squawk box begins right now. ♪ the devil went down to georgia, he was looking for a soul to steal ♪ ♪ he was in a bind because he was way behind ♪ >> live from new york where business never sleeps, this is "squawk box". good morning, everybody. walk to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe ke kernen and mike santoli. andrew ross sorkin is live this morning, what's going on >> reporter: good morning, becky. i am in atlanta this morning talking to some of georgia's biggest business leaders about the hot button issues from the business worlds from today's big tariff news to taxes and the economy and of course the controversial abortion law that has companies like disney and netflix and our own parent company questioning their presence right here. we're going to bring you interviews including a rare one with tony resler, billionaire founder of apollo global

management he's now executive chairman of aries management he has a number of provocative things to say about the trade war. you're going to want to hear some of the things we talked about about. also ed bastian, the ceo of delta airlines the president and coo of focus brands, of course the company behind jamba juice and cinnabon, and a jpmorgan executive who was named one of the most powerful women in banking and our host this morning john hope bryant, founder and co of operation hope, and we will talk to him later in the broadcast right now we want to get back to you becky with all the big news and what is going on overnight in the markets yeah, a lot to have talk about this morning, and we'll get to all of your wonderful guests in just a moment. let's get a check on the markets today. if you are just waking up, you have to take a look at this, dow futures indicated down by 271 points s&p futures down by 33, skmt

nasdaq off by 110 points all of this coming as this news that we heard from the president yesterday talking about the tariffs that will kbbegin to be imposed on mexico june 10th. those tariffs will start off at 10%. it's designed to make sure mexico takes additional action to close the borders obviously the markets reacting to this surprise news and not in a good way if you check out what's been happening, you're going to see treasury yields have come under increasing pressure, even with the downward drafts we've seen in the last week or so to this appoint. ten-year has fallen below 2.2% the last tick is at 2.151% the two-year is below 2 frern a -- 2% check out the move in the peso, you're going to see that as all this came through, people wondering what this is going to mean the dollar is up against the peso by about 3% overnight in asia, we saw some

ripple effects from this as all of the trade concerns about what happens between the united states and china continues. nikkei was down by 1.6%, and the shanghai composite down by 2/10 of a percent eunice yoon made an interesting point on twitter where she was saying the chinese probably look at this and think it's a good sign any companies that were thinking of relocating from china to mexico to take vadvantage of the new nafta may not be getting advantages. >> there was somewhat worrisome china pmi data, a manufacturing survey that came in much lower than expected indicated contraction and not expansion. >> is it 10% or 5% i thought it was -- >> 5% at first, ramping up it could go up to 25%. >> it starts at 5% >> maybe >> i think they said that very rapid succession it could move up and by october 1st it could

be 25%. >> a lot of calculus involved in this, obviously. it matters in terms of the election it matters in terms of the stock market, so trump is making a calculation here also he's been very frustrated with one of his promises to whatever you think his base is is immigration, but you've got to offset satisfying them with, you know, whether the economy, which is why some people say economic models indicate that he's got a good chance of re-election based on the economy, and yet this would -- this would -- you would think he'd want this handled quickly. >> for somebody who looks at the market as a report card. >> you know, mexico's going to pay for the wall, in this wall he may in his mind think mexico's paying for this, but then we're going to hear from leisman and everyone else it's just a tax on consumers and it doesn't hurt the country that's

being tariffed we'll see. mexico, can they really stem the movement across -- well, a lot of it is central america, and they've got their own border that they're not securing, mexico their southern border obviously is not secure enough it's a stopping point on the way from central america, honduras and el salvador. >> it's also the president's frustration with congress not being able to get anything done there, and saying okay, you do something about it. >> that's the whole chain of motivation and strategy and everything else that goes into it, but more immediately, first of all, u.s./mexico imports, it's a much more integrated system, right? it's the same company passing things back and forth across the border it's not really just ships arriving at a port and saying, you know, you owe us a tariff. i think that's one of the differences. the unexpected element of it certainly markets are adjusting to right now, but also it moves the markets in the direction they were already going, which is we had these challenges to growth we don't know what the world

growth picture looks like. the bond market's screaming for the fed to ease. the fed not sure what it should do in reaction to policy headwinds. all this is essentially reinforcing where the market was already. the good news is the s&p was down 5.5% before we woke up. the bond market was already in this defensive crouch. maybe this is just the news to kind of create that little decisive tax to see how far. >> the usmca, we're right in the middle of trying to get congress -- >> yesterday it went to the senate in mexico yesterday. >> and then i'm thinking we also just got the first revision or second report on gdp and trump's like all right, still got 3% i'm only a % off t5% off the his a lot of these things he thinks he's got leeway in terms of house money. i don't know whether that's true or not. >> creates massive uncertainty for any ceo. >> he's frustrated -- and you

know we don't always see it everywhere, but there are still lots of -- i was going to say boat loads of people, it's not coming in the ocean, but there are still lots of people. >> 4,500 people a day are coming and yesterday there was a caravan of almost a thousand people. >> we've got no place to take care of these people. >> wait for the commentary you're seeing people in the republican party saying hold on a sec. this seems like a misapplication of the president's tariff power. >> it's not based on the trade imbalance. >> it's not based on something -- >> it's base od on frustration. >> because you can't get anything through congress. >> kayla has nothing to say now because we've totally blanketed every issue, every nuance, every possible way to talk, kayla tausche is in d.c. did we get anything wrong? you've thought of all this stuff already i'm sure >> well, you guys hit all the high level points. i was on a briefing call last

night with the acting chief of staff mick mulvaney and the acting secretary of homeland security, which made some interesting comments about the administration's strategy here this tariff will escalate throughout the summer if mexico does not provide what the administration feels is a sufficient response, although these officials didn't put any specific numbers behind what that win would constitute, just that they wanted to see border crossings come down significa significantly and substantially and that they're taking this on a week by week and on a day by day basis. the president said he wants this problem remedied as soon as possible, although a response from mexico's president seemed to hit back at the president president lopez obrador saying social problems are not solved with taxes, saying that mexico promotes dialogue and finding alternatives to the immigration issue. you guys mentioned members of congress and how some of them are already criticizing this move by the president. senator chuck grassley, chairs the senate finance committee that is the committee that has

the most powerful jurisdiction on trade, and he put out a statement saying trade policy and border security are separate issues this is a misuse of presidential tariff authority and counter to congressional intent he says that this strategy will imperil the usmca. he says following through on this threat would seriously jeopardize the passage of the usmca. i support nearly every one of president trump's immigration policies but i do not support this one he urges the president to consider other options we will see what happens in the next ten days. mulvaney said to reporters last night that he hopes that these tariffs don't go into effect and that the mexican government steps in and stems the flow of migrants into its country and therefore into the united states so that they don't have to put these in place in ten days, seeming to signal that there's a little bit of a window here for the two countries to work together i would also remind you, this is not the first time that president trump has weaponized

tariffs to get a political or a policy outcome you'll remember last summer he doubled steel and aluminum tariffs on turkey to secure the release of the evangelical pastor andrew brunson, and that release did happen shortly after that happened. guys. >> all right, kayla, thank you what are your odds of this happening on the 10th? do you think it really happens it hasn't happened yet what do you think, 50/50 80%? >> i think it's notable that they set this deadline ten days from now and also notable there's not clear benchmark the u.s. is communicating mexico needs to hit that gives the president the right to change his mind, to adjust his expectations and see if the stock market goes down 5 additional percentage points may they reconsider whether this is the best approach. there was some internal tussle at the white house to get to this policy proposal >> whose idea was this >> perhaps some of those other

voices will get to him. >> kayla, whose idea was this? >> we're still trying to get to the bottom of where this came from the president has said i am the tariff man he has been the most vocal proponent at the highest level for these tariffs and he believes they are an effective instrument, albeit a blunt one, to get the outcome he desires. >> drudge immediately was slaps. if you put tariffs on, kayla, you slap them on there's no other word -- >> threatens. >> no, slap. >> but this is threatens >> there's a reason for that it used to be on cargo coming on boats they'd actually put a notice, they'd slap a piece of paper. >> the other reason it's four letters so in the old news paper headlines it was an efficient word. >> thank you kayla, mike santoli i've heard a lot of your reaction do you have additional reaction? >> the market is already kind of in this direction. i think it's going to just be

more flux, and so right now the global reaction is more of the same of what we've seen in may. >> look, what happens if usmca, if the new nafta doesn't get passed when you already members of congress, pelosi threatening to not bring it for a vote. >> it's another -- it's one of those layers of fog that's going to go on top of the policy side of the economy. >> pelosi -- we had the big conversation already whether they're going to give him a win on this either way. >> ence's chief of staff thought it would get passed this summer, as recently as last week or earlier this week, he thought it was going to get passed this summer i think this adds all kind of uncertainty, and nafta not being there, not having a renewal is a much bigger issue for the u.s. economy. in 2019 it is our number one trading partner. >> all right, so you're going to -- is he really in georgia,

sorkin >> yes. >> did you find your wallet, andrew did you find your wallet >> i did >> let me guess, it was at home with your air buds. >> it was a at home with my air buds, yes, thank you, for that the i couldn't find my wallet on the way to the airport yesterday. >> it wasn't here all morning, and then you go in there and all hell breaks loose. the entire staff is scouring you knew it was going to be at home, didn't you >> i didn't know it would be at home we've got a big show coming up we're going to continue the conversation that you guys are having right now with cat cole who's the ceo of focus brands. they have 6,000 locations, 50 different countries. these tariff wars matter the company behind cinnabon, southwest grill, jamba juice and much more. business around the world and right here in georgia, the health of consumer and a lot more plus we've got a lot more from

the fallout from president trump's tariff announcement. we want to take a quick look at the biggest premarket winners and losers right now we're back from atlanta in just a moment ♪ and he went off to andy's house, slipping through the backwos iet aodquas mouse ♪ ♪ came upon some tracks too small for andy to make ♪ plants capture co2. what if other kinds of plants captured it too? if these industrial plants had technology that captured carbon like trees we could help lower emissions. carbon capture is important technology - and experts agree. that's why we're working on ways to improve it. so plants... can be a little more... like plants. ♪

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if you are just waking up, here's what you need to know this morning stock futures are in the red after president trump announced he would be imposing a 5% tariff on mexican imports starting june 10th those tariffs will jump to 10% on july 1st and 15% on august 1st, 20% by september 1st and 25% on october 1st if mexico doesn't do something to stop the number of my fwraig coming across the border all of this coming as a big surprise, and the markets reacting as such dow futures indicated down by about 260 points if you've been watching the ten-year, you'll see it's been under extreme pressure, too. yields across the board with the ten-year at 2.154% now. >> the two-year is notable too last time we were down here it was january of 2018. that was four fed rate hikes ago. the bond market is firmly in

position to say -- >> the fed should be cutting. >> what was our last, 213 we said. >> i asked you 1.9% and you said -- >> what was it, we're 215 today? >> we had gotten -- >> no -- 220s. >> and then there was another one that said, someone said it was down there and that sounded ridiculous. >> it sounded crazy. we blew right through that >> 2.15 now. >> for the ten-year. we're going to talk much more about tariffs and the market reaction all morning long. right now let's get back to andrew in atlanta. he joins us with a special guest. an dr andrew we are at the hope global forum, one of the hottest cities for business we want to continue the conversation, pick up with where you were kat cole is with us, coo and president of focus brands, of course parent company of brand like mow's, southwest grill, cinnabon, pretzels, and jamba

juice of course. where i want to go with this, your 6,000 locations around the world, 50 countries, you're in mexico you're in china, you wake up to this news, and you think what? >> barely had my coffee yet. you know, the question is how is it going to play out we've learned over time not to overreact to these things. we have a large enough corporation where we can buy and secure supply in a reasonable way to protect for volatility, but it's wow. >> for you guys it's going to be more of a supply story in terms of getting those avocados here rather than necessarily the locations you have in mexico ab. what do we promote and what's the pricing strategy around it as costs rise. >> will there be a conference call or phone call about shifts or changes in that sly chaupply? >> i would imagine our supply chain will be very busy today. >> perhaps at small businesses and large ones around the

country. >> so different than for a small business who's probably on the phone with their local supply guy if they're reading the news saying what is this going to mean for me. for us because we have so many brands and an infrastructure where we actually collaboratively procuring supply, it will be a bit of a more sophisticated conversation where we talk to our purchasing group, our core suppliers, people around the world where we get product. lot of product is sourced domestically, but certainly avocados as you mentioned and a few others come straight from mexico. >> what else would be on the list in the food world >> certainly the produce >> produce is going to be a big one, whether it's strawberries, mai mang mangos, other types of citrus fruits, that's going to be a main import. we source a ton from arizona and california but certainly mexico is part of that supply. >> do you look at that as a potential net benefit long-term to the u.s. or do you -- i mean, do you say to yourself, oh, this is going to help the farmers

or do you say this is an actual real problem. >> i think it's going to create this volatile out of nowhere some winners on one side and losers on the other. on the restaurant side in the short-term if you're a larger organization like us in the short-term there's not a lot of o'pain in the long-term it creates some questions around menu innovation and pricing. >> what about your position as a company that is entering new markets around the world, i'm thinking about china, now we're on to a different tariff trade story. >> yeah. >> you have a huge business in the middle east, which we should talk about in terms of where the united states is and how you feel like you're you as a company therefore being perceived when you walk into these new markets, how has it changed >> yeah, over time certainly the discussion around the united states issue american brands, and then the politics associated with it have come more into the forefront than they ever have been it was never a discussion ten years ago when we were opening locations internationally. today it is a bit more, but still today -- >> when you say there's

discussions, what are those discussions like, meaning you go into -- you want to open a store in beijing, and the answer is different how? >> you know, the answer isn't different today for opening a store. there are different discussions with franchisees around the geopolitical climate, imports, tariffs, costs of doing business as it relates to the core consumer that lovers our brands in china, in the middle east, in south and central america that piece isn't changing they still love giant cinnamon rolls and delicious smooth ties and there's still a love for american brands today. >> the idea that you are an icon of the united states. >> yeah. >> still a positive? i just want to -- >> yeah, i will tell you it's not slowing down franchise sales today. our brands are growing more globally than they ever have there are certainly more conversations on the back channel and over a coffee with owners, but as it relates to the core business proposition, no, the brands are still loved. >> two very quick questions.

uber announced their earnings last night uber eats has become a huge component, how do you think that changes your business? >> it is changing our business radically. the consumer being willing to pay what it costs to get product deliver asked that not being just a coastal or urban thing, it's not just a young person's thing. >> are you -- would you be betting on uber eats versus post mates? there's a whole list of them. >> grub hub, post mates, door dash. >> who do you want to be in business with? >> the two big players are the ones we're really leaning into, uber eats door dash have the most coverage and growth, but post mates is a nice hold on the west coast, and we've got a lot of west coast based businesses. >> i know you're here talking about inclusive capitalism, we have not been inclusive enough to be able to talk about that this morning i know we will later in this broadcast. thank you for being with us. >> my pleasure. >> appreciate it >> guys, want to send it back to you. >> thank you

we will be back momentarily, probably got some nice weather finally stopped raining up here. we'll let you know it's going to be nice today. coming up, fallout from the big trade announcement that president trump's going to slap new tariffs on mexico. ro'll show you some big red arws for automakers that manufacture in that country. that's coming up next. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.

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can you raise the bar while reducing your footprint? for our 100 years we've been answering the questions of today to meet the energy needs of tomorrow. southern company shares of the major automakers hitting the skids today after president trump threatens to slap 5% initially tariffs on all mexican imports those tariffs could rise to 25%. gm, whichis the largest automaker in mexico with 14 plants is down more than 4%. nissan's exports from mexico

account for roughly a quarter of its u.s. sales it's down 5% today automakers have long built vehicles in mexico taking advantage of the proximity to the u.s. and the cheap labor the u.s. importing 2.7 million cars across the southern border last year alone. according to deutsche bank, cars, trucks, buses, and auto parts are mexico's biggest export items to the u.s. totaling $93.3 billion last year >> and mike, as you pointed out, some of these parts or vehicles go back and forth across the border multiple times. >> absolutely. it was feud since naftviewed bya single market and you have some products going back and forth across the border multiple times before you have a finished car >> i think the imports from mexico up about 60% since 2008 >> and more recently a lot of shift from china to mexico if

companies could shift production. >> carl was tweeting about that this morning about how go pro had been looking at mexico as a place to start sourcing their cameras instead of china because of the trade concerns there. this is going to be the type of thing you see play out. >> i think the real takeaway is it just stalls further planning, capital investment, people look at this and say there's no defined parameters around this policy it seems very discretionary right now, so there's not really a process you can sort of start to handicap if the tariffs go into effect. when we return, much more on our big story of the morning, president trump slapping new tariffs potentially on mexico. that would take place on june 10th in an effort to try and secure the southern border more market reaction coming up. stocks on the mover fr uber first report: right now as we head to a break, take a look at yesterday's s&p 500 win skpers lo -- winners and losers. >> it was great. >> it was pretty good. >> it wasn't bad.

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♪ i'm bringing you a love that' true so get ready, get ready ♪ >> announcer: welcome back, you're watching "squawk box" live from the nasdaq market site in times square. good morning, breaking news, u.s. futures pointing to losses at the open capping off what would be the worst month for wall street this year. president trump says the u.s. will impose 5% tariffs on all mexican imports starting june 10th until undocumented migration across the border is remedied to the president's satisfaction those tariffs will increase as high as 25% until the situation is resolved. you wonder always whether, oh, yeah, sure, is there teeth in any of these threats looking at the last six months with china, if you're in mexico, if you're a leader in mexico you'd have to say there's no way

i don't think that this might happen. >> if you're a business leader you better be coming up with plan b very quickly. >> it's not oh, he's bluffing. >> and i think the market just says, look, does it further help growth or hurt growth. on the margin it hurts growth. it sort of reinforces this idea that we're maybe globally getting to some kind of a stall speed, and you know, maybe the fed's going to have to do something right now. for the market, though, dynamics the s&p would open decisively below its 200 day average which it's been toying with for a couple of days. >> what is it? >> 1776 is the 200 day moving average. >> sometimes you bounce off it sometimes you clear through it, sometimes it kind of toggles around and then recovers there's no saying how it goes from there, but if you were looking at this week's action and saying, it's been a little tentative. it hasn't been decisive yet, people are negative. >> this pushes it. >> if you get some kind of a flush, maybe that's going to be the test to say, you know, can

we find some kind of a -- >> i think your point earlier was a very important one though. as ceo s are looking at this, cfos, and they're trying to figure out what to do, this could put a freeze on capital expenditures we've been wondering why there hasn't been more capex spending given the situation. >> now we're a year and a half before the election, you're in that window where any capital investment would have to be based on a longer horizon than that does create a little more of a paralysis to say look, let's just wait and see and hunker down for a while i also keep saying the biggest gains of this entire bull market that's been going on a decade happened when something investors were very afraid of didn't happen. i don't mean the tariffs won't happen but maybe you don't get a big growth effect and the u.s. economy holds up okay, and we feel like we've already discounted weakness in earnings.

>> a lot of people talking about this obviously if we have recession fears, whether they're justified or not but in certain markets you're seeing things that indicate versus three months ago they're more -- obviously more prevalent about worrying about that. this could be definitely something that pushes you into theoretically if it went to 25%. >> interesting to hear what the texas congressional delegation has to say. >> as i say, i'm having some conversations. i still think, you know, with trump either hate him or love him but one of the things that people who support him like is he is politically fearless, much more than a lot of mainstream politicians are, but then again, he -- i do think he wants to get reelected and there's always a way to find a safety valve with -- to claim victory in some respect between -- >> which is why it's probably

important there's nothing set out to say this will prevent us from putting out the tariffs we won't say what the improvement needs to be for that. >> previously i've seen him say mexico's doing much better wasn't that about six months ago, they're doing much better in terms of -- >> we reached an agreement with usmca, with new nafta, but the fickleness is an impact on business leaders and that could have an impact on business investment, and that could drive whether or not you wind up going into a recession or whether you see additional pressure on the markets. >> we've had former diplomats that have actually -- and not trump friends -- that have said his craziness sometimes can be. >> effective. >> effective in terms of, you know -- >> as a tactic >> we're watching shares of uber, watching this last night after its first set of results since going public after reporting a $1 billion loss, as costs grow for drivers and food

delivery it was in line with company estimates and analysts and everything else. revenue rose 20%, it was at the high end of uber's forecast. we'll talk much more about uber at the bottom of the hour. some people said that -- so they indicated that maybe some of the competitive pressure from lyft was easing and then i saw people say but you -- your losses peaked even though some of the competitive pressure -- this is what you do when competitive pressures ease you still lose a billion >> they're spending is up pretty drastically as they were heading into the ipo it gets back to that question of competition. if you have competition and you don't have some sort of agreed we're not going to cut prices with the competition, if you don't have some sort of a cartel, can you surf voovive. >> silicon valley said it was worth 120 billion. >> wall street says 57 billion. >> exactly at the ipo. >> at $2.26 a share in terms of the losses if you bought 100 shares, what are your losses

if you bought a thousand shares what are your losses. >> if you tonowned it yesterdayt was on such a long horizon, that the three month window is not that helpful in deciding whether you're right or wrong. >> right coming up, andrew's interview with billionaire investor tony ressler, that's coming up. >> when you bought this team, did you ever think you were going to become as critical a component not just from a sports and cultural element, but as an engine of the economy? >> i think sports can bring a city together. i think sports can have an incredibly positive impact >> you guys see the raptors won last night i can't wait to watch today's game, i'll be able to watch since i don't have to get up tomorrow or is it on saturday during the day, saturday night do i get to watch it or is it on sunday afternoon where i can watch it no, it's on at 8:00 p.m. sunday

night, thank you for nothing, adam >> silver? >> yeah. thanks >> that interview -- >> so we don't see any of it that interview is coming up right after the break. maybe i'll take monday off here's a quick check on today's currency moves ♪ i said are you going to be my girl ♪

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welcome back, u.s. equity futures at this hour indicated down, they were down 270 points. we've seen sort of stuck there, the nasdaq indicated down 105, and the s&p indicated down about 33 right now let's get back down to andrew in atlanta. andrew >> hey, thank you for that, joe. a very busy day in the markets we're covering all of that we're at the hope global forum where i spoke with one of the biggest players here in atlanta, billionaire tony ressler, oversees $130 billion. he's also the co-owner of the atlanta hawks. i began asking about all the volatility in the markets, the concern about the economy right now, and specifically where he thinks we are in the economic cycle. here's what he had to say. >> there's not that much debate on where we are in the cycle meaning most people would say we're very late in the cycle

because we are on the other hand, at least at areas manageme aries management we evaluate hundreds, actually thousands of companies on a weekly or quarterly or monthly basis in our direct lending business, in our liquid credit business, in our private equity business, certainly our real estate business as well we see an enormous number of companies. >> where do you see the biggest opportunity right now in terms of investment? >> again, under the category, again under the where we're going and large financial institutions in the u.s. and europe particularly since 2008 have been forced to change the way they do business, and many firms, aries management being one of them, has stepped into many of the assets that once resided on the balance sheet of banks. it's one of the reasons this alternative asset category has grown and will continue to grow.

obviously we are -- we're -- it's somewhat self-serving but we do believe these assets will continue to be attractive. we talked about trade and president trump's negotiating techniques with china. >> my experience with the chinese is that they are sophisticated. they understand what's being for china. i don't think they negotiate in the public domain the way many of our current leaders seem to in the u.s i don't think any of us have yet adjusted to communicating through twitter. this is all new for not just the chinese. this is new and difficult to digest for many americans as well as chinese, but the truth of the matter is the trump administration is making some, i think, very important points about how we do business with china, how he's communicating, listen, as you know by now, he's got a style. we're not going to change it, and hopefully the trump

administration and the chinese lower the amount of noise, focus more on substance, and i think then you'll see real progress. >> and we are here in atlanta and perhaps the biggest topic of the moment right here is the abortion law here with a number of big entertainment companies speaking out saying they don't want to do business in this state if the policy is enacted i asked tony ressler what he makes of this controversy and the impact on the business community, and he has some provocative thoughts >> well, this is as you said in the beginning, something sensitive. i can't help myself. irrespective of your social view, irrespective of your politics, we had a governor in the state of georgia that ran on being incredibly friendly to business, incredibly supportive to business. this is a state that has built a remarkable relationship with the entertainment industry over the past ten or15 years offering tax incentives to build what is today one of the largest

employers, one of the largest industries that operates in this state. does the governor have even the right to -- knowing that that industry is a liberal industry and is, in fact, focused on pro-choice as really core to many of the companies that operate as you're hearing in response to production leaving or potentially leaving the state. my view is it's literally -- it's political malpractice to poke in the eye one of the largest industries that employs your population after spending 15 years attracting them in any way possible led by tax incentives so how could you say you're business friendly and yet go after what is, in fact, one of your largest employers so i'd say it's really bad business that's i guess a diplomatic way of avoiding the social issue and the political issue. it really is bad business if you think about it

>> social issues becoming economic issues right here in georgia. he really didn't want to make a comment on the social impact, but boy did he make one on the economic impact and already making headlines with some of his thoughts here. of course the owner of the atlanta hawks he was off to watch the game last night, guys, but a lot going on here. we're going to bring you more on the markets, the trade turmoil, what's going on with mexico and china, and we've got a number of big executives also talk to ed bastian from delta, and we'll bring you some of that in just a little bit >> becky. >> andrew, thank you very much when we come back, we're going to be talking uber the company reporting a $1 billion loss in its first ever quarterly report, and the stock is pushing higher. we'll talk about the future of the company next as we head to a break though, let's take a quick check of what's been happening in the european markets this morning, under pressure across the board, the dax in germany down by 2%, the cac's off 1%, and the ftse

off 1% concerns about what's happening in mexico, and china manufacturing data coming in overnight that showed that the manufacturing there is actually contracting ask that was a surprise we'll talk more when "squawk box" comes right back. is doing s that i want to do, not the things i have to do. unlike seattle, less than half of americans participate in their employer retirement plans. so what keeps people more engaged in their retirement? i want to have the ability to easily transact online, great selection of funds, great advice, everything in one place. helping people in their working years and beyond. that's financial wellness. talk to your employer or start a plan at prudential. what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives.

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welcome back, everybody. uber reported its first-quarter numbers yesterday, posting an inline loss of $1 billion. and just this morning, one of the few banks with coverage of the company so far, atlantic equities, is upgrading its rating to overweight from neutral, thanks in part to an easier competitive environment joining us right now for more is uber investor bradley tusk, ceo of tusk ventures, and dan primak, axios' business editor

dan, your quick takeaway of what you thought opinion in line with what the street was expecting, but still a $1 billion loss. >> still a loss. there was a mild upgrade there, the stock went up a little bit it's almost like people didn't believe what uber said it was going to do, right this is in line with what they said three weeks ago people buy the stock because they hid it. that suggests they didn't trust them. >> bradley, let's talk a little bit about this, as somebody who's been long time involved with the company and who has a holding in uber. what did you think when you saw these numbers yesterday? >> they were what i expected, and as dan said, it's what had been put out there i think the underlying problem, though, is we're addressing these things at the margins trying to address for investor expectation on the amount of losses, instead of selling the case as to why this is a good investment long term for the market i think one of the big problems uber's facing right now is they've brought in a ceo and leadership who calm things down at a time of crisis, and that was great, but sort of didn't

think about what the market would need and when the company finally went public, the belief and the vision in this, what uber can be, isn't really there no one's investing in a company that's losing $1 billion a quarter for its profitability today, only investing because of belief in the future, and uber's doing a really poor job demonstrating why people should believe. >> i think part of the reason why the stock's up today is because dara said that the competitive outlook is maybe improving, that they're not seeing the same pressure from lyft trmi itrying to undercut tn prices that's been my question, can this market for any of these players be successful if they are trying to undercut each other on pricing >> look, it's going to go one of two directions the best thing for both companies going public around the same time is the driver substance dasion war has to end because the market won't tolerate it in the way investors did, so that's good because it reduces losses and spend on the flip side, you'll either have fewer drivers on the platform -- you're subsidizing them because you're trying to keep them there, not just to be

nice -- which means wait times may go up, meaning people may use uber or lyft less, or you'll have to raise prices to make up for it either way, it reduces some pressure on the company but poses a new challenge to having it dealt with. >> which is maybe, dan, what we saw -- >> can i add to that the other piece of that is when you hear uber on the conference call, they're talking about uber eats as their big growth ride-hail, the growth has slowed down, but on eats, you still have that competitive pressure with privately held companies like doordash, which can take huge losses. >> good point. what do you say to that? >> yeah, you're right. they've talked about a subscription model for uber eats, which is smart because if you think of me as a different user of these services, i have no loyalty to any of them. whoever will get me the food fastest is fine with me. if i'm paying a monthly fee, i'll use that more regularly. >> likeamazon. >> yeah, so that was encouraging. but thinking of things like we'll take you off the platform, they're really incremental and i think they have to show much more vision.

when i was studying in writing in college, the teacher would say "show, don't tell. uber is doing a lot of showing, not much telling >> mike santoli, thanks for being here coming up, the futures continue to be under some pressure this morning, down 258 points after president trump threatened to vap new tariffs on mexico we're going to talk about the fallout in the markets, the sell-off in the auto stocks, and the big currency swings. eaghafr e ing rit teth brk.

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global ark is sinking after president trump's announcement of a new tariff on mexico. the latest on the market's sell-off and developments out of washington, straight ahead. uber's first quarter as a publicly traded company. what investors should take away from the report. and we're live in atlanta speaking to some of the top business leaders about the president's tariff push, the markets, and growing business in the south, as the second hour of "squawk box" begins right now. ♪ try to run, try to hide, brea on through to the other side ♪ ♪ break on through to the other side, break on through ♪ >> announcer: live from the beating heart of business, new york, this is "squawk box.

good morning, and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick. andrew is in atlanta this morning. we will hear from him in just a bit. first, though, the morning's market in the sell-off that we're witnessing in the u.s. equity futures premarket were down about 1% here or so so, the point number sounds big, and it is, 255 points, but it's like i said, about 1% on the dow. >> and it comes after a close to 6% decline. >> 5% or 6%, yes, from the highs. then the s&p 500 up 31 or so, nasdaq indicated down about 100. and we've got -- i think we should -- maybe we'll show it later, but the ten-year is below 2.20% at this point. >> that is something to sit up and take notice of ten-year right now at 2.163%. >> and the five-year -- >> the two-year sitting at 2%, but it's been below that this morning. and the five-year is still below

that at 1.96%. president trump announcing plans to impose a 5% tariff on all mexican imports. that would happen starting june 10th and would proceed potentially to a 25% tariff. let's break down what it means to the economy and what average americans actually think about tariffs. steve liesman has that. >> a couple things we'll draw from here. as of roughly 7:30 last night, economists, investors, u.s. consumers have a new tariff to fit into their outlook and reactions are not positive "if you're going to turn the world upside down, you're going to turn the economy upside do down." "trump trade policy might well mean a permanent state of endemic uncertainty and instability in the global trading system." what are we talking about? we're talking about cars, $93 billion of cars imported from mexico, $27 billion of computers, this according to goldman sachs that wrote an article on this. $17 billion of electric equipment, crude oil, equipment and veggies, $15 billion of

vegetables u.s. imports from mexico total, $347 billion so, put the full 25% in tariffs on it, it would equal $87 billion, assuming no exemptions. so, what is that that would more than surpass the $72 billion in estimated tax revenue from all of the president's other tariffs. so, we'll do 70 and 80 is 150. we do $260 billion of corporate profit income tax. so, that's $150 billion from revenue. kevin brady's getting ahis bordr adjustment tax meanwhile, here are the things that are out there take a look at the results of our survey of 800 americans taken in the past week 43% disapprove of how he handles trade. 50% disapprove of how he handles border security and immigration. 45% disapprove of how he handles u.s./china relations we did not put mexico in this

context. it was not on there. however, his overall economic and job approval rating remain pretty stable here in fact, one of our pollsters, the republican pollster, calls trump's approval rating one of the most stable forces in the universe everything happens, goes up, goes down, and this doesn't change 48% approval you had little bump before when the economy was running red-hot last summer. 48% approval is economic approval 40% overall job approval nothing changed. i will say that it was interesting to see republicans support this president, 82% supported the president. when we asked about tariffs, that number drops to 53% so, it is not all that popular amongst self-described republicans. >> no, even senator grassley making some comments about it. >> made some comments about that it will be interesting to see how that plays politically, domestically as well as what impact it has. i don't think, though, no indication here that it's a voting issue

it's not abortion. it's not the supreme court it's not -- well, it's not taxes yet. >> and if the tariffs went too long where they don't say, okay, do it as long as you need, just make sure it's not permanent -- if it becomes clear that it's going to stay for a while, the 82% will start going down. >> right. >> the 53% and the 82% will meet somewhere. >> you have farmers supporting it until -- >> -- saying look, i still support him, but i don't like these tariffs, but i want them off -- >> and people make that distinction in our poll, which i think is fascinating. >> so, these are -- >> sorry, there's one more factoid. >> but these are athletes that are -- are they out of school and ready to go into the workforce with a professional -- the all-americans? or are they -- isn't it june it's june! >> it's comforting it's like a sunny, rainy day when you make jokes that you've made for so long -- >> how do they find the athletes when they've left school >> we have a -- >> i don't know why he cares about the athletes and what they think. usually they're very funny they've never heard of ben

bernanke. >> can i just say, we changed the poll name. that's why we made the name called all america, because people thought we were only asking rich people. >> oh, rich people. >> like, cnbc poll means we're only talking to rich people and investors. >> you saw the first-year contracts in the nfl -- >> even in college they're getting some revenue. >> that's what i'm talking about. >> can i tell you one more actual fact here thank you for that, joe. >> you're welcome. >> you did warm my heart there. >> it's a three-hour show. i'm here all week. >> so, the probability of a rate cut by the federal reserve, 71% for september. >> wow. >> i'm not seeing any action in june and july. i think they're still thinking that the fed takes the summer off, but when they come off from summer vacation, they think the fed, 71% probability now, this is symptomatic, axiomattic, sympathetic -- is that the word i'm looking for, rick santelli -- with what happens in the fixed-income

markets, that if the two-year's going to fall, you'll have a reaction in the markets -- >> the fundamentals are aligning with the dot-plot stars. it's bizarre the way it happens. >> yes. >> what's fascinating is bund yields and we haven't talked about that, minus 20 basis points the close from july 2016 is minus 19, so intraday -- >> why do you think bunds are that low what is that telling us, that this recession in germany -- >> it goes both ways i think this is one of the instances where we actually probably went down legitimately without the pressures of europe or japan, and we're pressuring them a bit -- >> can we give rick a proper introduction did we do that >> it's friday and it's early, so i'm going to allow you to just -- i'm not going to start anything, but -- >> rick santelli's here from chicago. so, rick, are you taking off your boot now and putting it on the back of your neck to talk about the impact -- >> he's starting it! he's starting it >> -- television on car manufacturers -- >> this is easy. all the polls would reverse if

gaining leverage, which is the only way trump thinks you can get anything done -- if it actually works or not. i mean, the real story isn't the prologue, it's the epilogue of how this works out. >> you're taking your boot out. >> they might not like the bumpy ride all the analysts and economists, intelligent people, are going to say it's not the way i would do it, but it's really the way it turns out. >> so now everyone's in agreement, right, that taxation is a reasonable means to a social end, right? democrats are -- >> i think you'd have to ask a democrat that's really their forte in life. >> now it's the republican forte to use taxes -- >> yeah, but -- >> fort. forte is a musical term. fort is actually -- i know, like john like jon fortt. >> jon fortt okay it's now the fort of republicans, isn't it, rick, to use taxation >> i don't know how this is going to turn out, but i will say this -- how do you get leverage >> he's being sarcastic, rick.

he's trying to nudge you. >> right how do you get education how do you get health care you tax people hold on, let's bring in -- >> can we bring it back to markets and economics. >> please, do it. >> otherwise, the fireworks are very interesting, but we have to talk about economics and at the end of the day, this is not a good move but at the same time, i think it is worthwhile remembering, the economy has enough momentum to kind of live through it. so, we will shave off -- we are clearly increasing the risks, you know, i think, and the risks are really on the capital investment front far more than consumption. >> and that is the big question. >> yes. >> we've already seen -- >> becky's been on that all morning. >> i think that is really the key. we are not just jeopardizing the growth today we are jeopardizing future growth, and that is playing with fire so, i think the expectation the market still has -- if i had told you three months ago that we will have a full-fledged trade war and the markets would be down 5%, 6%, i don't think you would have believed that,

and i think what that is telling you is the fact that markets are still expecting that we will reach some sort of a resolution. mr. santelli is right, because -- >> santini -- >> president trump famously told joe kernen, i want to say in the summer of 2017, or was that 2018 i can't remember. >> i can't remember -- >> you sat down with him. >> steve, i can't remember yesterday. >> remember he told you we were playing with house money on tariffs? >> oh, yeah, yeah. >> are we still doing that when it comes to growth and the stock market >> at the end of the day, tariffs are taxation it's fiscal consolidation. and the only people who end up paying on all of that are the u.s. consumers and u.s. companies. there's no doubt about that. that's basic economics i think the bottom line, though, is the markets are still expecting some sort of a resolution and i think as long as that is the case, the markets will probably hold these levels. >> here's another issue that concerns me longer term, just from capital expenditures. we thought because of the tax cuts that we would see corporations putting more back

into capital expenditures -- >> good point. >> this is going to be the counter effect to that, so you're never going to get a clean sort of experiment on what happens -- >> get some gps on what lies ahead two or three or four quarters, certainly they're not going to -- >> doesn't it strike you as bizarre that a president who, in my opinion, has done more to foster capital spending by companies, has on the other hand done asmuch to reduce it >> well, you know, i was talking to black & decker's ceo, stanley black & decker, and his interpretation was -- obviously not with the mexican element, but with the chinese element -- is that, listen, it doesn't matter to him now how it works out. he's going to diversify all his supply lines, and that is going to be something that's good, just like your portfolio. >> but you had guys who were, like, who were saying, oh, let's move to mexico oh, remember that order for mexico let's change that this morning and then what's next >> i think the bigger concern is how complicated the supply chain is when it comes to the auto parts. from michigan, they get more than $15 billion of intermediate

parts from mexico, for texas, $6 billion, $2 billion for kentucky these are parts that go back and forth multiple times across the border, and that becomes difficult to try to -- >> now we are not talking about imports, we are talking about core of u.s. production. i think mexico -- with china, we were talking about things like -- things that we import and things that we consume >> finished products. >> finished products now we are talking about auto production i think the impact of auto production in the u.s. economy is significantly higher than what it would be for a few tv sets or things like that so, this is not a good outcome by any measure i think the markets still believe there will be some sort of a settlement and then we'll probably go up from there after we do that >> ten days. >> ten days to what? >> he does get kind of clever, though, okay before anything actually goes into effect, he has a lot of

wiggle room in the way these tariffs are implemented, so it's going to be fascinating to see listen, the president doesn't get any help on his key issues one of the few politicians where he gave you a list when he ran for president. i want to do this, this, this, and this, and he actually walks around and tries to put a checkmark on it. immigration is something he's not getting any help on. the guy is desperate to try to make a difference. would i do it? i don't know i'm not in his situation, but style think everybody's underestimating the notion you're looking at the here and now. what are about the big picture on these big deals a generation down the road? somebody needs to think that way. the chinese certainly do. >> i think from a trade policy standpoint, do we have to do things to bring change absolutely imposing unilateral tariffs, is that the best way to get there i'm not so sure. >> do you have a better idea how do you get their attention >> i think there are lots of ways of getting their attention -- >> give me two examples. >> which is engaging with them in a far more productive way as somebody was saying before -- >> like we've done for the last

couple of decades? >> i think they get the seriousness of this president, but at the same time -- >> but why are they getting the seriousness? because he's a strange guy and he gets very aggressive, out of left field -- >> the negotiation hasn't worked is a big myth of the trump administration let me tell you what negotiations have done on the highest level, they have kept the bullets from flying and the armies from marching that's on the highest level. on the second level, they've opened up markets, created vast opportunities for wealth in this country and in other countries global growth, u.s. growth have both done well because we have negotiated and cooperated. along comes president trump who has essentially rewritten the last 20 years and said nothing that came before me has worked it sounds like almost a religious entry into a bible -- >> i don't look at status quo as religion, so you can just stop there. that's not my thing. i like to think outside the box, and i like to get resolutions -- >> it's a myth. >> and having decades of

ambassadors that tell you we know how to do it, we're making progress, but they never end up in the promised land, never. >> well, i don't think we'll get to the promised land if we have a recession in the u.s. either >> we're bound to have a recession at some point. we will some day recessions are therapeutic one of the big problems in the world -- >> recessions are not therapeutic -- >> put a cork in it! >> recessions are not therapeutic by any measure >> unilateral tariffs are in response to existing unilateral tariffs that were already there, so that's another thing, too -- >> china and mexico, too -- >> tariffs were one-sided before now -- >> this is a reason to go after -- >> so they're not unilateral -- >> half with mexico, that's playing with real fire -- >> you have a camera in chicago, don't you? >> particularly when it comes to nafta -- >> can i come to you every day you're not going to be on studio, but do you have a camera where i can come to you? >> any time you want. >> i want you here just, it makes it easier for me. all right. >> gentlemen, thank you. when we come back, we've got more tariff talk with the ceo of jpmorgan chase consumer banking. right now, though, as we head to

break, let's take a look at u.s. companies with the biggest exposure to mexico "squawk box" will be back after a quick break. hey! i'm bill slowsky jr.,

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planning to draft a list of foreign companies that it calls unreliable, saying they could harm chinese companies eunice yoon is joining us from beijing on why this is a big deal and what it all means good to see you. >> reporter: thank you so much, becky. it appears china is drafting what it's been describing as an unreliable entities list, and it's laying the regulatory groundwork to go after foreign, and likely american, companies as well as individuals just moments ago, the commerce ministry via the state media said that on this unreliable entities list, it would apply to foreign enterprises, organizations, or individuals who don't obey market rules, the spirit of contracts, and who carry out a block or a cut in supply for chinese enterprises for noncommercial purposes and who severely harm chinese enterprises' rights and interests. so, this decision looks to be a

direct counter to -- the chinese telecoms gearmaker and this announcement by the commerce ministry looks as though it could potentially threaten those american companies with sanctions on the chinese side so far, there's no clarity as to what the specific measures would be or exactly when those measures would take hold, but this is what the american business community, and in fact, the general, broadly, the international business community, has been worried about with this trade war. the trade war could eventually lead to the chinese state going after individual companies, and in fact, just individuals. >> and just to put a little clarity, a finer point on it -- going after american companies or american individuals who are complying with u.s. law would

then put them at risk in china >> reporter: it's not clear. it's not clear and it's, i think, that uncertainty that's unsettling people in the business community here now. >> eunice, thank you very much we'll talk to you later about the implications of this threatened tariffs against mexico means but in the meantime, we want to get down to atlanta. andrew is there and he has a lot still coming up today. andrew, good morning again >> hey, thanks, becky. when we come back, we're going to be joined by one of the most powerful women in finance and one of my favorite people, the ceo of chase consumer banking. we'll talk about the markets, the consumer, the president's trade agenda and much more from here in atlanta. val, vern... i'm off to college and i'm not gonna be around... i'm worried about my parents' retirement. oh, don't worry. voya helps them to and through retirement... ...dealing with today's expenses... ...like college... ...while helping plan, invest and protect for the future. so they'll be okay... without me?

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welcome back to "squawk box. we're in atlanta this morning. i want to show you the futures right now, pointing to a sharply lower open on wall street. joining me now to discuss the market economy uncertainty and impacts on the market and more, thasunda duckett is here, ceo of jpmorgan chase one of my favorite people in the world. >> thank you. >> i'd like to talk about what's going on, red arrows across the

board, tariff news overnight i'm curious what's going on with the consumer as a function of all of this. we talk about the markets, but what about the real economy. >> when you look at the overall numbers at a macro level, unemployment continues to be low, at 3.6%, you see consumer confidence did spike up last month. so, the overall health of the consumer is strong but whenever you have market volatility like you have today, i mean, that's where it's just important for our advisers and bankers to talk to customers and keep them focused on their goals and objectives. >> do you think this, though, the headlines, actually impact consumers? people talk about -- >> yeah. >> -- you know, how closely correlated or not they are >> right yeah, i mean, i think it may drive some uncertainty and some confidence questions, but the reality is, when customers are just trying to figure out how to make ends meet, it's about engaging with them, keeping them focused and seeing what happens to consumer sentiment as a part of the market volatility but overall when you look at just the strength of the consumer, it continues to be strong, and that's why it's important for us to talk to them

and let them know what's going on in the market but keep them focused on their goals. >> maybe a curveball of a question, but from your old life as ceo of chase's automotive lending business, we were talking about the impact of what the mexico tariffs could look like it would impact the auto business in a big way. do you think that the automobile manufacturers can actually pass on increased cost to consumers at this moment >> yeah, i think, you know, for consumers, it's about what their monthly payment is, when you think about their affordability. and so, what they can pass on and what they can't, i mean, we'll see. but i think that when you have an increase in cost, ultimately, that can get passed to the customer, which will impact the affordability of the type of vehicle that they can purchase. >> you have been on a tour -- >> yes. >> -- called "the amazing chase," as in the amazing race of the country. >> right. >> speaking to all sorts of consumers everywhere what was the biggest lesson of this tour of yours >> "the amazing chase" is one of our favorite things. it's about getting out in the

marketplace, going across the country in one week, visiting over 200 branches. and the focus is to say thank you to our employees. >> right. >> and an opportunity to talk to the customers that are coming inside of our branches i think the one thing that really resonated with all of us is how they value the investments we're making in technology, but they also value the power of our branches and being able to talk to bankers and advisers about their goals and objectives, and that's something that i think, you know, we're really proud of because we are able to meet the needs of customers. >> was there any surprise, though, in terms of how you think consumers actually feel? >> there were no surprises i think we're always out in the marketplace and we're always listening to customers, so going on the tour, it's one of just continuing to get the feedback no real surprises, but more about, you know, what can we do more to help customers meet their financial goals. >> one of the big issues here is this idea of inclusive capitalism, something we've talked a lot about and you're passionate about. >> yes. >> what do you think we're not doing right, right now >> when you look at the overall

health of the consumer, what we are not doing well and one that we still have to focus on is that 46% of americans are concerned about saving $400 in the event of an emergency. and so, what we have to continue to do as an industry is to educate our customers, let them know what the importance is and how they can get on a path to saving, but also investing in technology, like our auto save rules, where customers can understand that they can save $5, $10, you know, every pay period, and how that adds up so, i think when you look at the importance of savings, it's one that we as an industry have to do better, but i would also point to different segments of the population and when you look at african-americans, for example, you see that the median net worth of black men and women is $200 to $300, compared to single white men and women, which is $15,000 to $28,000 so when you say what can we do better, we have to make sure that access to capital, access to building that rainy day fund is accessible to all americans across the country. >> t. duckett, that's an amazing

statistic. thank you for joining me $200 to $300. >> yes, single, median net worth, yes. >> compared to >> single white americans, $15,000 to $28,000. >> $15,000 to $28,000. >> yes. >> okay, that's something we should all take away from. so, thank you. great to see you this morning. guys, i'm going to send it back to you. >> andrew, thanks. coming up, some reports that amazon may be interested in buying boost mobile. details after the break. and take a look at u.s. equity futures, down about 250 points on the dow we'll be right back. ♪ what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information.

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welcome back to "squawk box. amazon is interested in buying prepaid cell phone service boost mobile from t-mobile, and sprint, according to a reuters report that says a deal would allow amazon to use the combined companies' wireless network for at least six years the report also says they would be interested in buying any wireless spectrum that could be divested t-mobile and sprint already have pledged to sell boost to reduce market share in prepaid wireless in order to gain regulatory approval for their planned $26 billion merger. still to come on "squawk box," much more on the market-moving news of the morning, new tariffs potentially on mexico. the futures down sharply after the announcement last night. we'll run you through what's moving and get the latest on the trade front. plus, uber's first report since going public we're going to break down the numbers for you. and cbd is all the buzz, but

regulations and restrictions are all over the map we're going to speak to the former fda commissioner, scott gottlieb, about a regulatory framework. check out the futures this morning, again on concerns about tariffs on mexico that could be put in on june 10th. dow futures down by 238 points, s&p futures down by 28, the nasdaq off by 90 it's going to be a rough end to the end of the trading month of may. wnloe already been -- market's do cse to 6% we'll see what happens with today's losses, too.

welcome back, everybody. uber reporting results for the first time as a public company will the results keep investors away from future ipos? leslie picker joins us now with more on that leslie, good morning. >> hey, good morning, becky. the rule of thumb is, when you do an ipo, make sure the first quarter of earnings you release is a home run. if you don't think it will be, you may want to consider delaying your debut or find a way to post better numbers that was the rule, at least, until this year's crop of unicorns went public lyft and pinterest each disappointed investors when they revealed their numbers over the last month shares of both stocks plummeted after they announced and last night, uber became the latest to report first-quarter numbers, beating expectations on the top line, but revenue growth has slowed and losses accelerated to a whopping $1 billion during the first three months of the year investors, though, seem to be shrugging that off, for now. the stock is modestly higher in premarket trading, although still well below its ipo price

but in many ways, the first quarter out of the gate is a bigger test. is the company reporting the way it said it would o are analysts able to model appropriately? how are executives performing on the call these questions are all factored into investors' trustworthiness in those at the helm of these ipos guys. >> leslie, good question let's talk more about uber with rett wallace and steven yang from kindred ventures, an early uber investor and adviser. rett, we hear from you quite a bit. steven, you had, you know, your initial investment you had $120 billion you've got $57 billion on a scale of one to ten, how are you feeling today after the results? are you about a 6.5, or are you still ecstatic about the investment >> i've always been a ten on the company since 2009, so, this

company's vision has always been about long-term growth and changing mobility and logistics, and they're on track to do that. we've got a strong, seasoned management team in place running the company and steering the ship, and we're super excited about it nelson an daria is doing a great job. >> what i didn't get to ask earlier, and i'll ask you and then rett, and that was -- sooner or later, it seems like uber and lyft are too good to be true, and it's still pretty expensive. like, it works really well for the situation a lot of people are in with their kids or even themselves, but it's still expensive. it's kind of a luxury to be able to, you know, not take mass transit or whatever. and if to get to where it's actually profitable goes up a lot, i'm not sure. is it inelastic, the demand for it, or do people finally do something else and it doesn't become profitable ever

steven >> so, i think the overall vision for the company is to build multiple product lines off of one common platform and driver network so, what you're seeing is segmentation across uber black, uber pool, uberx, and you're seeing actually experiments with public transportation in denver with uber. and so, i think that the concept that pricing is too high is actually misguided >> it is okay. >> i think there's pricing for segments there that fits americans and global riders well i think the other point is that when you build multiple product lines off one platform, there's a common infrastructure there and also multimodal transportation as well so you see freight actually picking up as a new business line so, i think the idea of utilization across the platform, the global uber platform, is super important. the logistics and the transportation mobility, all of that is sort of, they're

customers of the platform, so to speak from a technology perspective -- >> so, lyft would need to do this, too, then. and i know we're talking about uber, but you would say that all these positives about uber, they're not currently in lyft's business model, are they, or do you figure they will be? >> yeah, i think, you know, that runs across the board for all of uber's competition, whether it's ride-sharing or it's a third-party food delivery, all of their competition are sort of single-purpose companies, usually in one region, right, europe or asia or the u.s. uber's the only company that's truly global and has multiple lines of business that are scaling right now. >> okay. >> and they're mostly funded by private equity dollars today, whereas uber is now public and has a seasoned management team running the ship and so, i think one of the things to watch here is how the private equity dollars dry up. and i think the ultimate winner here is going to be based upon

brand, products, balance sheet, and management team. and we'll see how that plays out. >> rett, has anything changed since the report came or -- >> since yesterday nothing. it was a nice, boring call, which is what it should have been this management team i think was very comfortable, very steady. it's going it make people feel like, okay, we know what we're doing. we already knew what the numbers were going to be, so no surprise there. >> that's why my biggest ta takeaway was when they talked about the competitive pressures could be easing. >> that means they don't know, so they can't control it yesterday i heard on the call three things as far as the business is concerned, revenue growth for them is about differen products oeats is a new way to get customers. scooters and bikes is a way to get new customers. discounting and the competitive dynamics are about profitabil y profitability. lyft uses discounting to get share. so discounts are a growth driver for lyft uber thinks about that as making it rational. when they compete on brand, rather than on discounting or incentives, uber says that's good because it means they get back to profitability. but i think the other story

we're seeing -- and steve just mentioned this as far as the private equity dollars coming out of this. you know, the average basis of the investor in uber's preipo is less than $11. and with softbank shifting out of position out of their ownership, means we have to find new investors to support it in the public market. >> did they say anything about how they think the competitive pressures are easing and therefore we will no longer discount, or -- >> no, they said the opposite of that, which is that we think it's easing, we hope it's easing, we're a lot more comfortable in our chairs than last quarter, but if people want to fight about price, we'll be right there to fight with them about price is what they told us >> investor -- >> so buckle up. and really, for our smart customers who sat out the ipo, who said okay, there's no catalyst to invest here, you know, that was true at $45, that's true at $37, $38, 40 bucks. when do the ipo investors show up that's the question. >> last quick word >> and keep in mind that the, you know, the multiple lines of

product that uber's running -- uber eats, uber ridesharing, they're all built off one platform, so the marketplace and rider apps and the driver networks so, they're able to create multiple sources of utilization on that platform most other companies they're competing with cannot do that, so i would watch that as well. >> all right, steve, rett, thank you both for being here. we are monitoring the markets this morning after the announcement of new tariffs against mexico taking a look at the futures this morning, we're actually off our lows, but you're still down by 233 points below fair value s&p would open down by 27 points, the nasdaq off by almost 90 points. we are also watching the mexican peso we'll have much more on the market sell-off in just a bit. you can see the dollar's up by 2.8% against the peso. up next, we'll talk to dr. scott quttlieb about the growing cbd maet"sawk box" will be back aft a quick break. ectations, there's one thing you can be sure of. they're changing by the nanosecond.

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while we have seen pharmacy chains like walgreens and cvs selling these products in select stores, most were topcals, which were less controversial. others like walmart and costco have not made similar moves. many are waiting for the fda to put regulations in process, but tilray expects to launch the products in the u.s. by the end of the year and canopy growth has just told us that in the coming weeks, it will plant hemp in seven states. those states, including california, kentucky, and new york and new york's where the company said it would also launch hemp processing operations as well. the interesting question remains, what canopy will do with those hemp products, what kind of hemp products they'll make. >> right we're going to see all kinds of stuff that comes out of it thank you. for more on the hearing today, former fda commissioner scott gottlieb, also a cnbc contributor. scott, let's just start with what cbd is. it's not the stuff that makes you high in pot, but it is

supposedly something that has some medicinal qualities >> well, it does have medicinal qualities. as an approved drug, it's derived from cannabis, does the don't think it can't make you high. >> really? >> the cbd dried from cannabis, some of it does have thc in it when we analyze it, there are high concentrations of thc in it part of the problem is it's hard to differentiate the cbd derived from hemp which wouldn't have thc, to that derived from cannabis, which would have thc. >> how do you regulate that? what's legal >> that's the problem. there's more hemp growers now wanting to put cbd oil into the market because it's perceived as a high-margin derivative of hemp, so you'll have more cbd in the market and it will be hard for regulators to differentiate from the cbd derived from cannabis versus hemp and what is derived from cannabis could have high levels of thc in it the dogs have a hard time

differentiating it -- >> dogs? what do you mean >> the dogs that sniff -- >> oh, i thought you meant eating it -- >> i thought you meant people giving it to dogs. >> people are giving it to your dogs, on the perception that when you go to work, the dog will be more relaxed there is no science to support this it's flooding the market most of the products are illegal right now. i think the challenge is the food companies want to get into the business and there's no legal path so they're reluctant to step forward and are putting pressure on the regulators. >> it's -- i'm sorry, aditi -- we're arguing about the cbd and the potential that we may get thc in the cbd, but we're legalizing pot everywhere. that's the real issue, isn't it? >> well, on a state basis and i think there will have to be a federal reckoning at some point between what the states are doing and the federal regime but if you're legalizing thc -- >> the larger issue is whether we know whether we really want

to just go head long into just legalizing. >> remember there's also safety issues here. there's cumulative effects from taking too much thc. we know, for example -- >> oh, i know, but here we go. but i mean, we know that -- >> well, if you put it in every food substance and have it for breakfast, lunch and dinner, you're getting a lot of cbd. >> sorry, aditi. >> i'm wondering, how do you regulate not necessarily how in and of itself affects you, but how it might interact with other things you might take throughout the day, which in and of itself might be fine? >> those are questions i think the agency needs to answer that's why they had this workshop i set this workshop in motion. fda will have to have a reckoning here congress had an expectation when they passed the farm bill, even though they preserved the fda authorities, there would be a pathway against cbd into the food supply, so the question is how they do that congress could legislate a one-off around cbd it might be faster to require notifications from the companies and put the onus on the companies to come in with the scientific data to demonstrate that questions like the one you asked, that it could be safely put in food, that there isn't a cumulative effect, what is the

concentration. presumably, the agency would set a low concentration on what's allowable in food and a higher concentration would be a pharmaceutical-grade cbd component. there's ways to do that. the grass notification process, the food additive petition process. it would take years to do it for the companies, because i don't think they have the scientific data. >> that's interesting. if the onus is put on the companies and they're told they have to come up with it, what would that do to this industry overall, put things on a freeze for years? >> well, i think the industry would probably welcome that process right now, because i think at least the legitimate companies, the big-package food companies just want a pathway they could follow. i think they're willing to invest in the science, recognizing that that's going to be a barrier to entry to others who want to come in. that might be the most expeditious way to do this the idea of this workshop was to come up with a set of recommendations on what the regulatory framework would look like one of the things to do is to punt it back to congress and say congress has to legislate specifically on cbd. that could take years. >> you know, scott, you're in a really interesting position. you're a medical doctor who still practices. you've worked on wall street and

are back on wall street now and have been fda commissioner when you see things like pot stocks taking off, what do you think? >> i think it's getting ahead of where the regulation is right now. ultimately, i think that there is now such an impetus behind this, there is going to be a pathway, at least for the cbd. i think the issues around thc and some federal framework around that is a longer way off, will take one or two more administrations, but at least with cbd, i think there is going to be a pathway, but it's going to take a couple years and i do believe that the companies are going to have a hard time coming up with the scientific data, not just to demonstrate the safety of these products, but frankly, to demonstrate the benefits all these uses they're purporting right now, the fact that it's being put in dog food and pet food, i don't think they'll come up with any evidence to support that if it's a food additive, they could potentially put it in the food as long as they're careful with the claims they're making, not to say it has a therapeutic effect, and they could have a legal path to do that. right now the claims they're making probably violate the law. >> all right, so put on your doctor's hat and what would you tell consumers at home who are thinking about trying some of these products >> they're not getting a benefit. they spent $2 billion a year on

this last year cowen did a survey saying 7% of all americans have reported trying some cbd product, doing this without getting a therapeutic benefit. >> and what about topicals it seems like walgreens, cvs, are walking the line by putting topicals on the shelves without getting into the ingestibles is that legal? >> well, it's not clear what -- so, i looked at some of what's being sold in those stores, and it says hemp-derived it's not clear that it's cbd what exactly is in it from the hemp plant itself? but there is a legal path to putting cbd oils on the market in topicals if there's no absorption now, i don't think they've done the work to demonstrate there's no absorption, so that's probably a gray area i don't think anyone's going to regula regulate, enforce that right now because there is so much violative behavior, mostly in the pet food space there is a lot of cbd being put in put food. so there is low-hanging fruit before you get into the topicals. >> if you were at the fda, would you start taking actions to do those things >> we were taking actions where people were making egregious

claims, like cbd can treat cancer or prevent alzheimer's. i was trying to come up with a regulatory framework that had some imprint from congress and i think congress can either legislate a separate pathway that's a one-off on cbd or give the agency direction that they can use the food additive petition process or grass certification process, two processes they have right now that would put the onus on industry to come in with the scientific data to demonstrate that these can safely be put in food then it becomes a question of what claims you're going to allow, and i think the claims would probably be narrow. >> polls show more and more americans want to see pot legalized. does that put congress in a position of not wanting to step on anybody's toes when it comes to that, maybe more likely to push it to the fda or other agencies >> that happened a long time ago. i think that it's very difficult federally for an organization now to take action against these state dispensaries fda was still doing it dea seemed to have stepped away from it. i think fd weinke one of the few agencies still setting out enforcement actions, again, against people making egregious,

over-the-line claims, but i think we're probably an administration or two away from a federal regime that federal regime will probably look more onerous than what the states are allowing, but it will be a uniform federal regime i hope it doesn't go to fda because they have enough challenges to grapple with, but there is alignment if you put the food stuff or the food stuff with the tobacco center. i hope it doesn't happen, but it might. >> scott, thank you very much. aditi, great to see you. coming up, u.s. futures, equity futures pointing to losses at the open, capping off what would be the worst month for wall street this year. president trump says the u.s. will impose 5% tariffs on all mexican imports starting on june 10th until undocumented migration across the border is remedied to his satisfaction those tariffs will increase -- would increase to as high as 25%, unless the situation is resolved "squawk box" will be right back with more market cere.ovag

president trump targets mexico, threatening new tariffs on everything coming into the u.s. from south of the border. the growing fallout for wall

street in key sectors of the economy, straight ahead. plus, business leaders react. i'm in atlanta talking to ceos about the big news overnight and the fallout for american business and reddit for uber. the ride-hailing giant reporting its first public results as a company, a ten-digit loss. the final hour of "squawk box" begins right now >> announcer: live from the most powerful city in the world, new york, this is "squawk box. good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew is in atlanta today, speaking to some of georgia's top corporate leaders. we're going to get to him in just a couple minutes. first, though, let's get to the markets and talk about what we're seeing down significantly, 1%, 250 points on the dow, after president trump's latest threat, tariff threat this time on

mexico you can see in addition to the dow being down 1%, the nasdaq is down just under 100 points it was almost over 100 for a while, and the s&p indicated down about 30. it will make may one of the worst months we've seen recently, but we did have december and november, so it hasn't been that long, but -- >> december the s&p was down by 9.2% the nasdaq was down by 9.5%. >> the worst this year. >> but yes, we've seen four straight months of gains all of the losses the market's talking about, 6% for the s&p, before today's losses, have all happened this month. so, that's why people are starting to sit up and pay attention. it pales in comparison to december, but it's the first down month we've seen in a while. >> well, the ten-year has got -- and the whole yield curve, and sovereigns around the world have to be something that people are, like, taking up, sitting up and taking notice of, 2.16 on the ten-year -- >> two years back below 2% we've fluctuated above and below today, but right now it's at

1.992%. >> and supposedly, the best economy in europe has bond yields that are negative. >> negative 20 basis points, the bund in germany. >> in germany. we'll start this hour with the economic fallout already being felt from president trump's threat to hit imports from mexico with new tariffs phil lebeau joins us with a look at the auto sector, which is feeling some pain this morning and phil, obvious reasons for it. >> hey, becky. these tariffs would hammer the auto industry and would likely lead to you and i and everybody paying a lot more in the dealership in terms of buying a new vehicle. here's the reason why. look at the number of vehicles that come into the united states from plants in mexico. if you go all the way back to 2012, look at the dramatic increases. by the way, 2.7 million vehicles, that's expected to potentially move even higher in 2019 in terms of value, it has skyrocketed. it's now $52.6 billion that's the value of the vehicles that are coming across the

border from mexico and the biggest importer, general motors that's why the stock is under pressure this morning. it imports more vehicles from plants in mexico than any other automaker. another automaker that's feeling the pain, fiat chrysler. they build ram trucks down in mexico again, high-value vehicles that come from plants in mexico into the united states. also look at the asian auto stocks, all of them under pressure overnight, not only because of mexico, but obviously what's going on with china nissan is one of these in here, even though it's unchanged today, a huge importer of vehicles from plants in mexico bottom line is this, guys -- the average vehicle right now, what you and i pay at a dealership when we go out, on average is about $34,000. you know it doesn't take much. 5% of $34,000, you're adding another $1,700 onto that vehicle, and that's just the average. we're not talking about people paying $45,000, $55,000 for a

vehicle or a new pickup truck, so it could go substantially higher, and that's just at 5%. >> all right, phil you're right thanks let's talk to someone that we've talked to about tariffs before joining us with reaction on the new threat of tariffs on mexico is former commerce secretary under president obama, bill daley. and bill, we've talked about fair is foul, foul is fair we're not sure which side of the aisle is either for or against these tariffs. chuck schumer at some point seemed to be saying stay tough on china and when you were here -- i mean, tariffs might not be the best way to approach things, but there are -- i guess there is a time and place, in your view is this one of them with mexico, or this is crazy >> well, it borders, i think, more on the crazy, for this reason, joe -- the president and his team was just making plans to put the updated nafta proposal to congress to vote then you come out yesterday not

putting tariffs on because of some economic problem that was negotiated or not negotiated in the update of nafta, but because of a political problem around migration. and in the president's view, the mexican government not doing enough to stop people from coming to the border well, adding tariffs on to an issue that is really a different issue than the economics, that the deal with mexico and canada was negotiated over the last -- rather toughly -- over the last two years i think is just kind of throwing gas on a fire and hoping that something happens that's positive. but i don't see how it works well first of all, it does, as we all know, hurts the consumers, hurts the suppliers, hurts the overall economy, and does it really get to the point where mexico finds a way to stop people who want to come to the u.s. i doubt it. >> from crossing their country, too, sometimes, because it's their southern border that they're coming across.

let me ask you, we always -- we can talk, because we've known each other in this i can call you, an old-line democrat that may or may not recognize this party that he's part of right now. you do remember the days that democrats talked about securing our border and president obama talked about it and bill clinton talked about it. we've got the tapes, bill. we've got the tapes. >> yeah, and took actions to do that, joe. >> don't pelosi and congress share some of the blame here for being totally unwilling to talk about any way of stemming the flow i mean, we've got some people who want beto or kamala -- they don't even want borders! maybe i'm overstating it >> beto doesn't have a job. >> i do think that's an overstatement. look, the bottom line is nobody seems to be willing -- and i know this may sound pollyannish. if the president wants to

address this problem, and he is the president, put together a comprehensive immigration plan that will piss off your voters and the democrats have to p iis off their voters, okay, in order to get something done. the rest of this is just silliness. >> right. >> this is punting i can't get anything done, so you deal with it, mexico. >> right and the president at one meeting with congress, i remember maybe six months ago, opened the door to maybe doing something around people who are here, either a path to citizenship, or at least a path to not being chased down in the middle of the night, people who have been here for years, and then he got beat up by the right, and the left would beat up somebody who wanted to compromise but there is going to have to take some awfully strong, tough people, led by the president and i know this issue is good for him and his base to keep stoking it -- >> right, right. >> but you know, we'll be sitting here five years from now talking about the same 20

million people that are here illegally. >> we share -- i mean, both parties share blame -- >> yes. >> -- in doing things for their base at this point and you do sound polilyannapoll because there is no way that democrats and the speaker are going to give trump anything between now and 2020 isn't that the harsh reality >> no, i do not agree with that, joe, but it does take two to tango. i could say the same thing to you, which gets us nowhere -- the president will never go close enough to pelosi and the democrats to make a deal because he will piss off his base. okay everybody's to blame, nobody's to blame, where are we we're where we're at after ronald reagan did immigration reform and worse off, okay and everybody felt good about that, and they tried, but at some point, rationality and not just the reality tv show, has to take place here to run a government. >> let's say -- let's just -- we'll return to this, but let's

go to infrastructure do you think that trump was justified in saying, look, it's been two years of this, it's been $35 million you didn't find any collusion. let's do infrastructure. or do you think that he should say, okay, fine, let's do another two years of you guys trying to get me out of office and i'll do infrastructure with you. are you surprised that he walked out of there and said, you know, if you people are going to continue this, then i'm not going to deal with you what would you do? >> watching the president for three years, it doesn't surprise me on the other hand, every president's under siege constantly by the other party. i was -- >> you don't really think -- >> -- chief of staff -- >> you really think to this extent he's been seen as illegitimate by the other party, not just that they don't like him, like a lot of republicans didn't like president obama. this has been not even admitting that he was elected president. this is -- >> well, those are the people way out on the fringe. he got elected he got more electoral votes, and that's the system.

when i left al gore's campaign and went to the supreme court and the supreme court ruled, they had five votes on the supreme court, they had four, they won got the case decided, you move on we don't see -- >> you remember that old democratic party i don't -- you know, and you do have some -- >> no, but how about the old country? how about the old system of working together now, i get the politics of all that stuff, but this issue around immigration almost was done under george bush and could have been done under george bush, okay you had the gang of eight or whatever it is they were reasonable people, rational people. both sides in the last eight years, and a lot of it started when the illegitimacy of people trying to ill legitimize barack obama and we went into a downspin, and it's only gotten worse from trying to make obama illegitima illegitimate, now trying to make trump illegitimate. >> bill, it's funny, because i've got some of the people that i remember -- i've been here so long that i've got people that thought george w. bush was

satan, on that side of the aisle. now they're writing it down, i'm going, wait, who's satan are they co-satans, trump and george w. bush i mean, it goes back all the way to the bush years, too, remember i mean -- >> and people forget, we're talking about impeachment, the congress did impeach bill clinton on one perjury charge. >> who was before him? i guess it was the first, h.w. all right, bill. well, but, the bottom line, do you think between now and june 10th that he snatches some safety valve that says, okay, they've agreed to do this and there's going to be fewer people coming across from -- >> yeah, i do, because these tariffs will go at, at least geographically, the states that are extremely important to trump next year. >> michigan, ohio -- >> michigan, ohio, indiana, to a

degree and i don't think -- the bottom line is, he's not going to screw around with putting those in greater play than they may already be in play >> all right, bill daley thank you. the daley name -- i mean, you get -- you can go anywhere, any restaurant in chicago, right, i mean, and they just -- there's a red carpet, there's a window seat, you get a table -- >> hey, i ran for office and lost, so the red carpet was rolled up. >> you get a table near a waiter i mean, it's just -- >> yeah, sure, okay. >> great to see you, bill. come back soon. >> thanks, becky thanks, joe. >> all right. let me tell you about some comments just coming from mexico's president he's holding a news conference right now, something that he does every morning at this time. but among the headlines so far from this news conference, mexico's president says his country won't respond to any provocations, and in his words, will be prudent with the u.s he suggests disputes must be resolved by dialogue and says that there is no point in coercive measures. he adds that this is not about an eye for an eye, a tooth for a tooth.

the mexico president characterizes the relationship between mexico and the united states as friendly, so at least on that front, it sounds like there is the potential for dialogue to work some of these things out when we come back, we have much more on the markets this morning. the futures, as we've been showing you, pointing to a lower open dow now indicated down by about 260 points the s&p would open down by 31 points here and the nasdaq down by 101 after this break, we're going to head back to andrew in georgia, and andrew, you've got a lot still to come for us this morning. >> absolutely, becky and we're going to continue the conversation you've been having in new york about where the markets are headed and trade and everything else. we're going to do that with our guest host here in atlanta, operation hope ceo john hope bryant is going to be with us in just a moment to talk about the big tariff news of the daynd a a lot more stay tuned you're watching "squawk box" on cnbc wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman?

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welcome back to "squawk box," everybody. the indexes are down sharply in the premarket this morning after president trump's threat to impose escalating tariffs on mexico the president looking to use economic pain to stem the flow of illegal immigration from the south of the border. take a look at the futures this morning. you're going to see that the dow futures are down by about 262 points, s&p futures off by 30,

and the nasdaq down by 97 points of course, this comes in addition to the string of losses we've seen this month. right now let's head back to andrew in atlanta who is standing by with another special guest. andrew >> hey, thank you for that, becky. all morning we've been live from the 2019 hope global forum where business leaders are gathering, ceos all across the country coming here. jack dorsey arriving, i believe, this morning of course, from twitter and square joining us now is the founder of that organization behind it all, friend of the show, john hope bryant, ceo of operation hope. and it's great to see you here we've been talking -- >> good to have you in atlanta. >> we've been talking about the markets all morning, the turmoil with trade, mexico you talk about inclusive capitalism interconnect them, because i know you're thinking about this this morning. >> there's a need to push back and a need to find the right balance, so in some ways, the administration's doing what they think they need to do. but remember that birmingham, alabama, could have been atlanta, that they fought over race and stupid stuff, and we

decided to fight over money. so, the color wasn't white, black, red, brown and yellow, the color was green and what's best for the city. now, atlanta has exploded economically -- busiest airport in the world, one of the top ten msas in the country. theme are getting along. prosperity -- enough prosperity to go around and economic growth for all. and we're finding that sometimes that the tail wags the dog, that my rich friends want to do better, they need -- my rich friends want to stay rich need to make sure that my poor friends do better. whether those poor friends are on the south side of atlanta or the west side or mexico or in africa or china is irrelevant. we're a nation built on immigrants. >> well, let me ask you, though, about that, because we may be a nation built on immigrants, but legal immigrants. >> yeah, of course. >> so, the question is, is it appropriate to use trade or tariffs, sanctions, if you will, to effectuate this other issue that's what we were just talking about with bill daley. >> look, i'm not going to get into that because that's a complicated issue.

i will say, though, that nascar is celebrated, but it was made by moonshine runners in the appalachian mountains. that wasn't exactly legal. the immigrants who came through ellis island who looked like you more than they looked like me, weren't all legal immigrants and many of them were turned back, many of my jewish friends. they came in and we built an economy on their foundation. they couldn't get into the office towers, so they made some of their own goldman sachs was a guy named goldman and a guy named sachs who went door to door doing financial services i'm saying these are serious issues and i'll let washington deal with that, but we should balance this out by saying that we don't live in an isolated world, that america is a beacon for freedom and economic opportunity, for all. >> let me ask you -- i was just saying during the commercial break, this is your super bowl you have executives and ceos this is -- 5,000 people are here. >> ed bastian was e-mailing me over the weekend, going back -- >> ceo from delta.

>> -- he was preparing to go to korea because he was so happy being here and loved the interview with you, by the way so it's not just checking a box. they're really in this. >> what is this about. >> expanding prosperity for all of god's children. this is about gdp. i believe we can pop gdp 1% if we can get the credit score up 100 points i know that sounds a little silly, but half of african-americans have a credit score below 620. >> right. >> you can't get a small business loan. you can't get a decent home mortgage we have -- most of the problems we have in rural white america, 500 credit score neighborhoods, black and brown america, 500 credit score neighborhoods it's not a political or racial issue, it's an economic issue. >> at&t last night announced a new partnership with you and your organization. >> yeah. >> to go -- >> hope is out of the workplace. >> explain what that is. >> the average worker spends 28 hours a month at jobs, stressed out and immobilized about money, the average worker that's half a workweek so, we're trying to provide financial well-being we're doing it, hope inside at

delta, at u.p.s. -- the ceo of u.p.s. will be here later today -- and now we're doing hope inside at at&t for call center employees if you can't pay your workers more, treat them better. give them the coaching to have the resiliency to lean in and make your company better we want to do that at scale across the country. >> i want to ask you about a hot-button issue in georgia, your home state. the governor signing an abortion law. entertainment companies, parent company of this network, nbcuniversal, at least threatening to pull their business in the state. i want to play a clip from this interview that i did with a partner of yours and a speaker at this conference, tony ressler. he oversees over $130 billion, and of course, owns the hawks, so he has a big stake -- >> and is investk $6 billion downtown with his brother -- >> in atlanta. listen what he said about this. >> it's literally political malpractice to poke in the eye one of the largest industries

that employs your population after spending 15 years attracting them in any way possible, led by tax incentives. so, how could you say you're business-friendly, and yet, go after what is, in fact, one of your largest employers >> this is almost the same conversation as we were having with the immigrant conversation, that sometimes the tail wags the dog. sometimes you're winning the battle and losing the war. you've got to be very delicate about how you do this. i love the phrase that tony ressler is not making a political statement. >> right. >> he's making a math statement. it's like two plus two equals four it is, i love the phrase, political malpractice. how can you say let's bring all these businesses in here, let's bring the entertainment industry in here, give them tax incentives to do it. it's billions of dollars of gdp and jobs in the state of georgia. you have studios that have been stood up here. >> right. >> and then you stub your toe on something like this, and i'm not even sure what battle we're

winning, but we're certainly proposing to lose the war. i think there are other ways to get to these issues. this is a little bit i think stagecraft and i think tony ressler is right, and i think he's making a very accurate statement -- it is political and economic malpractice to say you want jobs and to do something like this. >> well, let me ask you this, which is the hard part, is what you do so well -- and you are at the intersection -- you are at the intersection of social issues and economic issues. >> right >> and a lot of times we -- and we talked about it on the show yesterday -- we almost want to separate those issues, but in so many ways, they are connected. >> yeah, yeah. and look, 70% of my employees are women. so i'm not telling them what to do with their bodies i'm real clear they made it very clear what their opinion is and you know, i just -- you look at somebody who makes political decisions in, like say alabama it's all men it's all white men who are 65 years old. is that really progressive to not include the people you're making a decision about in a decision that you're making a decision for i think that we have got to stop winning battles and losing wars.

and i think that you can find a common ground here to do well and do good and to speak to all interests. i respect all views here, and i think the governor even here has a right and a principled position on this, but we've got to find a better way to get to the solution. >> john hope bryant, thank you for being with us. >> thank you for being here. >> congratulations on your extraordinary -- >> we've honored to have cnbc "squawk box" in the great city of atlanta. >> good to see you joe, back to you, my friend. >> okay. andrew, thank you. coming up, a critical read on consumer spending out of the bottom of the hour plus, exclusive cnbc data on who in america thinks their wages are going up next year and a view of the crisis at boeing from one of its big customers, the ceo of delta air lines talks leadership, boeing's handling of the 737 max crisis and the state of government regulation as we head to break, take a look at the futures stay tuned you're watching "squawk box" on cnbc

all right, welcome back to "squawk box," everybody. we've been watching the futures this morning and they have been under some pretty intense pressure this morning. dow futures down by 265 points, nasdaq down by 100 the s&p down by 31 those losses themselves only about 1% declines, but if you add that up to what we've been

seeing in a steady drip all month along for the month of may, it does start to catch your attention. you're now talking about the dow down by -- the s&p, i should say, down by 6%, a little bit more than that over the course of the month we'll talk more about this when we come back this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets. and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more. you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse.

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all right, we are just seconds away from the latest personal income and spending data we've been watching the futures this morning, which are at this point under a bit of pressure. dow futures down 261 points, nasdaq down 98, s&p by 31. jim iuorio, what are the numbers? >> obviously there's more important things to look at, but the personal income number comes out as plus 0.5, greater than expected plus 0.3. the personal spending number comes out a little better than expected as well, plus 0.3, instead of the expected plus 0.2. real personal spending, insteadm, expected steady. pce plus 0.3 was expected. the reason i think income's a little more important than any other numbers might be today, because we want to believe that the fed is perfectly willing to sit on their hands and maybe even ease if the need comes because of these trade wars, and

this number doesn't do anything to solidify that it's actually a little stronger than expected. the stock market came in under pressure, as you said, lost a tick or two. the ten-year at about 2.17%. it's about 2.17% as well back to you, joe. >> jim, thank you. joining us to dig into the numbers, steve liesman and rick santelli all right, wow we think this is okay that you're sitting right next to each other >> they've been conspiring, back and forth -- >> quickly to get into the data, up on income is best of the year. >> since december. >> december was up 1%. but the interesting thing is, if you consider with 1% last year, in order to take that out, you have to go to december of 2012 so -- >> 2012? >> yes >> wow. >> so, it goes 1% in december and the next one higher than that, takes you quite far back these numbers aren't bad, but jim iuorio hit it on the head. this is not going to be the guiding force of which way the market's going to be venturing today. >> just real quick, i got

inflation-adjusted personal spending at zero that's flat. that's going to be troubling, i think, maybe for gdp i don't know what the economists had dialed in. nominal consumption up 0.3%, but that gets wiped out by a 0.3% rise in the pce price index. and rick, i'm sure you want to know the year over year is 1.5% on the headline pce, and this is the one the fed uses -- the core is 1.6%, up from 1 .5%, so a little bit of inflation. becky, you had an intro you were going to read. you want to read it? >> we also have new numbers on the consumer beyond just today's economic data. >> yes, i do. >> what would those numbers be >> america's views on sort of -- what is it james brown" living in america"? what's it like two years after president obama. don't do the tariff one. that's not the first one i want to do. that's the one well done. 52% say the job market is better than two years ago 39% saythe housing market's

better america's standing in the world, however, 47% say it's worse, and the u.s. health care system, 45% say it's worse so, there's the good and the bad of views about changes over the past two years now, check this out. this doesn't happen all the time something runs flat. i think it's peter hart, famous pollster, said polling's not interesting until it is. >> hmm. >> people's expectations saying their wages were going to rise the next year ran at 40%, da, da, da, and then it just popped up now. >> why >> now, we don't get too excited about that, because it's one quarter's tracking if this stays up, this goes back -- you have to go back to get numbers like this -- before the recession. so, we've been doing this survey we just happened to do one in 2007 so, we have one track on what the world looked like or felt like to america before the recession. 56% thought their wages were going to go up this is getting up and close to the prerecession highs, or prerecession-type numbers, where

most people think in the next year their wages are going to go up and i want to share with you one other piece of data, becky, which is people's views on tariffs. 40%, when we asked about the chinese tariffs, disapprove. 28% favor it 32% say they don't know. so, minds out there remain to be molded on this issue take a look by party 53% of the gop support it. that looks like a high number, except consider that like 80%-plus support the president and think he's doing a good job on the economy, but that number drops by 30 percentage points when we talk about gop approval. and you can see dems and the gop -- dems and independents are net negative on it >> you know, rick, i think you called it right earlier in the show when you said that people's views on this will be hindsight, 20/20 hindsight, because -- >> if it works, everybody's going to be ecstatic if it doesn't, they're going to say vote out the incumbents and let's move forward. >> right

and it does across party lines, because traditionally, republicans would be the ones supporting open trade, no tariffs, going ahead and moving forward with these things. >> listen, but steve brings up some great points, and when i look at the democrats and republicans, chuck schumer not often is in the same inventovena as the conservatives and i think it gives credence to the notion that there is bigger fish to fry with regards to china, and i'm glad, because i know it's very difficult for chuck schumer to break ranks, but on this issue, i think it's quite important and it definitely demonstrates not only his commitment to issues like currency manipulator, but it also dovetails in what the commerce department, the treasury department are working on to create a better model for trying to assess if there is currency manipulation occurring. >> rick, when democrats propose government programs, one of the criticisms, i think a correct criticism, is about externalities, right, all of the unintended consequences. when i look at these tariffs on

mexico, who gets hit this is about border, right? gm gets hit. consumers get hit because they pay higher prices. manufacturers in mexico get hit, which could unemploy mexican workers, and who knows what they would do in response to that would that then be helping or hurting our border security at that point don't you worry about the unintended consequences of government programs in this case >> no. >> the way you do in other cases? >> no, i really don't. >> you don't >> i don't worry about it. >> it's going to work perfectly? >> i didn't say it's going to work perfectly i just think that at the end of the day, these things need to be addressed. and when you look at cost, there is a huge cost to everyday low prices, okay it's called exodus of jobs in many different arenas, and i think in the end -- here's the metric i have a problem with, okay let's say they say these jobs that we're bringing back cost 800,000 apiece the first tesla cost how much? the first microchip cost how

much >> from mexico -- >> we can't leave the economics unanswered crazy economics -- >> i disagree with your entire premise, as i do almost all the time, steve, and that is that conservatives don't like democratic policies because of the unintended consequences -- >> you say it all the time, joe! >> that's not what i said. i say the intended consequences are now effectuated by the policies themselves, that if you connect the dots to the misguided policies, you never get to the holyland that these policies are intended for, and they probably do have unintended -- >> maybe, maybe. >> that is, because the path to hell is paved by good intentions so, saying, oh, that would be a great democratic program if it wasn't for unintended -- that's not what it is the consequences never pan out for what they are intended you can look at it that way, so -- >> i think that's one criticism -- >> so when you start the premise like that -- >> the other criticism that you start all the time -- >> no. >> no? i'll go back $100 bet -- >> that ranks lower than -- >> any time you say the controversial -- >> it ranks -- >> rick talked about the economic costs --

>> -- never ends up happening -- >> let's talk about that, the economic cost of low prices. i have more money in my pocket because prices are low, and that costs money? no, what it does is it creates opportunities and jobs in other places >> the jobs haven't caught up with many of the people that are displaced, and it creates many of the issues that drive democratic policy. >> there are a vast number of things americans have money for because imports are cheap that they're spending money on that have created jobs that didn't exist. i can sit there and make you a list of things that ten years ago did not exist as jobs -- >> and ten things from now -- ten years from now, i want manufacturing in a larger scale to be in the u.s. so all the innovation ends up actually potentially creating more jobs here. >> hold on, innovation is not -- in some instances, that's not jobs, isn't that robots? >> i think robots are going to create many jobs another big fallacy. i think it's a job-creator. >> i agree with that, but you want higher prices, is what you're saying? >> no. i'm saying lower prices isn't

the panacea people think it is there are consequences for outsourcing everything -- >> right, right. >> because eventually, you have a dependency on where you're importing things from, and china is highly aware of that dynamic, and i know i should separate china and mexico, about the i personally think the mexican situation's going to work out quite quickly. >> because you don't think the tariffs will actually be put on. >> i don't think they're actually going to be put on. >> i wonder the who situations -- >> i think illegal immigration, it f it goes on for the next five years to the extent it's going on right now, i think it's going to be economically worse than these tariffs and i'm just wondering, is there a way you'd approach the illegal immigration issue down in mexico well, you have to deal with -- would you try to deal -- do you think the democrats are willing to come to the table >> joe, the first thing i would do -- let's say we can agree on that there's an economic cost to illegal immigration. i would, before i'd put on what amounts to -- what would amount to in its highest amount one of the biggest revenue or tax

increases since 1993, for sure -- it would rival all of the president's tariffs would be, i believe, more expensive than obamacare -- >> and the premise of your china biggest tax ever, i don't think that's true because not all of it accrues to u.s. consumers >> so, i would say -- >> let's set that primacy -- >> very quickly, i would think about the costs and benefits, and i would look at what the costs are in relation -- i wouldn't say what you just said, which is i think it's going to be better. i would study and figure out. >> he always wants to study and we know about academics and studies. it doesn't happen. if i was left -- >> what's the opposite of studying, joe? >> if i was left -- >> what's the opposite >> these are bargaining chips. >> no, they're not, joe! now they're policy. >> it's june 10th. >> you keep saying that, but there's no evidence of bargaining chips this is policy -- >> anyway, steve, rick, thank you for being here good to see you. >> unfortunately, you've been left there, but guys like

blankfein, guys like tom friedman -- >> before we go to break, if you want the last word, i'm going to give it to you. >> okay, on that point -- >> i'll stop lying when you do >> boeing -- >> you'll stop lying when, exactly? >> delta air lines ceo on boeing's road back after two fatal crashes of its 737 max we'll hear from the executive, ed bastian, on that. stick around (gasps and screams) i got in! yes! woah! oh yes yes yes yes! to start a college savings plan, find an advisor at massmutual.com ♪

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welcome back to "squawk box," everyone we've been watching shares of uber this morning. the ride-hailing company delivering its first set of results since going public uber reported a $1 billion lost that costs grew for food and delivery, but it was in line with estimates and what the street was expecting meantime, all of the news isn't bad -- in fact, that number was better than expected revenue was up by 20%, which was at the high end of uber's forecast the stock is up by almost 2% today in a down market. all right, we're going to hear -- this is you, right >> i don't know. they rolled up it is me, okay we're going to hear much more on the premarket sell-off, but before that, we want to get back to andrew in atlanta he got a chance to speak with the ceo of delta air lines andrew >> thank you, becky. here in atlanta, home to delta's headquarters, of course, it's also its largest airport hub i spoke with ceo ed bastian shortly before the mexico tariff

news broke since then, delta gave a statement saying "it is too early to know specifically about the impact on delta" but they are monitoring the situation quite closely. meantime, this is what ed bastian said when i spoke to him about the grounded boeing 737 max, and specifically, ceo dennis muilenburg's apology earlier this week. >> well, dennis is a friend, and i first of all thank him he's going through a terrible crisis management issue at the present time dennis has a -- you know, he's getting himself out in front of this i think his hands were tied a little bit by the regulators and getting the information. and i think that delay caused a lot of concern in consumers' eyes boeing's a great company they'll get this fixed they'll get that plane listen, we don't fly the max we're anxious to compete against the max and i hope they get a fix soon. >> when the plane gets in the air, would you go on it? >> yes >> you would >> yes >> and do you have -- you know, we've read all of these articles that have been very suggestive of other problems at boeing.

do you have any anxiety about the company right now? >> i don't -- >> not about the planes that you have in the air, but more broadly? >> yeah, listen, they're an amazing technology company, a great american company the engineering talent there is phenomenal when you have a crisis like this, it's going to be newsworthy and unfortunately, as i said, they didn't get out far enough in advance of the story. the story was told about them, rather than them being able to manage their story. >> there's a real question about whether the faa is too close to industry. >> you know, i have to take a contrarian view. i think the closer we are with our regulators, the safer we're going to be. years ago, the faa had more of a policeman mind-set, an audit mind-set they'd try to catch you doing bad things and when you have that type of environment, people aren't as willing to offer any problem they see we want there to be total transparency total visibility anything we find, the first place we go is to let the regulators know. we saw some anomaly there. and likewise them with us,

telling us and what it's done is it's created the safest transportation system in the world. >> i also asked him what he thought about fears of a potential recession in the united states, given the conversation we've been having around the table this week and whether any of that has shown up in any of the data in terms of the strength of the consumer right now. here's what he had to say. >> for us, no. we're having one of our busiest periods in our history this year our top-line revenues are growing 8% our summer season's going to be very full. consumer demand is at an all-time high, and i think the risk, andrew, is that we keep looking for when this is going to end, and we don't realize that we need to be investing in keeping it going >> should note that delta is one of the largest employers right here in the state of georgia and i asked ed bastian about the backlash from the abortion law in the state and the number of media companies who have now threatened to take their business out of the state, if the law is enacted we heard what tony ressler had

to say we want to show you what ed bastian had to say on this same issue. >> abortion is a personal issue. it's deep-felt in terms of people, advocates, proponents, people that are against it i don't think it's our position -- we're not in the middle of that discussion in terms of production talent not wanting to work in our state we're very much involved in trying to make certain that when we pick a social topic to comment on, it's relevant to us, there's actually a reason why we're talking about it abortion is a personal decision, and i've got too many people on both sides of that we can't take a side on that >> ed bastian taking perhaps a less -- or a more political approach, if you will, to this issue than mr. ressler in the meantime, want to send it back to you guys in new york joe. >> you know, the ressler quote and -- i just think it's kind of not well considered and kind of callous to say that this abortion law is costing me

money. it just seems like a weird angle, and i think bastian's response was much more even-keeled to the whole issue if i ever said to you -- andrew, if i said to you, antigun laws are costing me money, you would have a heart attack. if i equated antigun laws with business being hurt, right and i just think it's -- i thought that was bizarre, to be honest with you. i thought it was really bizarre that, hey, i thought we were business-friendly. hey, what's going on here? i can't -- you know. i thought it was very weird. but you know, we all have different -- like ed bastian said, everybody has -- >> it's so interesting because we take it on different sides, right? when we're talking about guns on one side -- >> right, if someone said that to you -- >> you would say it's economic freedom. and i would say it on the other side so, it's very -- no, look, it's a fascinating issue. >> that's what i'm saying. yeah. >> i will tell you, here, given the number of ceos we're talking to and so many 350epeople who c about the economy, there is anxiety about the announcements that have come from disney, that have come from netflix,that

have come from our parent company. and so, there are a lot of people here -- this is an issue that is being very much talked about, and the distinction -- i didn't appreciate this about georgia as much as i should have -- there is georgia the state, and then there is georgia. there is georgia the state and atlanta the city i hate to say it but there are almost two different things in terms of how people think. >> my argument is the supreme court already settled this and there is precedent for it. >> that's my approach and we can agree on it. we can settle it that way. this is costing me money here, what's happening here and abortion >> my first consideration about this law would not be that it would hurt business. >> it takes it to an unserious

place. >> that's the side of the story, this is a state and the governor who spent a lot of time over a decade trying to track a specific industry and specific rights >> whether they are pro-life or not? >> there are social issues in this country where we talked about forever where i made the social side of the argument and you said thit is bad for the economy. these social and economic issues are connected in so many ways are so important that's why we have been having this conversation. >> i would go to the supreme court and say look we already settle this. >> that would be me. >> there is some people that would want to unsettle that.

>> i think there is a place where you can feel a little bit about going in , in that case >> all right, let's get back to the markets. joining us now is steven the announcement on potential tariffs on mexico, you see market sell-off by 1% today. is this a appropriate sell-off do you expect more >> just look about business exposures, auto trade between mexico and the united states, to make about half a trillion dollars for those product inside the united states. higher tariffs are going to have an impact on that. it is going to hurt the bottom line on particular companies until general this issue now of

bringing non trade issues and trade issues together with tariffs is reducing confidence that we'll be able to settle trade quickly and easily >> that's the bigger point here. several people around the table don't think these tariffs are coming into play by introducing this and using tariffs as a weapon even when it is not about an economic issues per se or not about free trade that will changes the dynamic and i suspect we put business people in a little of paralysis. >> we are left guessing. we think it is a large issue for corporate. >> we thought this is a plus or minus 10% issues if there were no unintended consequences just the impact on large company profits from paying these tariffs, that's something that

can disrupt the market >> what if usda, i know the administration mulvaney has said it is not related. it is hard when they took up this issue yesterday and our house is refusing. >> do we fall back on nafta or do we remove nafta that's a question on business of canada we are left with this. u.k. equi u.s. equities is up 50%. they got there for globalization. that's a high level and there is a lot of profits moving across border and a lot of these things are at risk. if this is all resolve quickly we have a sound economy. we could rebound from this we want to be careful here when you build up a lot of anxiety of these issues, sometimes there could be war and rebound

this is one of rare cases where we see a particular condition in marks now where it is one or the other. it is bullish around this. this is one of the time where we are hedging portfolios and we want to just be careful around thisparticular issues we have some serious risks this is another challenge. >> steven, thank you >> let's get down to jim cramer. he joneins us now this could be the straw that breaks the camel back. this will cause recession. what's the market saying it is down but if it is really going to push us into a dire situation, it would be dow more does the mark thiet think it ist going to happen on june 10th or not as bad as we think it would be >> the market may be wrong

i don't think trade people on the president's team, they may not know it is coming. we need to speak to larry kudlow i know larry is my partner for many years this is something he would not do i think it is a threat it is all kinds of astonishing frankly. we had a bunch of good numbers last night we had some really, really great commentary verses what would be for uber the market should not be down much more. gm should be down -- i don't know 15% three football fields. that was a mistake to build. >> if we did not have what we

have seen with china, we would say all trump's bluffing that's one of the benefits of not bluffing we don't know if he's bluffing or not >> gm is going down the elevator right now. be tuning into hear comments don't miss our top trade adviser here with navarro will join us on "squawk on the street" live at 10:00 eastern

dow is looking down by 240 points nasdaq is off by 90 points s&p down by 28 that does it for us today. make sure you join us next week. right now it is time for "squawk on the street. ♪ good friday morning, welcome to "squawk on the street," i am car quintanilla with jim cramer and david faber. final day of may we are closing the worst month of the year. the president announced these surprise tariffs on mexican imports. europe is down 1% plus oil looks to end its