The Tariff Formula with Commerce Secretary Howard Lutnick 4/3/25

22:48Citi says the Fed will cut aggressively. Morgan Stanley removed its June cut and seized the Fed on the sidelines for a protracted period of time. So nobody knows what's going to happen. Nobody knows. The Fed doesn't know. On the growth side, Trade Partnership Worldwide estimates tariffs will cost$654 billion in a year, or one of the largest tax increases in U.S. history. They said, quote, with tariffs taking effect immediately, American companies will be on the hook for$1 to$2 billion per day in costs for products that were ordered months ago. Even in smaller trading states like Idaho, for example, businesses could pay an extra$5 million in tariffs.

23:23The biggest concern was that the president was said to have completely made up the tariff numbers other countries charge the U.S. He said the U.S. was charging those countries half of what they charge us, but his assertion bore little resemblance to the real tariffs other countries charge, most trade experts said. Instead, the White House used a formula few had seen before based on the trade deficit that caused most to scratch their heads. So this tariff policy looks like it's basically resting on made-up numbers. Can I ask you about the made-up numbers for a second? Yeah. Because we were talking about the made-up numbers a little earlier.

23:51I don't think they're... You're calculating. They're not quite made up, but they get the tempered registration where it wants to be in terms of... Right, well, when you make up the formula... They reverse engine. When they make up the formula, I don't know whether it's... You've seen this formula before. Right. If, in fact... It's a real formula. If, in fact, Steve, you wanted to come up with a formula... How would you do it? How would you do it? That's my question to you. Country by country. But they did. Look, they did have a formula. If you look at... Talk to a bunch of... No, I'm not saying they didn't have a formula.

24:18It's the U.S. trade deficit divided by the gross imports from that country. My point is that... Or 10 % if you... My point is that nobody has seen this formula before. Or 10 percent. But that's not in the formula. Nobody has seen it. Or 10 percent. Look. No, but I and I will say the traders who are passing this on to me are also saying what a very well known one. It's absurd and shows a kindergarten level understanding of international. Right. Imagine that somebody had something that they're the only ones who had it. Say it was a rare earth mineral and you needed it and you bought it from them.

24:46And let's say you spent a hundred billion dollars buying it for them. You would have a billion dollar trade deficit with them. They would have no tariffs on you. And, of course, you were taking those rare earth minerals and putting them into computers and value added. You don't have to look at it that way. You just got to say we're huge consumers of everything because we're so rich and prosperous. So 34 percent. Trade deficits by definition are going to be something. Among the things that are quite remarkable about the president is this idea of saying that we are being taken advantage of. We're somehow.

25:14Well, in some instances, we are. In some instances, we are. But look, what about the people that moved all their stuff to Vietnam? Remember when I was reading those USTR comments? They're like, hey, we went to Vietnam because you told us to go to Vietnam. And then they put it on Cambodia. 40 to 50 percent, according to trade experts, is not a tariff. It's a shutdown. It's you just don't do it anymore. So China, 54 percent. It's the 34 plus the 20. Vietnam was 46 percent. And these are not the tariffs they charge us. It's not. You don't do it anymore overnight. Probably not. It's probably going to be a while before they can figure out where to manufacture and do some of these things.

25:53There's not the capacity for a million. We had somebody on this show, Becky. They said for a brownfield, which is an existing plant, a year and a half to plant it. Three years for a greenfield. And then another year to have to plant it. I hear on factories it's usually three to five years. I get that entirely. But what does that mean? You think the companies are just going to stop selling stuff in the United States or they're going to stop? What's Apple doing? Let me make one comment here, which is listening, of course, to Phil LeBeau, our expert. What did he say? He said that the cheaper cars are made overseas.

26:22By the way, the cheaper guitars are made overseas. Cheaper everything's made overseas. So who gets hit by that? The people who buy the cheaper cars. Let's start there. What does that mean? It means maybe they go to a used car. Maybe they don't buy a car. Maybe they share a ride. What's that? Used Teslas are cheap. Apparently, yes. But they have swastikas carved on the side. Maybe that guy doesn't get his first guitar when he's 16 and never plays. And we never hear from, you know, Little Richard or something like, I don't know. That's not the kind of thing. But the long-term thing, I will just say the long-term thing.

26:50Maybe you don't get the avocado. You have higher wages because there's more manufacturing here, but that is something that takes years and years. And this goes to, I think, a larger political point, which is, and I also talked to a number of people on this issue last night. There's a whole number of CEOs, we talked about playing chicken, who are going to sit now and say to themselves, I can hold out longer than Trump can hold out, not me personally. But there are companies that are going to say, if I'm going to make the three to five to six year investment in this factory that's not going to even exist for five years, what is the prospect that these tariffs are still going to be in effect five years from now?

27:25I talk to you. That is the fundamental question. And if you don't think or you think there's even a chance that they won't be, you may just say, you know what, I'll accept what's going on here for a little while because it's not even worth me to bring back the stuff yet. You see how democracy is good for business in the sense that a tariff proposal or a tariff plan that went through Congress, that CEO wouldn't have to worry as much about that. Right. I talked to a manufacturer said I benefit from the terrorists, but I am not expanding my capacity because I don't know if those terrorists will exist.

27:58You might not be on five months from now, much less five years. What's that? You might not be on five months from now, much less five years from now. Well, if that's the case, then what was this all about? Negotiation. And negotiation. But Joe, is this the way to do it? I mean, imagine. That's what he said he was going to do. And you got elected. I don't know. No, no, no. He said these were negotiation tactics. Right. And they still might. They still might. And now it's fentanyl, and now it's China. And remember he put out a tweet that said, we're keeping the Canadian tariffs in place until they become the 50th percent.

28:27You can find video of him saying this stuff 30 years ago. That's true. He's wanted to do this. So that tells you they're not temporary. They're not negotiations. As negotiations. If he gets a better deal for the United States with other countries. But how do you start when he says my tariffs are 46 percent, But, for example, Singapore has no tariffs. Switzerland has almost no tariffs. Europe is not 39 percent. Europe is 4 percent. Right, except with this calculation. But, Steve, you do need to... Their argument would be that you can't quantify all the other protectionist measures that aren't done through tariffs.

29:10So you sit down with our allies. So you reverse engineer it. You reverse engineer it. That hasn't worked. Did that work with NATO? I don't know. have we tried as Trump sat down with them? Didn't work with NATO. Didn't work with a lot of things. I don't know if that doesn't work. Well, I mean, I think there's been a lot of prosperity in this country and around the world. And we're talking about capitalism. You're talking about free markets and what that's done to bring people out of poverty. Don't point at me. I'm just saying. 28 percent of global GDP with five percent of the population. This is an enormously wealthy country.

29:44The idea that other countries are raping and pillaging us is what the term is. That does set us up as a very large country that's not going to care if we're not treated fairly. That could be true. It is true. They send us wine and cheese and Mercedes. That's not rape and pillage. We send them paper in response to that. Right. A lot more on Squawk Box this morning, including Howard Lutnick. We're going to talk about all of this with him. Yes, Andrew. Commerce Secretary Howard Lutnick is next on Squawk Pod explaining the president's tariff strategy. What he's saying is, look, we need to rebuild American manufacturing base.

30:25We can't allow the United States of America to not produce steel. We can't allow the United States of America not to produce pharmaceuticals. Plus, how retailers and automakers are responding to these changes. All the tea on tariffs right after this.

30:47Welcome back to Squawk Pod from CNBC, where it's the day after. We're digging into the impact of the Trump administration's proposed tariff policy and rates. Here's Andrew Ross Sorkin with a recap of the numbers. There is now a baseline tariff of 10 % on all imports into the United States. It is effective April 5th. Then there is what the White House is calling reciprocal tariffs. Those begin on April 9th. Here's what we do know, and we still have a lot of questions out there. But in addition to the current tariffs, there'll be a 34 percent tariff on China. But of course, that's on top of the existing 20 percent tariff.

31:23So that makes the effective rate at least 54 percent. So you see 34 percent there, but it's really 54 percent. For the EU, the new rate is 20 percent. But again, that really looks in some ways like 30 percent. 46 percent on Vietnam. Of course, that's a country where a lot of U.S. companies had been moving their manufacturing facilities out of places like China because the United States told them to do such a thing. And then 24 percent on Japan, which historically has been one of our great allies as well. China and the EU each saying they are planning countermeasures already this morning. So this could escalate.

32:02In the United States, two notable sectors getting hit this morning. As you might imagine, the auto sector being one of them. You're looking at General Motors down about 2.5%. You're looking at Tesla, interestingly, down 6%, which surprises me. We can talk about why that may be the case in just a moment. Take a look at retailers as well. You're looking at Nike now off about 10%, 11%. That's a company that's manufacturing a lot of its goods in some of the countries that are going to be seriously tariffed. China, Vietnam, and the like. Five below off now, 15, almost 16 percent. Dollar Tree off. Best Buy off as well over 11 percent.

32:36Very closer look, rather, on all of us want to get to our team of CNBC reporters. Courtney Reagan's at the table. She's got reaction from the retailers. But we're going to start with Phil LeBeau on autos. Phil. Andrew, I get this question from a number of people. Why don't the auto companies simply move some of these plants from Mexico and Canada back to the U.S.? The answer? Oh, it's a big one. It's all about money. Look at how much more expensive it is to build a vehicle in the United States compared to Canada and compared to Mexico. This is information from the consulting group Alex Partners, a leading consulting group in a number of industries, including the auto industry.

33:14And we put the question to them point blank. In terms of hourly labor and overall labor, how much more, what's the difference in building a vehicle in the U.S., Canada, and Mexico? And a couple of things to keep in mind here. That's just hourly labor. All in when you add things like indirect labor, energy costs, etc. U.S. Assembly of vehicles, 68 % costlier than Mexico Assembly. And it's 38 % costlier than if you're building a vehicle in Canada. Just a reminder on where we get most of our vehicles from in this country that are bought at dealerships. A little over half are built here in the U.S.

33:52But look, you've got Mexico, South Korea, Japan, Canada. That's where the bulk of the vehicles come from. It's only 5 % for Europe. I say only. That's a significant amount. But that's where we get our vehicles from. The inventory right now is at 71 days, which is basically normal. That's a normal market. But that's going to be changing very quickly. A couple of notes this morning. Stellantis saying that it will be pausing some of its production in Mexico and Canada, including shutting down its plant in Windsor, Ontario for two weeks, restarting on April 21st. That's where they build all of their minivans at.

34:30Ford this morning out with a new marketing plan offering employee pricing as there is a surge of people going out to dealerships looking to buy a vehicle now before the tariffs take effect. And finally, take a look at Nissan and VW. Nissan is suspending some of its production in Mexico, according to reports out of Japan. And VW is halting rail shipments from Mexico to the U.S. due to the tariffs. It is also going to be adding an import fee that will be listed on the sticker price when you go into dealerships as the tariffs take effect. That is the story with the automakers. Courtney, tell us what's going on with the retailers.

35:10Yeah, Phil, I mean, wow, what a morning I think that we might be in for. President Trump's tariff announcement is what Jeffrey's team in Asia calls, quote, a nightmare come true for textile and footwear manufacturers. So many brands and retailers have shifted manufacturing out of China over the last number of years to Vietnam and other Asian production of Asian countries. And now those are subject to heavy reciprocal tasks. What we learned yesterday, Vietnam imports subject to 46 percent. Cambodia, 49 percent. And China, as we've mentioned, now subject to a 34 percent reciprocal tariff. That's on top of the previous 20 percent levied by the administration for a total import tariff of 54 percent.

35:47And a note titled Tariff Tantrum, U.S.-based Jeffries analyst Randall Koenig says the new tariff announcement makes retailers' guidance and mitigation strategies, quote, essentially fruitless, and all footwear and apparel margins will be affected. The question comes, where do we go from here? 34 percent of footwear sold in the U.S. last year was imported from Vietnam. That was second behind China. Similar picture for apparel. Some of the retailers most exposed to manufacturing in Vietnam include Nike, On, Lululemon, American Eagle, Wayfair. We know Abercrombie has a lot of exposure as well and many, many others.

36:23Retailers, frankly, have a lot to figure out. In the meantime, the lobby groups are speaking out on their behalf. While I imagine the war rooms are going to be packed and busy today, Steve Lamar, president and CEO of the American Apparel and Footwear Association, saying in part for companies that have been in a wait-and-see mode, the chaos of the last few months coupled with the confusion from today's announcement, that was from yesterday, has only created more uncertainty. So, Andrew, a lot of the retailers just frankly aren't ready to speak yet, as you might imagine, because they just don't know what to say or what they're going to do.

36:52Let me ask you two questions. One is, for most of these manufacturers, when they have moved from China to Vietnam or from China to India, how long has it taken them to spin that up? Is that? Years. Because I keep hearing three to five years is almost a minimum amount of time that you have to, okay. So then there's this, and we'll talk to Howard Lutnick about this, then there's this game of chicken that goes on politically, which is to say they need to know that five years from now these tariffs are going to be here if they're going to make that move. What are you hearing from retailers? Are they saying, we think this is here to stay?

37:25We don't know. I mean, really, it's a lot of we don't know. And there was a there was a lot of surprise yesterday. This is, you know, the words that I'm hearing is sort of shocked, much worse than we thought. We have to rethink things. I mean, when we were thinking that tariffs were coming in on all Mexican and Canadian imports to the degree of potentially 25 percent. That's what I think a lot of the retailers were preparing for. And we had asked them very specific questions in this last several rounds of quarters reporting. about that. And so they had really begun to talk about it because, as you might expect, as the China conversation sort of took on a life of its own, we talked more about nearshoring and brought things to Mexico.

38:08And so now I think that lesson is going to scar retailers a little bit, to your exact point. I don't know that anyone wants to have a knee-jerk reaction because is that the right thing in three to five years from now? So I think there's just going to be a lot of questions, a lot of confusion. I don't envy a retail CEO this morning. Court, there have been people who have suggested and even as recently as this week Jan Niffen suggesting that a lot of these would be picked up by the factories themselves by the manufacturers of this. I don't think anybody was anticipating numbers this big which makes it way more complicated and maybe there's just a lot more pain to go around.

38:47Right I think that's such a great point because I think if you're talking about a 10 percent or a 20 percent tariff which I guess is the case in some of these countries, but if we're looking at the top 60, or in this case, what I'm really focused on is the Vietnam, the Cambodia, the Bangladesh. Where most of these clothes are made. Exactly, where most of these clothes are made. It is a very, very big number. And so we're not talking about splitting hairs on a 10%. We're talking about 46%, 49%. So is everybody going to take 15, 20 % of that? I mean, that is a lot. And it's especially a lot if you are a lower end manufacturer.

39:20We're not talking about luxury retailers where they have some more room for more margin that they can kind of play around with this stuff. But in some cases, when you're making clothes on the cheap. Right. I mean, you know, think about companies that have been built up to traditional strategies. We got a guy who's got a lot of public answers to our questions. Okay, great. Join us now, Commerce Secretary Howard Lutnick. You've been through a lot over the years, Howard, very seasoned, obviously. But today's move, is it unexpected for you about right? I mean, And you saw Monday was kind of like a bonus, the way it turned around.

39:54But when it finally did happen and we got the numbers, was this reaction, is it overdone, you think, or about what you thought? Well, I think the long term or even the medium term, you've got to expect the United States of American markets are going to do extremely, extremely well. I understand the reordering of the rest of the world's markets, but they have been taking advantage of the trading policy, the markets policy. All the policies of the United States of America were designed to make you rich and make us poor. You know, take our factories from us, go build elsewhere. I mean, imagine this.

40:35Why are all of our pharmaceutical products, the ingredients to our pharmaceutical products made in Asia? That's not cheap labor. That's just a failed policy that lets the rest of the world gut America. And that's what Donald Trump is here to address. And he's going to change it. And he's going to protect America for our children and our grandchildren. Mr. Secretary, who came up with the the equation that we've shown? And I know it's hard to get a clean number for tariffs plus all the other things that you would constitute as unfair trade, whether it's currency manipulation or regulations or whatever.

41:18But there is some, I don't know if I'd call it confusion, but there's some downright derision about using a trade deficit imbalance and then subtracting it and, you know, putting it over another and coming up with some of these what look like almost arbitrary numbers taken. There it is. Did you come up with that? I don't know if you if you had advanced. All right. The council. Stop, stop. The Council of Economic Advisors. Right. Coupled with the United States Trade Representative. They have huge staffs of economists who study this and have been studying this for years. They put out the non-tariff trade barriers.

42:00I'll give you an example. Yesterday, I was talking to a trade minister of a big country. And I said, look, we can't sell cars in your market. You've got to do something to change that. It's obviously unfair. And at the very end of the conversation, the trade minister dropped his head and said these words. He said, fine, we will provide your car manufacturers the same subsidy we provide ours. Just think about that for a minute. So you've got all these countries, they charge a VAT or a consumption tax. What do they do with that tax? If they turn around and sell really cheap energy to their steel company, then their steel companies destroy ours, put ours out of business, and then all of the steel goes elsewhere and we can't defend ourselves in a war.

42:57If they take that and give it back as a subsidy to their car manufacturer, then their car manufacturer actually has a cost of$40 ,000 when our car manufacturer has$50 ,000. And of course, we're never going to sell a car. So this is the reordering of fair trade. And what happens is people think it's all about tariffs. It's about those non-tariff trade barriers. That's what we are addressing now. It'd be nice if everybody on that list, all those countries said, you know what? You know, we've seen the air in our ways and we're going to go zero, zero. We want to make it fair across the board. But how likely is that?

43:38How soon do you expect to see some concessions or conversely, retaliatory tariffs, which just caused this to go much longer than anyone probably wants to be more costly? and could be a full-scale trade war if it goes that way. Which are you expecting? I expect most countries to start to really examine their trade policy towards the United States of America and stop picking on us. Stop saying that we can't sell our corn to India. Stop saying that we can't sell our beef anywhere. Just stop treating us so poorly if we are the great consumer of the earth. The United States buys everybody's products.

44:23They buy, we buy everybody's goods. You just have to treat us fairly. And that is the problem. So some countries, you know, which have these VATs and they use these VAT taxes to, you know, they basically subsidize their domestic production. Right. That's got to really be balanced. We've got to figure that out together. But what you're going to see is you're going to see tariff rates decline. You're going to see the opening of all of these global markets to our agriculture, to our ranchers, to our fishermen. You're going to see American production start to rise and finally be fair. And I think that we have Stockholm Syndrome.

45:04We're so used to being abused. And Donald Trump's been talking about this for 35 years. Mr. Secretary, in terms of the suggestion that we're being abused or being fair, what would you say to the United Kingdom or what would you say to Australia where we have a trade surplus, where they could look at us and say, we're the winners of that competition and yet we are going to tariff them? Well, look, they each have the lowest rate available, right? I mean, if you really dissect the trade numbers that are made publicly, I mean, the United Kingdom, part of their trade surplus is that they have the London Metals Exchange and they count the importing of bullion.

45:50I mean, come on. So, I mean, if you really dissect these things, you realize they have a 20 % VAT, okay? And these things, but they work hard to have a balance. They're raping us too? Well, they are, they have, if you looked at them and really studied it, you'd see they have a goods deficit with us, right? And Australia buys a lot of our planes, which we really appreciate. But we're really looking at the production for people to get jobs. So the stuff with Mexico and Canada, I'd really like to talk about because USMCA is still in place. So if you make a car in America and the parts are made in Canada or Mexico, there is no tariff.

46:33The auto parts business of Canada and Mexico are not being touched. Energy prices are not being touched. You know, people need to understand we did not today. You know, semiconductors are not included. Pharmaceuticals are not included. Donald Trump's going to deeply study those. and those are going to come later on how to reshore from Taiwan, all that semiconductor manufacturing. We have to protect ourselves at some point, right? America has to be able to protect itself. We can't have everything. Think about it. All of our electronics are primarily built in Taiwan. It used to be built here. Our policies let Taiwan take it all.

47:15And now 9 ,000 miles away, our way of life is being built. And Donald Trump is saying, come on, that's got to be here. That's why you've got Apple announcing it's going to do 500 billion in production here. I mean, think about it. We all hold our iPhones, which we love. Why do they have to be made in Taiwan and China? Why can't those be made with robotics in America? And you know what Donald Trump has said? They're going to be made in America. Secretary Lutnick, there have been questions raised already about whether a company like Apple would be able to get a carve out from this because they have promised to build more in the United States.

47:53The market's trying to figure out how permanent these tariffs are going to be if there is a negotiation taking place. Scott Besant, the Treasury Secretary, said yesterday that we may have to let these sit for a while, but I'd also heard that you'd been in charge of already negotiating with some countries, maybe giving them wish lists to say here's what it would take to get these tariffs reduced or removed. Is that the case? And if so, which countries are you negotiating with? We're talking with all of the major countries of the world, and we've been talking to them for more than a month. This has been coming.

48:29We've said it's been coming. The key is, will they take our agricultural products? Will they treat us fairly? Can they treat us fairly? And the answer is over time, that is going to be yes. American products are going to be better sold elsewhere in the world. But the fact remains we are treated unfairly and they have built structurally into their markets this unfairness. The subsidies to their steel companies, the subsidies to their car companies. That's why we don't do well. Did you ever think about why we don't sell cars in Europe, why we don't sell cars in Japan or Korea, why we could never really sell cars.

49:11It's very difficult for us to sell cars in China. I mean, it's not that hard to figure out. We can't sell corn. We can't sell beef. We can't sell cars because the rules are stacked against us. And I think it's interesting. It's time to change the rules and make the rules be stacked fairly with the United States of America. We need to stop supporting the rest of the world and start supporting American workers. Let's take a for instance. Australia, for instance, hit with a 10 percent tariff and they don't accept beef imports from the United States. That goes back to when they thought Mad Cow was going to be imported with some of those things.

49:50If they were to start taking American beef imports, would that be something that would get them an exemption and how quickly do you think that could happen? I don't think the word exemption is going to be a factor. I don't think that's such a thing. I think what there's going to be is a world of fairness. Let's go try to figure out ways for the world to treat us more fairly and more properly. I don't think it's effective for the world to retaliate. I mean, those things are silly. We are the consumer of the world, right? We buy$20 trillion worth of goods, and we are basically the buyer of everybody else's in the world's items.

50:34So what is the point of them going higher so that we go higher? I mean, come on, look, he gave a 50 % discount. What he's saying is, look, we need to rebuild American manufacturing base. We can't allow the United States of America to not produce steel. We can't allow the United States of America not to produce pharmaceuticals. We can't have a war where we can't get antibiotics and we have to call another country to make a missile or to make a plane. I mean, these are obvious things. We need to have domestic production. We need to employ Americans. And I think that is the model that Donald Trump is seizing on.

51:18We need to employ Americans for the good of the United States of America. Factories are coming back. And here's the key. Factories now can use robotics. And so American workers can be much more efficient with robotics. You're going to see the greatest surge in training for what we call tradecraft, teaching people how to be robotics mechanics, engineers and electricians for high-tech factories HVAC you'd think about your air conditioning system no no no when you build one of these great factories like an Apple factory if they use air conditioning to cool it that is really high-tech it's a great paying job and it requires a high school education and training and our Americans are ready for it and you're going to see the greatest resurgence of factory building and factory production in america this is our time and it is time for us to rebuild it and that's what donald trump is out to do he's changing the way people think about production in america it's time to stop exporting and time to stop taking all our factories and letting the rest of the world have them it's time to bring them all along with that There sometimes are some unintended consequences.

52:37And if it's the biggest reset of the economy, U.S. and global economy, since World War II, Howard, the stock market's one thing, and I can understand, you know, we had 20 percent gains the last couple of years, and it's done well. But there's other markets in a world order to think about in terms of currency moves and bond yields. And it does matter because we're interconnected. So I'm going to paint you a story just quickly. The dollar has declined significantly since the president came into office. What if that became disorderly? And, I mean, Europeans have already lost a lot of money in the stock market and even more with the euro appreciating.

53:17What if it got to the point where interest rates suddenly had to spike? The dollar started to go into free fall. Investment capital no longer came into the United States like it has been. because there's a fundamental shift in the world order in terms of currency. Is there a Trump put there? Maybe there's not a Trump put on the stock market, but what about on a collapsing dollar? It just can't happen. I mean, if you think about it, the United States is a$29 trillion economy, and we are the consumer of$20 trillion of goods. Other countries are producers of goods, and we are the buyer of goods. So if you want to build your product, you're going to have to build it in America if you want to avoid these tariffs.

54:10Or these countries have to fundamentally alter the way they do their business. Those two things going together are going to result in interest rates in the United States of America being much, much lower. High quality production jobs much, much higher. domestic production of huge amounts of factories, that's GDP, right? Remember, when Donald Trump says we've got$5 trillion of factories coming to America, think of$5 trillion divided by his four years. That is huge GDP growth on factory building, which all of you are not yet thinking about. These factory commitments are going to create huge growth in America.

54:51Mr. Secretary, that's the big question I wanted to ask you about, factory commitments. And one of the things that I was speaking to a whole number of CEOs yesterday who need to actually make some decisions. And the question is, how soon do they make those decisions? And they talk about what they think of as this game of chicken, a almost political game, which is to say they don't know whether these tariffs, which are being announced today, are going to be the same in a month, two months, six months, and more importantly, in four or five years, when in fact the factories that they would have to invest in today would be up and running.

55:24What do you say to that CEO who says, you know what, I'm actually going to take a, I'll take a flyer and I'll wait a year or two, see how this all plays out before I do anything, which also means that we're going to have a real freeze in terms of investment. I think you're going to see, and we've been feeling it every day, that you're going to build in America. that this is a reordering of global trade and it's really thoughtful. If you understood how rough these other countries are on American products, rough, and their tariffs are just like the tip of the iceberg, the classic, the rest of the iceberg below the water is so rough and so difficult and they have subsidies and they have trade barriers and you can't sell because if you lean one inch to the right or one inch to the left.

56:16Oh, you're not allowed to sell. I mean, I tell the story. We made a deal in 2012 to take Korean cars. In exchange, they were going to take our produce and agriculture. And when McDonald's tried to bring in French fries, they actually said we can't bring in the French fry. The American company can't bring in the French fries because we couldn't prove the origin of the potato. I am telling you the rules of the world are so stacked against us that we are just the consumer of the world and it's going to end. And once that ends and once America wakes up to it, and now all of America is going to wake up to it, that everybody is going to build their factories here.

56:56Everybody's going to move their factories here. And America is going to become the producer of much, much more of what we consume. There will become a balance. Interest rates will be much, much lower. The United States of America will be much, much stronger. We are growing much too much like the rest of the world. Our growth rate should be double or triple them because we are the greatest economy and we are feeding the world. And Donald Trump would like to have America first. How about we feed America first? We start building these factories. You're going to start to see GDP, domestic production go up.

57:33We talk about buying foreign cars. That's consumption. That's not domestic production. We're going to start to see domestic production dramatically rise. And that's what Donald Trump is focused on. We appreciate all the time you gave us this morning and hope to see you explain all these things. Make the case. I said, you know, the Commerce Secretary, he'll probably be waffling a lot about all these things. That was that was sarcasm. You are not. You're very steadfast in making that case. We appreciate it. Thank you. And that is Squawk Pod for today. Come back tomorrow. Listen every day. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin.

58:19You can tune in weekday mornings on CNBC at 6 Eastern or get the smartest takes and analysis and news from our TV show right into your ears anytime you want when you follow Squawk Pod wherever you listen to podcasts. Thank you. We'll meet you right back here tomorrow. We are clear. Thanks, guys.

58:41Thank you.