decision to lieliminate ths exemptions >> he made the decision in time for us to make the announcement this morning >> what does that mean like this morning he made it >> well, it's an eminent decisi decision i don't sit with him 24 hours a day. but we were informed of it this morning as a final decision. >> we always appreciate you coming on to talk through these decisions. wilbur ross in paris, heading to china next for trade talks thank you. >> thank you very much >> with us now for some reaction is john harwood in washington. a little bit of color there on how the decision was made and what it entails.

>> that's right. your question at the end there where did the president make this decision. saying he made it this morning there was at least some doubt up until the last second of whether or not this would go into place. so as with a lot of things in this white house, this decision really came down to the wire you heard him saying this is less than 1% of the economy. you guys read him. he seemed not very affected by that en a conference call with reporters this morning, he was asked about the reaction of allies and friends around the world. and he said governments will say what they say and take the

action they will take. so relatively fatalistic approach here to what the reaction could be and the possibility of a trade war being started between the united states and some of its closest al lice. ross saying the cost of this will be minimal and the benefit. s to the u.s. economy will be relatively great >> i would also add he was dismissive of the broader hit this could make on our friendship with some of our closest allies and trading partners yes we're having a spat with our allies first of all it's not the a spat the iran nuclear deal and the paris climate agreement, those are big important things trade wars are big important things so this is unambiguously a blow to the economy overall to the

u.s. economy overall it is possible and this is their goal to help particular sector of the economy but overall this doesn't help the economy and if you go knock your head against the wall, you may not seriously hurt yourself, but you're still knocking your head against the wall. that's what's happening with these tariffs. >> although trump is just doing what he said he would do he would pull out of the iran acord and he did it. he said he would do what's in the best interest of our country in terms of no longer having jobs stole front our country by others >> not surprising. it's just that the things that he promised and the results that he claimed from the things that he promised are not likely to be correct. they are likely to be wrong. and he said i'm going to cut

taxes and the deficits not going to go up the deficit is going up. you can hope there's some rebalancing, but no economists believe. >> what do we make of the mixed messages the market is down today i alluded to the fact that the market rallied two weeks ago at the trade wars on hold that doesn't appear to be the case what do we listen to what is the policy path here >> i think intentionally sending mixed signals because they are calibrating in realtime. we heard sa the white house press secretary say wait a minute, steve said the trade war was on hold. we didn't say it was on hold

indefinitely so the implication that the trade war could be coming back here one other piece of news of that interview on zte you asked about the chinese economy and whether there was a deal here. the objective here is to modify the behavior of the chinese in terms of stealing intellectual property he said if there's a deal that can can do that, we will explore ta when he says we will explore that, i take from that to mean that there's not currently a deal on zte. there's been a lot of reporting there's a deal, not a deal from his comments that sounds like a commerce secretary speaking without a presence tense deal in place. so we'll have to explore that a little more with the administration sources we talked to >> i'm sorry i didn't follow up on that one. we both have had interest in that i appreciate your clarification on that as well. >> thank you for weighing in >> a huge story today. for more on the eu retaliation,

don't miss the eu ambassador to the united states. he will be on power lunch later today. as we expect the tariffs to come within hours, according to the eu when we come back on the show, a warren buffett fan boy that's how uber's ceo describes himself in an interview with carl talking about his goals to get warren buffett to invest we'll fill you in. plus the man who transformed verizon into a tell come giant we discuss industry consolidation, regulation and a lot more we'll be right back.

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welcome back the ceo of uber has big plans for the company hoping to make the ride hailing firm into much more we sat down with the ceo and he talked about where he sees uber going in the future. take a listen. >> when you're involved in the hotransportation marketplace, ts is a $6 trillion market. it's an enormous market to go after. you have to keep your eye on the core, but you also have to be making forward investments it's gaining a significant share

in the food delivery space we got into jump we are now investing in what we call uber as a platform. we're not just about taking a car from point a to b. >> corporate logistics and commercial delivery be out of bounds >>s that business that's been incredibly offline if you take that forward into the age of automation where trucks are driven autonomously at least on a highway, you get to a pretty interesting business in the space as well so that's another bet we're making but the early results are pretty encouraging for us >> do you think that kind of innovation is going to show itself first in the u.s. or is is china more ripe for at least the autonomous part of all that? >> i think that the u.s. and

china are going to play a part i think it's going to be a race. everything you're seeing in the technology space right now, i think the innovation you see in china is extraordinary >> it's going to be a race certainly that's the message we got today with this soft bank investment in gm's cruise division sort of being in amazon b that you go there for no matter what kind of mode you're looking for. so he's getting much more det l detailed about the long-term vision for the company later on in the next hour, we'll talk about the 2019 plans for ab ipo. look iing for a cfo to get there first and the reports on that discussion with buffett earlier in the year about an investment in oouber and whether or not that may be in the cards >> buffett, as i heard it back

awhile, i didn't know what it was. it pushes for tough terms. the vision fund invested in gm is their big investor. >> talk about spreading your bets uber, gm cruise, another signal that autonomy is going to be an area people are going to try to cover on many areas. and we're just now getting even more interesting taste of their ambition s. >> no doubt. and interesting to see what uber is going to be doing thank you. we want to stay with automation general motors is focusing on its gm cruise venture. it took in $2.25 billion in new investment

let's get more details as this race really keeps heating up >> shares are up more than 10% they are say issing we have evaluation for gm cruise out with a $47 price target. that's giving the stock some momentum let's talk about this investment deal announced between general motors earlier today soft bank investing $2.2 billion. that's the parent company for cruise automation. it will take a 19.6% stake in gm cruise and now set for $11.5 billion when it comes to holdings the question is now you have this money you have this investment what does it mean for the future of the autonomous drive vehicles being developed by gm cruise

the president of general motors says this gives us the funding needed to make it through commercialization, which they are planning on happening next year here's talking on "squawk box" about the development of these vehicles >> we see a path to commercialization in 2019. we have continue ed d to make a of progress since then that continues to be our objective. but really importantly, our decision to launch the technology fully driverless is going to be guided by safety we need to hit the right levels of safety performance. we'll be ready to go >> as you look at shares of general motors, the reason we're showing you this is because it was basically two years ago tha general motors spent a half billion dollars buying cruise automation and saying this is going to be the platform for autonomous drive vehicles that we're developing and i can't stress this enough that last mile, that's the crucial sticking point when it comes to self-driving vehicles

making sure they can pick people up at different locations, drop them off at different locations. driving on the highway is not a problem. it's those last mile, tricky pickup situations. >> they own 9% of lyft >> correct so to an extent, what you're talking about spreading your bets, general motors has done that as well in terms of its partnerships >> between uber and tesla and gm and others i may have forgotten, how do we know really who is ahead? is there a way to measure their progress >> it's a little bit hard right now. most people believe that general motors and wamo are the two leaders when it comes to developing autonomous technology but until we see this in everyday use, not just in testing situations, but in everyday use, that's when we'll have a sense of these guys get

it this technology works. we can see a plan for gret in. the future and again, we're a ways from that wamo will start it then gm cruise hopefully they are hoping will be launching its commercialization next year. >> we'll stay on it all the way, as we know you will. thank you. coming up, stocks are lower this morning this after the white house unveiled new tariffs on some of our longest allies we're going to dig into some of the stocks that are moving on that announcement, next. your muscles look good,

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gargood morning, everyone here's your update at this hour. president trump talking to reporters on his way to houston. he says talks with north korea have been very positive and is expect iing the delegation to travel to washington to deliver a letter from kim jong-un. >> i believe they will be coming down to washington on friday and a letter is going to be delivered to me from kim jong-un.

those talks are being held in new york between secretary of state mike pompeo and north korea. the meeting taking place at the apartment residence of the deputy ambassador to the united nations. and in pyongyang, meeting with kim jong-un the trip is seen as an attempt by moscow to make their voice heard. he passed on his wishes from the russian president vladimir putin. we will keep you posted. >> a closer look at how these new tar aoiiffs are impacting ga markets. >> some of the the more immediate reactions we're seeing happening in countries specific etfs especially tied to canada and mexico and much of it has to do with the currency moves tied to each

particular country so the shares fund has moved lower on the day and the currency shares which tracks the value of the dollar versus the u.s., that ticker is down by a similar percentage amount the canadian is unhedged for currency exposure. so as they lose value relative to u.s. dollars, this fund is going to take a hit. same for the mexico etf. also lower on the day. it's only got $150 million in assets but we did see a move higher after the announcement of those tariffs.

back over to you >> thank you very much technology staying strong. the dow is down 200 points can you hear him now the former verizon ceo joins us to talk about the story of the growth into the largest wireless provider in the u.s. and what comes next "squawk on the street" will be right back

welcome back to "squawk on the street." live at post 9 from the new york stock exchange an hour into trading and let's look at where we stand the dow is is down 200 points at this hour. it took a turn lower after we got the announcement that no longer would the eu, canada and mexico be exempt ed from the tariffs. the s&p down a little less than half a percent technology is staying strong, but all the other groups have moved into the red

nasdaq was positive but now just flip ped over >> look at that. verizon untethered, an insiders story of innovation and disruption tells the story of how it grew from a regional phone company in 2000 to the global communications giant that it is today. the thofr of that book is the ceo aye san and it's been a long time it's not about you but the other people and all the decisions that made verizon a very strong, competitor and company during what was your very successful tenure why do you take a backseat on these things >> i don't think i take a backseat i think the company is in the forefront of this. the reason i wrote this, i thought verizon had a good story to tell with a lot of lessons to be learned after a professional story

teller in the history factory, we concluded it was a good story to tell. >> what's the key take away that you'd like people to understand as you go through the history of the company from way back? >> a think a couple things the first is we had a self-image that we provided a great reliable network it doesn't sound like a complicated strategy and it took a long time for us to get confident enough to make sure that we told that story all the time and there were two events that sort of made that happen the first was 9/11 and getting the stock exchange back up and running was a great achievement. >> the other woint was the famous commercial can you hear me now that sort of reenforced our

self-image our story is all about providing a great service to our customers. >> it's interesting in reading that part. it's hard to understand how important that might have been for the company. advertising, and marketing becomes that important in a sense for the growth that you saw. >> i you leverage what you wanted to achieve which was getting the stock exchange back up and running, but since we're on your show, for years analysts would say to me what's your strategy and i always tell them we want to provide great networks. it never sounded exciting enough but 9/11 and can you hear me now reenforced the self-image and the foundation of what the company was all about. >> that still seems to be the theme. there are some now who say the differential between you and competitors in terms of network quality is not what it onces of. and is that a more difficult

time in terms of the competitive landscape. >> the current state of the economy, there's et author mouse amount of disruption and continuity so it's a harder job than i face but even though the competitors may be providing better networks, verizon continues to lead the league in all the awards and the accolades about what the network is all about. when you get to 5g, it's another game changer >> tell me what your thoughts are. it seems like vest rrizon is is trying to lead with the innovation are they going to be successful? >> when you go back in time and you look at we were the first to go from 3g to 4g, now to 5g.

verizon viewed itself as an enabler for other people to create platforms around a robust network. so the opportunities that will come to the company once they install and deploy broad scale 5g will be far greater than thinking about the limited number of the companies in the universe today that you can buy. so i really like what they are doing. not because that's the only thing they will do, but the first thing they will do now, which will lead to even greater opportunity in the coming years. >> in reading the book, the pace of change in technology, the pace of change in terms of decision making and how quickly things can change only continues to increase. what do you advise current ceos in terms of how to deal with that >> you have to pay attention to your customers so your customers are the first

ones to tell you whether or not you're on the right track or not. you can have great strategies and mergers, but your customers will tell you. so in our case we worry ied abo sales growth, churn, quality of metrics, the market tells you what you need to do. the other thing is every company needs to set their first principles running a good network is first principle. if we continue to do that, there will be good years and bad years, but the trajectory over time will be up. >> you say we. you're a verizon guy through and through. 44 years at the company. how has life been since you left the corner office? >> it's great. more time with my family, my children, my grand children. i get to dabble in projects and don't have to get up and not sonl for other people. i'm responsible for my ideas and my projects. it's good. it's really good and it's wonderful to look back

at the industry and see it's a strong industry and verizon is a strong company >> congratulations on the book it's a great read. certainly appreciate it. nice to et see you again >> thank you for having me >> former chairman and ceo of verizon with his new book. >> when we come back, spotify's ceo apologizes after the streaming platform announced a ban on artist r. kelly that move facing pushback from professionals. you'll hear from sti'seopofy c, nerks. next. fp whoooo.

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. veteran wall street bull urging investors to proceed with caution when it comes to this market find out what has him so nervous. trading nation, more "squawk on the street" coming right up.

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verdes couple of days of news from uber, alibaba. and spotify talked about a few things, companies that compete for your eyes versus your ears, the lessons of going public and take a listen to that. >> to make sure we didn't have hate speech on the service it was never about punishing one individual artist or naming one individual artist as well. so i think coming back to this, it's really kind of my responsibility as the leader and i think we rolled this out wrong and could have done a better job. >> interesting we don't hear from ek a lot, sara and david it was interesting to get comments from him. he has talked about transparency

all across the board, especially in the process of going public and had to explain, i think, some of the missteps they made, at least around specific artists. that was one that got people talking today. >> always a question when it comes to how -- he used the term moral police how do you do that when it comes to art i'm wondering about the conversations you're having there with some of these big tech executives on trade or anything macro it's the only sector in the s&p that's positive. >> yeah. it's definitely a place to hide today. and it probably reflects an idea that innovation is going to happen, buffeted by

you're still talking about big, grandios structure, whether that happens in 5g, autonomy or mobile gm news and uber last night. there's an underlying sense of optimism even though it's been about tech taking responsibility progress continues even despite all the drama carl, thank you. we look forward to much more from you, carl quintanilla coming up in "squawk alley" they'll talk to vox medicea o. "squawk alley" coming up next. it can power your apps with public services without starting from scratch.

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welcome back to "squawk on the street." i'm dominic chu. one of the sectors getting hit the hardest in early trading are consumers staples stocks you've got clorox, kimberly clark and tyson foods down by a couple of percent or so. clorox on pace for their worst day in more than a month that's a big deal over here,

sara back over to you guys. >> adding to double-digit declines for consumer staples. dom, thank you don't miss our interview with eu ambassador to the u.s. that's coming up later on "power lunch. already comments, david, streaming in from the eu totally unacceptable to see those tariffs. uk government spokesperson deeply disappointed by the u.s let's send it over to jon fortt to see what's coming up in the next hour on "squawk alley." >> thank you, sara a lot more from global trade to the picture for ipos all of that is cinupn omg o "squawk alley.

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