Trump’s Potential Flexibility On Tariffs… And OPEC’s Impact On Oil & Energy 3/21/25

0:00Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast Money, and here's what's happening right now. Stocks staging a comeback after the president uses the F word, flexibility, around tariffs. And the losing streak goes out with it. The S &B and NASDAQ both breaking month-long losing runs. Call it an energized trade. Oil is up as the U.S. lays out more sanctions on Iran. But why isn't there more of a war premium built in? Plus, Boeing's big win, Nike's big loss, and Elon Musk telling Tesla employees to hold on. Hi, everybody. I'm Brian Sullivan in for Melissa tonight.

0:40Coming to you live, as always, from Studio B right here at the NASDAQ and on your desk on this Friday, Mr. Tim Seymour, Bono and Eisen, got Steve Grasso and Carter worth joining us as well. Guys, welcome. Let's start with some signs that President Trump may be ready to deal around tariffs. He said today that there will be, quote, flexibility on tariffs. That's a pretty big comment. But Trump did stop short of making any firm exemptions ahead of the planned April 2nd starting date. But that word, flexibility, that one word, helping your investments, stocks bouncing off their lows, and the three major indexes also higher on the week.

1:22So let us start the show by talking about what is driving stocks right now. That is largely tariffs. Megan Cassell is at the White House with more on all the signals, some of them certainly mixed, coming from the president. Brian, absolutely a little bit mixed here, but the president signaling some openness to negotiations with countries or with companies on those tariffs, especially when it comes to exemptions. Take a listen here to what the president said. There will be flexibility, but basically it's reciprocal so that if China is charging us 50 percent or 30 percent or 20 percent, and I don't mean China, I mean anybody, any country.

2:06So the president was also asked whether he'd be willing to strike a deal with China, and he said he would be talking with Chinese President Xi Jinping, potentially leaving the door open there to some negotiations as well. And, Brian, it's not the first time this week that we've seen the president at least implicitly acknowledging some of the economic impact of these tariffs and of his policy plans. He posted on True Social after the Fed met on Wednesday, late Wednesday night, saying the Fed would be much better off cutting rates as tariffs were starting to transition or ease their way into the economy.

2:36And, Brian, one last point on this. I was also talking with a White House official earlier this week about the total value of goods that would be hit with tariffs on April 2nd. This official told me it could be in the trillions of dollars, multiple trillions worth of dollars of goods that could be hit with these tariffs. But the official also told me that nothing is final until that plan is ultimately released in the coming days. So for all that talk about the president and this administration not paying attention to the market impact or the economic impact of all of these plans, we are starting to see some movement here and some reflection and some potential for things to remain in flux just 12 days out from that April 2nd deadline.

3:12Brian. All right, Megan, Excel at the White House. Megan, thank you very much. Let's trade this. Talk about it. Steve Grasso, how important are tariffs to these markets right now? Well, that's what they've taken the lead from. It used to be Powell. Now it's tariffs. Then it was NVIDIA. So we've had all these different things, side slices of the economy. But when you think about it, didn't we have some flexibility? hasn't he shown some flexibility, whether it's with Mexico, Canada, China? And that was the if in tariff. Does he put them on? Doesn't he put them on? I thought that was the flexibility.

3:48That could have been the negotiating. And now we're on the next level of flexibility. But to everyone, whether it's a CEO who says that there's lack of clarity to run their company, when is it clear when you're a CEO. Never. Right. The downturn. We have we have had the financial crisis. We've had the European crisis. We've had dozens of crises within the markets. But when you think about it, what they do know is their taxes aren't going up. What they do know is that their taxes are actually going down. Probably corporate rates going 21 to 20. And if you if you manufacture they're going to 15. But if you think about the tariffs, the average nut that's been put on the average household is$1 ,200.

4:31If we, due to tariffs, we get an extension of the tax cuts, the average household gets$2 ,000, easy for me to say, in tailwinds. So I know you want to get it. Just let me wrap it up. So if you have headwinds and you have tailwinds that compensate, I think we got to say we're making this too complicated. Well, it sounds to me like you don't think that there's any more uncertainty in the eyes of CEOs. Is that what you're saying? No. I said there's always an uncertainty to being a CEO. There's never a certain time to be a CEO. Okay. So what do you think? But isn't the current environment more uncertain for CEOs than it was three months ago?

5:06Well, three months ago, you had EPA stringent regulations. You had regulations on banks. Your taxes potentially were going up. So you have to pick your poison, whether or not you wanted those headwinds or whether you want these. So we're in agreement. There always are going to be minefields. Well, I mean, I think about this week and I think about FedEx, which is one of the most cyclical companies out there and always been a barometer of the economy. And what we heard about yesterday is industrial uncertainty, the industrial economy, what we hear about company after company, and we hear about CEOs lobbying the White House.

5:35Now, this is not me making a call on whether tariffs are effective or not. We're talking about uncertainty. We're talking about what that ultimately means for companies and their willingness to spend. We know where consumer confidence is. But if the White House is willing to be more flexible, and if part of this to me is a broader message that everything we're saying is up for negotiation and that also we're looking to play. They're not going to admit this, but basically, yes, we're going to draw a hard line, but we can soften it. And that if the markets are priced in the worst, you've got a Treasury secretary pointing out that the markets need basically a detox period.

6:09You've got an administration that basically until the latter part of this week was saying deal with it. We're not that worried about the market. This is a little bit off topic, but I've got to give a shout out to my neighbor. My neighbor is Canadian. Here's why. Is his name Astro? No, but there is no Canadian government right now. And I think this goes to the president. They're going to have an election on April 28th. Mark Carney's in, but he could be out if he loses the election. I don't think they will, but they could. And I bring this up, Manu, not because we're going to discuss Canadian politics, I hope, on the show.

6:41But if tariffs and sort of this language against, for the most part, Canada is what's driving stocks, How much of it, you wonder, could just be Trump knowing there's really nobody in Ottawa, the Canadian capital, to push back? And once there is, maybe this calms down. And thus the markets calm down. I see where you're going there. I'm going to use another F-bomb, fluidity. And I think the tariff process has been somewhat. What was the first F-bomb? Flexibility. Flexibility. Yeah. It strikes her out, so we're going to keep it at two. So I do think this process has been fluid. And I liken that to flexibility.

7:18I think flexibility comes across as a little bit less antagonizing. And to your point about Canada, I do think that the rhetoric has been received north of the border as being quite a bit antagonistic, essentially calling them the 51st state. So I think a willingness to go back to the table and work through. To me, flexibility indicates that there's going to be a bilateral type of agreement versus a situation that's being dictated. And then we will unilaterally make a decision on whether or not we want to pull back, whether we want to scale from 25 to 50, et cetera, et cetera. So I do want to make that slight distinction.

7:53But to Steve's point, I do think there has been uncertainty. I'm not sure using the term flexibility removes said uncertainty. Are you getting ready to cut me off? No, no, no. But I think that word did seem to change the markets. I don't know. Where I differ from Steve is that I do think that the tariff situation, unlike other uncertainty that you would face as a CEO, is really drilling down to long term capital decisions. And to FedEx's point, your input costs are going to affect not only your tomorrow or your next quarter, but also your three and five year spending plans. And I think that is a slight nuance that makes the flexibility or fluidity, this whole tariff situation a bit more daunting.

8:34I think that was a Queenstrike song, Silent, Silent, Lucidity. Carter, come in here because your job looking at the charts to kind of strip out the words, strip out the emotion. The market obviously is not able to do that. But here's what's weird. The stocks that have been driving the gains and some of the losses, the Nvidia is the world, the Amazon's the world, the Microsoft's the world. For the most part, maybe with the exception of Amazon's consumer business, I don't see any tariff impact on any of these names. But they're the ones that have been down four, five, six, seven weeks in a row. They're the ones driving the market, stripping out the emotion.

9:11What do you see in the charts? I mean, look, drawdowns, selloffs, dips, declines, corrections, pullbacks. You choose the nomenclature are normal if you're in a steep and uncorrected uptrend. And that is the general circumstance of the market before this past five, six, seven week drawdown since February 19th. But I think the F word that really is applicable is flummoxed. I think investors are bewildered. I think the White House perhaps is bewildered. Congress is bewildered. Allies are bewildered, perplexed. There's so many cross currents, both at the economic level. Is there a recession? Isn't there?

9:48Is the consumer OK? What about employment? Is this tariff thing going to get worse? Is it going to be flexible? The real word is flummox. Markets are flummoxed here, and I think participants as well. Well, I mean, this is like the F is the word of the day. So, you know, I think, first of all, I'm embarrassed that we're 10 minutes into the show. We haven't welcomed Brian. So welcome to the show today. Which one, Brian? It's always on. It's Friday. It's fantastic to have you filling in on a Friday. Formidable. Look, I think we get back to what the market has done and what the market exhibited. And really since since Wednesday or Friday.

10:26And I think you started with this, Brian, is what's more important here? Is it is it going to is a tariff policy or is it the Fed? And and historically would have always been about the Fed. But I think now that we have the Fed out of the way. And if anything, I think we got a dovish pause. And I think we got some easing by less tapering. And I think the dynamic here is the market is very unnerved by these dynamics. Look, quickly, before we move on, I want to I'll just be more direct. Steve Grasso, if the president tomorrow comes out and says, you know what? I thought about it. I got what I wanted with fentanyl, another one or whatever.

10:54No tariffs. Market rips. Rips. Because I think you're right. The lead in, I could have my own opinion on what it is. We even heard Jerome Powell say that it was transitory. So another F word, fleeting. So that could be it could be temporary. Right. So if the market has decided that tariffs are an evil and if they are not put into place, I think reciprocal tariffs are different. Those can be palatable for everybody. But to your point, I think the market would rip higher. OK. And by the way, I do want to remind our audience that there are tariffs on right now. Trump put them on in the first one.

11:29Biden kept them going. And increased them on China. And increased them on China for certain things, solar panels. So tariffs are not non-existent. All right. Also happening today, a nice bop for Boeing. The company winning an Air Force contract to build its next generation fighter jet that helped the stock but hurt rival Lockheed Martin. Lockheed Martin fell 6%. So, Tim Seymour, don't look now. But old beaten up Boeing has had a little bit of a stealth rally. Yeah, no, fabulous. And again, this is the B in band, my acronym. I think Boeing is a free cash flow story really at its core if you're an investor and where the analyst community is watching.

12:10This has been a cash burn story. We don't need to get into the problems. And at times we've never been willing to acknowledge the defense business. But the reality is this is a company that not only today gives you some sense that possibly a 50 billion dollar contract is powerful. And we understand there's pretty high margin in that in that contract, but also the dynamic around where they seem to be in favor of this administration. That counts for a lot these days. So Boeing isn't necessarily the name you're going out to buy on this news. I think Boeing's news flow had really more or less bottomed.

12:40And as we've started to see the 730 max, that's the dynamic that we really should be watching in terms of free cash flow. Yeah, I tend to agree. It really has been a cash burn story. And that isn't going to be switched off overnight. I understand$20 billion and will likely be hundreds of billion dollars over several decades here. But, you know, when I look at how low Boeing has been, I feel like that 140, mid-140s level when they offer the secondary has kind of been the floor. But we fell from this level before. And if we play this game, if I told you yesterday that they were going to win this contract, would you say the stock was going to be up just 5 %?

13:15Or would you assume that it would have been up 10%, 15 %? That's a little rich because fighter jets are not a huge part of Boeing's business. I want them to sell more 737. But to Bono's point, it's a knee-jerk reaction. Given the sentiment of the stock, given the stock performance, given the cash burn issues, given the lack of CEO clarity for so long, if I had told you that they were going to win this contract, I would think this would have led to a massive sentiment reversal, and I don't think we've seen that in stock. Could you imagine if Boeing screws up at all during this contract? Let's talk about it.

13:47What is the risk to Boeing? We've got a little pop to Bonham, not a huge one, but I think what you're saying is any good news is very welcome right now. Yeah, but I'm shocked that there isn't more follow-through on that good news. It's because of the negative headwinds. negative headwinds. So it's compensated. It's holding it back. And also, we thought Lockheed was going to get the contract originally. But to the original premise, if Boeing screws up or if they have some sort of inefficiencies, this could be a major headwind where a good thing turns into a negative thing for Boeing, because we know we have someone in the White House that's not going to be hesitant or coy about calling them out on any type of inefficiencies that they might.

14:28Carter, do we have a chart on BA? Well, I mean, the temptation always when something is weak and in a downtrend to think, hey, this is the moment. It's cheap. Let me try to buy some and cross my fingers. It's really too early to qualify as a bearish to bullish reversal buy from my seat. So I would hold off. I'd rather pay higher. There you go. Yeah, I was just going to say, I mean, Boeing is not cheap right here. And I hear you guys saying that this is actually, you know, the positive endorsement by the government is really a negative way to happen. I mean, think of all the companies that have, you know, government contracts over the last three months have meant a lot.

15:08I mean, think of Palantir. You tell me Palantir now is a target on their back because they've been getting government contracts. It's not about defense with Boeing. And it's really about the commercial line. Yeah, that's it. Want to sell more, 737. All right. Now, let's talk more about tariffs and how they could have a very real world impact. Joe Lavorna advised President Trump during the first administration. He is now chief economist at SMBC, NICO Securities America. Not advising officially, I don't think, the president this time, Joe, but certainly you've got the ear of the administration. Will tariffs, if we get them April 2nd, will they destroy the stock market?

15:46No, they're not going to destroy the stock market. Why are we acting like they will? Well, because I don't know, it's fear sells. Tariffs were in place in the first Trump administration. They had a very marginal impact in terms of actually didn't have any impact on inflation whatsoever. The Chinese bore most of the cost. They may have worked and had a more important impact had we not had the pandemic. This time around, tariffs will be used more aggressively. There'll certainly be some level of tariffs for revenues. Certainly, they're used for a negotiation tool. But the other thing is they're also as a carrot to encourage capital to come back to the U.S.

16:26and for investment and supply chains to decouple from China to go to other places. So tariffs are a necessary and important tool, Brian, if you want to reindustrialize the economy. Because in addition to the tariffs, this is a multi-pronged approach. You're going to have cheap and abundant energy costs. You're going to have a corporate tax rate for producers from 21 to 15 percent. You're going to have much more friendly business regulation. So the tariff is all part of that. Reciprocal tariffs are good. It's a negotiating standpoint. We'll see what happens on April 2nd. My best guess, Joe LaVornia, is going to say there's still probably going to be some uncertainty.

17:03But so what? We've got tremendous uncertainty on taxes. If you look at the uncertainty index, you're going to see the uncertainty around taxes is incredibly high. That's one of the highest readings ever. And that relates back to the Tax Cuts and Jobs Act of 2017. Is it going to be passed? That to me is what's driving. I think that was I think that was Steve Grass's point. But why does the president then? And I know you can't speak for him, but just say what you said. Say we're going to we're going to put a little tariff on. We're hoping to bring jobs back. You're going to pay a tiny bit more. But he said you're going to make up that money in tax.

17:35Well, he said that. Well, Secretary Besson has said it. President Trump has said it. By the way, President Trump on the campaign trail consistently talked about tariffs. We're just surprised that he's actually implementing them. I say we the collective narrative in the market. So but the point is, is that you're not going to tell everybody everything you're going to do before you've done it. And the fact that investors are uncertain. Well, can you imagine the people who we're negotiating with? Do you think they know what's happening? They're going to be off balance. And that's what you want. It's a negotiation.

18:07And my guess is it'll be very effective when all is said and done. But it's only eight weeks. I mean, come on. I mean, it's like everybody wants everything yesterday. Give it some time. And Joe. So it's Tim. And it's only been eight weeks. Let's let's dive into the economy, the economy we have not attaching. This is so and so's economy, because frankly, this is everybody's economy at this point. We've had a number of numbers. We had we had regional manufacturing service this week that weren't great. We've had different dynamics with some lumpy, but also some, I would just say, some data series that are not necessarily telling you a whole lot in real terms.

18:42Where are we? Because there's we've suddenly gone. All I hear about is a recession now when, in fact, a month and a half ago. No one was going near that. Part of it is part of it is this Atlanta Fed serve Atlanta Fed GDP now, which is widely followed. They've done some good forecasts. This one, I think they're totally off on because if you look at job growth, private job growth, you look at real income through January. rates up almost 3%, but the expenditure side of the data is softer. Some of the regional surveys you talked about are weak, but the national PMI, the manufacturing and services are pretty healthy.

19:15They're well above 50. And this week we had a huge gain in industrial production. So to me, the economy is healthy. I don't want the Fed to start easing rates in the short term. I think a lot of this inflation we have is partly due to the Fed being too easy for too long. And certainly those cuts last year, the first one I didn't mind, I advocated for that first cut because the data at the time looked very weak. But the Fed wound up going 100 basis points down. That was much too much. And the 10-year note went up 100 basis points. So the market clearly said that was a mistake. But the economy right now, to me, looks pretty good.

19:46Yeah. And Joe, we'll let you go to your point. I tweeted it out today. We talked to a former Fed official last night. They left their foot in the gas, even as people cranked in 2021 in the economy, making more money in car sales and home sales, and they kept stimulating as if the entire economy was shut down. Huge policy mistake. Joe LaVorna, thank you very much. Brian, one last thing. One last thing. Tim Seymour, David Lee Roth is coming out of retirement. Well, look, we're talking about one of the greatest front men in rock and roll history, and I have this debate with my wife all the time. It's not Sammy Hagar, honey.

20:17Sorry. I'll see you at this show, Joe, as I have in the past. Look forward to it. The opening by Foreigner would fall into the F word theme. Bono and I said very quickly, if the U.S. consumer does slow down a little more, do market multiples have to come down? I would think so. I mean, we're talking about two-thirds of 70 percent of GDP is driven by consumption. So clearly, I mean, that's just too large of a factor to sweep under the rug. We're still at, what is it, 21 and a half times? I do think if you start to see earnings erosion, you start to see consumption dry up, you start to see CapEx pull back, it's only logical that I would expect multiples to start to come down as well.

20:56Have they come down enough already? I don't think so. Okay. On deck, it is all hands on deck, at least at Tesla. What Elon Musk just did and said to try to keep that stock on solid ground, plus just buy it. Why Nike crashed today, but if that means any real opportunity for you. All right, welcome back to Fast Money. Tesla had a recently rare update today, but overall, it's taken a pretty big hit since the record highs of December. Stock's down about 50 percent since those record highs. Still made just some money the last year or two, but well off the highs. Elon Musk attempting to rally the troops at Tesla's headquarters last night, giving product updates and also urging employees to hang on to their stock.

21:44for more on sort of all of this. Let's wrap it together, bring in Phil LeBeau on a Tesla. Maybe the company's not in disarray, but certainly the narrative around it, Phil, appears to be. Yeah, and that's what they tried to change, Brian, last night. Look, this was a well-produced one-hour town hall. But let's be clear here. There was no new, new information in this. There was nothing that you woke up in the morning and you saw this and you said, oh my goodness, I've got to go buy Tesla. It was Elon Musk saying, if you believe in me, you believe in us. And these are some of the messages that he delivered to the employees.

22:20Basically, the future is bright at Tesla. Said it time and again, humanoid robots, he believes the first ones will be delivered to Tesla employees in the second half of next year. Autonomous technology is coming. We're not going to go into all of his usual, here's what I expect in five years. He has said this time and again. And then there is his message with regards to those who believe that Tesla is a stock that is tanking. There are times when there are rocky moments, like things are like a little bit of stormy weather. But what I'm here to tell you is that the future is incredibly bright and exciting.

22:58So what I'm saying is hang on to your stock. If you're hanging on to the stock, you've got to go through this rough patch in terms of deliveries. This is what the company has delivered over the last 10 years. Last year, they were at basically 1.79 million vehicles. A couple of things to keep in mind here. Morgan Stanley, Adam Jonas, he has cut his delivery estimate down to 1.61. He was previously at 1.95 for 2025. Almost every analyst is bringing down their expectations for deliveries this year. We get the Q1 deliveries in less than two weeks, Brian, probably on April 2nd. April 1st, 2nd or 3rd, we will get those deliveries and then we'll have a better sense of just how rough the first quarter was.

23:41We shall see if that pep talk of sorts really works on a stock that could use it. Phil LeBell, great stuff all week as always. We'll see you later. Have a good weekend. Thank you very much. Carter Worth, what do the Tesla charts say? We have one chart, but before we get to it, I think it's important to say that obviously as the CEO, you would want to try to say positive things. But to his credit, he in the past has also said he thinks the stock has been expensive. And he has gone out and said that. So here he is saying quite the opposite, that it's a time to buy. But either way, let's look at a chart and try to figure it out together.