How Markets Are Reacting to the Tariff Announcements, and Who Could Buy TikTok 4/2/25

0:01Live from the Nasdaq market site in the heart of New York Times Square this is fast money Here's what's on tap tonight. President Trump announcing reciprocal tariffs on countries around the world. 34 percent on China, 20 percent on the European Union, 46 percent on Vietnam. And the list goes on and on. We'll break down the impact on the economy, the markets and a number of key sectors straight ahead. Plus, shares of RH getting crushed after hours down close to 25 percent after missing on the top and the bottom line and issuing weak guidance. But this says about the spring housing market coming up.

0:31And later, our Elon's days in Washington numbered. Will Tesla shareholders cheer? Corweave continuing its post-IPO rebound up over 50 % this week. And Newsmax comes crashing back to earth. And I mean crashing. The details straight ahead. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Bono and Eisen, Karen Feynman, Dan Nathan, and Guy Adami. But we start off with the breaking news out of Washington. President Trump just wrapping up an event at the Rose Garden where he laid out his tariff plans. Stocks moving sharply lower as he spoke in the last hour. The SPY down more than a percent right now.

1:02queues down as much as 3 % at the lows after hours. Let's get to Megan Casellin, who's got all the details. Megan. Hey, Melissa, absolutely a lot coming out from the president just in the last hour. The top line being that the president is implementing a 10 % across the board baseline tariff on nearly all countries. That's effective on April 5th. So just a few days from now, almost all imports will be subject to at least a 10 % tariff. He is also going country by country for about 60 of what the White House is calling the worst offenders and imposing a higher what they call reciprocal tariff against those countries.

1:35To give you a little bit of a sampling, China, subject to a 34 percent tariff on top of the 20 percent tariff that's already in effect. The EU, subject to a 20 percent tariff. Vietnam, 46 percent. All of those will take effect on April 9. They'll also say the president is declaring a national economic emergency here. That's what's giving him the power to do this and to regulate imports. I also want to emphasize there are a few exemptions for Canada and Mexico. they will continue to face the 25 percent fentanyl tariffs and the USMCA compliant goods will continue to be exempt there. So no changes for those two countries.

2:08Also specific goods, autos, auto parts, steel and aluminum. And some of the other ones that we expect to be forthcoming, copper, lumber, pharmaceuticals and semiconductors, all of those goods specifically will also be exempt from the reciprocal regime, but will face their own tariffs so far set at about 25 percent. Just finally, Melissa, I would flag the White House does not look like they're messing around on this. They are not really welcoming negotiations with other countries. They say if other countries reach out and offer to lower their tariffs, they're ignoring the decades of trade barriers that they've had up.

2:38They're mostly worried about non-tariff barriers, and they don't seem willing to lower these tariffs in exchange. Melissa? Megan, didn't the press secretary just today, I think, say that President Trump will always take a phone call? So what's the message here? That was yesterday, absolutely. I know. So they want to look like they're open to talking. And we will have to see in the coming days. There's not a lot of lead time that allows countries to make deals here, but maybe tariffs could take effect and then they start to come down. We also heard the Treasury secretary told lawmakers just yesterday that these would be the maximum level of tariffs and they would come down from here.

3:11We do have to wait and see on that. I think the next step is that countries might start to announce retaliation. We will see at that point how this White House responds and if they try to go higher or if they try to start a conversation. That baseline 10 percent across goods, is that to prevent companies from country shopping, tariff shopping, so to speak? Yes, that's exactly right. They say they're really concerned, especially in the first term, when the tariffs are mostly focused on China. We know this from companies and from industry as well, that a lot of folks were looking and setting up shop in Vietnam or Cambodia.

3:41That's what they want to cut down on is that transshipment. They say at least there's 10 percent across the board. Yes, you might still leave China if there's a 54 percent tariff there to go somewhere else. But if that's at least the baseline, they're hoping it cuts down on that to really send a message here. All right. Megan, thank you. Megan Casella joining us from the White House with so much news. It is Liberation Day, as it's coined, Guy, and we've got a list of tariffs. So what do we make of it? We saw the market reaction. No surprise. Lower in the after hour so far. No surprise. Now, the day actually sort of made sense.

4:11Market route. We talked about this sort of yesterday. Personally, I thought there'd be sort of a pullback, not as draconian, not as robust. The market would like that. We would continue to rally. The bond market would sell off to a certain extent. We saw that during the day. Obviously, a lot of things have been reversed now. So what do you try to make of this? Well, Treasury Secretary Besson and President Trump have asked for lower rates in terms of 10 year announcement like this might get them to lower rates. The question is, at what cost? That fifty five hundred level in the S &P clearly is going to start to come into play again.

4:41But, you know, secretly, I wonder myself, have deals already been in place despite what they say about we're not going to negotiate? You can't call us or things in place where a week or so from now, there's a countries at the White House or the Rose Garden that are acquiescing. And there's some sort of detente in terms of what's going on. So maybe this is sort of act two or three in a five act play. Yeah, I think the debate and, you know, a lot of folks have been talking about this. Is this policy or is it politics? Right. And so at the end of the day, it's kind of what guys just talking about is like, are they going to take the calls to your question?

5:12Are they looking to do deals? And, you know, when I think about how targeted some of these tariffs are and how basically whatever they come back with, these countries that are being targeted, a lot of these are really in Trump country. If you think about it, they're in red states. You think about what happened with farmers going back to 2018, the trade war. I mean, they collected tariffs. They collected tens of billions of dollars in tariffs from farmers. And then you know what they ended up doing? They ended up giving it back to them in relief, you know. So are you going to do that to the auto workers in, you know, in Michigan?

5:42I mean, the list goes on and on. So at the end of the day, I'm probably more in guys camp that, you know, they're talking a tough game here. I think they probably want to do some deals. A lot of these countries are going to come to the table and say, we're going to do this. We're going to do that. And they probably won't end up doing them, you know. So at the end of the day, I think it's one of those things where maybe they're focused on the yield. I think they're going to have to get focused on the stock market pretty soon. We were talking about certainty and whether or not we have any more certainty.

6:03As Megan had mentioned, even though we know these country specific and the baseline tariff regime that we will operate in, We don't know the sector-specific ones, such as on pharma, which will face tremendous tariffs because many of the raw materials come from China. We won't know semiconductors, which also will probably face some pretty stiff tariffs. True, yes. But we do know for autos, we saw a turnaround in the after-arcession somewhat. GM was down as much as 3 percent. It's now down 1 percent. You're pointing out also the Mexican peso. Yes, and that was sort of—I actually rallied a little bit.

6:35I don't know where it is right this minute. But I think—do we have certainty, not on the things that you said? Do we have certainty on what the worst case scenario is? I think we do. I think this is the biggest tariffs we would see. I agree with both Guy and Sunshine Dan that that it is very possible and probably more than 50 percent likely that we do see some movement there. It's interesting after the first round of tariffs going years back, how there was such a push to leave China manufacturing, go elsewhere, go to Vietnam, go to Thailand. Well, OK, so that's sort of been thrown into flux. I think, you know, you're right to see the tenure.

7:14Could the tenure come down and inflation go up? Both of those things seem likely. So that's sort of interesting. And I think so who does it benefit? I think it benefits a Walmart over a Target, but doesn't absolutely benefit either of them. So if you've got power, you're going to be relatively better off, but not better off than you were yesterday. I'm not the desk statesman. So me trying to parse whether this is going to be policy or politics, as Dan stated, I just think for me, it's probably over my head and outside of my level of interest. What I am concerned about is how this is likely going to affect the stock market and what is Trump's willingness to affect the stock market.

7:53And I think here we have seen that this is probably worse than the worst case that was modeled in. And so even if we are even if we do start to see some reprieve from what the levels that have been indicated right now, what is likely going to be the stock market response? I think any presidential put, I think you might at least want to rethink whether that is actually in play. And if you are, in fact, getting a longer a lower 10 year yield or seven to 10 year yield because of lower growth expectations, I think you also want to think about how we're arriving at said destination point. I will say, yes, across the board, you've got a mix.

8:32We thought perhaps maybe we're going to get one sweeping tariff level or perhaps you're going to get. But we've gotten a mixture of both, which I do think I do think my other panelists are making a strong point in terms of them kind of kitchen sinking it. However, you know, given his reluctance to pull back, despite what we have seen in a weaker stock market, tells me that perhaps he is a bit more emboldened than we're giving credit credit for being. The other thing we don't know is how this will impact the economy, because we don't know how long these tariffs will be in place and how they will be taken by the consumer.

9:04Let's get more on the economic impact from these tariffs. Bring in Steve Leisman. Steve, in terms of what you've seen economists model in, is this worse? Is this better? I think it's worse. I don't know what the average tariff is. Maybe we could just pull up. I asked you to make a board on Canada, the EU, Mexico and China. Those are the principal sources of our imports. So that's the stuff that matters. I think it's over 20 percent, if I'm not mistaken. So a good chunk of all of our imports will have a tariff over 20 percent, I believe. And by the way, yeah, you see that big one on China, which I think is actually 54 because of 34, I believe, plus 20.

9:46In any event, people modeled in 20 percent and they were detracting from GDP. They were adding to the CPI. This just seems like the president having his own sort of school of economics that's different from everybody else. And he said that the economists were all wrong. But in fact, they would insist they were absolutely right. Here's a comment from the Cato Institute, which, as you know, is very conservative. They said, quote, these so-called reciprocal tariffs don't mirror foreign trade barriers and ignore those imposed by the United States. For all of President Trump's talk of a new golden age, this huge tax increase will inevitably result in higher prices for American families, lower growth and business investment and diminish exports and manufacturing output.

10:32So it is not a good forecast or a good look from the economists and the forecasters. And as you can see from Wall Street on these tariffs here, the president believes this will lead to a golden age of growth and increase in manufacturing. Economists believe it will lead to lower growth and higher inflation and really puts the Fed in a pickle here. You can see that there was something of a bump, however, in the probabilities of Fed rate cuts. And I think that comes from a view of greater economic weakness. And they believe it will be so great, I think, that the Fed will be forced to ignore the surge in inflation.

11:10There are the probabilities a touch higher than they have been. That December number for the third cut had been as low as 60. even 50 percent. But now that he's very serious about these tariffs, you have the market saying, hey, the Fed's going to cut three times because I believe not that inflation is going to be low, but that the economy is going to be that bad. Steve, it's Karen. Thanks for being on. So getting to that Fed point a little bit more, if you're the Fed, do you need to see the inflation first before you see how, you know, the weakness in the economy before you're going to cut? Because I think of Jay Powell thinking of inflation as the single most important thing he wants to not have as his legacy.

11:50Well, I think there's some division on the Fed right now, but nobody's taking any action on the Fed. Everybody is in a wait and see mode. And if you take the forecast on Wall Street at where they are right now at face value, they see that core PCE number up near 3 % for most of the first three quarters of this year. I personally have a problem with the futures markets probabilities being so high, given that the forecast for inflation remains elevated. So I think the Fed's ability to come to the rescue might be overstated here. It's a bit like there's quite a storm and they can't necessarily launch those Coast Guard boats, even though, of course, the Coast Guard does come to your rescue in terrible weather.

12:32But in any event, it's going to be tough for the Fed to ride to the rescue with these kinds of inflation numbers that are expected. Maybe they end up being wrong. But, you know, and the other problem you have here is you have retaliatory tariffs that could be coming down the pike. And as for certainty, I listened to the president. It sounded like there were three reasons for the tariffs. Bring manufacturing back to the U.S., get foreign countries to lower their tariff barriers and raise revenue in different forms. Those kind of work against each other. Maybe you're hoping they're negotiated away.

13:04But then what happens to the goal of revenue and what happens to the goal of bringing back manufacturing to the U.S.? They sort of work in a tension between those three goals that make it difficult to figure out exactly what the president wants here and whether some of this can go away. All right. Bear with me for one second, Steve. So I think the president declared an economic emergency, if I'm not mistaken. I think I heard Melissa use that term. It's clear that the president wants interest rates to be lower. He's made no bones about that in terms of what he has said and some of the comments that have been made through the administration.

13:37is this give him grounds to browbeat Jerome Powell during an economic emergency? We need rates to be lower. And if he does not acquiesce, is that grounds then for dismissal? Just throwing it out there. Guy, first of all, you're assuming that President Trump needs grounds to browbeat Powell. I don't think he needs grounds. He'll do it if he feels like it. And he has in the past. He can he can do it if he wants because of the weakness. But I just think you've got to put yourself in Powell's shoes. Right. Is he going to be Burns here and is he going to accommodate the political will to essentially monetize the inflation surge?

14:12I am sure that Jay Powell will not be Burns. I am positive about that. If anything, Powell in the fury of the final hour, as Jackson Brown sung, he will model Volcker. If he is faced with weak growth, but also stronger inflation, he'll probably hold for a while. But if it looks like that inflation persists, I think he's going to ignore the weakness and he's going to address the inflation. Agree with you 100 percent. But I guess maybe it could be grounds for dismissal. I don't I don't know. That's my point, because if it's an economic emergency and if he's holding his ground, is that by definition grounds for dismissal?

14:55Well, it's supposed to be it's supposed to be malfeasance guy. And I don't know what qualifies as that. I'm 100 percent to decide, I guess, at some point. I know that Powell has lawyers for all this stuff and he'd have to defend himself. But I don't think he would resign. I think he would make Trump kick him out. And that would be I'm not sure even the president wants that fight right now. All right, Steve, we've got to leave it there. Thanks so much for being with us tonight, dissecting all of this. Steve Leisman. A lot of interesting commentary in terms of the sort of, you know, the goals of these tariffs and how they work against each other.

15:33Listen, there's some stuff in what he said that made a lot of sense. So here's one. And I want to just bear with me for a second. So we talked about shipbuilding. OK, so in 2024, China built a thousand commercial ships versus our five. Think about that. OK, their Navy this year is going to have 400 ships. Ours is going to have 300. By 2030, they're going to have 425 versus our three. I mean, I could go on and on and on about some of this stuff, but I'm not sure tariffs kind of achieve that goal. Like shipbuilding come back. Yeah, I mean, let's build ships here. I mean, if we think it's important from a commercial standpoint, we think it's important from a national security standpoint.

16:13So I'm not sure a trade war kind of fixes that. So there's probably a lot of things that make sense. And the flip side of this is like, what is going to happen in two years when we have possibly a different House? What is going to happen in four years if we had possibly a different administration in the White House, whether it's Democrat or Republican? I mean, there's some of these things that just have to become universal if we're going to change this stuff. It's going to be this Mar-a-Lago Accord. Then it can't just be Mar-a-Lago. It's got to be something much broader. And I just don't think this is going to happen over these tariffs.

16:43Let's now bring in CNBC contributor Carlos Gutierrez, who served as Commerce Secretary under President George W. Bush. Secretary Gutierrez is also former Kellogg CEO. So you wear a lot of hats. Carlos, great to see you. Thanks for joining us. Thank you. What do you make of these tariffs right now and the ultimate impact to the U.S. economy and trade? Well, I would say, like most people, this was stronger than what many of us expected. But it's, you know, it's the opening step. So I would expect, I would assume that this will not be in place in a month, two months. Definitely not in the back half of the year.

17:20So I'm in the camp that this is the beginning of a big negotiation. I would put these tariffs in four groups. Number one is automobiles. And really, that comes down to Mexico, Canada, and Germany. Korea and Japan don't charge tariffs for automobiles anymore. So Mexico and Canada will most likely be addressed with the USMCA agreement. that's scheduled for 26, but that will be brought forward, hopefully in the next month or two. And the autos will be folded into that discussion. Germany, it's about, you know, they charge us 10 percent, we charge them two and a half. That could be fixed. And it's not only about bringing production back, but it's also about market access.

18:03So if Germany brings down their tariffs, then that gives U.S. companies more access to the German market. The second group are these reciprocal tariffs. And this is all about negotiation. So we're going to be hearing about tariffs for quite a while now. And the president has set the stage for what he loves to do. He'll be negotiating every single day for the foreseeable future, which each one of these countries. It's interesting, as we think about, is this designed for negotiation or are these permanent? Vietnam yesterday reduced their tariff regime considerably, but the president didn't mention it.

18:43And he still included Vietnam with some very steep tariffs. So that tells me that he will use what Vietnam is already intending to do to name as a victory. And the president will be looking for victories. And with this number of countries, I believe he will have a slew of victories that he can point to. The third group is the 10 percent from all countries. And that's an interesting one. I wouldn't discard that as being a move just to prevent supply chains from moving. And that's an interesting one. We can return to that. The fourth one I would put is China. I wouldn't lump China into these other groups.

19:23China is a group on its own. China will require a very special negotiation. It will not be a phone call to talk about autos. That will be something more important, more consequential, and that's hard to predict. It could be a trade deal or it could be something a lot bigger. But definitely bigger than I thought. But each one has a piece. Each one has a solution. I do not believe that these tariffs will be in place going into the second half of the year. The baseline 10 percent, Carlos, there's no party to negotiate with on that one. It seems like that's one that could actually stick around. That's a great point.

20:02And the thing here is if President Trump is looking for a way to keep tariffs in place long term, a way to cement his legacy of tariffs, It would be by putting on, say, 10 percent for all imports coming into the U.S., maybe five, maybe seven. In this case, 10 percent. So that would be a way of just saying from now on, all imports will include 10 percent tariff coming into the U.S. And if companies want to evaluate, analyze whether they should be manufacturing in the U.S. or where they are, Just do a 10-year net present value analysis, and that will tell you whether you can afford a plan. You know, it'll be predictable.

20:47It'll be certain. So that enables companies to be able to analyze it. And it'll also be a way of guaranteeing a long-term stream of revenue for the U.S. government. So that could be an interesting one. As you look out across the tariffs that were announced, it seems like one of the most punitive tariffs, the one on China, it's a 34 percent. And that's on top of the existing 20 percent. And so would you be concerned about those retaliatory tariffs? Because they might not even be in the form of tariffs. They could be in the form of, I don't know, seizing officials, kicking companies out of the country.

21:26I mean, there are many ways China could retaliate. Yeah, I would expect China to respond. There's no question. But it won't be dollar for dollar. I think the Chinese will do what is in the interest of China. and they won't be as emotional about it. And so it could well be less than our tariffs, but something that will hurt us, but will not hurt them as much. And that's something that we should watch. It's interesting with China. I was just there last week and they're a little bit confused. I thought there was more back-channeling going on, but actually they're worried, they're confused. There hasn't been a lot of back-channeling going on, so they're just reading what they see.

22:08And in terms of negotiating, they like the idea of Secretary Besant. And that has gone well for them. I think they've developed a relationship. But below Secretary Besant, there's no one. So the Deputy Secretary of International Affairs, that is not in place. No one is there. So part of the problem here is how do you get these things started? Because it's a lot more detailed than just the phone call. But China is one to watch. I would put that in a separate camp. And as you say, I don't think it will be dollar for dollar, but it should be a big negotiation. Yeah. Mr. Secretary, thank you so much for joining us tonight.

22:44Thank you. Appreciate your analysis. Thank you. Secretary Carlos Gutierrez, what do you think in terms of the market reaction here? We're still down close to three percent on the queues at this point. Well, I think he made an excellent point that I think will matter tomorrow, which is, I mean, Trump has really set this up to do what he likes to do, which is make deals. And here's a possibility for him to just continue making deals for weeks or however long. And so that sets up the market to if that's the case, and that seems very plausible that the market would find some relief in that. Yeah. Bonwin.

23:18Yes. I just think that in the short term, I think it's hard. my confidence interval of believing that there is going to be a deal and that the goal of that deal is to lead to a higher stock market has definitely been diminished after what I've seen today. You did believe that there was a Trump put prior to today. I did. And now that's out the window. Correct. Okay. Coming up, a sector-by-sector look at the impact of tariffs just announced by the president. We're taking a deep dive into what this means for autos, pharma, and housing. That is straight ahead. But first, RH sinking after hours on a big earnings miss.