welcome. we begin with breaking news. the united states officially imposing new tariffs on $34 billion worth of chinese imports. president trump also threatening to extend those tariffs to all 500 billion of goods imported from china the u.s. tariffs that take effect today aim aircraft parts, heavy machinery, construction equipment, medical equipment, diesel powered trucks, lcd screens for tvs and touchscreens and another 16 billion are expected to go into effect in the next two weeks th china is not backing down.

beijing saying it has no choice but to fight back against u.s. bullying on trade. the nation imposing a 25% tariff on more than 500 u.s. products also worth 34 billion, those tariffs target soybeans, poultry, seafood, suvs and lek tris c electric cars. the trade moves are so well telegraphed, the markets are fairly muted in their reaction stock futures are flat to slightly lower again, it is early futures are thinly traded. it's also a jobs number friday we get the monthly payroll number coming out in about 3 1/2 hours. a lot could happen over the next couple of hours. kind of surprisingly the asia markets are moving higher today. china shanghai up about a half

percent. some saying they're glad the trade rhetoric has not heated up more the past few days and hours. in europe, major indices there are higher oil is slightly down as well u.s. traded oil that is. u.s. dollar is slightly weaker against the euro at 117.11 now that the first round of tariffs are in effect. let's see what the reaction is from china eunice yoon has more >> reporter: the foreign ministry today confirmed that china did retaliate with its own tariffs and that it acted immediately after the u.s.'s move customs authorities levied tarries on 545 items worth 3$34 billion. the targets goods include cash crops as well as cars. earlier today the commerce

minute stli saistry said china choice but to fight back the chinese move only escalates what many people here fear will become a protracted trade war. president trump xi jinping has shown no signs of wavering and overnight president trump appeared to double down on his stance during a visit in montana. he said he could have tariffs on all 5$500 billion of goods imported from china. the trump administration has said that these tariffs are meant to make beijing change so either with industrial policy or open up the markets, however beijing has not really shown any sign that it wants to make those changes. in fact many american companies are much more concerned that these measures could end up hurting them at the end of the day because american companies as well as china are so plugged

into the global supply chain in fact a peterson study shows that non-chinese companies supply 87% of goods impacted by the tariffs. also a lot of american companies here are worried about all the uncertainty. so now there are questions of how long is this trade war going to last? how is it all going to be resolved there's very little sign that there's dialogue going on between the two sides. that is worrying many people here and in fact the foreign ministry weighed in with that saying china believes unilateral pressure is futile again, not so sure how this is going to end >> we've had very strong economic data here in the united states for the last fi monthew . how is the chinese economy doing? is there any sign that the rhetoric you guys have seen as

well over the last couple of months has done anything to impact the domestic china economy? >> there are signs that people are worried about it we saw that in the stock market. the stock market has fallen to multi-year lows because people are worried that the trade war and this tit-for-tat tariff spat could end up being the tipping point for the chinese economy. the chinese economy has been doing relatively well. it's still growing in the 6% range. at the same time there are factors that are showing it's slowing down fixed asset investment is slowing down the country is trying to crack down on some of the credit and the credit risk and the debt what people here are worried about is the last thing the chinese economy might need is to see a trade war affecting a big engine for the economy, which is exports. so there are definitely a lot of

concerns about the potential impact on the economy, even though economists, when you look at the hard numbers, they say that just the tariffs itself might not have a big impact, but then there could be a spiraling effect on the economy just because we don't know how long this is going to last. >> we don't know what that effect, if at all, might be. markets are not reacting today thank you very much. what stocks what sect, what what industries might be after fektde affected japan up a percent european markets up. was this so well telegraphed that the market is reacting in a muted way? >> i think so. in the last month you have seen money come out of etfs even commodities and a lot of that money has gone into fixed income the defense trade has been put on already we're at 34 billion now. i would expect if we go to the next level, 200 billion, we'll

take another look. >> right now, we're not going to make light of it, right now 34 billion plus 16 that will come in in two weeks, 50 billion is your number. on a global scale, that's a small number >> very small. >> but the fear is that i shove you, you shove me, then somebody throws a punch next thing you know we're rolling on the ground, if this escalates up, what happens to the u.s. equity markets? >> it's challenged for sure. make no mistake, this is a concern for investors at this point. look, i agree with the president. the trade system is broken at this point it's not just the theft of intellectual property out of the industrial marketplace, look at the military complex the j-31 strike fighter looks strikingly similar to a lockheed martin jet >> they have a jet like the boeing 737 have you seen the land rover, looks like the land rover evoke. almost an exact copy

>> where i take issue with the president is the communication of the message you can't have mnuchin and navarro out on various networks trying to influence the president, that should be done behind closed doors. it makes for havoc in the marketplace and we get these selloffs >> markets can handle and adjust to known quantities. 34 billion, now 50 billion let's tweak the numbers now, we can figure out where fair valuation should be. we don't know what the next leg should be, we don't know what's going on behind closed doors at the white house. how much do we factor in those unknowns into figuring out how much we invest >> i'm not sure we can >> that's scary enough >> we know conversations are going on we're hearing word out of europe that auto manufacturers are going to their constituents and politics saying let's cut a deal we'll likely have to come back,

do something with truck tariffs in this country. that's how these things play out. right now the usual suspects are taking it on the chin. the global players, the boeings. >> i know china gets the headlines, but they don't buy that much stuff from us. soybean farmers in america are being het harit hard. china mostly buys scrap medal and ag products from us, europe does not if this escalates on the european side, what's the risk >> then the trend you're seeing will continue. domestic stocks will hold up best money will go into utilities and such you're already -- >> utilities the best performing sector over the last 30 days >> i think that's the long end of the curve the spread between 5 and 30s at the lowest level >> do you think people are parking in bonds and utilities they're renting, not there to live, but they want to hold their money in a safe spot >> i think they're scared. it's scary when you come in

every day and see some of your favorite names getting hit the secular growth engines will go wel do well. f.a.n.g. are the defensive stocks right now >> there's no indication that amazon or netflix will be hurt at all if the trade war escalates, correct you won't stop watching "blood line" because we're in a trade war with china >> it's not just them. small caps are doing well. restaurants in the united states, darden, they'll do well. >> you are stealing my thunder for later on in the show because domestically small cap stocks have soared the last 45 days >> i'm a large cap manager and i would be foolish not to notice that is happening. i have to push some of my money into domestic-based stocks >> you have been inching down? >> unfortunately, if i had followed your advice at the beginning of this year, i probably would have done better.

i'm surprised you had me back on because everything i said last month didn't pan out >> i appreciate the honesty. if everybody was right 100% of the time, we live in glass castles. i appreciate it. >> i'm in one for sure >> appreciate the honesty, thank you very much. >> thanks for having me. beyond trade let's get you caught up on the other morning headlines. leslie picker has those. your big individual stock stories include deutsche bank shares which are spiking in germany today on a report that jpmorgan and china's icbc may be interested in taking a stake in the lender a german magazine says angela merkel met with the former bundesbank chief now chairman of ubs to sound out his views on deutsche bank. samsung estimates profit rose 5.2% in the second quarter which would be the slowest growth in more than a year analysts say weak smartphone sales are likely offsetting record high chip earnings.

square has withdrawn its application for a banking license, the company plans to re-file the paperwork at a later date square applied last year for a special industrial loan company license which would allow it to take deposits that are federally insured. shares of price smart are down after the warehouse club's third quarter earnings missed forecasts. revenue growth was offset by higher costs as the company digested the acquisition of package delivery and e-commerce firm aeropost. >> thank you very much up next, it is not just about tariffs. could china be set to launch a different kind of fight against america? what beijing just did to one major american company that has one analyst ticked off. and we'll take you to kentucky where one industry is waiting out how this trade fight will impact it and its workers

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welcome back if you're just waking up here at 5:15, your top story is one that hope would not come to pass, but it has the u.s. and china slapping tariffs on $34 billion worth of goods from each other's nations. president trump also threatening to extend those tariffs to all 500 billion of goods that we import from china. party leadership in beijing says the united states is

bullying them on trade their tariffs run more than 500 goods from the united states, particularly soybeans and soybean farmers across america have been hit hard the last couple of months as prices have collapsed. the trade might may be on but your next guest says it is not just about tariffs you need to be careful that china doesn't fight back in other ways you may have missed this, it broke over the fourth of july, a chinese court ruled that micron is violating patd teents of a china-based firm and that could put about 50% of micron's revenues at risk let's bring in eric ross from casend securities. you put out a passionate, strongly worded note to your clients on micron saying you believe this was a complete sham of a court ruling. i assume you think this court ruling was done particularly to poke the united states in the eye over this tariff fight

>> that's what our belief is i'm not a particular passionate person so the fact i was so strongly believing this, i think should say something to the people that know me. we think this is a problem because this is legitimate i.p. that has been shown in taiwan to be directly stolen now we're seeing it as being legitimized as being stolen from micron as opposed to the other way around >> so two employees of micron left the company, alleged by started another company with patents which ostensibly belonged to micron and they were upheld by a chinese court. they upheld the valide edity ofa

believe was stolen technology. >> the two people went to xinxa. >> you called this a kangaroo court, you said these are long standing micron ip, and there's a two-year-old company that claims to have effectively developed technology which would have taken longer to do so >> micron was started in 1978. they've been competing every year fairly against other companies. they're not the number one memory company in the world. they continue to hold their own in technology. for another company to come in after only three years of development, and to be at this level is frankly ludicrous they rushed to judge -- there was a rush to end this case on that day and have an injunction against micron products. >> i'm not the world's expert on

chinese patent courts, but i know this was a speedy ruling. that's the risk. do you think china, forget about the tariffs, that they may start to do these kinds of things? this is the kind of fight that we could see with other united states companies not so obvious, not so direct, but done under the cloak of legitimacy >> absolutely. this has always been our fear and we have been watching it unfold what seems to happen is companies are required to share their ip or a part of their ip with chinese counterparts, and that then goes into the pool that the chinese can draw from of course they've been upholding international patents to date, but what happens when that stops? a lot of ip has been transferred into china what happens if we have rulings

like this over a whole number of different areas. >> it will be something important to watch micron case could be alone or it could be a litmus test for what is to come and what could be a nasty and protracted fight eric ross, we'll get you on soon to talk about the oil call micron more relevant to today's news >> appreciate it. coming up, much more on the trade fight and your money plus president trump nearing a decision on his pick for the supreme court. what investors need to know. later on, splash of color, looks like iphones could be getting a makeover apple fans everywhere are buzzing.

the futures markets indicating a slight drop. they were lower this morning when we came in. starting to see a slide there. down 29. this on a day where the trade fight actually does take off a bit ironically the asian markets are higher the nikkei 225 in japan, up more than a percent the shanghai up a percent. keep in mind also it is a jobs friday we get the june monthly jobs numbers today out at 8:30 a.m. eastern time those will break on "squawk box. a lot going on a lot of moving parts. there's also washington news outside of trade

president trump expected to announce his supreme court justice nominee monday night chris pollone has more on that story. >> good morning. nbc news learned that the president has narrowed that list down to about three finalists. he is said to be going over the list right now in order to make that selection by monday night he has met with all of these judges the three finalists are all appeals court judges in the federal court system amy coney barrett in illinois, brett kavanaugh in washington, d.c., and raymond kethledge up in michigan. now, different factions in legal circles, in congress are pushing their various favorites. all have been vetted by the federalist society, so they are all conservative judges in the sense that the federalist society has signed off on them some people are pushing barrett as a favorite of social conservatives because of her devout catholic faith. she's a mother of seven.

kavanaugh is the consensus favorite at this point he was the staff secretary for george w. bush he's been involved in republican politics for a long time but kethledge is seen as a bit of an outsider we'll have to see what the president does >> chris pollone in d.c., thank you very much. let's check the other headlines outside of money and business. phillip mena has that. good morning the head of the epa is out scott pruitt resigned from his post amid multiple ethic scandals pruitt faces more than a dozen separate investigations but it wasn't just environmental activists and democrats calls for his ouster, also republican members of congress even as president trump defended him a sad development in the rescue effort for that trapped soccer team in thailand. a former thai navy s.e.a.l. died during rescue operations he died after running out of oxygen while placing tanks

throughout the cave. this as rescuers race against time before monsoon rains bring more flooding. here in the united states, unrelenting weather is assaulting much of the country in colorado the spring creek fire, the largest in the state, burned 16 acres every minute in wine country the county fire is jeopardizing 1500 homes and structures in pittsburgh immense rains set off flash flooding and drivers found themselves flooded. officials say they knocked door to door to evacuate homes there. finally in phoenix, this video here captured a towering wall of dust whipping across the state as temperatures there shattered a record of 115 degrees. back to you, brian >> a lot of weather stuff going on our thoughts to the family of that diver in thailand sad story. thank you very much. coming up, we'll give you more market reaction to the trade war which is officially on as of midnight

$34 billion in goods slapped with tariffs on both sides the market indicating a slight drop at the open the surprise star that facebook tapped to help it bill out its tv business. he is knowfor n his foot and his hair happy anniversary dinner, darlin'. can this much love be cleaned by a little bit of dawn ultra? oh yeah one bottle has the grease cleaning power of three bottles of this other liquid. a drop of dawn and grease is gone.

. breaking news, u.s. tariffs on chinese goods are now in effect chinese tariffs on u.s. goods now in effect.

washington versus beijing round one. jobs in america. it's employment number friday. the report due out in three hours time. do you need color in your life apple may have the answer for that we'll tell you why it's july 6, 2018, you're watching "worldwide exchange" on cnbc ♪ welcome back thank you for being with us on cnbc it's 5:30 in the east coast. i'm brian sullivan there's one big story you need to know about today, it's indeed trade or tariffs just after midnight eastern time, president trump officially imposing new tariffs on $34 billion worth of annual imports from china the president also threatening to extend those to all 500 billion in goods that we import from china every year. china calling the act typical trade bullying saying it

seriously jeopardizes the global industrial chain, hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies. the european union reportedly prepping a new list of duties against the u.s. these would go into effect if the president slaps tariffs on european cars imported to america. last month the eu fired back at d.c. with duties on products from everything from peanut butter to motorcycles. how are global investors reacting to the trade fight? relatively polluted at thimuted. the dow seeing a drop of perhaps 17 points at the open. nasdaq and s&p are flat to perhaps slightly higher. we have the jobs number coming out in three hours a lot can happen

the oil markets fairly muted the price of oil sliding, still over 72 a barrel crude oil at 7 22.91 the majority of markets in asia higher we saw the japanese market climb more than 1% there is green on the screen across europe as well. not a lot. but the major european indexes are higher across the board with the exception of the ftse 100 in the uk which is down 0.01. rs raj, are you prized or optimistic about the fact that global markets have not reacted in a more negative way >> well, i think it's important to put this into context we've been aware of these proposed tariffs for some time

if you look at recent maonths, the chinese market has sold off. june was one of the worst months for the chinese renminbi to some degree the muted reaction is partly because the markets were discounting this first round. what happens next in markets does depend a lot on what happens next in terms of the trade talks. >> i think your point is important and well taken the majority of chinese domestic companies are in a bear market, down 20% from their highs. the u.s. is flat small cap domestic u.s. stocks have done well is that a sign that you believe china will be more injured than the united states by this fight? >> mathematically it's clear that these kind of tariffs do affect chinese gdp more than they affect u.s. gdp

when you step back and look at the broader picture, look at the issues with europe, canada and mexico, you can see actually it is a much bigger deal than just the tariffs that came into effect at midnight last night. so we would expect in the absence of a quick settlement of the outstanding dispute, some more serious consequences if the trade wars keep escalating >> as a fund manager what are you watching most closely right now? >> well, essentially all trade wars are political rather than being economic the key issue to watch is all the tariffs that have now been announced, the first step in a negotiation, in which case all sides have established they mean business, and if they are getting around the table and

settling relatively quickly, which is what has happened in past tariff disputes, which have been smaller in scale, then actually this should blow over and we shouldn't have a market impact however very important issue is that this seems to be part of a broader trend that was in place even before the current administration came into power in the u.s., which is visible all around the world that's the election of more nationalistic politicians, more isolationist politicians, and more political movements that are against globalization, against liberalization >> that the biggest risk what you just said is happening in germany we saw that angela merkel had to probably hold her nose and make a deal with -- i don't want to say the far right, but the right side of german politics to create the transit or detention centers at the border of germany. are we starting to see more european nations become more

insular, move more to the right, perhaps risk that political side even more over the next number of years >> i think that's the case so we've had 30 years of steady, one-way ratchet of liberalization and globalization. the benefits of that have been unevenly distributed the working class and middle classes in many developed countries have suffered. what we're seeing now is a reaction against that. so the one thing we can say for sure out of last night's imposition of tariffs is that we passed the high tide mark for globalization and liberalization the risk, the greatest risk of these tariffs going forward is that it entrenches the positions ofiticians and creates more blelligerent trade talks and negotiations for

parties going forward. >> raj, appreciate your insight on an important issue today. thank you very much. >> thank you let's get your other morning's top trending stories leslie picker has those. >> if you're looking for a fresh new color for your next iphone, you may be in luck an apple analyst reported that the next iphone will be available in new colors including orange, blue, red and a new gold i see you as a new gold guy. >> yeah. no more of an orange guy. m.i.t. released foot tang of its latest robot while it's unsettling, the technology could be life-saving. the cheetah three robot is designed to do power plant inspections or searching disaster sites the robot can move over uneven ground and handle stairs without an issue all in complete darkne darkness

it doesn't need to see >> if it can help save lives, even if it's creepy, it's cool. already worried about what to watch when the world cup ends facebook is working on it. the social network is in discussions with cristiano ronaldo for an original reality show on facebook watch ronaldo is the most popular athlete on facebook with 120 million followers. if the deal goes through, ronaldo could get around $10 million for the 13 episode show. >> not bad work if you can get it speaking of soccer stars, you may have heard that brazilian superstar neymar has spent almost 14 minutes of the world cup rolling on the ground. so kfc put out this ad poking fun at neymar. it shows a player flopping dramatically and rolling through the city

cameramen chasing after him until finally he reaches a kfc restaurant, once there, he pops up happily ready to give his order to a smiling cashier >> at least they're making light of it. >> they are. it's been a controversial -- >> he's been on the ground for 14 minutes he will be on the ground more today when my belgium team beats him 2-1. you heard it here first. let's go belgium still to come on "worldwide exchange," how strong is the u.s. job market? we'll find out soon, and whether we will force the fed to raise rates more quickly. and risky war. will china's tariffs hurt jobs in bluegrass country >> more than 17,000 people work in the whiskey industry in kentucky, a lot of uncertainty today about how chinese tariffs will affected the industry as a whole, especially in addition to the other global tariffs they're

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welcome back good morning thanks for joining us. big breaking news overnight. tariffs on 34 billion of goods both imported into and exported out of china are now in effect as of midnight eastern time, china and the u.s. slapping tariffs on each other.

president trump also threatening to extend those tariffs to all 500 billion of goods imported from that country if they don't change their ways with regards to trade what products are impacted u.s. tariffs that take effect today involve more than 800 products ranging from machinery to construction equipment, medical equipment, diesel powered trucks, flat panel screens for tvs and touchscreens for china it's more than 500 u.s. goods subject to tariffs. china saying it's pushing back on what it calls u.s. bullying on trade 25% tariff on more than 500 products those products agricultural, soybeans, meat, poultry, along with some suvs and electric cars 800 our way, 500 their way most of the asian markets are rising right now those chinese tariffs

putting some pain on specific u.s. industries, like whiskey. beijing imposing a 10% tariff on american whiskey joining the likes of europe, mexico and candidate. contessa brewer has more life from kentucky. >> brian, tourists come from all over the world to visit louisville because of its signature liquor they come, they walk whiskey row, they visit distillers along the bourbon trail. this town has an economy that relies so heavily on its signature liquor the mayor coined a term bourbonism around the world bourbon is booming. american whiskey has doubled its share of the chinese market between 2012 and 2017. it's at 9% it's really chipping away at the share of scotch whiskey. many distillers both large and small are making strategic plans for growth based on global

expansion. kentucky peerless distilling facing uncertainty with only 20 employees, just launching its international business and hoping to sell in seven countries in the next couple of years. >> i think it is going to change things a bit i'm building warehouses. i constantly have additions going into the distillation equipment, bottling line to think there's a chance we will not be able to utilize everything we're putting forward is a problem >> it's not just the distillers. u.s. chamber of commerce has 17,500 jobs in kentucky depending on the whiskey industry, that's farmers, glass suppliers, tourism the coopers who make the barrels. the kentucky distiller's association suggested that the trump administration sit down with our trading partners over a glass of bourbon and just work this thing out they say it's super important that they continue to have access to these overseas

markets. >> it's a good example with how soybeans, these markets are niche. i would imagine that a year ago these men and women working in this industry in kentucky just going about their jobs every day never imagined that the possibility of a trade war, 11,000 miles away with beijing, was going to possibly have a negative impact on their livelihoods. >> it could have a huge impact here in kentucky and also if you look at the trajectory of the growth of bourbon, there's been a lot of new investment here investors believe they can make money on bourbon, but their making money dpen depends on n markets. think about a $5,000 bottle of american bourbon, that might have people reconsidering and heading towards cognac >> yes, or japanese whiskey.

>> bourbon can only be made in the united states. but here's the thing, if you don't have a trading relationship with those places, it makes it harder to go in and sue over the use of the term bourbon in places like japan >> i know a lot of soybean farmers are worried this morning. a lot of real-world industries being impacted by this obviously the trade fight, but also the jobs numbers are in focus on "squawk box." joe kernen, a busy morning for you guys >> yeah. there's also some rule about whether there's an "e" in whiskey. the scotts spell it with out the "e." the irish have it with the "e. >> the japanese, they don't use the "e." >> there's a hard fast rule. i forget what it is. there's a way to figure it out >> maybe the foul was tariffed >> there's a tax on es

>> you are correct, sir. becky saw our picture together >> i did she said you guys dush-are -- a are, we're bros. >> trade bros. >> yesterday the adp number, there was some excecommentary t they couldn't find people. i think the devil in the details of the report should be interesting. >> is the job market full? do we need to open up the job market to people with felony convictions, some of these non-violent ooffenders, get them back into the market >> you're saying convictions you don't mean arrested but not -- you mean -- >> i'm saying -- >> i know. when people look at you, you have ever been arrested for

anything arrested or convicted. bad joke never mind if it is tight, then we start looking for wage gains which would be good. the economy and corporations are doing well enough for what we've been wishing for all this time without worrying about profit margins, wage price spirals, we could welcome some wage gains. the articles have been written maybe we start to see that as well you know it's going to be the fourth straight week where the dow was down after yesterday, in the face of this trade stuff, the dow managed to go up almost 200 points today we'll see. we're down to three or four -- >> i got excited >> we have kavanaucalvanaugh on

morning. karen cavanaugh, not brett kavanau kavanaugh. that's on monday you know how trump introduces these things it's like a big fanfare. >> listen, after the -- the small cap stocks have done great. i know next week i will be up in the north woods of michigan, wisconsin. i will examine the whiskey debate up close and personal >> i bet you do. i saw you do that in vienna. witness it up close and personal >> joe kernen, thank you moving on. thank you. just how strong is the job market we'll find out in a few hours. will it be enough to change the fed's thinking on interest rates? former fed insider danielle dimartino booth is next.

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appreciate all of our folks out there that got up early for us u.s. trade relations with china dominating the headlines investors also need to watch something else, that's the june jobs number. will it come in hot enough to change the fed thinking and make them more aggressive danielle dimartino booth "daily feather" author. getting a lot of press on that congratulations. >> thank you very much >> is the job market so strong that we won't add any new jobs because there's nobody left to take the jobs? it's so bad or so good it's bad? >> you know, these are valid questions. they are if you look at the quit rate -- the take this job and shove it rate, they're totally bold in an environment like that, people are convinced they can get jobs regardless. you have to ask yourself, if there's skilled workers out there unqualified for some

non-violent felons -- >> we have to get more people into the work force. you can't have a checkout person at toys "r" us turn around tomorrow to be a trucker that won't work. >> also you have to be licensed. >> hopefully >> if the jobs number comes in soft, if it's soft, some people say the economy is slowing down. other people say, no, there's just no workers what did you expect >> there's something else going on in the background m&a activity is off the charts we have not seen these kinds of mergers and acquisitions in years and years. record numbers so what happens when two companies merge? >> they tend to lay people off >> they tend to lay people off if you look at the data, it's up 8% over last year, layoff announcements. hiring announcements have been cut from 468,000 to 233,000.

so why aren't companying hiring as much as they were last year there are undercurrents in the job market and some of it comes down to what you've been talking about all morning long, john challenger added a new line to his table in the laughl.a.f. re, tariffs. so imagine what the next four weeks will be like with the earnings season. >> it's like bad weather weather gives you the excuse to blame whatever you want. >> will the tariffs give companies an excuse to say it's too good or too bad, we had to make a change. >> of course >> how does the fed think about that when they go around that table, do they say there's a trade thing, this number didn't

matter >> the fed minutes yesterday said companies are preemptively starting to cut back on spending bay of the tariffs these are minutes from a month ago. so they're concerned about them, now we get actual implementation yes. roll this out as an excuse over and over again >> is there a risk to the fed's -- i can't say it, the dot plots, expectations. >> gosh. i still like your idea to do a lite brite >> do you think fed expectations will change today? >> i think if we start to see an appreciable move in wage inflation, if you look at last year, very weak comp 0.19 it had to be rounded up to 0.2 today we'll look at those average hourly earnings that will come in hotter. it will move the wage inflation needle, that will keep jay powell's foot on the accelerator. >> people are leaving jobs,

taking jobs at higher pay. >> appreciate that trade fight, jobs numbers, it's a big morning. "squawk box" is coming up nextt your finances, your future. how do you solve this? you partner with a firm that combines trusted, personal advice with the cutting edge tools and insights to help you not only see your potential, but live it too. morgan stanley.

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good morning president trump launching the opening salvo in the trade war as competing tariffs between the u.s. and china take effect we'll get a live report from beijing. samsung posting its slowest profit growth in more than a year we'll show you the reaction in that stock and it is jobs friday again. we'll bring you the final predictions for the june employment numbers it's july 6, 2018. "squawk box" begins right now. ♪

live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. it is jobs friday. the forecasters are looking for an increase of 195,000 non-farm payrolls the unemployment rate is expected to hold steady all the way down to 3.8% let's look at the u.s. equity futures. despite the beginning of the tariffs being placed on chinese goods by the united states and on u.s. goods by china, you can see that the futures are down, but not by a lot looks like the dow is down by 41 points s&p is off by 2. nasdaq off by 3. this comes after a positive day for the markets yesterday. dow was up 181 points yesterday. s&p up by 23