you bullish. are you bearish. wal mart trading to a new all time high. tell me frank what does wal mart benefit from a bullish environment a bearish environment. which environment or a hybrid of all. >> all right there we go. final trades. that's going to do it for halftime. take a look at the markets still in the red. have a great day. the exchange starts right now. >> thank you very much. and welcome to the exchange i'm. >> kelly evans. >> and here's how the day started with a major sell off following the 25% tariffs on canada. and mexico. >> and those 10%. >> tariffs on china. bank of america even asking whether this is america's so-called brexit. the dow was down nearly 700 points at the lows. but guys that's so three hours ago. the dow is now down just over 100 points. was briefly positive earlier after the mexican president tweeted. and the white house confirmed that those tariffs on mexico will be delayed by. >> a month. >> but it has sent ripples

through global supply chains, adding more uncertainty to the fed's calculus and to companies and industries trying to figure out what's next. and with canadian tariffs still in place, the housing stock still remains under pressure. this hour. we'll get to that in a moment. we do have full team coverage. as you can see here. stand by everyone. first let's get over to dom chu with the market action. dom what can you. >> tell us. >> all right. let's put some context around just how low we got at some points here in the. midday trading. markedly better than it was to start the day so far. right now the dow is down about 192 points. the s&p is down roughly 55 points. and the nasdaq composite is down 254 well off session lows. where we did see the dow down 665 points. the s&p was down 117. and the nasdaq was down over 480 points. so that's the relativity. bitcoin prices have also taken a bigger dip as general risk aversion works its way through the markets. prices for the biggest cryptocurrency out there standing currently just around 98,000 or so. you can kind of

see there they were 106,000 just last week. now stocks in the ecosystem like exchange operator coinbase, also mining company holdings and microstrategy which owns bitcoin on its balance sheet all lower on the day so far. but again well off the lows of the session. a key sector in focus right now is the energy side of things, where it is outperforming as concerns over potential supply disruptions for crude oil tied to tariff policies are boosting prices in the near term. that's leading to outperformance in oil and gas names like katerra, eqt, even chevron on the majors side of things. so wti crude currently $17.58. and we're going to end with a check on the consumer, a big focus as investors digest just how much those consumers could be hurt by potentially higher prices due to tariffs. companies with exposure to china and from a customer and supply chain perspective also lower on the day. think nike, think ralph lauren, think wynn resorts on the casino side of things. and that's in addition to all the auto and parts makers like general motors that are taking a dive. as for what the industry braces for, what a production

and situation for cost looks like in those trump tariffs. so, kelly, a lot of things in focus right now, not just cars, a lot of ripple effects. i'll send things back over to you, don. >> thanks very much. and what we're whispering about over here, the president just saying as he signs an executive order to create a sovereign wealth fund. more on that in a moment that we haven't agreed on tariffs yet with mexico. so the dow is down about 192 points right now. >> not a massive movement. >> but let's review this trading day in a nutshell. check out the e w w the ishares mexico etf. it was on pace for its worst day since last summer. you can see that around that 930 mark, but no more. mexico's president did agree to send 10,000 mexican national guard members to the border and in exchange, according to her post on x, the u.s. will pause tariffs in mexico for a month. so end of story. or just the beginning, let's bring in senior economics reporter steve liesman, along with our global supply chain reporter, lori ann larocco. welcome to both of you. steve, again, fast moving situation. >> are we. >> reporting this or not? that's

what i don't know. >> the president. >> has said. >> we haven't agreed on tariffs yet with mexico. you can look at. >> the market confirmed that. he said that. >> look we can have megan. >> on in a moment. >> but you. >> can. look at the. >> market and see we have not moved on that headline. >> fascinating. >> they are right now keying in on what the mexican president said on x. >> this morning. >> we were able to confirm. >> that appeared to confirm. yes, exactly. so for now we'll. >> go. >> with that was confirmed. right. so president trump kelly, here's what's interesting about this. he's linked the new tariffs to progress on issues like fentanyl, immigration and trade deficits. so that suggests that things mexico, canada and china can do to undo them. but he's made other comments that suggest maybe, hey, they could be more permanent. for example, he posted on truth social this weekend quote, make your product in the usa and there are no tariffs. that suggests a different and more permanent underpinning for tariffs. and then when campaigning in october 2024, he said we were a smart country in the 1890s. this is when the country was relatively the richest it ever was. it had all tariffs. it didn't have an income tax. trump has praised, extolled and otherwise revered

president william mckinley, who had the nickname the napoleon of protection. he raised u.s. tariffs from 38% to 50%. more importantly, president trump needs revenue to pay for his tax cuts and efforts to reduce the deficit. at the same time, morgan stanley, writing over the weekend, fully implemented tariffs with staying power don't appear to be in the price of key markets. and yet kevin hassett, the president's top economic advisor, telling squawk box this morning the media has it all wrong. we've been misreporting it as a trade war when it's a drug war, suggesting that that's temporary. so there's reason to be confused. i think they may be a little bit confused on people in the white house as well, and reason to think of a risk as being two sided, leaning perhaps towards temporary. that's what the mexican news today tells you. but some non-zero and important chance that there's a permanent sense, kelly, to all these tariffs that the president wants to enact. >> all right. let's bring in lori in. >> here for a second. >> we can. >> kind of kick this around. you've been on the phone all weekend long i mean it's one

story one. and let's back up for a second. it was a. surprise that the tariffs moved forward in this way. we thought we might get exemptions entirely on oil. we thought there might they might be more specific. some had thought they might only be steel and aluminum. so you had to go from reporting on that extreme to now, today maybe as of a couple of hours ago, maybe the mexican ones are on hold. what are your supply chain sources telling you? it's absolute whiplash. i've spoken with a trade attorney, suppliers, government relations folks, and trade like certainty. and when you have certainty, that's what bakes in the price. and right now is so critical for us consumers because right now all the brands are negotiating with the retailers for back to school. oh, really? in january for summer and for fall items. and so with with these negotiations, it's like, okay, how much do you how many items do you want and what are you willing to buy. and because of these uncertainties, they're now trying to put in some some of these companies trade war clauses so it could cover their

bottom line, because that's interesting. you know, we had we had a shoe guy, 200,000, 200,000 pairs of shoes. and this is china or this is china. >> but i talked to a guy this morning who sinks cement for five and ten year factories. yeah. and he's like, tell me what the situation is going to be, and i'll figure out whether or not i can pour concrete. >> and then on top of that, and we want to get to these headlines from the president. but we now have basically three different situations. we have mexico 25% delayed for a month. we have canada 25%. >> tomorrow. >> depending on what the next few hours bring. and we have china at 10%. so all of these we're kind of lumping it all together. there's three totally different situations going on here. exactly. and the federal register notice that is key. that's a key document for shippers because it details how these tariffs are going to be deployed. yeah they're not out yet. not even the china one. and the trade attorneys that are waiting there like they should be out by now. and so heaven only knows what's going on. and that only adds to the uncertainty. all right. stay right there guys. let's bring in the president not the president.

let's bring in megan cassella to talk about the president, who just signed some new executive orders, including to create a sovereign wealth fund. megan, with some potential implications for tiktok. welcome. >> absolutely, kelly. so a whole bunch of topics that we're going to hit right now. the president is in the oval office right now talking to reporters. we have not yet seen the full tape playback, but we're seeing the headlines hit from the wire. so first, on the tariffs front, i heard you guys hit these at the top. trump is saying according to the wires that we haven't agreed yet on tariffs with mexico and that we will have a big negotiation with mexico. my interpretation of those comments, since we know earlier that they agreed to this one month delay, is that he is signaling that over the next 30 days there will be more talks. they haven't yet decided where to go from there. for now, i would assume that that one month delay still holds. he also says that he had a good talk with canadian prime minister justin trudeau. and we are watching because we know at 3 p.m. today they're expected to speak again. no deal yet with canada. so a lot to watch coming out of that very consequential phone call later this afternoon. and then on china, they haven't been speaking with china today. but

trump saying now that he'll speak to china over the next 24 hours probably, and that those 10% tariffs are an opening salvo. those could move higher if they need to see more from china. then on the sovereign wealth fund front, this was the reason the pool was called into the oval office. trump signed an executive order calling on his treasury and commerce departments to take the lead here in setting up a sovereign wealth fund. and scott besson is in the oval office as well, telling reporters it should be stood up within 12 months. this was something we heard from trump about on the campaign trail, saying there was interest in it. president biden, by the way, was interested in this as well. and on the tiktok front, he said that that sovereign wealth fund could potentially be used to make some sort of a deal with tiktok, potentially using some of that money to purchase half of tiktok, as he's talking about, has he's been talking about wanting to find a buyer for that half of tiktok. and then finally, guys, just a couple of headlines as well about elon musk and all of the news that's been going on today with relating to him and usaid and the treasury department's payment system. trump, responding to questions here,

saying that musk is doing things only when we give him approval, saying that musk has access only to letting people go if we need to, and saying we won't let elon go places where there is a conflict. so more to come. there will be parsing this tape playback as we get it. but obviously the president here covering many of the topics we've been talking about today, guys. >> megan, for now. >> thanks, megan, cassella and steve, i'm just going to go back to, you know, look, we follow the market because it's the best discounting mechanism. so kicking this all around not necessarily sending us back to the lows from earlier, but thinking we kind of know what we're going to know for tomorrow at this point. >> i think. so i mean, it's something that the market is going to react to. i think minute by minute, i will tell you that there's an index called the economic policy uncertainty index. it's the highest it's been since september 2024. and i think one of the positives that was mentioned a lot in terms of the campaign was the idea that president trump would bring some certainty to business, and this is just a very difficult time. and i think that there's

businesses out there that would i don't know how to say this, but maybe the answer is tariff or get off the pot is maybe what they might be saying in terms of tell us what the rules are. >> yeah, exactly. >> you have people who were coding over the weekend, the tariff into the software. >> yeah. >> and now what are. they doing? they're coding. >> now, of course. i mean, but i would have to say, i don't think people are that surprised that this is the path we're going down. it's more maybe just the scale and scope. even just in the past few weeks, there was before the inauguration. >> there was this talk. >> that maybe tariffs would not be universal, that they would be much more targeted. and i think the president is taking a stand and trying to say, so what we don't know, laurie ann at this point is are they going to continue to be negotiation chips with columbia and now with mexico? there actually isn't much to worry about as of right now. or given that he seems to want to go down this broad. >> path. >> they have to kind of brace for this. regardless, they're bracing for everything, even though even if there's like you put a pin in it with mexico, it's the threat of 30 days from now. and so if you're negotiating the price of your

product, you got to get that clause in. is there an interesting strategy? >> who pays that clause? who pays the shipper? >> the shipper in the us. >> shipper pays it in the receiver the importer. >> it's a trickle down effect. so what happens is if you're a brand, you know, you got steve liesman ties. you've got your tie coming from china. you pay the tariff. i have seen the i've. >> seen the chinese seller says if there's a tariff on this thing, you the us recipient pays it. >> absolutely. customs actually dips into your bank account before you can get your your container. they go into your bank account, they take the tariff out and then you get your. >> can i talk about one other thing. >> if you do it in about eight seconds. yes. because we'll see you next hour. and then we can talk. >> about a whole. >> lot of the, a lot of the deals and relationships between mexico and canada are not just by price, they're by geography and then by price. there are monopsony and monopolies on both sides. >> professor liesman come. >> on, monopolies. not many seconds, but but close monopolies are the seller,

right? i'm the only one with a product. i can tell you. price monopsony is the buyer. yeah, there are things. and we'll talk about this with brian. when it comes to crude oil, where the us is the only buyer for canada. so we can set the price. however, adding 25% and bringing in miss lori anne larocco here, all of a sudden that pays my shipping, doesn't it? >> well, it opens you up to more buyers. >> it opens it up. so the changes the geography of it in ways that are very difficult to analyze. >> that is an. >> excellent point. 18 seconds. >> trade is water. it flows regardless and it will always find a way to find a new buyer. yeah. or maybe looking for the most frictionless surface is a way to say it. lori anne, thank you, lori ann larocco steve liesman again. we'll see you in a few moments. steve, let's talk more about the economic fallout we may face from tariffs, assuming that china and canada ones go forward, who knows if mexico will join. my next guest says there's one key player less likely to cushion the blow this time around. let's bring in dean mckee. he's the chief economist at point72 asset management. >> dean i feel. >> like i heard steve, steve

cohen sounding a little bit more bearish lately too. but you don't need to get into all that. but you know, as someone you've been very constructive and very correct about the us economy the past couple of years. i sense a bit more nervousness in your outlook for this year. >> i am more. >> cautious at this point than than i have been over the past several years. >> and one key. >> reason is that. >> consumers are if. >> tariffs are put in place the way we think they will be in some form, and at some point that is going to cost consumers significant amounts of money. and one of the linchpins of this economy has been very strong consumer spending. >> so that's going to undercut that. >> to some extent. >> how much, of course, depends on how big the tariff increases are. the second thing i would highlight is. the uncertainty. >> that that. >> you are just. >> talking about. you know, for. >> example, if you're. >> thinking of building a plant in the us and. >> you're, you know, you're going to import. >> some goods and you're going to export other goods, what. >> prices. >> what tariffs. >> assumptions do you make about any of that? you know, it would have been the case with the free trade agreement with canada and

mexico. >> you can just know what. >> those are going to be. now i don't know what. >> anybody puts on on those tariff assumptions. >> going forward. so i think that is going. >> to weigh on business investment spending. >> and that to me. >> makes for. >> a much more cautious us. >> outlook for. >> both consumers. >> and for businesses. >> especially, you know, if the fed isn't there. so this is a point. dave zervos obviously you know dave, he's a much he's very optimistic about this whole situation. thinks deregulation will overwhelmingly still provide a positive economic force. but even he and his note this morning said, you know, the fed may wait. they might not kind of move in the moment that they sense weakness. they might think there's more inflation coming, whether or not it actually comes. and, you know, markets like it better when the fed is kind of right there ready with the next rate cut. and he says, and i'm sensing you think the same thing, that they're less likely to cushion the blow now than they did in the past. >> i think that's right. you know, people think back to the 2018, 2019 experience. and we did have a slowdown. >> a. >> contraction in us manufacturing. the economy slowed. the fed.

>> came in and cut rates. and so that may be. >> in the back of people's mind. >> but what i would. >> highlight is that was a very different environment for the inflation was below target. >> so they didn't. >> mind pushing inflation up a little bit with tariffs if that happened. >> now inflation is above. >> target for the fed. >> we've just been through a couple of years of. >> very high inflation. >> so what the fed is worried about. >> is that. >> if consumer prices do go higher with tariffs then inflation expectations may start to rise. >> in a significant way. >> and the fed really. >> doesn't want that to get out of hand. >> so they're. >> going to be much more cautious now about. stepping in and cutting rates. if growth does slow down in response to those tariff increases. >> yeah. >> which makes those the data points. you know, consumer inflation expectations which are kind of at high levels, you know, kind of the cycle highs let's call them already. so if i'm the fed you're saying i'm going to look at i'm going well inflation expectations are high. we're going to get near term upward pressure on the cpi. i don't want to be cutting in that environment. but do you think they should be right. like we is

this kind of a enough of a disinflationary force in the longer run? maybe with some help from. >> you know. >> what they're doing on the deregulatory piece that that ultimately that cuts are the right move here. >> i don't think the. fed knows that. and i don't think we really do either. what we do know is that prices are going up in the near term. if tariffs go in place, you know. at least the prices of those goods. >> that are tariffed are. >> going to go. >> up in price. so what the fed. >> knows is that there's an upside inflation. >> shock coming of some. extent and duration. >> what they don't. >> know is how. >> long that will. >> last and what the growth. implications of that will be. >> so i think what you know, what. >> we heard from. >> president collins this morning is, is what how the fed is likely. >> to. >> react to it. >> let's just wait. >> and see what happens. why do we want to. >> try to. >> get ahead of this when we don't even know what the policies are going to be? and, you know, we just have to wait and see. >> yeah. and if that keeps them on the margin more hawkish then the market has to contend with

that. dean appreciate you joining us today. good to get your thoughts. >> thank you. >> point72 dean mckee. let's get more on the market reaction. now. we got a glimpse of what could happen to stocks this morning. interestingly enough the russell was and still is the worst performer. although you'd think strong dollar tariffs these would all be more big company problems. dow was down more than 700 down 108 right now. but my next guest is a buyer. even if tariffs go into full effect as discussed including on mexico next month. here to explain why is paul christopher, head of the global investment strategy at wells fargo investment institute? paul, we kind of set this up without meaning to as a as a he said he said you got kind of a little bit more of the bearish case from dean just there. and you're in a different you're in the camp that says deregulation is going to override all of this really? >> well i wouldn't say. >> deregulation by. >> itself, but. >> if you take deregulation tax cut extensions, which. >> we think. >> are very. >> very likely later this year. >> and the organic strength of. >> the economy, the. >> the rate at which consumers are spending, especially on services which have not been

tariffed. we think, though, that combination will pull the economy forward and. >> we would. >> be buyers here. certainly of the s&p 500. >> is the dollar the kind of story that is a market event? when i saw it at 110 earlier today, i mean, the euro is almost at parity. and you think, well, all right, good for consumers who want to travel, but maybe not so good for manufacturing exports. you know that's kind of the whole point here too. so you know it's almost like tariffs are kind of a narrow issue. but strong dollar becomes a pretty broad one. >> the strong. >> dollar is as you say. >> it's. >> a. >> it's a two. >> edged sword. >> cuts both ways. for importers. >> though it does make. >> the tariff. >> a little bit more blunted. because if you're a canadian supplier and your currency is weakening but you're pricing in canadian dollars, well, then the price that the american buyer pays for. >> those auto parts. >> let's say in us dollars, is now less. >> than it was before or or. >> less than it. >> would have been. let me say. that less. >> than it. >> would have been. so the.

>> stronger dollar. >> helps blunt. >> the inflationary impact of. the tariffs, which is one of the reasons why we're not terribly concerned. >> about the. >> inflation impact here in the next couple. >> of quarters. >> and you're sticking with large caps, which today in this little kind of stress test proved the most resilient. >> the dow. >> outperformed the russell by like a full point during the worst of the sell off. >> look these are efficient companies. if you go back for example. and just i was looking at tariff. >> revenue the other day. >> and noticing how tariff revenue in 2018 surged to a new. >> high. >> an all time high at about 3%. >> of federal revenue. >> but you know what? by 2020, it was back down to. >> where it was before. >> my point in this. >> is that. companies make adjustments. >> and. >> these large, efficient. >> companies in the s&p. >> 500 will make the adjustments eventually. we wouldn't get too hung up in the day to day. >> of the. >> you know, what your guests were talking. about a few minutes ago in terms of, well, how do we know what. >> to. >> buy. >> for summer or fall that will. resolve itself. you'll see some volatility. >> in margins.

>> but we. >> think the. >> secular trends. of infrastructure building, reshoring. >> and artificial. >> intelligence, along with the mitigating factors. >> that we mentioned. >> like the. >> currency. >> the. >> dollar being stronger. and some of these companies in. >> canada maybe. >> being willing to absorb the cost in their own. >> margins. >> that will help offset here. so you'll get. some volatility in margins. but we would look through. that and still buy industrials here. >> and we would still buy. >> large caps and energy. we had this. >> as. part of our outlook. in december of last year. we're sticking with it. >> but it's fascinating that you said basically i'll kind of read between the lines you laid out. once companies have to pay tariffs, they find a way to not have to pay tariffs. you know, they obviously make supply chain moves or other. so that might be reassuring for me as an investor. but what about the whole idea from the politics of this, which is that tariffs are supposed to raise revenue. tariffs are supposed to reshape supply chains and so forth. >> well tariffs. >> do raise revenue. but at. >> 2% of total. >> federal revenue, we'd have. >> to consider. that kind of. >> a. >> minor source. we wouldn't

expect. >> that that the. >> fiscal plans can. be unlimited for spending and further tax. >> cuts. >> beyond the extensions that we're expecting. we wouldn't. >> expect that. >> because then. >> you'd have. >> a much. >> larger deficit. >> and then we'd. >> worry about bond. >> yields. which is where. >> our focus. >> is in terms. >> of risks this year. >> not tariffs. >> all right. and i see how that still remains a top one despite efforts to maybe start addressing it. paul thanks. good to have you today. we appreciate it. >> thanks, kelly. >> paul christopher with wells fargo. goldman sachs is telling clients which stocks are most at risk from tariffs going forward. they've got names like ford, nike, canada goose and a few others. some are pretty surprising you should know about. for the full list, scan that qr code or go to cnbc.com/pro pick. and coming up, mexico's tariff delay is not helping the homebuilders there. problem is the canadian lumber. and that's evidently still going forward. president trump saying from the oval office moments ago us doesn't need canadian cars, lumber or agriculture. up next, we'll hear from one ceo who's warning of a lumber supply

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666 now 116. but not a lot of relief for the homebuilders. they're already coming off their worst day since december on the anticipation of this. now they're down 2% today. that's about a 4.5% drop since friday. many of them depend on canadian lumber to construct and renovate homes across the country. those tariffs are, as of now, still moving forward tomorrow. diana olick has more on how this could affect home prices. diana. well. >> kelly, up to 30%. >> of softwood. >> lumber, which is framing lumber consumed in the u.s. each year, comes from canada. >> while the u.s. has. ramped up. >> lumber production. >> in recent years, 70% of wood product imports that's. >> $8.5 billion are. >> from canada. >> they're already. >> subject to. a 14.5% duty. so this would raise the tariff to over 39%. the home building. >> industry association is. >> asking president. >> trump to exempt building materials from the 25% tariff, saying tariffs. >> on. >> lumber and other. building materials increase the cost of construction and discourage new

development, and consumers end up paying for the tariffs in the form of higher home prices. now, i spoke with. >> the ceo. >> of taylor morrison, cheryl palmer, and she told me in a time where some consumers are still struggling to overcome higher interest rates. my sincere hope is. >> that these. >> will be short lived. >> now. >> while the mexican tariffs are on hold for now, for a month, 71% of lime and gypsum product imports that's your wallboard are from mexico. the nahb says new tariffs from imports from china. canada and mexico together could raise construction material costs by 3 to $4 billion, affecting. >> builders ability. >> to complete projects. now lumber futures are. >> up a little. >> about 2% today. they were higher earlier in the day before the mexico announcement. stocks to watch on this. of course the homebuilders the etf. itb but also remodeling names like home. >> depot, lowe's. >> and sherwin-williams. and of course there is also a downstream effect on insurance companies. >> in the. >> wake of the la fires and hurricanes.

>> and flooding last fall. >> this increase. >> those costs. >> for. >> reconstruction kelly as well. >> all right, diana, thank you very much, diana olick. my next guest is getting tons of questions about lumber tariffs, including how his clients can hedge higher prices going forward. let's bring in kyle little. he's the chief operating officer at sherwood lumber. kyle, take me into the last few days. what's it been like? and what happens now? because as of this conversation, those tariffs are happening in the morning. >> yeah. >> thank you, kelly, for having me. >> it's been a whirlwind 48 hours. >> i think the. >> majority of our. >> industry was. >> kind of. >> hesitant to. >> believe that. these tariffs would actually go into effect. >> given that we are already. have a product from. >> canada that is. subject to a countervailing and. >> anti-dumping duty here in the united states. >> so adding. >> an additional. >> 25% on. >> top of that. >> just puts the canadian producer really out of the marketplace for the american consumer and makes it very, very. challenging for us. >> to have access to. >> that supply. >> the president has repeatedly including just now, kyle said,

we don't need canadian lumber, he said. we can grow it here. so remind me, what are the top level stats for how much lumber we have and how much we need? >> yeah. >> so it's. >> it's very it's. >> very interesting. >> that we hear those those kind. >> of comments clearly. >> we do have enough trees in our. >> in the united. >> states forest lands to go out there and produce enough lumber than we need. >> but we do. >> not have. >> the. >> facilities to process. >> we don't have the foresters. and the loggers to. >> go out there and bring. >> that material to. >> the. >> manufacturers to go out. >> there and do it. >> so currently. >> today. >> the us. >> consumes about. >> 50 billion board feet of lumber, softwood lumber on an annualized basis. >> that's about 10% below the peak from covid. >> and today. >> the us. manufacturers only produce about 36 billion board feet of that. >> so there's a 14. >> billion. >> board foot gap. >> that needs. >> to be. >> supplied from somewhere. and currently the us. >> producers can't do that. in addition to that, we have osb, which is the major panel. component for. >> new. >> home construction, and. >> about 6.5. >> billion. >> of. >> that is. >> is not. available here in.

>> the us market in domestic production. >> and this is the first. >> time that i can. >> that i'm. >> aware of. >> in the history. >> that we've had a. >> a tariff or any duty of any some sort with from a canadian producer of that product line, which is so incremental or. so important to the construction of, of new homes in the united states. >> yeah, i hadn't thought about that. you know, we focus so much on lumber and one reason why maybe we can show a five year price chart. we all remember when the price of lumber absolutely skyrocketed during the pandemic. now, that was partly demand driven, like you said, partly supply shock. why are we seeing a very little price reaction now? >> well. >> it the. >> current cash market. >> today is roughly 10%. below what you're seeing today on the cme. >> so we saw a spike up to 635 and. >> change today. >> which would mean about. a 20% premium. >> to the current cash market. so at one point today, the. >> duty was almost fully priced. >> in, i think with. the with.

>> the mexican. news and the feeling in the. >> marketplace that. >> that this could be short lived. >> you're seeing some. >> a little. >> bit of a pullback. >> in regard to that. >> and finally, kyle, sorry, i didn't mean to interrupt. but i'm the other question that i have i think a lot of people are confused by didn't we have lumber tariffs under the biden administration as well including last summer. can you just remind us how much lumber has been in the middle of. it's a trade war of its own in recent years. >> yeah. >> so we've been in a, in. >> some sort. >> of a dispute with the us lumber producers and canadian lumber producers, since i can remember. >> i think it. >> started in the. >> mid 80s, and now. >> it's transcended. into what we have today. currently we have there is an. >> expiration of the softwood. >> lumber agreement. >> back in 2015. >> which has. >> led to. >> the current duties. >> that we have today. >> and those duties have ranged anywhere from 8%. >> to 28%. >> and they are always subject to an. administrative review on an annual basis. >> we're in the process. >> of administrative. >> review six. which all. preliminary indications are

that. that will be announced. >> here later. >> this month, that that. >> those duties will be increased. >> from 14.5%. >> to. >> as much as. >> 28 or 29%. >> at some point. >> later this year. so the. >> duties on softwood lumber coming from canada. are scheduled. >> to move. >> up and move up in a significant way. regardless of the. trump tariffs that are currently enacted. >> interesting. you know, at some point people are going to say, well, i'll just grow it here if this is the way it's going. but it's also a reminder. while we might be down in price from the pandemic, we could be facing 20% or so spikes depending on what happens tomorrow and in the weeks to come. kyle, thanks. appreciate it today. >> thank you. >> kyle little with sherwood lumber. still ahead nvidia is coming off its worst week in more than two years and is back to its october level, down more than 20% now since the start of the deep seek induced sell off. we'll look at how much more downside could be ahead. why it's selling off today. and what about the rest of the chip makers with wall street's number makers with wall street's number one semi analyst business. it's not a nine-to-five proposition.

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>> welcome back. >> to. >> the exchange. i'm bertha coombs with your cnbc news update. homeland security secretary. >> kristi noem. >> has moved. >> to terminate deportation. protections for nearly 350,000 venezuelans. >> as part of president trump's move to. expand cracking down on immigration. a government notice posted today said the conditions in venezuela no longer meet. the criteria for its citizens to qualify for a temporary protected status. usaid will. merge into the state department with, quote. significant cuts. >> to its workforce. multiple outlets reporting the. >> trump white house. >> is expected to. >> announce the plans to revamp the agency in coming days. it comes as secretary of. >> state marco. rubio told. >> reporters in el salvador today that he. >> is now. >> its acting administrator. and reigning nfl defensive player of

the year. myles garrett. >> wants out of cleveland requesting a trade from the browns. >> his request comes. >> one week after the team said. >> it would not trade him, and today said it is not entertaining any offers. garrett is under contract for two more seasons under a five year, $125. >> million extension he signed back in 2020. >> the browns finished three and. >> 14 this season. >> that's not a friendly situation to be in. >> thank you very much, bertha. bertha coombs coming up. we're only two weeks into president trump's second administration, and so far, elon musk is wielding influence that no ceo has probably ever had publicly on the oval office. although the president said earlier this hour during an executive order signing that musk is only doing things when he's given approval and that we, quote, won't let elon go places where there is a conflict. up next, we'll take a closer look at the fallout for his companies, with tesla in

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and canada, the industry faces a headwind of $110 million a day. tesla taking the biggest hit, down 6%. that's not the only potential headache for elon musk. leaders in canada are going after his ventures specifically. they're not even just targeting tesla. deirdre bosa has more for tech check. hi, deirdre. hey, kelly. it's not just techcheck. it's not just tesla. ontario premier doug ford he has ripped up the province's contract with starlink, worth some 100. >> million cad. >> adding ontario. won't do business. >> with people hell. >> bent on destroying our economy. in response. >> musk posting on x. oh well. that was. >> just about. >> 30 minutes ago. >> now, to put. that number in context. >> it's. >> only about 68 million usd, a very. small amount for spacex. whose revenue is estimated to. >> be in the billions annually. >> but still a setback. for starlink, which has been embraced. >> by canadians in more. remote locations. >> that do struggle to get cheap. >> reliable internet access. >> it's also another instance where we're seeing the flip side of musk's cozy relationship with

the trump administration. kelly mentioned tesla. >> as the fallout around these new tariffs. >> comes into focus. >> musk's universe, it is in the crosshairs. >> and it's not limited to canada either. on the. >> last earnings. >> call, tesla's cfo called out. uncertainty around tariffs, noting. >> that the company has tried to. >> localize its. >> supply chain but. >> is still. reliant on parts. from across the world for their businesses. >> and he said it. >> will impact. >> the business and. its profitability. even if tariffs could restrict competition. >> from, say. >> chinese ev. >> makers, it was highly. >> unlikely that they were ever going to be able. >> to sell. >> in the us in the. >> first place. so instead it's supply chain selling. >> to chinese, a key market. >> for tesla that could. >> be challenged and impacted. >> this will also be. >> a major. >> test of. >> musk's relationship. >> with the president, one that has at times. seemed mutually beneficial. the escalating tariff war, which trump has indicated he would take even further if reelected, could hurt. >> musk more. >> than it could. >> help him. >> back to you. >> yeah.

>> i mean, deirdre, listen, you're we're sort of our local canada expert, along with many other things. and i'm curious about when they go after, you know, when they say, i've heard. freeland said maybe we'll do 100% retaliatory tariff on tesla. they're talking about what? potentially blocking starlink. what else is on the table? >> i mean, in the musk universe, there's that, but there's a lot. >> of. >> other stuff. i mean. >> it's i can't remember a time at. all when you saw. >> such tension between. >> two. >> neighboring countries that have such a long standing. history and friendship. you see signs. >> in the local liquor stores. >> and grocery. >> stores saying buy canadian. at the end of the. >> day, though. i think. >> what's clear is that canada has a lot more to lose than the u.s. does, but. >> we haven't seen this. >> kind of tough rhetoric from politicians like doug ford. who canceled the starlink contract, like chrystia freeland, who was in justin trudeau's cabinet but has really. >> you know. >> taken this harder stance, a tougher stance. >> and then. >> you've also got pierre poilievre, right, who. is running for the conservative

party just hitting back. and that, i think, is the difference between this trump. >> 1.0 and. canada's reaction and. >> trump 2.0 and canada's reaction. it's a lot tougher because, you know, the country has been through this before. they know that there's a lot more to lose. what that means for retaliation, i mean, that's a big open question they face. trump has alluded to. yep. absolutely. to your point. and you know, again, there's apparently going to be a call with trudeau again at 3 p.m. eastern time. and we'll watch the market as we get any detail on that. deirdre. thanks, deirdre. bosa. the president said earlier this hour that elon musk only acts once he's given approval. but many wonder if the ceo has too much influence in washington and over competitors to his own benefit. will he face more public pushback going forward that could constrain his influence? and how much will shareholders put up with for days like today? for more, let's bring in ed mills, washington policy analyst at raymond james. ed, the early line was that musk was the biggest winner from trump's election and that his political pivot, his ownership of twitter, it was all brilliant. it had created hundreds of billions of dollars

of wealth for him seemingly overnight. are we playing that in reverse now? >> well. >> when you look at the. >> year to date and kind of. >> election to date. >> impact on elon. >> musk, it's. >> still pretty positive there. >> kelly. >> and you know, when you come to washington dc, what you. >> want the most is power. >> and it is. >> very clear that he has. >> that right now. >> how long. >> that lasts. >> most people. >> around donald. >> trump have an expiration date. that's going to be. >> an open question. >> but this. >> is a relationship that is in the public, very unusual. >> unprecedented for modern times. >> it's not unusual for business interests to have the ear of. >> a president. >> it is very. >> unusual to have. >> an individual in dc without a official government job having this much impact on the government. >> kelly. >> let me put it this way from tesla shareholders point of view, because i believe that's the only publicly traded of his companies. although we all know the valuation of starlink, we hear about the valuation of x maybe on the rebound lately. regardless, you know, originally

the line was tesla shareholders are benefiting tremendously from kind of his access to power. does today show that there might be a flip side to that, which is that if things don't go great, that his companies are the ones that are going to face retaliation and the extent of which we don't know. but could shareholders get frustrated with that? >> well, absolutely. >> kelly, i. >> do think when. >> you look. >> at this, it's. >> exceptionally unusual that. >> you. >> have the president of the. united states. >> you have. >> elon musk. >> both having publicly traded. companies that can be specifically targeted as it relates to. >> elon musk. >> you have the story about. starlink in ottawa. >> but also. >> if there are direct tariffs, i don't. think that. matters as much to elon. as it would to a shareholder. >> elon certainly has. >> kind of shrugged. >> off in. >> the oh, well. >> response. to the. >> spacex link kind of. contract being canceled. >> that's just. >> kind of how he does business. >> you know, his wealth is so. >> vast, kind. >> of what would be painful to a

tesla shareholder. well, there's pain for elon. >> it's not. >> the same level of pain that you would see. >> so if there were a groundswell against him, and maybe it comes from federal workers who are concerned about what's happening to them. maybe it comes from competitors who feel like he has an unfair advantage. maybe it comes from trading partners, i don't know. but if it came from american sources that the president felt he had to placate, what would his options be? i mean, he could literally just remove him from these posts. are there any other ways to constrain his power? >> yeah, kelly. >> what i'm. >> looking for is. not on your list. >> which is the united. >> states congress. typically, we are a country of. checks and balances. maybe add to that the us court system does a action by doge go too far? >> does it not. >> have the context of law? we saw last week with the memo freezing funds, that a court quickly enjoined that and. >> stopped that. but when i look at. >> the president's legislative agenda, he needs all republicans. >> in the.

>> house of. >> representatives, except maybe 1 or 2, to vote for the extension of the tax cuts, to get other things on immigration. >> defense. >> implementing those those priorities. and what you have seen with elon musk is going after individual. >> senators. >> going after individual members. there's just not a lot of play there. so to me, if there is. one pressure. >> point that i. >> am truly looking at is if he goes too far and if he takes something and makes it very difficult for a member of congress to win reelection, right? they just might be a no. and then. >> trump's agenda. >> is a no. >> you know, tim kaine's a democrat, but an example like that, you know, someone who represents a lot of federal workers or someone where there's, you know, a competitive threat and they feel upset about. that's a great point. he has such a narrow majority with major legislation that they need to pass. it's literally a ticking time bomb. so maybe that's one avenue. and if someone said to you, what are the direct ways in which musk's companies have benefited so far from his access to the trump administration, what would be on that list? >> you know, i think most. >> of it is. >> indirect so far. we're going

to look to see kind of what happens with electric vehicle mandates made. in america, mandates some of those were viewed as potentially negative. there's a lot of conversation about telecommunication funding, what's known as bead funding, tens. of billions of dollars that still need to be disbursed for rural access to internet. is starlink a potential solution for that? generally, you he operates in heavily regulated entities. are there opportunities within nasa to get more contracts for space x? those are the things that kind of people have asked me at raymond james. exactly what should we expect musk to continue to get if he's in such a. >> catbird seat here? >> but but the point being, as for now, it's mostly indirect. >> yes. >> yeah. interesting. all right ed appreciate it for joining us today. ed mills from raymond james on musk's influence. coming up, wells fargo writing that the combination of tariffs plus the suspension of that de minimis exemption, that's for little packages and imports below $800, that could have a

material impact on prices here in the us and in the e-commerce space. etsy and amazon, wells says, could be best positioned if those tariffs stay in place. they have less. cross-border competition could even improve etsy's marketing efficiency. google and meta could be hit the hardest due to their exposure to both china based sellers and advertisers, and we see alphabet shares fractionally lower but meta powers ahead, as it always does lately, up 2% today. we'll be right back. >> techcheck is sponsored by comcast business. powering possibilities. >> individually. >> each of us is great. >> but from. >> here you can see we're one big team. at atlassian, we believe real progress takes all of. us working together on new sources of energy. cars that drive to the future, even pizza deliveries. together we can go beyond where we've ever been collaborating from anywhere. on

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they last at. they last at. >> it's not an option. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number... and more about discovering magic. counts. >> last chance to be on the disruptor 50 list. is your startup disrupting the status quo? scan this code or go to cnbc.com slash disruptors to apply now. entries closing soon. >> welcome back. semis are some of the hardest hit in the market today. the sm etf had been down more than 3%. there's yes global supply chain and demand concerns from these trump tariffs. and while this round may not have had a direct impact could chips be next. with the president repeating a pledge last week to tariff foreign made chips after companies, quote, went to taiwan. the streets number one chips analyst says tariffs are trump's preferred way to boost

the industry rather than stimulus like the chips act. joining us now is bank of america securities senior semi analyst vivek arya. vivek, glad to have you here. i was very surprised that this area was the worst hit of the market today. with nvidia down 5% in the morning. why? >> thanks, kelly. thank you for having me. i think the industry is caught up in this, you. >> know, intersection. >> of. all the geopolitical nervousness. >> it's the. >> deep sea. >> concerns from. >> last week. and it's an industry that has done very well over the last few years. so i would imagine. that a number of investors own it as well. there is a fair bit of retail interest, i think. >> that naturally. >> enhances the volatility of the industry. but let's take the. news that has come out from tariffs. i think the cyclical part of the industry is exposed to it, as you said indirectly, if let's say, because of tariffs and the friction in the supply chain, if there is any reduction in volumes of cars and other industrial equipment from canada

and mexico, there can be a concern. but when you look at the secular part of the industry, which has to do with the application of artificial intelligence and the use of servers, most server production has shifted to taiwan, right? some to mexico. i think the customers who buy a lot of these products for them. this is very mission critical to have in their cloud infrastructure environment. so we are assuming that the impact of this is notable in the near. >> term. >> but should dissipate in the longer. >> term, right. so do you think the near term impact has more to do still with kind of the deep seat hangover? or do you think it's really that people go, look, what happens if the president starts really tariffing taiwan made semis as all of them are. right? i think that, look, semiconductors is a global industry and there's a lot of kind of pools of excellence, right? there are certain companies who design these semiconductors extremely well. certain companies that manufacture them very well, certain who who package them. well, you know, japan is a great

source of chemicals. so it's. a global industry. it relies on inputs from many different companies coming together. so any kind of friction is not good for the industry. but we should, you know, remember that this friction is nothing new. you know, back in the first term, remember there were a lot of restrictions that were put on the chinese ecosystem, on huawei as, as an example. and semiconductors over time powered through that. so our assumption is that this is another one of those times where, you know, when you do have restrictions put in. >> this ecosystem. >> but the global demand for chips that enabled new markets and applications, whether it's in cloud computing or automotive or industrial automation, i think that secular trend does continue over the longer term. >> sure. and a lot of the more bullish, you know, analysts and experts have said, look, everything that's happened with ai, with ai development and innovation, whether it's deep sea or what have you, is only going to increase the need for these highly complex chips going forward. so here's my question, vivek. nvidia is down 23% from

its recent highs. is it going back to 140 or are we going to laugh to think it ever was a, you know, almost $4 trillion company? >> sure. >> so first of all, kelly, i think we are big believers in the fact that if one makes computing more efficient, we will use more of it, right? if you look at the last eight years or so, the capability of nvidia chips has gone up by a factor of 1000 times, right? since 2018, the. >> capability of. >> their chips has gone up by three orders of magnitude. in that time, the revenue of their data center business has gone up by 300 times. right. so just because the chip is made more efficient, or there are other efficiencies that come out because of software or operating systems or large language models, i think what history shows us is that there is enough demand in terms of new applications that is able to absorb all this. it's just that this news is coming at a time when there were delays in blackwell, which i think will be sorted, as the company reports over the next few weeks. so no,

we are big believers in nvidia. >> we will leave it on that clear note. vivek, thanks always good to see you. vivek arya with d.o.j. and thank you for watching the exchange. i'll join watching the exchange. i'll join brian for power lunch right (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com >> coffee and. >> not just because i look good drinking it. >> hello there. >> i also like the improved focus and. >> all day energy. >> plus it's. >> easy on the stomach. >> that's because we use only

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