picks. all new investing tools securely linked to your brokerage accounts, plus cnbc global market news and analysis tailored to your holdings. become a smarter investor with the power of cnbc pro. go to cnbc. slash get pro now. >> trump trade. >> moves sparking a global sell off as plans for 25% tariffs on canada and mexico and another 10% on china putting investors on edge. futures pointing to a sharply lower open one sector hit especially hard. that's the global automaker shares falling around the world this morning. those companies responding. president trump also doubling down on his warning for u.s. consumers, saying there may be short term pain, but he's confident it will be worth it. it's monday, february the 3rd, 2025. you're watching worldwide exchange right here on cnbc.

good morning. thanks so much for being here with us. i am frank coghlan. a lot to get to today. we begin with our top story, the u.s. announcing 25% tariffs on canada and mexico and an additional 10% tariff on china. the tariffs on all three of those countries, they begin tomorrow. the president also targeting canadian crude to a lesser extent, and the de minimis exemption that previously excluded lower value items. speaking with reporters last night, the president saying he plans to speak with his mexican and canadian counterparts as soon as today. also again warning a possible short term pain for american consumers. >> we may have. short term, some. >> little pain. >> and people understand that. but long term, the united states has been ripped off by virtually every country. >> in the world. we have deficits. >> with. >> almost every country. >> not every. >> country. >> but almost. and we're. >> going to change it.

>> canada retaliating with its own two step import tariffs on u.s. made goods. prime minister justin trudeau, speaking over the weekend. tonight i am announcing canada will be. >> responding to. >> the us trade action. >> with 25% tariffs. against $155 billion. >> worth of american goods. >> this will include immediate tariffs on. >> $30 billion. >> worth of goods. >> as of. >> tuesday. followed by. >> further tariffs. >> on. >> $125 billion worth of american products. >> in 21 days time. >> and mexico is joining canada with its own plans for retaliation, including what it calls non-tariff measures. china promising to file a lawsuit with the world trade organization, but stopping short of announcing its own tariffs on u.s. goods. taking a look. at us futures right now, you are seeing a big reaction to these tariff plans. take a look. the s&p down over

1.5%. the dow down nearly 1.5%. looking like it could open more than 600 points lower. the nasdaq down nearly 2% over 400 points. all right. we want to look at some of the biggest laggards on the s&p 500 at this hour. take a look right here. you can see right here at the top of the list. gm global automakers under quite a bit of pressure on this news as we previously mentioned. shares of gm down over 7.5%. constellation. this is a company that imports beer from mexico the very popular modelo brand. those shares down over almost 5.5%. some other names on the list vistra, aptiv and also ge, renova all under quite a bit of pressure in the premarket. and on the other side of the coin, as we always like to hit, there are some gainers this morning following that tariff news. taking a look at those names. zebra technologies this is a company that creates devices for warehouses to scan and do things. that company recently hit an all time high not too long ago. you can see shares are up about 5.5%, expected to be a beneficiary of more goods being made here in the us, if that does turn out to be true.

rounding out the top five gainers, remember we do have some gainers this morning. celanese. nucor. lindale. basil. also gen digital. this is a cybersecurity company. those shares up nearly 2% right here this morning. we're also watching a number a number of other areas of the market that includes apple. apple actually under some pressure this morning you can see down about 2%. not clear if apple will be given any exemptions when it comes to this tariff policy. they did get exemptions the last time around during the first trump administration. apple shares under quite a bit of pressure. you can see in recent days under pressure as well. you see the chart. not only have there been a number of downgrades, but a lot of questions about their china business and also, again, questions about if this company will be given exemptions to tariffs. and we have to look at the bond market this morning. we are watching bond yields terror policy seen by many economists as inflationary. also today, newly confirmed treasury secretary scott bessent will have his first quarterly funding announcement. that's basically how much the government plans to borrow. bond traders are watching that very closely right now. taking a look at the benchmark 4.53% on the yield, it's actually down nearly ten basis points since the

inauguration. remember the president did telegraph a lot of these tariff moves. we have not seen a reaction longer term in the bond market to these tariffs moves. we'll continue to watch the bond market today. and we have a check on the us dollar. we've seen the us dollar move higher on these tariff announcements. right now the us dollar up just about 1%. just over 1% since the president entered office however pretty much flat. but you see the big ramp up in the dollar in recent days. again, the tariff announcements being one catalyst for this upside move on the greenback. and we have to talk about the energy markets this morning. they've just continued to digest tariffs specifically that 10% tariff on canadian oil. oil is traded lower for the last two weeks. but you can see this morning it is moving significantly higher. wti crude the us benchmark up over 2%. brant crude the international benchmark up about 1.5%. natural gas spiking. natural gas up more than 7%. and we're tracking some wild moves when it comes to cryptocurrency. take a look at this. remember the trump administration seen as being pro cryptocurrency and pro bitcoin. however bitcoin under quite a bit of pressure this morning

back below 100,000 right now trading at about 95,300 per coin. down just about 2.5% ether down double digits. solana down over 4%. litecoin down double digits. xrp similar story. and we're also watching the etfs that are focused on canada, mexico and china this morning. taking a look at those. you can see the action here. this is the premarket action. you can see the mexico etf down 3%. the canadian etf down over 2.5%. the china etf down just over a quarter of a percent. you see the moves. the canadian etf this one the sky was actually higher over the last week or so despite some of these tariff concerns. but you can see right here downside moves when it comes to these three etfs three etfs. after these official tariff announcements right now okay that is your setup. now we want to turn overseas seeing a lot of red arrows there as president trump calls out the eu describing the eu trade actions against the us as, quote, an atrocity. >> it will definitely happen. >> with the european. >> union, i. >> can tell. >> you that, because. >> they've really taken.

>> advantage of us. >> and. >> you know, we have. >> over a $300. >> billion deficit. they don't. >> take our. >> cars, they. >> don't. >> take our. >> farm. >> products. >> they take. >> almost nothing. >> and we take everything from them. >> and tracking the overseas action, we have our julianna tatelbaum in london with much more. giuliana. good morning frank. >> good morning. great to see you. well, a very similar picture here in europe to what you're seeing in those us futures markets and around the globe. heavy selling as investors react to news of these tariffs out over the weekend, and also as investors brace for potential tariffs targeting europe in the days and weeks ahead. so here's the picture. you've got the ftse 100 here in the uk off about 1.2%, the xetra dax in germany bearing the brunt of the selling down now nearly 2%, the french market down 1.8% in the italian market, down about 1.5% as well. european automakers in sharp focus this morning. they're selling off heavily as they have relied very heavily on manufacturing operations across north america

and, of course, have highly complex supply chains. so here's a picture for you of the key auto makers. volkswagen in sharp focus. it is down nearly 7%, stellantis down nearly 8%. a similar picture in asia. overnight, the automakers selling off very sharply. you've got toyota down about 5%. honda down more than 7%, mazda down nearly 8%. in terms of the corporates and what they're saying volkswagen is counting on, quote, constructive talks between trading partners to avoid conflict. after donald trump announced those tariffs on mexico, canada and china. volkswagen owns mexico's largest car factory, which produced 350,000 cars in 2023, all for export to the us. now, bmw, which makes around 100,000 cars in mexico and canada, says free trade is one of the most crucial drivers of growth and progress. frank. >> brianna, thank you very much. julianna tatelbaum live in our london newsroom, taking one more look at us futures. again, we're seeing big declines across the board. we just showed you a

short time ago. red arrows across the board when it comes to the us futures for the s&p, the dow and for the nasdaq. right now the dow looks like it would open more than 600 points lower. we're also seeing the spike in the canadian dollar and the mexican peso compared to the us dollar, and a fall in the euro that is pushing it to parity with the us dollar. let's discuss all of this now with greg branch, founder of branch global capital advisors, a financial consulting firm, and james pethokoukis, an economic policy analyst at the american enterprise institute. both are cnbc contributors. good morning to both of you. thank you for joining us on this day. >> good morning frank. >> greg, why don't we start with you take a look at us. futures under heavy selling pressure. i want to ask you why the president telegraphed all these moves well in advance. why do you think we're seeing such a sell off in the premarket? >> well, i think you can have one shoe drop, frank. but when you have multiple shoes dropping at the same time, perhaps it lends itself for the market not having discounted everything. and right now we have the shoe dropping of hard line against immigration and deportation, which has an inflationary impact

of its own. we have deep sea, which sends some jitters down the tech market. and now we have the tariffs and it seems like it's just the beginning and that we are using them as a cudgel. that is going to spark a retaliatory response based on economists have trust. and i've talked to this week this could add about 770 bips to a point to core inflation and maybe a three point hit to earnings. just the measures we've seen as far. >> as yeah, we did have joyce chang from jp morgan on our air here on worldwide exchange a few days ago saying that everything wasn't priced in when it came to tariffs. and she was definitely correct here. jimmy, i want to come over to you. so there were some reports that scott besson would push for the tariffs to be ramped up gradually. then we saw some other reports that it was just a negotiating tool, that the president was going to try to talk to these countries about it. a number of issues that he had on his mind. but then we've seen these terrorists be officially implemented. what does that do for the economy here in the us and also the global economy? just i guess he telegraphed it, but it still seems rather sudden.

>> he kind of. >> telegraphed the wrong thing. >> he telegraphed that these were going to be ramped up slowly. they're going to be kind of targeted. and i think obviously a lot of people on wall street were assuming these that was going to be just that targeted, ramped up, probably temporary tariffs. now here we are. they're they weren't ramped up. they don't seem particularly targeted. so now all wall street is left with is temporary tariffs i know like you know goldman sachs. they're still expecting these terrorists to be temporary. but i don't think that's an assumption we can necessarily hold to. i would love to hear from the treasury secretary right now. what is his current theory of the game. what is the end game for these tariffs? because if i was if i was an american business person, i'd be thinking, is this my life for the next four years. tariffs even if these tariffs get negotiated, what's to prevent the president six months from now, a year from now saying guess what, i don't like that negotiation. we're doing it all over again. >> so, jimmy, what you're really talking about is uncertainty specifically for business leaders and even for governments

in your mind, what does that do for investments, even for the companies that want to invest here in the us? does that change their outlook? and certainly when it comes to investments outside the us that are designed for companies that want to get into the us market, how does that impact things? >> yeah. >> listen, on one side, you have the president talking about deregulation, tax cuts. that's all great stuff. now, on the other side, you have a highly uncertain trade war that's happening right now. all that other stuff might happen. this is actually happening. so if you're in business, i don't see how this doesn't have a paralyzing effect. if you think this is how the us is going to run its economy for the next four years of sort of, you know, going from one crisis to another based not on like an obvious again, not an obvious theory of the case, is the goal here trade policies, trade surpluses with everybody is the is the goal here de-dollarization or is the

goal here that the president sort of really believes ideologically in tariffs and likes doing deals. and when there's tariffs war, it's a constant churn of deal making. i think that is an absolute perfect recipe for investment. freezing uncertainty. >> all right, greg, i want to come back to you. so a lot of uncertainty about the president's policies. but there is one consensus out there that the tariffs are going to hurt the us economy. i'm looking at an e estimate. they believe it's going to be a 1.5 impact negative impact to gdp this year, 2.1% next year. as an investor. does that change your thesis when it comes to certain sectors or investing in certain parts of the market? >> it does. and i think jimmy hit upon this with what he just said. you know, there's lots of things that would spur gdp growth and spur earnings growth, like deregulation and corporate tax cuts. but then when we have not only the actions we've seen thus far, but uncertainty around what further actions and what further retaliatory responses

will receive, which certainly have a meaningful impact to gdp and earnings growth. we have no compass in terms of where to value things. we have no compass in terms of what a reasonable valuation is, because we have no compass on what earnings growth is going to be, and it is earnings growth that determines valuation more so than static earnings levels. and so, as jimmy rightly said, i think this puts us in a at a posture where we have to consider taking risk off right now until there's some clarity on the way forward. >> greg branch, jimmy pethokoukis, great to see you both. thank you very much. yeah. when we return here on worldwide exchange, the tariff war, putting energy traders on alert. rbc's helima croft is here with her reaction next. then later in the show, we have jay timmons from the national association of manufacturers. he's here to weigh in on the industrial consequences of the president's actions. before we let you go, a quick check of u.s. stock futures, as we've been mentioning all morning long, they've been under quite a bit of pressure following these tariff announcements. right now, the dow looks like it would open

more than 600 points lower. the s&p and nasdaq both down more than 1%. the nasdaq down nearly 2%. we're back right after this break. >> welcome to reinvented with accenture. today i'm here with margherita della valle, ceo of vodafone. you were employee 25 in vodafone italy. today you're the ceo of vodafone. what is your strategy and vision for the future? >> we are. changing our culture. >> to really. >> focus on our customers. >> we need to. >> acknowledge that change is hard. >> but if. >> people understand it's for the right reason. >> then you. >> get the power. >> of the organization. >> with you. >> there is one death from cancer. >> anywhere around the world. >> every three. >> seconds. >> 75% of patients. >> don't actually know that they have heart. >> failure until. >> they've gone. >> into a. clinical setting. >> as healthcare. >> demands grow. >> the urgency. for innovative. solutions has. >> never been greater.

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the oil processed by u.s. refiners. the president, speaking last night on his decision to include energy imports. >> canada has been very tough on oil. >> on energy, they don't. >> allow our farm. >> products in. >> essentially, they don't allow a lot of things. >> in. >> and we allow everything to come in. it's been a one way street. >> let's bring in helima croft, global head of commodity strategy at rbc capital markets and a cnbc contributor. helima. good morning. good to see you. >> thank you for having me, frank. >> all right. so, halima, just looking at what's going on in the market right now. oil prices are jumping. despite the thought that tariffs would actually dampen global demand for oil. i want to get your take on the tariffs on mexican crude. and also the fact that canada got a 10% tariff when it's on its energy. and then what does this all mean for opec and its production cuts. >> i mean. >> frank. >> as you mentioned. >> oil is up today. >> i mean. >> clearly i think there is. >> some. >> concern about potential broader. >> disruptions coming from these economic measures. >> i would say it is very interesting that canada only got a 10% tariff on energy, and not

the full 25% that other goods have received. >> i do think there was. >> a pretty significant lobbying effort on the part of the alberta premier, on the. >> part of. >> canadian energy corporates. they'd hoped to be exempted. they're not happy about 10%, but i think it could have been worse. but the question going forward is if we think about tariffs, is will we be seeing further tariff action? because that could really impact demand. so hence we watch very carefully the situation with china. >> i want to go back to that opec question. opec planning to do production cuts. does this change things meaningfully meaningfully for opec. i mean i'm seeing some reports out rystad one of many saying they believe that these tariffs are going to be short lived. how does opec view this. >> i think opec. >> as they. >> think. >> about how you manage. >> production going forward it just adds to uncertainty. we have sanctions that are being imposed on countries like russia. potentially more sanctions on iran. and now you have to factor in what is a tariff effect on demand on key

producers. so if you are opec and you are seeing all this policy coming out of washington, i think it reinforces their desire to watch and wait to stick with the production plans outlined in december and not to make sudden moves in terms of increasing production, because, again, you don't know where this is going to land. there is so much policy uncertainty right now emanating from washington. >> all right. so speaking of we don't know where it's going to land. what happens to those canadian and mexican crude exports that are being tariffed here. do they go to other parts of the world? do they go to other parts maybe that are facing sanctions? i mean, how does that all work out? >> i mean, canada. >> is in a really challenging position because they have one market for canadian oil. and i think what is very interesting, if you listen to the canadian conversation, is they're now starting to talk about is our energy security now contingent on having other available export routes, other markets not being solely dependent on the united states? now that will take years, but i think it is

sparking a very important conversation in canada about what is the best path for canadian energy security and canadian market access. >> all right, helima croft, always great to see you. thank you very much. >> thank you. >> all right. still here in worldwide exchange, president trump is hoping that elon musk and doge can counteract some of that short term pain with big government savings. and as we head to break a check on some of the largest canadian, mexican and chinese companies listed here in the u.s, seeing a lot of red on this board. enbridge down 1%, toronto-dominion down nearly 3%. shopify down over 5.5%. looking at some of the chinese companies here, alibaba down about 2% pdt down more than 4.5%. jd.com down more than 4% as well. and looking at mexican companies as well. not a lot of movement there, with the exception of simex right there. you can see those shares down more than 2.5%. much more worldwide exchange coming up worldwide exchange coming up after when the temperature drops... you've got two choices. close your eyes and think warm thoughts.

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the department of government efficiency. we've seen a number of headlines about this over the. >> last few days, frank. >> and what we found out last night during this twitter spaces was musk plans to shut down u.s. aid. he said, quote, none of this stuff could be done without the full support of the president. you know, and with regard to the u.s. aid stuff, i went went over it with him, you know, in detail. and he agreed with that. we should shut it down. so there you go. there's your confirmation. at least i know there is some wiggle room about comments from the president, but elon musk apparently believes he has the authority to go through and shut down u.s. aid. also, musk took this opportunity to speak a lot about breaking up bureaucracy within the government. he called it a fourth branch of government, saying, quote, you have the rule of the bureau, and this is obviously wrong. it's unconstitutional, unconstitutional. and it is imperative, therefore, that we return power to the people of

the country, later saying it's not just that there's an unconstitutional fourth branch of government, but it is arguably the most powerful branch of government. now, this comes after a weekend where he made accusations about u.s. aid, now gained access to the treasury payment system. he called it a criminal organization. a lot of unfounded claims going on here, frank, about what u.s. aid has been doing, but it was enough to at least apparently get the attention of the president and basically work to shut down this government agency that provides billions in aid to countries in need around the world. frank. >> yeah, a lot of talk about that. you see, if you look on twitter, a lot of people commenting about that as well. so i'm just looking at what the congressional research service is saying about u.s. aid, that they managed about $40 billion in appropriations. is the plan to put that money in other parts of the government or simply just cut that spending altogether? and i would assume somehow, you know, cut those jobs, about 10,000 jobs in that agency, according to the congressional research service.

>> yeah, yeah, frank, you're acting like there is a plan. we don't know what the plan is. there have been some reports that maybe some of this organization gets folded into the treasury department, which also distributes foreign aid. and speaking of treasury, we know that scott bassett, the new treasury secretary, gave elon musk basically the keys to the payroll system there and the and can control the inflow and outflow of money going in and out. so this is a really uncertain time. basically, we don't know what's going to happen to this organization ultimately, but it does sound like musk thinks he has the authority from president trump to shut this thing down, despite the fact that this is congressional approved spending. frank. >> steve kovach, live from the nasdaq. great to see you as always, steve. thank you very much. thanks. as we head to break checking some of the top trending retail investor tickers, according to vanda research, nvidia, the triple qs and tesla topping the list. you see all those names under pressure. nvidia down more than 2.5%. triple qs down over 1.5%. tesla also down about 2.5%. we will be back right after this

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right here on this show on friday, warning that investors they may not be fully appreciating the market and the economic impact of president trump's proposed tariffs this morning. wall street it appears to be coming to terms with the reality of tariffs. you're seeing futures under a lot of pressure. welcome back to worldwide exchange i am frank collin. want to get right to the futures right now a very busy morning. let's start off with the markets reacting to trump's tariffs. right now you see the s&p down just about 91 points. that's down over 1.5%. the dow down about one and a third percent. looking like it would open up about 575 points lower. the nasdaq the hardest hit down one and three quarters of 1% down over 350 points. right now. we're also seeing a sell off when it comes to the small cap space. take a look right here. you can see the russell futures down more than 2%. even though tariffs are supposed to stimulate us manufacturing something that's seen as good for the small caps. we're still seeing small caps under quite a bit of pressure down about 2% right now. we're also seeing red arrows across the board over in

europe. our julianna tannenbaum hit that for us earlier. the stoxx 600. the broader index right now down about 1.5%. nearly the dax down nearly 2%. germany the biggest economy in europe, also a big hub for auto makers. we're seeing the cap, the ftse and the italian nib all down more than 1% right now. speaking of global automakers, they are being hit especially hard right now. taking a look. see general motors right here in the us. those shares down more than 6.5%. stellantis, the parent company of jeep, down more than 7%. toyota, volkswagen and honda, all of them under quite a bit of pressure right now in the premarket. we're also watching bond yields this morning. tariff policy seen by many economists as inflationary. also today, newly confirmed treasury secretary scott bessent will have his first quarterly funding announcement. basically how much the government plans to borrow bond traders will be watching that very closely. right now, however, we're seeing the benchmark at 4.5, 4.54 actually falling since the inauguration right now again, 4.54 falling about almost ten basis points since the inauguration. also want to watch the us dollar this morning? we are seeing that pop this

morning. the us dollar up over 1%. you can see right here. big ramp up as we go on into these tariff announcements over the weekend right now. but right now the dollar up 1% actually hitting a recent high trading very strongly against other foreign currencies. and we have to cover energy energy markets. they continue to digest these tariffs specifically that 10% tariff on canadian oil. oil is traded lower over the last two weeks. however this morning big upside moves for wti as the us benchmark up about 2.5%. brant crude the international benchmark up over 1.5%. natural gas spiking nearly 8%. and a different move when it comes to bitcoin. we actually see bitcoin under some pressure. bitcoin falling back under 100,000 right now at about 95,300 a coin, down about 2.5%. you can see the downside moves across the board. ether and litecoin as well as xrp down double digits. solana down just about 2% right now okay that is your setup. we want to continue to cover our top story. the president doubling down on his warning for u.s. consumers when it comes to his tariff plans.

>> we may have short. term some little pain and people. understand that. but long term, the united states. >> has been ripped. off by virtually every. >> country in the world. we have deficits with. almost every. >> country. >> not every country, but almost. and we're going to change it. >> our megan cassella joins us now with much more on this story. megan. good morning. >> good morning frank. so it's official. >> now. >> this is president. >> trump following. >> through on threats that he's made for years but never fully carried out in imposing these sweeping. tariffs on the us's three largest. >> trading partners. >> and the actions go a little bit. further than we had initially expected. >> there are, of course, the 25% tariffs on canada and mexico. >> and 10%. >> on china. >> that we had. >> expected. >> but there's also a. lesser 10%. tariff only on canadian energy. >> products products. >> and there are no exemptions, meaning no company can apply for relief to get. >> their product. >> carved out. the white house also unexpectedly. >> took away. >> a rule that allowed smaller.

>> packages worth. >> less than $800 to come in duty free. now, that's a step that will especially hurt small businesses and the platforms they use, like etsy and. >> shopify. >> as well as chinese fast fashion retailers like sheehan and tamu. now, the value of goods impacted here is around $1.3 trillion. so that means roughly 40% of everything the us buys from abroad will now see higher costs. and that's before you count in the retaliation. all three countries say they'll respond with tariffs of their own, likely hitting sectors including agriculture, alcohol, apparel and cars, including evs. and frank, the main question from here is what, if anything, the three countries could do to satisfy trump's concerns to get these tariffs removed. and the white house was really vague on this point. they told reporters there would be a wide range of metrics, including only having legal immigration and zero american deaths from fentanyl. and trump told reporters last night that he will be talking with leaders of both canada and

mexico this morning. so some small window there for negotiation. but unless something changes, frank, all of these tariffs will take effect just after midnight tonight. frank. >> all right, megan, thank you very much. our megan costello reporting from dc want to keep this conversation going. now. joining me now is steve odland cnbc contributor and the ceo at the conference board. also with us, jay timmons, ceo of the national association of manufacturers, the largest manufacturing association here in the u.s, representing small and large manufacturers in all 50 states. good morning to both of you. really great to great to have you here on a morning like this. jay, if you don't mind, i'm going to start with you. you put out some research over the weekend. you say that these tariffs are going to cost u.s. manufacturers an additional $144 billion every year. what's creating that additional cost. what does that mean for the manufacturing sector. >> yeah well good morning frank. look i just to start it off, i represent manufacturers in the united states. we want to see manufacturing grow here, but that means we've got to have the right conditions, the right tax policies, the right regulatory

policies, and anything that adds to the cost of doing business in the united states makes it more difficult to invest and hire and raise wages. so as we see the impacts of these tariffs, we're going to have to see what happens to the american consumer. we're going to have to see what happens to the cost of doing business. the president, to his credit, said that these policies would cause some pain for americans. and he has he has tried to warn folks what's coming. we're going to see we're going to have to see how this plays out. obviously. >> we definitely have to see how it plays out. steve, good morning to you. great to have you here as well. i want to talk to you about how ceos are seeing all this. i've seen a number of analysts come out and say, well, these tariffs will probably be short lived, but how does the uncertainty impact business leaders? >> well, i mean. if you look at the projected results, the conference board projects that gdp could slow by nearly one full point. inflation could rise. >> by 6/10. >> of a point. you know. this puts us near. >> it'll feel recessionary. you

know if. >> the economy. >> slows to this level. >> ceos don't. >> like uncertainty. >> they want to know. >> the rules of the game. you have to. >> plan for the long term. >> you have to know what your. >> cost of capital is. >> you have to know what your volume projections. >> are going to be. when the rules. change like this, everybody just stops. all investment stops, everybody holds back. that adds further uncertainty. >> and a further drag. >> and friction. >> to the economy. >> so it's not. >> a good time right now in the economy. >> and obviously you. see markets declining. >> the only. way these things make. >> sense is if these this is just a shot across the bow, that this is. >> the opening of. >> negotiations, renegotiations of the usmca. otherwise, why would you take your two closest. trading partners, your two closest. >> friends. >> and start there versus starting in some other areas? >> you know, steve, you're mentioning the usmca. we actually heard from the uaw over the weekend saying that they're in support of aggressive tariff action. but i'm going to show the audience and read to you

guys another tweet that we got from the uaw president. he said in part, we need to stop plant closures, bring back american jobs, and stop the global race to the bottom immediately. then he goes on to say, speaking of the usmca, any tariff action must be followed with a renegotiation of the usmca and a full review of the corporate trade regime that has devastated the american and global working class. i want to focus on that part about the renegotiation, jay, with you, do you believe that the usmca needs to be renegotiated? and if these tariffs, which are going to create, according to your research, some short term pain for your industry, does the renegotiation, does that create a benefit long term? if that's part of a two pronged plan? >> well, look, the usmca was going to be reviewed in 2026 anyway when it was implemented five years ago. manufacturers responded to that. and to steve's point, you know, that certainty that was provided by a negotiated and accepted trade agreement by the three countries enabled manufacturers to make investment decisions. those

decisions have been implemented, and now we have more uncertainty about what's ahead. we were pretty pleased with the outcome of usmca. in fact, we supported it greatly during, you know, during the negotiation phase and the and the final implementation. so i agree with steve. it seems to be a it's a little unusual that we would come after our two closest trading partners and also our closest allies, both geographically and from a national security perspective. but we assume that there is a rationale for this. my biggest concern, frank, to be honest with you, is what happens to small manufacturers. they don't have the flexibility. they don't have the access to capital to make rapid decisions that that are going to be required. as as trade flows are affected by by these tariff increases. >> you know, to your point, according to your research, once again, about one third of us manufacturing inputs come from mexico and canada. jay and steve stay right there. we have a lot more to talk about, including

the potential china angle when it comes to all this. all right. we have much more with jay timmons and steve odland right after this break. please stay with us. >> did you know. >> some liquid laundry detergents are designed to leave chemical residue on your clothes? try earth breeze laundry detergent sheets. unlike some liquid laundry detergents. earth breeze delivers a powerful clean with less chemical residue and no optical brighteners. plus, each sheet is made of 100% concentrated cleaning ingredients to fight tough stains. for a powerful clean with less chemical residue, try earth breeze, available at walmart. brand power helping you buy better. >> introducing aztec minerals listed on the otcqb in the toronto. venture exchange, gold and silver prices have surged to. >> multi-decade highs, creating a strong. >> backdrop for. >> precious metals exploration. aztec minerals is drilling in tombstone, arizona, a. >> historic high grade silver and gold. >> mining. >> district with significant. >> expansion potential, with. >> additional drill. >> results expected soon. >> and having private.

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concerned about what this could mean for the us-china dynamic. when you're talking to ceos, are they worried about this trade war? the idea that things could escalate from here? >> yeah, i mean, ceos are worried about all of this. >> and china provides. >> just they have. >> become our supply chain. and we have moved. >> over the past 20 to 30. years to a globalized, integrated supply. >> chain with canada and mexico and china providing low cost labor. you don't. >> undo that. >> in a matter of months. and so you're going to have, you know, even if. >> you. >> said, okay, this is a one way trip, we're going to put these tariffs on, it's going to be forever. >> it's going to take years. >> for manufacturers to be able to respond to this. so you know, you're dealing. >> with a very difficult situation. you've got the geopolitical overlay. >> with china as well. and the friction in the south china sea over taiwan and other things. >> so this this escalates. >> the danger in the world on top of the. >> costs of all of this. so you've you've just seen.

>> tariffs go on 41%. >> of our total. >> imports into. >> this country. >> 41%. that has a material impact that cannot be just undone or adjusted to in a. >> very short. >> period of time. >> so jay, coming over to you, i mean, steve hit on it. so many things are made over in china, shipped here to the u.s. when you look talking to the manufacturing companies that you represent, how concerned are they about retaliatory tariffs coming from china? just the potential impact this could have when it comes to trade relations between the two countries. >> well, i think we have to look at the fact that 95% of customers reside outside of the united states, and we don't want access to those markets to be curtailed. but on china specifically, you know, we negotiated a phase one trade agreement in the first trump administration. and i don't personally believe that china has lived up to that. and what we really expected was we expected there to be targeted, very strategically targeted tariffs implemented that would deal with things like

intellectual property theft or subsidization or dumping from countries like china. and i have to say that the north american tariffs that were imposed were a little bit shocking, a little bit surprising, most, most ceos, most companies did not expect that or see that coming. and the disruption to the supply chain is going to be pretty significant here in north america. china is a whole different situation and one that that obviously we've been dealing with for a number of years. but north america is now a new, you know, a new territory for us. >> all right, steve, i want to come back to you and talk about the potential impact of these tariffs. a lot of people see it as inflationary. a lot of concerns about bond yields possibly spiking. on this news. we're going to hear from the newly confirmed treasury secretary later today. at the same time, some concerns about inflation when it comes to the fed and the idea that we may not actually be on a cutting cycle anymore. i want to talk to you. how do these ceos view all this, the inflationary impact and also the potential impact on the fed. >> well. >> you know, i.

>> think there's a couple of weeks ago, ceos thought. >> that they understood what the rules of the game were and what was going to happen here over the next couple of years. and they breathe a sigh of relief because now we have some. level of certainty. >> this throws all. >> of. that back up into the air. certainly bond yields will be under pressure not only because. >> of this. >> alone, but then you add on to it that they're talking about lengthening the tenure of the debt, us debt. and so therefore. >> that puts. >> pressure on the long yields, which then. puts pressure on consumer borrowing rates, consumer mortgage. >> rates and so forth. that hits. >> the housing market. which is has been hugely inflationary and problematic. >> for us. so all of this. >> puts, you know, this could. take us down to almost no growth, which feels in the united. >> states like a severe. >> recession, even though even if it's not negative, you know, and then. you look at our trading partners beyond canada, mexico and china, the. other 60%. >> and what. >> do they think? >> and so they're going to. assume that.

>> everything is off. >> so the whole. thing gets. >> thrown into the wind, which which is why i. >> come back to this has to be, you. >> know, and when you're. >> negotiating. >> you don't you don't lay out, you know, all of your, your. tactics for everybody to see. >> but this has. >> to be the beginning of. >> the usmca renegotiation. therefore the question is. >> what do they want? >> what what concessions. >> are they looking for from mexico and canada. >> in order to stop this? they've talked. >> about the border, immigration, drugs. >> okay. >> that's not perfectly controllable as we all know. it can come from many sources. so you have. >> to you have to get. >> to what are the metrics that they're going to. >> look for. >> all right steve allen james jay timmons great to see you both. thank you for your time and for your insight. have a good day. as we go to break here on wide exchange, a lot of talk about the headline numbers with those tariffs. but cnbc we took a look at some of the items that may see prices spike in the very near term produce. at the very top of that list you can see that. you can see that fear in shares of chipotle always mentioned the pricing, always

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meaningfully change their outlook ups, saying their guidance did not factor in tariffs. ceo carol tomé saying this about the potential impact. >> in terms of the of our our risk, if you will. last year we delivered 22.4 million packages a day. of that, less than 400,000 packages were imported into the united states from countries like canada, china, europe and mexico. >> the beauty of having. >> a global integrated transportation network is that we can well, we can handle our shippers, whatever they decide to do. if tariffs come their way. >> so the dow transports names such as norfolk southern kirby corporation, painting a much more clear picture. norfolk southern calling the tariffs a headwind. kirby, which operates barges domestically, saying it's a clear tailwind. trucking companies reporting last week also not seeing a negative impact. schneider forecasts continued growth in its us mexico business despite the tariffs this week. less than truckload companies or ltl companies, they report these truckers, they get about two thirds of their volume from

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is. >> get invested. join the club today. go to cnbc.com. slash join jim. >> all right. welcome back to worldwide exchange. u.s. stock futures are off session lows but still down more than 1% across the board. the nasdaq the hardest hit down more than 1.5%. small caps down more than 2%. joining me now jay woods chief global strategist at freedom capital markets. jay good morning. great to have you here. start off seeing a big sell off on wall street right now, at least in the futures market. even though the president indicated we'd see these tariffs. why do you think we're seeing such a big reaction. >> yeah i. >> mean there's. >> still uncertainty. >> we don't know. >> what the retaliatory strikes are going to be. china's been awfully quiet. >> i know it's the lunar. >> new year. so there's a holiday there. but this is just the first of a string of negotiation tactics that the president is taking. and we're not certain where this is going to lead us. so we always sell first and we settle things out later. >> all right. with that in mind, what's your word of the day. how do you see today shaping up? >> yeah. seat belts. i mean it's apropos for the volatility we

we've been seeing last monday with deep seat. still not sure exactly where that's going to take us especially with these chipmakers. but we need to buckle up. those watching your portfolio minute to minute. you may want to step away for a little while. the volatility is going to ensue because the headlines the headlines keep coming at us. now trump is going to meet with trudeau and the mexican leader. and so we're going to see see intraday volatility day to day volatility. so we need to buckle up. >> all right. so you're saying there's a lot of questions a lot of uncertainty. we're all seeing the dollar rise which can impact a lot of multinational companies. with that all that uncertainty in mind what is your pick today. >> well we have earnings in one big stock. it's alphabet. alphabet continues to hit it on all metrics. two things to watch when they have earnings. the ai and ai infrastructure. how gemini's were rolling out. and then the cloud. the cloud is what hurt microsoft. their cloud growth continues to grow exponentially. the margins are shrinking. so from a fundamental base i love the stock. and then litigation looks like that's off and on the back burner for now.

and then technically on a daily basis and a weekly basis, the chart looks phenomenal to me. so to me it's got strength, both fundamentally technically it's a stock. you want to be. >> all right. one thing i want to ask you about is bond yields. we're going to hear from the newly confirmed treasury secretary later today about funding tariffs. supposed to be inflationary, but we haven't really seen a reaction in the bond market, at least not yet. >> we haven't. and that that was that's the one silver lining. when we see bond yields get back to 4.7% and go towards five in the ten year, then that could have a deeper impact on equities. but right now bonds are kind of off to the side. we're focused on individual stories. these tariffs what they're impacting and then what china's going to say and do and how those negotiations go. so buckle up. it's going to be a fun week. >> so we got our seat belts on and very quickly do you have to get out of here in a second jay. but if we do see bond yields spike, does that create competition for the equity market on top of the uncertainty, you can get more yield when it comes to the bond market. what does that do for equities. >> yeah it's going to put a cap on equities. right now the 6100

level in the s&p 500. we've gotten there twice. we failed that friday reversal a little scary to me. so just just more turbulence and uncertainty. so people may want to stick to the sidelines have levels where they want to enter. if this gets deeper. >> woods where do they seat belts. very apropos with what we're seeing in the premarket right now. thank you very much for being here. thank you. one more look at the at the futures in the red across the board nasdaq down about 1.5%. that does it for us. squawk box starts right now. >> good morning. president trump making good on. >> his promise to. >> slap tariffs on. >> america's biggest trading partners. cnbc has reaction. >> from every. >> corner of the markets. >> this morning. stock futures pointing to a. sell off. we're going to run you through the companies with. >> the biggest. >> foreign exposure and. >> show. >> you what is moving. >> right this moment. >> plus elon musk. >> held a live. >> spaces discussion. >> at. midnight to talk about what the doge. >> team has done. >> so far. >> and its plans. >> now that. >> musk has access. >> to treasuries. >> payment system. we'll bring you a rundown straight ahead. it

is monday, february 3rd, 2025. >> and squawk. >> box begins. >> right now. >> good morning, everybody, and welcome. >> to squawk box right here. >> on cnbc. >> we're live from the nasdaq market site in times square. >> i'm becky quick. along with andrew. >> ross sorkin joe is out today. but let's take a look at the market's reaction to those tariffs that the united states is putting. >> on its. >> partners to both. >> on. >> its borders, to both the north and the south. you can see right now in the us equity futures. >> there is some pressure. >> that's being added to this. dow futures off by about 560 points. >> right now the s&p. >> futures are down. >> by 85. the nasdaq. >> down by about. >> 344 points at the moment. treasury yields have not seen. a huge