An FDA Resignation & An M&A Outlook with Makan Delrahim 3/31/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Deal-making under Trump 2.0 is at full speed ahead with former antitrust assistant attorney general Macon Delverheen. No, the antitrust laws will still be enforced and in fact will be enforced pretty vigorously. And protecting our public health, the FDA's top vaccine official resigned, a measles outbreak spreads, and former FDA head Scott Gottlieb says trust in vaccinations is key to our future. We have to get this outbreak under control within the next 10 months or so to make sure we don't lose our measles elimination status, which could have some profound impacts on advisories related to travel to the United States.

0:47Plus, a commuted sentence for Aussie media's Carlos Watson, automakers brace for tariffs set to begin this week, and President Trump floats the idea for a third term. He's never going to do a third term. He's never going to really do tariffs. And here we are in this place where he's talking openly about both. It's Monday, March 31st. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick along with Joe Kernan. and check this out, Andrew Ross-Organ.

1:27Welcome back, Andrew. Back from vacation. Thank you. Nice to see you. I just wanted to be here for Tariff Week. I wanted to make sure that I was here. Liberation Week. Liberation Week. In time for the big news. In time for the market to go the other direction. T-Day. I've been calling it D-Day because I couldn't remember Liberation Day, but T-Day is more appropriate for tariffs. Does it feel like it's the beginning of the night, or does it feel like it's the beginning of the day? Oh, I was just in Japan, everybody. So I don't know what it feels like. I got back 24 hours ago, so I'm still a little bit off.

1:56You were sleeping theoretically during our day over there, weren't you? It's 12 hours. I miss the show, if that's what you're asking. You've got your DVR. I do, and I've got friends on Twitter who like to tell me what's going on. You have friends? I know a surprise. You've got some sun. I don't know if it made me make up. I don't know. You look relaxed. Thank you. I don't know if I'm relaxed. Your friends include me. This will take your vacation glow away. We're going to jump right in to all the news. They include me. Your friends include me. A lot of them include me. No, you've blocked them. So they actually, they talk to me, they don't talk to you.

2:32They only blocked 6 ,000 people. Were they upset about anything last week? They weren't really that upset, were they? Well, let's just, let's start on a great note. Okay. All right. I can't believe you missed some of that stuff. You missed a signal through the noise. There's a lot going on. Yeah. Right now, as we get ready for that final day of the first quarter, we're going to be taking a look at where things stand. For the quarter to date, you are looking at the Dow off by two and a quarter percent. S &P is down by just over five percent. And the Nasdaq down by about 10 and a quarter percent.

3:05If you are looking at what we've been dealing with for from the all time highs, at least the Dow is off by about seven and three quarters percent. The S &P down by nine and a quarter percent. The Nasdaq off by 14 and a quarter percent. If you're looking at the Nasdaq 100, it's by closer down, closer to about 11 percent down. And take a look at the magnificent seven stocks in the first quarter. An article from The Information getting some attention over the weekend. It said that some large companies are finding DeepSeq's AI models can be 95 percent cheaper to use than open AIs. And lower AI costs could pressure Microsoft and other firms to reduce prices.

3:44All right, let's take a look at Treasury yields this morning, because as you see this sell off in equities, You are looking at Treasuries catching a bid. We're looking at lower yields with the 10-year now at 419 and the 2-year at 384. Gold prices, by the way, also getting a bid this morning. They are at another record level. And you'll see right now the latest trade for gold prices is, drumroll please. It's like 3 ,050, wasn't it? Those are the Asian markets. We'll take a look at it. I know it's sitting at another record level again this morning, 3 ,146. Wow. It is. Meantime, let's tell you about some of the stocks that stumbled because this really tumbled in Asia overnight.

4:24Japan's Nikkei, where I just came from, falling 4 percent, entering correction territory. South Korea's KOSPI index closing 3 percent lower. The market's regulator there ending a ban on short selling that had been in place since November of 2023, if you can believe that, over regulatory concerns. And Hong Kong's Hang Seng now down by more than 1 % on the anxiety and nerves around tariffs. I think it was the PCE, I guess, on Friday. But what maybe is a little surprising is that we were still not in correction territory on the S &P. We got there for one day. Then we had a good week, I think, as far as a tradable bounce.

5:05We were back at like down 5 % from a high. Tradable bounce. Given where the S &P has indicated today, that'd be back in correction territory. But, you know, we hit it once and we didn't keep going to down 15 or down 20. We kind of rebounded. Now we're doing it again. But it feels even more painful. New call on the economy from Goldman Sachs. Firms chief economist Jan Hatsias raising Goldman's tariff assumption, its inflation expectations, also lowering its first quarter GDP estimate and increasing the number of rate cuts it expects in 2025. You could see traders, you know, with all the bad stuff, he said, but with an extra rate cut, you know, maybe the market goes up on that.

5:49Hatsia said higher tariffs are likely to boost consumer prices. So the firm lifted its year-end PCE inflation forecast by half a percentage point to 3.5 % year over year. When you're trying to get to two. You're not going to see rate cuts if that's the case. Yeah, but he said maybe another one because of the growth concerns, I guess. All of the pressure you're seeing in futures today, a lot of it tied back, of course, to what President Trump has been saying about tariffs. He now says that every country will face tariffs under his administration. Those new tariffs are expected to go into effect on Wednesday this week.

6:26The president making some comments on Air Force One last night as he returned to Washington from Florida. The tariffs will be far more generous than those countries were to us. They ripped us off like no country's ever been ripped off in history. And we're going to be much nicer than they were to us, but it's substantial money for the country. You're expecting to hit something like 10 to 15 countries. Is that right? No. So how many countries will be in that initial trunch? You'd start with all countries. Those comments capping a weekend of news about tariffs. The president telling NBC's Kristen Welker that he couldn't care less if foreign car prices go up, since that would make it more likely that Americans would buy American-made cars.

7:15Trump also denied, having told U.S. auto CEOs not to raise prices. That was the subject of a Wall Street Journal report last week. Also, reports saying that the president is still considering escalating tariff measures and that there's debate in the White House over whether to impose individual tariff rates on countries or an across-the-board rate. One theme permeating a lot of the reporting on tariffs, that perhaps what President Trump is expected to announce on Wednesday is still in flux, even at this moment. But if you looked at the Wall Street Journal last week, remember on Monday last week, every day you can look at something different, but on Monday of last week the markets were up because the Journal was reporting at that point that it looked like it was going to be much narrower.

7:55And maybe we'd be looking at sectors that were facing things and other countries that could get reprieves in some of these issues. It does sound like it's still in flux, But the reporting is coming from people who are leaking their side of what they are trying to convince the president. He was supposedly going to be more lenient. And then this is in the journal. Now we're back to no, no, no. We're going to be much tougher than just what they were saying on Thursday or Friday. If you are if you are trying to raise money, 25 on every offer tax cuts in other areas. These are going to have to be broader and they're going to have to be permanent tariffs, not things that go away.

8:28Well, you're going to need the permanent tariffs if you actually believe that these companies are going to actually come here and actually really build manufacturing plants. I still think that there is this crazy sort of behavioral science experiment going on, which is if people think that there's a chance that the tariffs come off at any point in the next three years or even five years, you will play chicken effectively with the system. Yeah. And so that to me is the whole game. You actually have to say this is what it is and we're not moving. The question is, even if he says that, could if you believe that there would be a permanent shift in terms of politics in two years, in terms of midterms or later on, that would somehow reverse this, changes the whole thing.

9:16Yeah. Look, it's complicated for companies because they make billions of dollars in CapEx decisions based on policy when policy shifts pretty rapidly. That's going to be something that takes time to catch up. But it does sound like President Trump will be the one who makes this decision is leaning towards going bigger on this plan. And there's been a change that used to be. These are just negotiating tools probably won't go on. Now it's you've got to eat your vegetables. So pick your vegetable that you don't really like and pick your dessert. I had Brussels sprouts and I had cheesecake. Can I ask a question to both of you about this?

9:51Because on my vacation, I'm thinking a lot about this. And I was thinking about the idea that we had so many people who came in here, including people who are now on his cabinet, who said, no, no, no, Andrew, stop worrying. This is just a negotiating tool. Still might be. Well, but so the question, though, is now you're saying eat your vegetables. That's what they're saying. I understand that, but how is the American public supposed to think about that? I asked just because I thought about that. By the way, I thought about this. You may think it's unrelated, but in the same context, over the weekend, he's now saying, maybe I'll do a third term.

10:26Remember, so many people came here and said, never, never, never. All of these Democrats and liberals are overthinking it. They're worried. They don't understand. He's never going to do a third term. He's never going to really do tariffs. and here we are in this place where he's talking openly about both. I don't know how he could possibly have a third term. The 22nd Amendment is very clear. I'll tell you how he has to have it. He has to be the most popular president in history, which means a lot of things would be going unbelievably well three years from now to get 75 % to overturn the 22nd Amendment.

11:00I understand that. 75 % of every voter in every state. It could never happen. But if it did, be happy because we'll be doing so well. Maybe. All I'm saying is he said relatively explicitly, as did most of the people who are supporting him. Don't worry about that. That's not on the table. It's never going to be on the table. It's not happening that way. First, he started. It sounded like a joke that he was doing it just to tweak the left. Now it sounds like he's no, no. But I think he's still tweaking. But my point is, he wasn't during the election period when he was talking to the American public.

11:33I'm not going to do it. Oh, I think we can go back and find some times where he said he wasn't going to do it. I think he's always been saying, but no one took, maybe you thought he was only kidding. Oh, I, by the way, I never thought he was kidding. No, he's still only kidding. I've always been of the view that. Well, you think he's a dictator and he's going to get rid of the Constitution. I hear that stuff all the time. No, no, I didn't say that. But I think that there are legitimate things going on in the past week or two where you have to say to yourself, this is not what I think some people signed up for.

12:00Wait a second. The past week or two, you've been saying that since November 8th, Andrew. And actually, but since 2016. So, I was, no, it's good to have you back. We're going to keep everyone honest. We're going to be looking at everything. When I thought about it, what I thought was to have any chance of even people wanting you to run when you're 83 or whatever the hell he's going to be by then, we'd have to have the greatest country in the world for there to be clamoring for him to run for a third term. Kristen Welker asked some follow-up questions. You can't do it. She asked him a good follow-up question.

12:39It's not going to happen. Welker's asking him, and he's not saying, no, no, no, I'm not going to do this. He's saying, you know what, yeah, maybe Vance will run Vance and give me the presidency back. What if there was a groundswell? Oh, no. What if there was a groundswell? Did you see that? Third term, third term. By the way, that's not a groundswell. That's something totally different, and the president's talking about it openly. You'd have to elect Vance. You'd have to elect Vance. Okay. But then Vance can't turn around and say that he's handing the baton to somebody else. No, no, no. It's all, I think it's all just to generate this.

13:10I do. I think it's to generate this. Look, he could have... But you said that about the tariffs. No, I didn't. I didn't say anything about it. I don't know what the tariffs are going to be. I don't say anything. I say what other people say. I don't know what's going to happen with the tariffs. But if you really want to spend your time gnashing your teeth and pulling your hair, that there's going to be a third term like Vladimir Putin, I just don't really think that's it. And he's not popular enough right now, probably, to get the 22nd Amendment overturned, right? No, his approval ratings are high relative to what he's been in the past, but they're still below 50%.

13:46So there are still more people who have a negative approval. That's why, if you want to look at it positively, the country would have to be doing so well for us to be clamoring for him. And that should be something you want. You have to believe that Congress doesn't feel that they're somehow under his thumb and that his popularity, right? That's the whole thing. Congress can't do it alone. Congress can do it alone. You'd need the public to do it. Right. And there's no law firm that's going to sue now because they can't. So we're in a whole, we're just in a different place. We're just in a different place.

14:13I really don't think we're in a different place. I think you just need to calm down. You're going to be bald. Seriously. You were going to, your hair. I'm holding on tight. Your hair is going to be on fire every day. You can't. You can't do it. You got to pace yourself. You definitely got to pace yourself. Okay. He didn't give out the$5 ,000. I mean, think of all the things you've been worried about just in the last couple of months. I got I got a list of them. OK, good. You hold on to the list. Hold on to the list. Apple's asked me to buy more memory for this list. But you know what I did? What did you do?

14:49I shifted over to the hair on fire for Biden and it was empty. So I have all this memory. I don't know why you're living in the past. Why are you living in the past? I got so much memory on that. You're still living in the past. Live in the present. Live in the future. Cheese will be next. Coming up next on Squawk Pod, Macon Delrahim was the Assistant Attorney General for Antitrust in the first Trump administration. He weighs in on the unique back and forth between the president and America's white-shoe law firms. And will an efficiency rethink lead to changes in how we manage big business competition?

15:27My favorite one has always been moving the antitrust functions of the FTC into the Justice Department. Do you think that's in the offing? I wouldn't be shocked.

15:40This is Squawk Pod. Up in Andrew. Q. You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin, along with Joe Kernan and Becky Quick, and we've got a big morning for you. Look now at President Trump's antitrust agenda. Joining us in an exclusive interview is Macon Delrahim, He's the former U.S. Assistant Attorney General of the Antitrust Division in the first Trump administration. He's also a partner at Latham and Watkins. And there is so much to talk about as people try to make sense of what's happening here. We obviously have tariffs coming in hot. Well, we'll see, hot or cold, on Wednesday.

16:13But I'm curious, before we even get into it, what you're seeing in terms of M &A pipeline, what people are really talking about, because there was this expectation we were going to have a lot of deal volume. The deal volume has not really materialized yet, I think in large part because of the tariff story. Yeah, thanks for having me. I think what we're seeing is we've never been busier as far as the people contemplating transactions, both strategic and private equity. But people are starting to take a look, you know, the type of exuberance that they had back in November. you know, folks were coming in with ideas of, you know, the first and the second and a three party market trying to merge because they thought there was going to be some kind of a holiday on antitrust.

16:59And I think the signals are being sent by both Chairman Ferguson and Gail Slater at the Justice Department is that, no, the antitrust laws will still be enforced and in fact will be enforced pretty vigorously. Well, that's what I was going to ask. I mean, do you think it's going to be how enforced do you think they're going to be and how much how aggressive do you think some Some of these agencies are going to be even look at an FCC, for example. And, you know, some of the letters they've been sending some of the media companies in the past couple of weeks around DEI programs and wokeism and other things.

17:30And I think there's some question mark about whether certain types of deals can be done at all. You know that there's certainly a handful of transactions being caught up in various regulatory stages. I think what you're going to see is an easier process than, let's say, the last four years with respect to transactions that could be fixed. So these are ones where you can have a divestiture or remedy. My friend Jonathan Cantor took the position that he wasn't going to do any remedies until there's a handful of them that were imposed on them by courts. But they wanted to challenge. They wanted to litigate.

18:05And they had a pretty good track record for the handful of transactions. What is the impact going to be of what Doge and Elon Musk are doing on the DOJ and antitrust? And the reason I ask is they're closing effectively field offices and other things and moving some of the functions and the like. That may make it more efficient, but also may make it harder to get some of these things through or even just to get people's attention? I think so. So there's there was this memo from the deputy attorney general that went to the division and to all the sections of the Justice Department. asking for their input.

18:40There's been a lot of panic about some offices being closed and some functions being consolidated. And I think we're in the early stages. I wouldn't count on all the changes occurring. I think it's a listening tour more or less. But look, there's going to be some reorganization that needs to happen. My favorite one has always been moving the antitrust functions of the FTC into the Justice Department. Do you think that's in the offing? I wouldn't be shocked if that's something that happens. I mean, it only makes sense, right? CFPB doesn't need to be in the Fed. It could perfectly fit within the FTC's Consumer Protection Bureau or the Treasury Department.

19:16You don't need two federal antitrust agencies. All you need is one. The FTC can do a lot more efficiently. I think, you know, just as mergers have a lot of synergies in the private sector, you can have them in the government. Maybe it would be good for business from that perspective to not have to worry about two different places coming after you or two different sets of rules that are being laid out. Well, two different sets of rules, two different legal standards. I mean, I get asked on different transactions where you have to go to boards to say, look at which agency is going to review this.

19:44It's like, I don't know. There's only a handful that by statute goes to some of them. But some of them, they get into a wrestling match between the two agencies and they eat up a lot of the time for the merger review by going there. And then you have a completely different process at the FTC than you have at DOJ. It makes no sense. There's legislation introduced in both the Senate and the House on that. What do you make of the larger debate that's happened even over the last week or two now in the world that you inhabit, which is the legal world of law firms? And I'm thinking of Paul Weiss and Skadden, which are settling effectively with the administration.

20:20Other law firms like Wilmer Hale and Jenner and others that have gone to court and actually won against this administration. And how you personally sort of look at all of this, because I think there's a major question. I was just looking at a letter that was written by a lot of these professors at Harvard who seem to be out of sorts about law firms like this effectively settling over some of their programs at their firms. Look, that's a really hot topic right now for firms and everybody involved around that. There's no question that some firms use their prestige and their brand to actually become a subsidiary of the DNC.

21:02And they didn't take on representation of conservative causes and others. Fortunately, you know, that hasn't been our experience at Latham. We did work for conservative causes. And so that's something that is a hot topic that, you know, we'll see how it all shakes out. But what do you think? How do you think it's going to shake out? because I know there are clients that I've talked to in the past week, even when I was in Japan on vacation, who were suggesting, look, Paul Weiss is settling with the government, Skadden's settling with the government. If you had a case that you had to bring against this government and this administration, and you actually needed to actually take, like, go with the case, not try to settle the case with the government, but you actually needed to, like, bring the case, you would actually not use Paul Weiss in the end.

21:47You would not use a Skadden Arps anymore because clearly they would say they're trying to placate this administration. And if you were a client that needed to fight this administration, that's not where you want to be. I think everybody has to take a look at the practices internally. I think some of these have been focused on some of the DEI initiatives. But I think we will see how it all shakes out over time. Do you think it was meritless or do you think that there was cause to go after it? You seem to indicate that some of these law firms acted as an arm of the DNC. So that would be that would mean it's not meritless.

22:25And you don't just think it's just a witch hunt and retribution train or whatever. I guess, you know, I think there's, you know, some cause. The ones that we just were talking about. Let me ask you this, though. I mean, let's put it in this context. So Jones Day has done a lot of work for Republicans, a lot of work for conservatives. And what was that? Was that a. Yeah. And nobody nobody went after Jones Day. And one of the reasons why, because the question, though, is whether the administration should be going after private law firms and whether it has a chilling effect, ultimately, on lawyers and their ability and willingness effectively to take on difficult cases.

23:04Because part of what we talked about forever is that everybody deserves good and fair representation. Everybody deserves that. Even somebody who we think is completely guilty and terrible deserves that. And if you get into a position where you feel like, if you're a lawyer, that this administration is going to somehow go after your law firm for representing somebody that they don't like or they don't like the position or the politics of it, that is an issue, no? Look, everybody deserves that. That's what we all learn in law school. But there was a period where I think a lot of my friends in the Trump administration who couldn't get representation out there four years ago.

23:44And I think they couldn't get representation because there was a view that the that Democratic administrations were going to undermine and upend the the business practices of those law firms. Because I had never heard that before, if that's what you're suggesting. Oh, yeah. I think there's a lot of them, and there are many who wouldn't get hired in some law firms. And these are brilliant lawyers. No, no, but what I'm asking is they wouldn't get hired because there was a view that the administration was going to somehow attack the business practice of that law firm? Or was it that their views didn't match, for whatever reason, the views of the law firm?