China Trade Pressure & TSA Workers Miss First Paycheck 3/13/26

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0:58Bring in show music, please. Hi, I'm CNBC producer Zach Valisi. Coming up today on Squawk Pod. Key U.S. representatives head to Paris for trade talks with China. We speak to U.S. Trade Representative Jameson Greer. We want to ensure continued stability in the U.S.-China relationship. It's one of the most important economic relationships in the world. TSA workers are not being paid due to a partial funding shutdown. Jay Johnson, President Obama's head of Homeland Security, joins us. It puts the agency and its workers under a tremendous amount of stress. Plus, Democrats introducing tax cuts for many that would hike the bill on high earners.

1:43Our Robert Frank reports. What's different this time is this thing, we're going to raise taxes on the wealthy and give tax cuts for everyone else. And a drone strike appears to hit a key financial neighborhood in Dubai, our Dan Murphy. This is walking distance from the Nasdaq Dubai and CNBC's own studio here. It's Friday the 13th of March. Squawk Pod begins right now. Stand back to buy in 3, 2, 1, cue it please. Good morning everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is out today.

2:29It's Friday morning and let's get you caught up to date. U.S. Central Command saying four of six crew members have died following the crash of a KC-135 refueling aircraft in western Iraq. The tanker was supporting operations against Iran. According to a post on X by Central Command, the crash wasn't due to hostile or friendly fire. It says the cause of the crash is under investigation. Let's show you the price of crude oil as well, which, as Andrew mentioned, is coming off its highest settlement since August of 2022. This morning, WTI is slightly pulling back by about 20 cents, still trading above$95 a barrel at$95.53.

3:07And Brent is above$100 a barrel at$100.80. For the latest on the Iran war, let's get over to CNBC's Dan Murphy, who is standing by in Dubai. Dan, what's the latest? Becky, good morning to you. Well, an emergency alert was issued here in Dubai earlier today, and authorities have confirmed an attempted strike inside the Dubai International Financial Center. Vision from the incident shows the damage on the outside of the Dubai Innovation 1 building. This is walking distance from the NASDAQ Dubai and CNBC's own studio here. There were reports of a loud explosion and smoke in the skyline. The Dubai media office said debris from a missile interception caused what they are calling a minor incident on the facade of that building.

3:53They said there were no injuries that have been reported. And of course, most banks and financial firms are now working from home after Iran threatened to target economic centers across the Gulf. Meanwhile, as you mentioned, the risk premium in oil is intact this morning, despite some reassuring words from the Energy Secretary, Chris Wright, on Squawk yesterday, suggesting naval escorts through the Strait of Hormuz could begin by the end of this month. I think that is quite likely the case. But again, I mean, I'll be over at the Pentagon later today, but that is what the military is working on.

4:26And yes, a lot of critical materials come out of the Straits of Hormuz. That task has been made even more challenging, with the New York Times now reporting that Iran is laying mines inside the strait. It's understood Iran is aiming to lay these mines faster than the U.S. Navy can clear them to create more chaos and delay through the channel. And at the same time as well, the Trump administration also trying to ease the price pain by issuing a 30-day sanctions break to make Russian oil available to the market. The administration calling that a short-term measure that won't really benefit Moscow because the oil is already at sea.

5:07Back over to you. That's the big question. Moscow ending up benefiting from all of this and seeing what's happening with it. You know, Dan, as you mentioned, we were told yesterday that by the energy secretary that they hope to be able to start escorting ships through by the end of the month. I would suggest the premiums that we're seeing in the market have traders wondering if that's even going to be possible, given how things seem to be escalating, not descaling. It really also reflects just how concerned the administration is about the elevation that we've seen in the price of oil as well. And the Treasury Secretary, Scott Besson, also announced that countries are now basically authorized to purchase Russian crude and petroleum products currently stranded at sea.

5:51And what's also interesting is that this follows a waiver that was granted to big consumers like India, for example, at the start of the month, reversing that previous U.S. push to have New Delhi halt Russian energy imports as well. And what's interesting here is, as well, on the mines, it seems like after the U.S. military destroyed those 16 mine lane vessels, the IRGC pivoted to using these hundreds of small, fast boats to deploy mines. Iranian officials have, of course, denied that this is happening. But you'll also recall that the Supreme Leader, Mojtaba Khamenei, said that blocking the Strait of Hormuz must continue to be used as leverage, as he made that first statement as Supreme Leader late yesterday as well.

6:37So the situation is still very live in the region. And as you can see, asset markets plus the price of oil still reacting firmly to the upside on that. Dan, you mentioned that the drone that came in that did some damage in the building only a block away from CNBC's offices. Financial workers working from home, I take it you are too? Yeah, that's exactly right. And look, it's been quite a long week here in Dubai. I'm not going to lie. I think the incident that we've seen inside the Dubai International Financial Center is certainly a worst case scenario for authorities here. I mentioned earlier that Iran did say it would be targeting financial centers and banks and financial institutions that are associated, it believes, with the United States and with Israel.

7:22Of course, Dubai is one of the main commercial capitals of the Middle East. NASDAQ Dubai, a really big brand. CNBC, an enormous brand. And so you would expect that as a result, that building, that district firmly in the crosshairs. And that has also played out in the last few hours as well with the emergency alert being received this morning. So now the Gulf Financial Center is certainly on edge that we have seen this incident in Dubai. And all eyes are on exactly what Iran does over the weekend as well. Dan, I'm glad you're safe. I'm glad you're at home. And we appreciate everything you are doing.

7:57Thank you. Meantime, the U.S. launching new trade investigations into 60 countries to establish whether they've failed to curb imports of goods made with forced labor. The so-called Section 301B probes will look into China, the EU, India and Mexico, among other nations. The announcement coming just a day after another Section 301 probe was launched. Those will focus on possible excesses in industrial capacity from 16 different countries. the investigations could provide an alternate route for the White House to replace at least some of the president's tariffs that the Supreme Court recently ruled were illegal.

8:35And we're going to speak to U.S. Trade Representative Jameson Greer about all of that. And the government says that it is between 40 and 80 percent of the way toward building a system to refund the more than $165 billion in tariff collections that were ruled illegal by the Supreme Court. That's according to a court filing. A Customs and Border Protection official says that the agency is developing an online claim portal for importers and brokers to submit requests for refunds, which would come with interest. That system is expected to be running by the middle of next month. Chinese company ByteDance is reportedly working on building up its computing power outside of China using top-of-the-line NVIDIA AI chips.

9:20The Wall Street Journal says that the TikTok parent is working with a Southeast Asian company on plans to use Nvidia's Blackwell chips in Malaysia for AI research and development. That report says that the Southeast Asian company is also called tier one Nvidia is a tier one Nvidia club cloud partner. That means it can get priority access to the company's latest chips, which of course are prohibitive from being sold in China. I don't know what we're going to do about that. I mean, this is the problem. But this is, if you were going to hold up the TikTok deal and all of the things, and then this is the outcome, this is a pretty bad outcome.

9:57A digital publisher, BuzzFeed, saying that it has substantial doubt about its ability to stay in business. The company says it won't provide a 2026 forecast as it evaluates strategic options. BuzzFeed was popular in the late aughts in 2010s with Newsy articles you might remember called listicles. went public in a blank check merger in 2021, but its stock has fallen 98 % since then. Company CEO Jonah Peretti saying the company believes its market value doesn't reflect the strength of its individual brands. And what's so sad to me about this story and fascinating at the same time is so many people tried to chase the BuzzFeed game.

10:38We all thought that BuzzFeed was the future. Driving traffic, getting eyeballs. Getting eyeballs, living in this sort of listicles world as opposed to living in a stories-based or reporting-based world. And it and so many others at the time seemed to be upending what seemed to be the media ecosphere. And here we are. Tees will be next. Coming up on Squawk Pod, U.S. Trade Representative Jameson Greer joins us from the White House North Lawn as the world watches the volatile price of oil and the conflict in Iran. Obviously, you can't talk about trade without the Iran war coming up and the effect of oil and gas.

11:17I think we're talking about a matter of weeks. Our expectation is that any effects we see will be short-lived.

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12:00At Venture Global, we think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. I want to grow the game of soccer and give every kid the chance to play. What would you like the power to do? Bank of America champion street soccer advocate Kyle Martino and is proud to be the official bank of U.S.

12:42soccer and FIFA World Cup 2026. Bank of America and A member FDIC. This is Squawk Pod. Three, two, stand Andrew by. Up and Andrew, cue. You're watching Squawk Box on this Friday morning. I'm Andrew Ross Sorkin along with Becky Quick. Joe is off today. The U.S. Secretary of the Treasury, Scott Besant, and United States Trade Representative Jameson Greer are heading to Paris tomorrow to meet with Chinese officials. The meeting coming ahead of President Trump's expected trip to Beijing and a new wave of Section 301 investigations. Joining us right now is Ambassador Jameson Greer. Good morning to you.

13:19Let's start with this meeting and then we can get into tariffs and everything else. What are you hoping to achieve at this meeting? It's good to be with you this morning. Like a lot of our meetings we've had with the Chinese over the past year, we want to ensure continued stability in the U.S.-China relationship. It's one of the most important economic relationships in the world. We want to make sure that we continue to get the rare earths we need for our manufacturing base, that they keep buying the kinds of things they should be buying from us, and that the leaders have a chance to get together and make sure that the relationship's going the way we want it to go.

13:52Where do you think that relationship is, given that it's one of the few countries, unlike the others that actually had reached deals on tariffs, they've never reached one. And how does that conversation change given the situation in Iran? Well, when you look at where we are with China versus one year ago, we have a much more balanced relationship with China. I've been saying for a year, where do we want to be with China? We want relations to be stable. We want our trade to be more balanced. We want it to be a non-sensitive goods. And so our trade deficit with China in goods has gone down by 30 percent over the past year.

14:263-0. That's a big change. Our imports from China in January were the lowest they've been since 2004. And again, that's not to say we're not going to trade with China. We certainly are. But it's getting to a much more balanced situation. Can we discuss, though, this situation with Iran? Because clearly that's weighing on our markets. It's weighing on the price of oil. And by the way, weighing on their economy as well. It is. So when it comes to energy and the effect of the Iran war, it doesn't so much affect U.S.-China economic relations directly between us. Obviously, China relies on oil from Iran.

15:02The United States, you know, we're a huge producer of both oil and LNG, but we do export and import a lot. We're a net exporter, but we do import a lot and we refine here. We import refined products as well. I think what you want to look is what are the feedstocks doing in China, because some of these hydrocarbons go into the plastics industry, the chemicals industry in China. I think we're more resilient on that front because we have a lot of domestic feedstocks and hydrocarbons. So we'll be watching how that might affect the Chinese economy and their ability to produce at the huge volumes they've been producing over the past several years.

15:36What is your expectation for how quickly this war in Iran is going to end? And if it doesn't, what do you think the global impact is going to be? Well, I think that we're and we're talking in terms of weeks, right? When I speak with Secretary Hegseth or the president or others, they're much closer to it. But obviously you can't talk about trade without the Iran war coming up and the effect of oil and gas and what that means. I think we're talking about a matter of weeks. Our expectation is that any effects we see will be short-lived, but we want to watch this, right? You could see other effects that affect cycles that we tend to see in commodity markets.

16:16So we're watching it very closely, especially if there are particular spikes or if there are areas where we think we have more resilience. Which piece of this so far was not on your bingo card in terms of expectations? And I only ask this because I think when the attack was first made, there was a sense that this was going to end very quickly. I don't want to say it was going to be a cakewalk, but I think there was a view that it would be something more akin to that. And it clearly is getting more complicated rather than less, despite whatever successes we seem to be having. Well, I don't work in the Pentagon.

16:52I used to serve in the military many years ago. But all I know is the Pentagon for years and decades has been planning for these kinds of contingencies. We saw the president and his security team execute historic victories in Venezuela. We saw what they did with Iran and the Fordo side last year. I have full confidence in the team that they've planned out all the different scenarios, not just the military scenarios, also the economic scenarios. Again, I think that they're looking at a matter of weeks. When I talk to the secretary, we talk about their levels of missile launches and drones. All that has gone down by 80, 90 percent.

17:31There is a finite amount of ordnance over there that the Iranians have. Pete and others are in a better position to talk to you about it. But that's how it looks from my perspective. Ambassador Greer, there was a court filing where a Customs and Borders protection official said that the government is somewhere between 40 and 80 percent towards building a system to refund the more than$165 billion in tariffs that were collected that were then ruled illegal by the Supreme Court. They said that they expect that system to be up and running by the middle of next month. they have an online claim portal where, I guess, importers and brokers will submit their request for refunds along with interest.

18:14Is there a chance that U.S. taxpayers will lose money on the tariffs that were instituted to try and bring money in if we are paying back those very tariffs with interest? Well, remember, Democratic attorneys general, they argued for these cases. They asked for the money to go back to companies that were importing goods. That was their ask to the court, and they got their wish was to take money from the U.S. Treasury that could have been used to pay down the debt or other things and give it back to companies who import foreign goods made by foreign workers. So, first of all, there is money going out of the Treasury, or that could, and it's because Democratic Attorneys General wanted that.

18:55Interest payments, those are par for the course if that happens. Any time the government has to refund money or anything like that, there's always some kind of interest associated with it. But it's U.S. taxpayer dollars that would be used to fund the interest if that's the case. Well, I don't know where Treasury is going to have that. I don't know where they pay the interest funds out. I'll talk to Scott. The point is that the attorneys general of Democratic states, they wanted this money to go back to companies who are importing foreign goods, and they got their wish. Ambassador, would you and the administration encourage companies that had higher costs during this period to seek refunds, that paid tariffs to seek refunds?

19:39And I ask because I've talked to a number of CEOs who have thus far been holding off seeking those refunds, worried potentially about the possibility for retribution for seeking such a thing. Well, if I were these companies and somehow they get this windfall, the most important thing and the smartest thing they should do is give it as bonuses to their workers. The whole reason the president imposed these tariffs was to try to reshore, to fix our massive imbalance in trade that we've experienced over many years because of China, Vietnam, the EU and others. If the companies are going to get this windfall, they should pass it along to their workers as a bonus or a raise, because that's the purpose of the program.

20:19It's always been the purpose of the program, and the American people should get it, and the companies should give it to their workers. In terms of the next stage of these tariffs, 301 and otherwise, these investigations that are taking place, how quickly do you think those investigations take place? What kind of reports need to come out of them, and then how quickly can those tariffs be implemented? So the Section 3 program, these are the types of investigations that USTR, my agency, has done in the past. They're very process-driven. They're transparent. There's an opportunity for hearing, for public comment, and then we typically produce some findings.

20:52It could be in the form of a report or otherwise. And if we find that countries have been involved in unfair trading practices like subsidies, excess capacity, allowing goods made with forced labor into their countries, we can quantify that harm to U.S. commerce and then try to resolve that issue with the country. If they can't resolve it or don't resolve it sufficiently, you can impose a tariff or a fee or something like that. We're trying to move very quickly, to your question. We're trying to move in a matter of months. And with that, we can try to resolve some of these issues that have been plaguing the global trading system for many years, and we're finally trying to solve.

21:28Ambassador Greer, I want to thank you for joining us this morning, as always, and wish you luck in your meetings in Paris. Thanks so much. Have a good one. Thanks. You too. Still to come on Squawk Pod, the tricky tax policies changing where the wealthiest in America call home. and the partial shutdown of the Department of Homeland Security leading to long lines at airports and missed paychecks for TSA workers. Former Secretary of Homeland Security Jay Johnson is next. We're in a heightened security environment generally, and the Department of our government that is supposed to ensure our homeland security has been defunded and basically shut down for almost a month now.

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23:05So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. I'm honored to make history and to make my community proud. Oh, what a brilliant tackle from Naomi Kerma. What would you like the power to do? Bank of America, proud to be the official bank of U.S. soccer. Bank of America NA member FDSE.

23:35Welcome back to Squawk Pod, today with Becky Quick and Andrew Ross Sorkin. A group of Senate Democrats coming up with another plan to extract more taxes from the wealthy while giving millions or millionaires maybe a tax break. Joining us right now is Robert Frank with more of today's edition of the Inside Wealth. What's happening here? Well, Andrew, it's really a sort of two-sided process here. The proposal is called the Working Americans Tax Cut Act, but it is also a large tax hike on high earners. So a group of Democratic senators proposing tax legislation that would exempt millions of Americans from taxes.

24:14Any income up to$46 ,000 for individuals or$92 ,000 for couples would not be subject to any federal income taxes. But to pay for that, taxpayers making more than a million dollars a year would get progressive tax hikes. So that's about one million taxpayers who would see a tax increase. Those making between$1 to$2 million would pay an extra 5 % for a top rate of 42%. The rate goes up, so those making more than$5 million would have a top federal rate of 59%. So, for someone in New York City making more than$5 million a year, the top combined state, city, and federal rate would be over 73%. And since Joe's not here and he's going to ask, New Jersey taxpayers, those who make more than a million a year, the combined state and federal rate would be over 69 percent.

25:07Democrats have made tax hikes on the wealthy a central policy this year. Washington state is poised to pass its first ever income tax. Taxpayers making more than a million dollars a year would pay a state rate of 9.9 percent. It was just passed by the Washington State House after a 24 hour debate. Interestingly, during that debate, as we mentioned here on the show Wednesday, Starbucks founder Howard Schultz announced on LinkedIn that he's leaving Seattle, moving to Miami after 44 years. The longtime Democratic donor didn't cite taxes at the reason, but he said, quote, it is our hope that Washington state will remain a place for business and entrepreneurs to thrive.