Liberation Day, Round 2: Trump’s Tariffs & the AI Talent Race 7/8/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. The president's latest pause on reciprocal tariffs on dozens of countries as tomorrow's deadline becomes next month, with only a few framework deals announced. Our Megan Casella on what to expect from our trading partners. But they recognize they have a little bit more wiggle room now, and who knows what happens once we get to August 1st. And Fred Kemp of the Atlantic Council on the optics and the strategy of Trump on trade. So I think it's not him pumping, I think it's him doubling down on his seriousness around tariffs.

0:39Meta has poached another tech worker with a giant pay package, and this one led Apple's AI Lab, the battle for top talent with Wired's Lauren Good. I would be very surprised if this ends up being something that totally disrupts the pay scales of every engineer around the valley. I do think it's going to be a specific group of highly specialized talent. Plus, the rest of today's stories that got us squawking, Prime Day's Start, a new version of Elon Musk's AI bot Grok, and hey, some changes on the tarmac for the TSA. When I'm traveling, I wear flip-ons. Do you wear the Skechers that go on your feet automatically?

1:18It's Tuesday, July 8th, 2025. Squawk Pod begins right now. Stand by in three, two, one. Cure, please. Good morning. Welcome to Squawk Box here on CNBC. We're live at the Nasdaq Market site in Times Square. I'm Melissa Lee alongside Joe Kernan. Fine. He's okay, by the way. I'm fine. I'm wondering. It's water. I have a drinking problem. Water will always do to you. I have a drinking problem. Sometimes it doesn't go down. And you are here. Becky and Andrew are off today. But you are. I'm keeping you coming. Do you know in hoops, people get awards, six-man awards for someone that did. You get the sixth-person award for being here.

1:59It's like an honorary squawk something, rather, that I'm going to get for you. Thank you. For always saying yes and coming in. Is there a monetary component to this award? There will be no money. There's no money involved. Just a lot of thanks and gratitude. It's always my pleasure. And it's the cover. I mean, the journal has about six stories on sort of the restart of the trade war. President Trump announcing blanket tariffs on imports from at least 14 countries yesterday. Megan Cassella joins us now with more. And with each announcement yesterday, the market got a little bit of agita. You could just see it in a stepwise fashion as more and more came out.

2:41The market went down from all time highs, we should point out. Absolutely. But still a drip by drip nature sort of yesterday, Joe. But good morning, guys. It was sort of Liberation Day round two yesterday. 14 U.S. trading partners ultimately received letters from President Trump laying out the tariff rates that their exports to the United States will face beginning on August 1st, unless they strike a deal with the White House before then. They range from 25 percent for larger trading partners like Japan and South Korea, up to 40 percent on the high end for countries that included Laos and Myanmar.

3:13And for the most part, the rates either closely match or are somewhat lower than the reciprocal rates that the president announced back in April. So President Trump said in the letters that these tariffs would be separate from any tariffs already in effect, including on specific sectors, that they would be raised higher if countries retaliate, but they could also move lower if countries strike deals or lower their own tariffs. So not a ton of certainty here as to the way forward. The president was also asked late in the day whether the August 1st deadline was now firm. Here's his response. No, I would say firm, but not 100 percent firm.

3:50If they call up and they say we'd like to do something a different way, we're going to be open to that. But essentially, that's the way it is right now. So not 100 percent firm. We'll have to see. He did sign an executive order late in the day, formally delaying for the second time the deadline for all of these so-called reciprocal tariffs to take effect, this time from July 9th to August 1st. So amid everything else and all of the headlines yesterday, guys, the new piece here is that timeline gets extended, allowing for more negotiations for a few more weeks. Guys. Just wonder what whether this puts pressure or lessens pressure on countries like like India or today's Tuesday.

4:31there were supposed to be a couple of deals announced by tomorrow. Are you hearing any? It's interesting. We've actually seen, we've seen a handful of countries responding overnight, to your point about the pressure. Some of them saying there was just insufficient time to reach a deal. That's why there's more time now. Japan seeming to be one that's not bending to the increased pressure. I do think that was the purpose here, to sort of raise the stakes and say we really mean it this time. This is the rate that you will have to pay or the rate that all of your exports will face coming into the U.S.

5:01But Japan, for example, saying they're not going to take any easy compromises on the way out. Korea saying something similar. The national interest is still the top interest here. So while the White House is trying to increase the pressure, some of these countries we're seeing so far holding firm. But I'm sure we'll see more responses today. But I just wonder what India, what does India think? But if the representative was here last week, we've heard from not just some of the president's people, but from the president himself. He mentioned India. Did he not? Would this make them likely to say, OK, we're going to give you this is going to be a big deal for us to do this because people have been waiting for something like India.

5:45India is an interesting one because you're right. The president again mentioned it last night, I believe. And we've heard administration officials mentioning that one for weeks now, saying that they're very close, it makes you wonder why it hasn't been announced yet. Clearly, there is some sort of a holdup on either side or maybe on both. That means they aren't announcing something yet. India was not one of the 14 that got a letter yesterday, but in the executive order, they extended the deadline for everybody. So it does mean that everybody gets a few more weeks of negotiations. You could look at this either way.

6:14I think the markets are down a little bit, reacting a little bit, but not in a huge way. I think waiting to see if this deadline really holds firm this time. Countries might be doing the same thing where they're trying to continue to work towards a deal, but they recognize they have a little bit more wiggle room now. And who knows what happens once we get to August 1st. Right. All right. Nobody knows more, probably, Megan, that we're all watching and waiting. Thank you. See you. The Transportation Security Administration is changing its policy that requires airline passengers to remove their shoes at screening checkpoints.

6:49That's according to multiple reports that say the TSA has begun rolling back the requirement at some airports, including New York's LaGuardia, in recent days. The agency has not officially announced the change and did not confirm this new policy. The TSA has required most passengers to remove their shoes since 2006. That was nearly five years after a terrorist tried to detonate an explosive in his shoe while aboard an American Airlines flight from Paris to Miami. The move could diminish the value of the TSA's pre-check program, which allows travelers to keep their shoes on during screenings. Customers pay for the privilege, about$80 for five years of the expedited screening.

7:25I mean, it is pretty, I've always thought it was pretty unbelievable. Because if you were to add up the total number of people that have removed their shoes, and all the rigmarole, for lack of a better word, that we go through, was it only one attempt? The one guy. Was it one attempt that someone, because you could put an explosive in your... You can't quantify the nature of preventing, deterring the attack because of she's screening. Six Sigma, where in a company you're not allowed to make, out of 8 million attempts, you're allowed zero screw-ups. And I understand all that. When I'm traveling, I wear slip-ons.

8:04Do you? Do you wear the Skechers that go on your feet automatically? Right. I have the, is it Vans or Vans? Vans is the supermarket. Vans is the, you know, I wear Vans because I don't want to be messing around. Of course. Yeah. You don't want to delay. To this day, I should get. Don't you have pre-check? No, I shouldn't. But well, now you don't need it, apparently. And clear. I'd like to have all those. But don't you have to get those things at the airport or something? Yeah. I can't visit the airport unless I'm going somewhere. No, no, you don't visit. You just go to the airport a little bit earlier and you sign up.

8:35I don't like that either. I don't like. You've never been at the airport for a delay? Like all those nice restaurants and the shopping. Who go? I feel bad for the people who have to work there. If you're stuck there. Yeah, if you're stuck. If you're stuck. You have time to go. You're right. Sign up. Right. I'm lazy. You're right. I should have done that. Keep taking your shoes off, Joe. I know. That's not good for anyone.

9:01Apple's top executive in charge of artificial intelligence models leaving for meta platforms. Meta confirmed that engineer Ru Ming Pang is joining its super intelligence group. Pang had joined Apple from Alphabet in 2021. A Bloomberg report says Meta offered a package worth tens of millions of dollars per year as part of Mark Zuckerberg's hiring spree. We've heard that some packages are total 100 million dollars or thereabouts. And I think you've been on a hiring spree. Got like 11 hires over the weekend or something. I hired a bunch of researchers from OpenAI. Yeah. So really going at it. Because they're behind, I guess.

9:46Or they want to get ahead or they want to keep their edge. I mean, it's a race for talent, right? Not good for Apple. No. Another strike against it, potentially. Check out the shares of Tesla. Also, the stock fell nearly 7 % yesterday after Elon Musk announced plans to form a new political party. That decline represents a loss of more than$68 billion in market cap. Separately, Elon Musk's XAI is set to release the latest version of its AI chatbot, Grock. Musk posted on X that Grock 4 would be released Wednesday at 8 p.m. Eastern time. It says here that, helping me out a little bit, that Wednesday is tomorrow.

10:30It usually follows Tuesday. See, I knew that. See, I knew that. I appreciate the help, but I knew that. What do you use? And do you use it much? I use it quite a bit. Gemini. You use Gemini? You do? I just, early on, I started, and I had problems with perplexity. I think, you know, they just scan Reddit boards when you ask them a question. But it's gotten better. I think it's pretty good. There are a lot of other functions. What about chat? Within FactSet, you can go through transcripts. Do you use Grok ever? No, not really. The thing that I have a problem with is that I can type in something into AI and ask a question, but I will always want to confirm that answer anyway.

11:10Yeah. So, I mean, it helps. It points you in the right direction. Some of it is pretty amazing. And I can't believe that they do. there is some logic involved with how it all gets put together. Other times, less so. Sometimes if I ask a name and they give me some European soccer star versus some corporate type. But like Karen Feynman was telling me that she was using various AI chatbots to find out, she was putting together for a class that she teaches, how to depict graphically an options trade. And the chatbots could not handle it. It took so many, I mean, it's, there are definitely areas in which, you know, these models need to be improved.

11:56So early. I mean, it just makes you wonder about five years from now. Oh, how much better it'll be. Yeah. Of course. It's going to be like scary, probably. Sentient, almost. That's your big thing. That's my big worry. Singularity. No, I want that singularity to be great. You know, before, you know, we can download our brain and live forever. I just don't know if that's possible. Is it? I don't know. Twice. My backup is going to church, though. Might as well hedge your bets. Exactly. An update now. Well, good. We need an update. I didn't know there was a garbage strike, apparently. In Philadelphia, trash has piled up throughout the city since the strike began on July 1st.

12:38Talks between city officials and leadership for the Municipal Workers Union were held Saturday, but no agreement was reached and there were no talks Sunday or yesterday. Union leaders, though, yesterday told NBC they plan to submit a new proposal to meet the city and meet today for further negotiations. The union's fighting for higher wages and health care benefits for its members. Philadelphia officials have set up locations for garbage collection centers where people can bring their trash during the strike, but reports say many of those sites are now overflowing with garbage. That's always nice.

13:17Coming up, a flurry of, that's when we realize there's your primary physician, then your garbage man. Two most important people in your life. When the garbage man doesn't come, yeah. I think so. Big problem. Big problem. Cheese will be next. Coming up from Prime Day, today's Amazon's Deal-a-thon is upon us. CNBC's Courtney Reagan swings by the Squawk set. How good are the Prime Day discounts? And like usual, it's sort of hard for me to tell you that. Exactly. And the delay heard around the world. The Atlantic Council CEO Fred Kemp on the president's tariff strategy as another date for deals with other countries' approaches and is moved.

14:03The president said this is a time for me to push and show people that I'm not Trump always chickens out. It's not Taco Trump. It's a deadline that's set three weeks out. More Squawk Pod right after this.

14:21Welcome back to Squawk Pod from CNBC. Today with Joe Kernan and Melissa Lee. Amazon Prime Days have arrived and consumers will be hunting for bargains, but will they find any? Courtney Reagan joins us now with more. Sort of the question everybody always asks, right? I mean, how good are the Prime Day discounts? And like usual, it's sort of hard for me to tell you that exactly for a variety of reasons. But this year, it's actually a little bit harder because of the possible tariff influence. Makes it murkier. But here's what we know. Amazon CEO Andy Jassy told our Jim Cramer that prices have not gone up appreciably due to tariffs going into Prime Day.

14:59We did a lot of forward buying several months ago. And then a lot of our sellers, our third-party selling partners, forward deployed a lot of inventory to avoid some of the issues with the uncertainty around where tariffs are going to settle. And we have so far not seen prices appreciably go up. I think some of that may be, some of it may be the forward buying and deployment I mentioned, but some of it is we have about 2 million sellers in our marketplace. And so even those that decide they're going to pass on whatever the tariff increase is in the form of price, there's probably going to be a number of sellers who decide they're going to take share and not increase prices.

15:35However, several outside pricing analyses suggest that's not true for every item. Commerce IQ says an analysis of 57 ,000 SKUs on Amazon shows the average selling price increased 2.3 % in May from April. So on average, maybe that isn't necessarily what you would call a quote appreciable increase. But Commerce IQ says while value brand pricing is mostly flat, so lower priced items, upper priced products show prices have increased between 5 and 15 percent. Now, a data-weave pricing analysis of more than 1 ,400 items made in China sold on Amazon from January to mid-June found the median price increased on 475 items, 633 were unchanged, and 299 actually saw prices fall.

16:23Now, this is according to Reuters. Overall, the median prices did outpace inflation, increasing 2.6 percent, with prices increasing more sharply in May and June, particularly in home and furniture and electronics. Now, CoreSite's Deb Weinswig says Amazon typically asks sellers to offer at least 20 percent to participate in Prime Day. But if that's on an item with, call it a recent price increase like we just talked about of maybe 15 percent, is 20 percent then that great of a discount? Amazon says it's confident in its deals and its focus remains on delivering value to customers as the trade landscape may be changing.

16:59Beyond pricing inventory, though, that's another key thing we want to watch because retail experts want to know how willing and able some brands, maybe even smaller ones, are to stock inventory to fulfill prime demand, particularly because they would have to do so in advance. If it's something that's manufactured in a country subject to high tariffs, if it doesn't sell, that were going to get stuck with this item that cost them maybe potentially more than last year. So there's a lot of fluctuating factors going into this year's event. So for a good to be considered part of the Prime Day event, it just has to go down in price by 20%.

17:30But it could have raised price by 20%. So in the end, up 20, down 20, you're actually higher than the original price anyway. Exactly. That's kind of the tricky part. Now, you know, Amazon doesn't really give like hard and fast rules when we talk to them. But generally, experts say, look, you need to be about 20 % to be a Prime Day product that gets sort of any feature or algorithm push. But again, to your point, if you've just recently raised price, is 20 % really that good? So it's like I would tell everyone all the time, do you think the price is good? If it is, then buy it. I know that's not the most helpful advice, but it's sort of true, right?

18:02Target, Walmart, all of them are matching or trying to compete also. How much pressure does it put on, you know, like a Target, for instance? Yeah, so I think obviously Amazon started this deal, the Prime Day event deal 10 years ago. It was in 2015. And they did it to celebrate their beginning, their anniversary. That's what they say. But many retail experts say, look, they also did it to sort of jazz up shopping during an otherwise pretty quiet period. And it has worked to pull some back-to-school sales forward, I think. Other retailers, like often happens with these events, feels like, well, I can't be the only one not offering it.

18:34So everybody gloms on. And shoppers have gotten much savvier about that. I think most of us, if we're looking for something, will check around and make sure the deal is the best. Now, Amazon probably has the most sophisticated dynamic pricing algorithm. So I think sometimes if it is an identical item, it will be very hard to beat an Amazon price on one of these big event days. But it can happen, particularly if the item is not identical. But when you look at, you know, companies like eMarketer that study online pricing, they say Amazon still is going to take probably 75 percent of all U.S. online e-commerce during this four-day event.

19:06And by the way, it's four days this year instead of two. For Target, we've recently seen the stock perk up a little bit. And so when I was asking that Target, I was just wondering what sort of pressure this, if they're forced to sort of cut price and offer incentives, could that put additional pressure on margins, but, you know, actually maybe draw people back? Right. That's such a tricky one because I think Target in particular has really struggled with its merchandise, both with sort of the types of merchandise it has, the amount of inventory, and then how it's priced. And so, well, not at Target at Walmart, but Doug McMillan always talks about sort of that's sort of the key of a merchant, right?

19:40You have to figure out if you can drive more volume, then maybe you can afford to drop that price lower. But unfortunately, Target's sort of equation has not been so perfect for that more recently. You are really fast money. What? Just really short term. It's a month. It's perked up. It's down from... Yeah, well, a month. It's down from 260. A turnaround has to start from somewhere. There you go, Melissa. It's down from 260. Okay, I understand that. Walmart's up from the... But if you bought it a month ago, you're happy with that. That's right. Does that look like a stock that's doing a little bit better to you right there?

20:14On the longer term chart, it's hard to see the more recent trend, of course. You are finding the silver lining. I wasn't saying it was out of the woods. Thank goodness she's here, right? I know you're not, but I heard you and I just decided I'm going to look to see if it, because I knew how poorly it had been doing. And I looked to try and... I see it. A teeny, teeny little on the right-hand side. Okay. Go woke, you go broke, baby. That simple.

20:44The deadline for reciprocal tariffs has been pushed to August 1st. The Trump administration already moving ahead with stiefer trade tariffs. Fourteen letters have gone out to notify countries of the new levies. Join us now. Fred Kemp is a renaissance man, is Atlantic Council CEO and president and a CNBC contributor. since you are a renaissance man i'm surprised we didn't book you uh maybe to talk about um peace breaking out is somewhat in the middle east and netanyahu publicly stating that trump should get the nobel prize nobel peace prize which we know isn't worth much these days uh after obama got it for for absolutely nothing um but you don't want to talk about what's happening in the middle east fred well look i've been writing about what a good month a good june Trump has had.

21:30It's not just his strikes on Iranian nuclear facilities, which has restored deterrence in the Mideast and has done and set back Iran and opened up the Mideast to a real possibility of tolerant, modernizing, moderate states coming together under the Abraham Accords and perhaps the Saudi Arabia and Israel doing normalization. There could be a real breakthrough. And then at NATO, the allies come up to 5 percent defense and defense related spending, which is huge and wouldn't have had it had happened without Trump. Secretary General Mark Ruta did an interview with The New York Times over the weekend where he said as much.

22:10And then, of course, the big, beautiful bill. So he had these three wins. I don't put the tariffs in the same category. They, you know, I think the markets still haven't priced in their potential impact on growth, their potential impact on inflation. He's particularly going after two of our allies, Japan and South Korea, where the cost alone to the auto industry could have a real hit to the American consumer. But there's some triumphalism right now here in the White House. They say, well, April 2nd, we did Liberation Day. It hasn't been inflationary. The markets are doing fine. You know, we've had a lot.

22:48We're having a good run on other fronts. You know, so the president said, this is this is a time for me to push and show people that I'm not Trump always chickens out. It's not Taco Trump. It's it's it's a deadline that set three weeks out. Many people were hoping it would go past Labor Day. And so I think it's not him punting. I think it's him doubling down on his seriousness around tariffs. and and for those that that wish and it's weird because the same people that really hate the tariffs Fred are the same people that are the first to say nani nani nani taco trump you you didn't do them so they they don't want them they they're horrible but then when they don't get them they're still not happy because it gives them another you know they're gonna damned if you do uh and damned if you don't but I will say for people that don't want tariffs and I you know I I sometimes I'm not sure how I feel.

23:41Targeted is one thing. If it works, if it brings people to the table, if it if it rebalances global trade, I can see the rationale. But in general, free marketers probably, you know, like comparative advantage. I understand how a lot of people do not like care. But now we're back to new highs in the markets and the notion of doubling down. This would be the time that the president would think he has the leeway to do it. And that might make it dangerous because we haven't, you know, every economic report we wait for, Fred, oh, it's going to be this jobs number. We're going to see it or it's going to be this PPI or CPI number.

24:17We're going to see it. And it just hasn't materialized yet. Well, look, Joe, the reason you don't bring me on to talk about markets is I've been historically not correct. But it sure seems to me that markets aren't pricing and what's happening right now. Now, in November, we already said, look, Trump, too, is not going to be Trump, one. The markets still see tariffs as a negotiating ploy for a better deal. So for freer markets, I think we've got to conclude it's Trump does tariffs because he likes them. It's economic policy. And he's got three reasons other than negotiation. One of them is he wants to move manufacturing to the United States.