“Defund Harvard.” Elise Stefanik & Gary Gensler 4/16/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. A call to defund one of America's most elite institutions from an Ivy League alum in the GOP leadership. Congresswoman Elise Stefanik explains her stance on the Harvard versus government debate that has captured national attention. These schools get billions of dollars of U.S. taxpayer funds. We have a responsibility to be good stewards to make sure that they are protecting Jewish students and they've abjectly failed. And in his first interview since leaving office, former SEC chair Gary Gensler, his tip for the Trump administration on negotiating with China.

0:39When they see inconsistency in policy, they tend to veer back. They lean back and they don't like to engage. Plus, is avoiding a trade war with China even possible? This shows global trade. They have things we want. We have things they want. We have the Boeing plane, but they make the MAGA gear. Maybe it's all about coming to the table. We're both on the same side. We're on the same side. How odd is that? It's Wednesday, April 16th, 2025. Squawk Pod begins right now. Stand, Andrew, bye. In three, two, one, cue Andrew. Good morning. Welcome to Squawk Box right here on CNBC. We're live at the NASDAQ market set in Times Square.

1:22I'm Andrew Ross Sorkin, along with Joe Kernan and Kelly Evans, hanging out all week long. Almost there. It's a shortened week, so today, tomorrow. Thank you for indulging us. You thought about that. Futures moved higher. That was a little bit ago after Bloomberg said that China was open to trade talks with the U.S. if, and if is the important point here, it names a point person on the effort and shows China some more respect. I don't know what that means, but we'll see. Yeah, they said, according to someone familiar with the Chinese government's thinking, they want more respect by reigning and disparaging remarks by members of his cabinet, among other things.

2:00And it's all translated into English. I guess, you know, respect, whatever. We were in makeup, Andrew, just a couple of gals getting their makeup done this morning. And I did mention, here's the big headline in the journal, Boeing hit from all sides because they won't accept deliveries in China now. And here's Xi on his world tour. That's a beautiful plane he's on, isn't it? It's a 747. So, you know, it's a 747. And I look, why does he use it? Because of reliability and suitability. And they make a wide body in China, but he prefers that. Now, it's just an allegory for what we're talking about.

2:40The United States has unbelievable stuff that it's going to be, it'll be a hardship for the rest of the world. But I will take the other side and say, you ever see when they've got a bunch of MAGA merchandise, the hats and the shirts, and make it here. I think one of the shirts that said make it here, if you look on the tag, it said made in China. So, I mean, we've both got things from, this shows global trade. They have things we want. So we could see. We have things they want. We have the Boeing plane, but they make the MAGA gear. Well, I'm not exactly, there's a lot of things that we still take for granted that are cheap that come from China.

3:15So it's going to be hard to extricate ourselves. But you want, so he's on this tour. You know, you do wonder if there would ever be a headline, you know, next plane built by Airbus. Yeah. Have you guys been following Kimball Musk on Twitter recently? What, now? You don't follow him. Lately, yes. Of course I do. You follow him on Twitter. Does his picture have that stupid hat he always wears, that cowboy hat? He's got to be distinctive somehow. No, he has his hat on. Would you like to be the brother of Elon Musk? He has his hat on, but he's going straight at this trade stuff. I mean, straight at the president.

3:50Elon, I think, is subliminal. No, they both are. Yeah. And I think it's fascinating just to watch what he's saying. He's making the argument, when you mentioned the Boeing planes, he says the reality is the Boeing planes are manufactured in America for Americans, including 10 ,000 Chinese-made parts in each plane. In China, they use American-made avionics and engines. in airplanes, pretty important parts. The trade war shows a stunning misunderstanding of how global supply chains work. I pencil. This is not a new concept. It's really not. Comparative advantage. Do we want to be... Tell the people.

4:29I did yesterday. I tried. That's when I went. But, you know, you're not necessarily... We're both on the same side. We're on the same side. How odd is that? I saw a cartoon this morning somewhere and it has President Trump and he's, here's his feet and there's, he's got a gun and there's all these holes in his two feet. Shooting himself. Shooting himself in, some would say that that's the end result of what's, but I think it's maybe negotiating and he may just show this is what I'm capable of. I'm going to come back from this, but there's nothing we can do to stop it. You can't, I don't even think you can stop it.

5:09But to your analogy, is it using all of the bullets? And is it, so now that we're going, and I don't know if it's 245%. There's like 10 holes in each foot, so. Right. So what are the bullets left if there's a move on Taiwan? You know, I'm just saying, are too many of the bullets being deployed here for, you know, for where we are? I'm not sure we want to make a lot of the things that they, or even robots want to make a lot of the things that the rest of the world produces very cheaply. We want to make AI like servers. Right. that I'm definitely not going to help design or... Or manufacture. You might, because you're such a geek.

5:45That's so nice. I wish I were geeky enough to design. That's nice that I said that. It very nice. I was a compliment. Yeah, thank you. NVIDIA says it'll take a$5.5 billion charge tied to exporting computer chips to China and other destinations. This came last night. In an SEC filing, they said the government, the U.S. government, told them last week they'll need a license to export the H20 chips that were designed specifically to comply with U.S. export restrictions. That bars NVIDIA from shipping its newest chips to China. Sales of H20 generated$12 to$15 billion in estimated revenue for NVIDIA last year.

6:18It's based on a previous generation of AI architecture that, despite not being top of the line, is still powerful. They used H20s, DeepSeek did, in research before unveiling that competitive AI model earlier this year that upended markets at the time. So NVIDIA shares are down 5.5 % still AMD, 6.5%. That's why we're seeing a lot of pressure on the NASDAQ in particular this morning. So it's not the water processors. It's H20. It's not H20. Not H20. Okay. It's H20. I got it. I knew that. The White House is ordering an investigation that could lead to new tariffs on U.S. imports of critical minerals.

6:58An executive order signed by the president directs Commerce Secretary Howard Lutnick to begin a national security review of these minerals. He's required to report his findings within six months, after which the president could decide to impose tariffs. The review looks at U.S. vulnerabilities for processing of all critical minerals, how foreign nations could be distorting markets, what steps could be taken to increase domestic supplies and recycling. Among the minerals in question, cobalt, nickel, uranium, and 17 rare earths used in the defense EV and energy industries. Earlier this month, of course, China placed export restrictions on some rare earths in response to the president's tariffs.

7:34Six months? We're going to be doing this? What, the investigation? That's a lifetime in this latest world. It's only been two, three months since he took office. So we're going to decide about the tariffs in six months after an investigation by the Commerce Secretary. But is that bullish? Does that mean that the can is now just way down the road? It means that there's so much uncertainty. Six months, I don't even, I hope we're around. I don't know. Six months in this world sounds... A long time. United Airlines maintaining its full-year forecast, but alongside first-quarter earnings, the airline took the unusual step of offering a second forecast to cover the possibility that the U.S.

8:14slips into a recession. United said booking trends are currently stable. It left in place expectations that were given back in January for full year adjusted earnings per share of$11.50 to$13.50. In a filing, United said that the company's outlook is dependent on the macro environment the company believes is impossible to predict this year with any degree of confidence. I don't think you should do that. You think you've got to let it go, man. Let it fly. So I just sneezed, everybody. Let it fly. I was trying to hold back the sneeze because we're here on television, folks. I know, but something's going to happen.

8:48Something's going to happen. And I've done that before where I've tried to hold in the sneeze. I know, but I just... And you think that you can't hold in the sneeze, that it actually is bad for your... physically. I hold in sneezes all the time. I don't think it's good. I didn't want to make too much noise. You were talking. You will get to an age where if you do that, you could really be screwed. Go ahead. Okay. Cheese will be next. Coming up, Elise Stefanik, a Harvard alumna, now chair of the Republican leadership, the New York representative is calling to defund her alma mater. We should have strings attached to our taxpayer dollars.

9:25We should have strings attached to$9 billion in taxpayer dollars when it goes to Harvard to make sure that they are living up to their founding mission. The$2.2 billion in Harvard grants now frozen by the Trump administration, protecting Jewish students on American campuses, and debating the government's role in free speech. All of that coming up. Squawk Pod will be right back.

9:51This is Squawk Pod from CNBC. Today with Joe Kernan, Andrew Ross Sorkin, and Kelly Evans. Stand by, Joe. His mic here. Harvard's rejection of the Trump administration's request has prompted a debate over free speech in the government's role on American campuses. Join us now, a lawmaker who calls Harvard her alma mater. Why is it not true? No, it's true. Oh, it's true. Okay. Yeah. Yeah. That would be interesting if you call it your alma mater, but, you know, didn't go anywhere. No, I graduated there in 2006. Very good. Okay. I knew that. I'm kidding. And has called to defund the institution. New York representative Elise Stefanik represents parts of central and upstate New York.

10:30She's also chairwoman of the House Republican leadership. Jeff, I mean, I've been watching. I can't be a fanboy. I cannot do that. So I'm not going to. So I'm not going to. But you see what I'm saying. She's pretty phenomenal in general. And even if you're a Democrat, I probably wouldn't. But thank you for joining us this morning. What did the president say about Harvard? Just now. So the president just posted a long post on Truth Social about the whole Harvard issue. Long, long post. Everyone knows that Harvard has lost its way. It goes on and on. I'll skip to the very bottom. Get some really good.

11:06It involves parts calling the radical left idiots and bird brains who are capable of teaching failure to students and so-called future leaders. Anyway, he then criticizes the president. The new president. And the conclusion is that Harvard can no longer be considered even a decent place of learning. He says it should not be on any list of the world's great universities or colleges. It is a joke in capital letters, teaches hate and stupidity, and should no longer receive federal funds. So with that in mind, I will mention a journal piece today, Congresswoman, that says that the Supreme Court has already weighed in, that the federal government should not be withholding even grants to try to force colleges to do certain things.

11:53Do you think it's been over? I mean, anti-Semitism, violence is one thing. But thought, do we want the government deciding what people can think? These schools are not entitled to U.S. taxpayer dollars if they're not living up to the standards and not protecting civil rights of Jewish students on campuses. That's probably true. And let's take a step back to what has led to this earthquake within higher education. After October 7th, we saw a skyrocketing of anti-Semitism on college campuses, particularly our known most elite college campuses, whether it was Harvard or Columbia. You saw physical assaults against Jewish students.

12:25You saw takeover of classroom. We saw riots of property at school, destruction. And then you didn't see enforcement of these universities against those who violated the rules, violated the standards of the university. These schools get billions of dollars of U.S. taxpayer funds. We have a responsibility to be good stewards to make sure that they are protecting Jewish students and they've abjectly failed. Harvard has been the epitome of this failure. They didn't enforce the rules. They gave the diplomas to those that committed these anti-Semitic crimes against fellow students. I mean, we're talking about physical assaults.

12:57And the other issue is these schools rank among the lowest when it comes to protections of free speech. They only want to protect free speech when it comes to calling for the genocide of Jews, when you saw very famously in that committee hearing, which, by the way, is the most viewed committee hearing in the history of the United States Congress, when three university presidents failed to condemn calls for the genocide of Jews. I remember. So you don't disagree with anything she just said up to this point? Up to this point, we do not disagree. I think that what's happened at Harvard is terrible.

13:31It sets me to my core. By the way, when you asked those questions, I was happy about it. And you know what? I asked those, expecting them to answer correctly. Correct. And I was disgusted by the answer. I was shocked. Like the rest of America. Go down to the list of things that Trump is demanding that you think he shouldn't be doing. I was disgusted by it. Right. The question then becomes the idea of defunding the university at the federal level and what is the right approach for them to change their behavior. Now, I think, this is my own view, that you asking those questions is absolutely what should happen.

14:09You should embarrass these people into changing their behavior. There should be public pressure that should change their behavior. Donors should change their behavior. Hopefully teachers might change their behavior. Where I think it gets more complicated is when the government, if you will, using taxpayer dollars, starts to try to change the behavior around the speech portion. Not the, look, violence and the idea that, you know, these classes are being. But if you look at it, Andrew, what the Department of Education has laid out to both Harvard and Columbia, it is not about speech. It is specifically about elimination of DEI, which in its basis, specifically at Harvard, is anti-Semitic.

14:50There are countless examples. I brought this up in one of the congressional hearings that the office of DEI at Harvard refused to respond to Jewish students. This is prior to October 7th when there was a concern of rise of anti-Semitism. In addition, a mask ban where so many of these rioters and, frankly, criminals are hiding behind these masks. And it doesn't allow the university to actually enforce the rules, the time and place, not allowing them to take over buildings. And the reality is the only way to get these institutions to respond is to withhold those U.S. taxpayer dollars. They are not entitled.

15:22I mean, as a representative in the United States Congress, I represent nearly a million people who are working hard when it comes to paying their taxes, and they don't want their taxes to go to prop up these universities. If these universities choose not to take taxpayer dollars and want to continue going down that road, that is their choice. Here's the issue, as I see it. One of the things that they're talking about is who is being hired at these universities, right? which professors are being hired, what their ideological belief is. This gets to this. And look, you know, my my you know, my ideological belief is not to support people who are anti-Semitic at all.

15:54I think they should be fired and removed from their job. The problem is, if you look at the ideological diversity, there is nearly zero ideological diversity at Harvard. And my own experience, listen, Harvard does not protect free speech. I was removed from a board at Harvard because of a speech that I gave on the House floor. And they decided to do their opinion. They didn't like it. They didn't like the fact that I am a proud Harvard graduate. It wasn't like that when I was there. So for them to say on one hand they're protecting free speech, they don't have a history of doing so. On the one hand, the right hates DEI.

16:24The government is insisting on viewpoint diversity in each department, field, or teaching unit. How is that any different? It's micromanaging. It just seems like it's overstepping. Some of the stuff I agree with. We want viewpoint diversity. The problem in higher education, particularly at Harvard and Columbia and some of these sort of elite schools, is you have 97 % ideologically far-looking aggressives. And that has fueled this deeply out of touch. And it also suppresses viewpoint diversity of students. What was interesting to me is Harvard, the response from self-identified conservative students, or maybe students that don't know and are there to learn and want to hear different viewpoints, they feel suppressed.

17:06They're not able to speak up in classrooms. Look, all of the things that you're talking about, I agree with. The harder part is I don't know if the government should be imposing that on a private institution. Now, yes, you're saying to me, well, we have these taxpayer dollars and we can use them how we want. I don't know that the American taxpayer has voted to change the way the university operates itself. And so I would push back on that because this was a determinative issue in this last election cycle. People paid attention to higher ed, and they're very concerned that billions are going to these institutions, and they're not standing up for American values.

17:46Let me ask you about talking about American values. I think one of the things that's made America great is a lot of the people who have come out of these universities, including Harvard, who've done amazing things for this country. So Jennifer Doudna created CRISPR. She's a Ph.D. graduate of Harvard. These are, by the way, science programs that are going to get defunded. Eric Lander, who managed to actually sequence our DNA, is a graduate of Harvard. I can go down the list of people who have managed their way in and out of Harvard. And by the way, taxpayers have effectively subsidized that. And I think, by the way, that is a great thing.

18:22If you look at the letter from the Trump administration to Harvard, in the first line, it talks about academic excellence and scholarly pursuits. What these schools have pursued in sort of this race to far left, this propping up of anti-Semitism, is the opposite of that. So those examples are prime examples. But again, we need to make sure that the schools are focused on that and being good stewards of U.S. taxpayer dollars and not propping up this ideological bias and, frankly, this anti-Semitism that has put students at risk. And you made the point. People are voting with their feet. Look at the matriculation rates they have gone down.

18:57But I like the idea that the free market can do that. And by the way, I like that you're raising these issues and highlighting them for the public. I think it's harder when the government is effectively implementing these things. And let me just take it one step further. These are requirements with our taxpayer dollars. They're not entitled to that. But let me make it even more complicated. It seems like, from the reports that we're all seeing, that if you are a law firm, for example, that's, by the way, going to represent one of these universities, potentially, against the government, that now we're going to effectively go after the lawyers.

19:34So I'm just saying that they're talking about free speech. It just becomes very complicated because what's really happening is we're trying to enforce certain types of speech. And I'm saying I don't like this other speech. I hate this other stuff. The only time these schools have testified when it comes to protecting a free speech, again, these schools are ranked among the lowest when it comes to protection of free speech. I've experienced that myself when I was removed from a board of Harvard for giving a speech on behalf of my constituents on the House floor on election integrity issues. And yet they want to stand up for free speech when it calls for the genocide of Jews.

20:06It is anti-Semitic at its core. Look, and the hate speech. They can't say it with a straight face. By the way, the hate speech, people should be arrested for the hate speech. The other issue is the lack of academic integrity. You had in the case of Harvard, the president, multiple examples of plagiarism scandals, which I think the president referenced in the tweet that he just put out as well. So there are a lot of academic integrity issues as well as academic excellence issues. And by the way, I have no problem with the press. I mean, I don't love it. But with the president tweeting or truth socialing or whatever he's doing to raise these issues, I think it's totally fair game that politicians raise these issues.

20:37The question is whether you think the use of the funding in the context of... Because they had an opportunity to look at the past two years. They still don't get it. They are appeasing the anti-Semitic professors. They are not enforcing the rules. These schools had an opportunity after that bombshell congressional hearing to get on the right. You don't think at some level the government is now in the business of trying to enforce something around speech? Just in the nothing? No, if you look at it, it is about what the administration laid out. It is protecting Jewish students on campus, protecting their civil rights.

21:13And by the way, we should do that. And if they're doing a terrible... And they're not doing that? So why should we be propping up over$9 billion in the case of Harvard? The president is absolutely correct in to freeze those federal funds. Congress is correct. And you know what's interesting, Andrew? This is not just Republicans who believe this. There are a number of Democrats as well. I'll tell you where you and I will agree. And voters across the country. If it was narrow, if you said, I'm withholding these funds because I think it is not safe for what's happening with Jewish students on campus to either get to their classes or to feel comfortable that they're not going to be injured or around violence.

21:42If it was narrow, I would be with you. If you look at what is being asked, it's a lot broader than that. Did you read the letter, though, from the administration? It lays out very common sense. The elimination of DEI, which, again, in the case of Harvard, was one of the reasons that fueled anti-Semitism. The mask ban to ensure protection of Jewish students, addressing anti-Semitism on campus. Ideological diversity, that has been part of the issue, fueling this as well as we do in ideological diversity. All of what you're talking about, there's a common sense piece to it. I'm saying the imposition of the federal government on, for example, DEI is actually a very interesting thing.

22:18Now, to the extent that the courts have decided that DEI is... We should have strings attached to our taxpayer dollars. We should have strings attached to$9 billion in taxpayer dollars when it goes to Harvard to make sure that they are living up to their founding mission, which was academic excellence. We talked about it yesterday. There wasn't money involved. But the government, a few years ago with Facebook and Twitter and all social media, and you argued, no, but you argued at the time it's perfectly within the government's rights to talk to a private company. Sometimes they have opinion pages.

22:49Perfectly within the government's rights to try to influence the public opinion of all these social media companies. Remember? To influence them. But now we know it was blackmail. They were withholding, they were not going to... Well, and that's wrong. And that's wrong. And my only point yesterday, which I'd say today is a similar situation. By the way, and that's wrong. And the point is, if we're going to have a consistent, if we care about consistency, we can say we can't go back in time to fix what happened in the past. But to the extent that we're all going to agree that the government should not be blackmailing companies over these issues around COVID and laptops and other things, it also seems to me consistently we shouldn't be doing the same thing to a private university.

23:29At least it almost seems that both sides have free speech that they want protected. It's just different free speech. It's just free speech, and that's the problem. This is about protecting Jewish students on campus. But we already went to all the other things. Go back to that question. Does calling for the genocide of Jews violate your university's code of conduct? We're not disagreeing with that. They said it depends on the context. You take any other demographic group, they would have answered it differently. And they didn't. And they failed to take action. And it has continued to skyrocket.